Item 1. Business.
Not Applicable.
Item 1A.
Item 1A. Risk Factors.
Not Applicable.
Item 1B.
Item 1B. Unresolved Staff Comments.
Not Applicable.
Item 2.
Item 2. Properties.
Not Applicable.
Item 3.
Item 3. Legal Proceedings.
Not Applicable.
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders.
Not Applicable.
PART II
Item 5.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Not Applicable.
Item 6.
Item 6. Selected Financial Data.
Not Applicable.
Item 7.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operation.
Not Applicable.
Item 7A.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Not Applicable.
Item 8.
Item 8. Financial Statements and Supplementary Data.
Not Applicable.
Item 9.
Item 9. Changes in and Disagreements With Accountants on Accounting and
Not Applicable.
Item 9A.
Item 9A. Controls and Procedures.
Not Applicable.
Item 9A(T). Controls and Procedures.
Not Applicable.
Item 9B.
Item 9B. Other Information.
Not Applicable.
PART III
Item 10.
Item 10. Directors, Executive Officers and Corporate Governance.
Not Applicable.
Item 11.
Item 11. Executive Compensation.
Not Applicable.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management and
Not Applicable.
Item 13.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
Not Applicable.
Item 14.
Item 14. Principal Accounting Fees and Services.
Not Applicable.
ADDITIONAL DISCLOSURE ITEMS FOR REGULATION AB
Item 1112(b) of Regulation AB. Significant Obligor Financial Information
No single obligor represents more than 10% of the pool assets held by this transaction.
Item 1114(b)(2) of Regulation AB. Credit Enhancement and Other Support, Except for Certain Derivative Instruments (Information Regarding Significant Enhancement Providers Financial Information).
No entity or group of affiliated entities provides any external credit enhancement or other support contemplated in Item 1114 of Regulation AB.
Item 1115(b) of Regulation AB. Certain Derivative Instruments.
No entity or group of affiliated entities providing derivative instruments contemplated in Item 1115 of Regulation AB is subject to the reporting thresholds specified in Item 1115.
Item 1117 of Regulation AB. Legal Proceedings.
Except as may be set forth immediately below, there are no known legal proceedings pending against any party specified in Item 1117 of Regulation AB, or of which any property of the foregoing is subject, or any proceedings known to be contemplated by governmental authorities against any of the foregoing, that are material to security holders.
Item 1119 of Regulation AB. Affiliation and Certain Relationships and Related Transactions.
Except as may be set forth immediately below and subject to the Instruction to Item 1119, there are no affiliations, relationships or related transactions specified in Item 1119 that are material to security holders. Certain information required by Item 1119 of Regulation AB has been omitted from this report in reliance on the Instruction to Item 1119.
Item 1122 of Regulation AB. Compliance with Applicable Servicing Criteria.
Except as may be set forth immediately below, all of the reports on assessment of compliance with the servicing criteria for asset-backed securities and their related attestation reports on assessment with servicing criteria for asset-backed securities required to be included in this report in accordance with Item 1122 of Regulation AB and Exchange Act Rules 13a-18 and 15d-18 have been included as an exhibit to this report.
First American Real Estate Solutions of Texas, L.P., assessed its compliance with the Applicable Servicing Criteria for the Reporting Period and has identified a material instance of noncompliance with the servicing criterion set forth in Section 229.1122(d)(2)(vii)(B) of the CFR with respect to the Platform. Specifically, the Asserting Party did not prepare reconciliations for all asset-backed securities related bank accounts within 30 calendar days after the bank statement cut-off date or such number of days specified in the transaction agreements.
1122(d)(3)(i) - Delinquency Reporting. For certain loans sub-serviced by Wells Fargo or for which servicing rights were acquired on a bulk-acquisition basis, Wells Fargo determined that it provided incomplete data to some third parties who use such data to calculate delinquency ratios and determine the status of loans with respect to bankruptcy, foreclosure or real estate owned. The incomplete reporting only affected securitizations that included delinquent loans. Instead of the actual due date being provided for use in calculating delinquencies, the date of the first payment due to the security was provided. Wells Fargo subsequently included additional data in the monthly remittance reports, providing the actual borrower due date and unpaid principal balance, together with instructions to use these new fields if such monthly remittance reports are used to calculate delinquency ratios.
1122 (d)(4)(vii) - Notification of Intent to Foreclose. Wells Fargo determined that, as required by certain servicing agreements, it did not provide investors with prior notification of intent to foreclose. While investors received monthly delinquency status reports that listed loans in foreclosure, such reports were received after such loans had been referred to an attorney. A new process is being implemented to send such notifications if contractually required, unless an investor opts out in writing.
Item 1123 of Regulation AB. Servicer Compliance Statement.
Except as may be set forth immediately below, all of the servicing compliance statements required to be included in this report in accordance with Item 1123 of Regulation AB have been included as an exhibit to this report.
First American Real Estate Solutions of Texas, L.P. noted the following in its Servicer Compliance Certification. The following describes the nature of and status of a material failure, which has been rectified. During 2006, more than ninety-three (93%) percent of all bank reconciliations were timely completed within thirty (30) days of receipt. The remaining reconciliations were all completed within thirty to sixty (30-60) days of receipt. Management has implemented enhanced controls ensuring that all bank reconciliations are completed within the thirty (30) day time period. By year end 2006, these enhanced controls resulted in continual one hundred (100%) percent compliance.
PART IV
Item 15.
Item 15. Exhibits, Financial Statement Schedules.
(a) Exhibits (4.1) Pooling and Servicing Agreement, dated as of December 1, 2006, among HSI Asset Securitization Corporation, CitiMortgage, Inc., Citibank, N.A., Wells Fargo Bank, N.A., and Deutsche Bank National Trust Company (incorporated by reference to Exhibit 4.1 to the Issuing Entity's Current Report on Form 8-K dated January 16, 2007 and filed with the Securities and Exchange Commission on January 16, 2007).
(10.1) Mortgage Loan Purchase Agreement dated as of December 1, 2006, between HSI Asset Securitization Corporation, and HSBC Bank USA, National Association (incorporated by reference to Exhibit 99.1 to the Issuing Entity's Current Report on Form 8-K dated January 16, 2007 and filed with the Securities and Exchange Commission on January 16, 2007).
(10.2) Assignment, Assumption and Recognition Agreement dated as of December 1, 2006, among HSBC Bank, National Association, HSI Asset Securitization Corporation, CitiMortgage, Inc. as master servicer, Deutsche Bank National Trust Company (incorporated by reference to Exhibit 99.2 to the Issuing Entity's Current Report on Form 8-K dated January 16, 2007 and filed with the Securities and Exchange Commission on January 16, 2007).
(10.3) Assignment, Assumption and Recognition Agreement dated as of December 1, 2006, between HSBC Bank USA, National Association, a National Banking Association, HSI Asset Securitization Corporation, CitiMortgage, Inc., as Master Servicer, and Wachovia Mortgage Corporation, a North Carolina corporation (incorporated by reference to Exhibit 99.3 to the Issuing Entity's Current Report on Form 8-K dated January 16, 2007 and filed with the Securities and Exchange Commission on January 16, 2007).
(10.4) Assignment, Assumption and Recognition Agreement dated as of December 1, 2006, among HSBC Bank USA, National Association, HSI Asset Securitization Corporation, Countrywide Home Loans Servicing LP and Countrywide Home Loans, Inc., CitiMortgage, Inc., as master servicer and Deutsche Bank National Trust Company (incorporated by reference to Exhibit 99.4 to the Issuing Entity's Current Report on Form 8-K dated January 16, 2007 and filed with the Securities and Exchange Commission on January 16, 2007).
(10.5) Assignment, Assumption and Recognition Agreement dated as of December 1, 2006, among HSBC Bank, National Association, HSI Asset Securitization Corporation, Deutsche Bank National Trust Company, American Home Mortgage Corp. and American Home Mortgage Servicing, Inc. (incorporated by reference to Exhibit 99.4 to the Issuing Entity's Current Report on Form 8-K dated January 16, 2007 and filed with the Securities and Exchange Commission on January 16, 2007).
(10.6) Reconstituted Servicing Agreement dated as of December 1, 2006, by and between HSBC Bank USA, National Association, HSI Asset Securitization Corporation and Wells Fargo Bank, N.A., as servicer, and is acknowledged by CitiMortgage, Inc., as master servicer and, acknowledged by Deutsche Bank National Trust Company (incorporated by reference to Exhibit 99.4 to the Issuing Entity's Current Report on Form 8-K dated January 16, 2007 and filed with the Securities and Exchange Commission on January 16, 2007).
(10.7) Confirmation relating to the Interest Rate Cap Agreement, dated as of December 28, 2006, to Citibank, N.A. (incorporated by reference to Exhibit 99.4 to the Issuing Entity's Current Report on Form 8-K dated January 16, 2007 and filed with the Securities and Exchange Commission on January 16, 2007).
(31) Rule 13a-14(d)/15d-14(d) Certifications.
(33) Reports on Assessment of Compliance with Servicing Criteria for Asset-Backed Securities. (a) Citibank, N.A., as Securities Administrator (b) Citimortgage, Inc., as Master Servicer (c) Countrywide Home Loans Servicing LP, as Servicer (d) HSBC Mortgage Corp., as Servicer (e) Wachovia Mortgage, as Servicer (f) Wells Fargo Bank, N.A., as Servicer (g) Wells Fargo Bank, N.A., as Custodian (h) First American Real Estate Solutions of Texas (i) First American Real Estate Solutions of Texas (j) ZC Sterling Insurance Agency, Inc.
(34) Attestation Report on Assessment of Compliance with Servicing Criteria for Asset Backed Securities. (a) Citibank, N.A., as Securities Administrator (b) Citimortgage, Inc., as Master Servicer (c) Countrywide Home Loans Servicing LP, as Servicer (d) HSBC Mortgage Corp., as Servicer (e) Wachovia Mortgage, as Servicer (f) Wells Fargo Bank, N.A., as Servicer (g) Wells Fargo Bank, N.A., as Custodian (h) First American Real Estate Solutions of Texas (i) First American Real Estate Solutions of Texas (j) ZC Sterling Insurance Agency, Inc.
(35) Servicer Compliance Statement. (a) Citimortgage, Inc., as Master Servicer (b) Countrywide Home Loans Servicing LP, as Servicer (c) HSBC Mortgage Corp., as Servicer (d) Wachovia Mortgage, as Servicer (e) Wells Fargo Bank, N.A., as Servicer (f) First American Real Estate Solutions of Texas (g) First American Real Estate Solutions of Texas
(b) Not applicable
(c) Not Applicable.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) HSI Asset Securitization Corporation -----------------------------------------------------------------
Signed: Citimortgage Inc., as Master Servicer
By /s/ Tommy Harris ----------------------------------------------------- Tommy Harris Senior Vice President
Date March 30, 2007 -----------------------------------------------------
SARBANES-OXLEY CERTIFICATION
HSI Asset Loan Obligation Trust 2006-2 Mortgage Pass-Through Certificates Series 2006-2
This Certification is being made pursuant to Section 3.05 and Section 8.12 of the Pooling and Servicing Agreement dated as of December 1, 2006 (the "Pooling and Servicing Agreement") relating to the above-referenced Series, among HSI Asset Securitization Corporation, as depositor, Wells Fargo Bank, N.A. as custodian, CitiMortgage, Inc., as master servicer, Citibank, N.A., as securities administrator, and Deutsche Bank National Trust Company, as trustee. Capitalized terms used but not defined herein shall have the meanings assigned in the Pooling and Servicing Agreement.
1. I have reviewed this annual report on Form 10-K, and all reports on Form 10-D required to be filed in respect of the period covered by this report on Form 10-K of HSI Asset Loan Obligation Trust 2006-2 (the "Exchange Act periodic reports");
2. Based on my knowledge, the Exchange Act periodic reports, taken as a whole, do not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, all of the distribution, servicing and other information required to be provided under Form 10-D for the period covered by this report is included in the Exchange Act periodic reports;
4. I am responsible for reviewing the activities performed by the master servicer and based on my knowledge and the compliance review conducted in preparing the servicer compliance statement required in this report under Item 1123 of Regulation AB, and except as disclosed in the Exchange Act periodic reports, the master servicer has fulfilled its obligations under the pooling and servicing agreement, in all material respects; and
5. All of the reports on assessment of compliance with servicing criteria for asset-backed securities and their related attestation reports on assessment of compliance with servicing criteria for asset-backed securities required to be included in this report in accordance with Item 1122 of Regulation AB and Exchange Act Rules 13a-18 and 15d-18 have been included as an exhibit to this report, except as otherwise disclosed in this report. Any material instances of noncompliance described in such reports have been disclosed in this report on Form 10-K.
In giving the certifications above, I have reasonably relied on information provided to me by the following parties: Citibank, N.A., Countrywide Home Loans Servicing LP, Wells Fargo Bank, N.A., Wachovia Mortgage Corporation and HSBC Mortgage Corporation.
CITIMORTGAGE, INC. as Master Servicer
By: /s/ Tommy Harris --------------------------- Name: Tommy Harris Title: Master Servicing Division Senior Vice President
Date: 3/30/2007