Exhibit 33.2
[LOGO OF CLAYTON]
Certification Regarding Compliance with Applicable Servicing Criteria
1. Clayton Fixed Income Services Inc. ("CFIS") is responsible for assessing
compliance with the servicing criteria applicable to it under paragraph
(d) of Item 1122 of Regulation AB, as of and for the 12-month period
ending December 31, 2006 (the "Reporting Period"). The transaction covered
by this report (the "Trust") for which CFIS acted as credit risk manager
(the "Platform") is Fremont 2006-3.
2. The criteria listed in the column titled "Performed by CFIS" in Appendix A
are those criteria applicable (in part) to the Platform under paragraph
(d) of 1122 of Regulation AB and are those criteria for which this
certification is required pursuant to the terms and conditions of the
various trust agreements and/or pooling and servicing agreements (the
"Transaction Documents") through which CFIS was retained to act as credit
risk manager;
3. CFIS can only certify compliance with sub-parts (A) and (B) of the
criteria set forth in 1122(d)(3)(i) because sub-parts (C) and (D) are not
within the scope of services CFIS has been retained to provide to the
Trusts.
A. With respect to subparts (A) and (B) of 1122(d)(3)(i), management
identified certain instances where certain component sections of
specified in the Transaction Documents were not included in a given
month's credit risk manager report. The component sections that were
not included related to the prepayment analysis (CPR) and standard
default assumption (SDA) components of the analytics reporting
specified in the Transaction Documents. Although the original
Transaction Documents have not been formally amended, the sponsor of
these securitizations has indicated to CFIS that these reports
should be excluded from the reports provided by CFIS. Management
does not consider the foregoing to be a material instance of
non-compliance with respect to the Platform as a whole.
B. With respect to subpart (C) of 1122(d)(3)(i), CFIS is not required
to file its reports with Securities Exchange Commission; per the
Transaction Documents, the CFIS reports are to be included in the
monthly filing responsibility for filing with the Commission rests
with a party other than CFIS. Accordingly, the certification
contained herein with respect to the Platform applies only to CFIS
delivering its reports to the applicable third party responsible for
including CFIS' reports with the Commission in accordance with the
Commission's rules and regulations.
C. With respect to subpart (D) of 1122(d)(3)(i), CFIS is not
responsible for ensuring that its reports "agree with investors' or
the trustee's records as to the total unpaid principal balance and
number of pool assets serviced by the Servicer." CFIS' role (in
part) in the transactions in which it is retained is to provide
Certificate of Compliance - Regulation AB
Clayton Fixed Income Services; March 2007
[LOGO OF CLAYTON]
oversight functions with respect to the servicers in such
transactions and to identify issues in the areas of collateral
reporting. In connection with such role, CFIS would report on
discrepancies it identified between the balance and number of pool
assets as reported by the various transaction fiduciaries.
4. Those criteria listed in the column "Inapplicable Servicing Criteria" on
Appendix A hereto are inapplicable to CFIS based on the activities it
performs with respect to the Platform;
5. Subject to the foregoing, CIFS has complied, in all material respects,
with the applicable servicing criteria as of December 31, 2006 and for the
Reporting Period with respect to the Platform taken as a whole;
6. Hein & Associates, a registered public accounting firm, has issued an
attestation report on CFIS' assessment of compliance with the applicable
servicing criteria for the Reporting Period. Such report is attached
hereto.
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Certificate of Compliance - Regulation AB
Clayton Fixed Income Services; March 2007
[LOGO OF CLAYTON]
March 15, 2007
Clayton Fixed Income Services Inc
By: /s/ Kevin J. Kanouff
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Name: Kevin J. Kanouff
Title: President
Certificate of Compliance - Regulation AB
Clayton Fixed Income Services; March 2007
[LOGO OF CLAYTON]
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Regulation AB Performed INAPPLICABLE
Section by SERVICING
Reference Criteria CFIS CRITERIA
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General Servicing Considerations
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Policies and procedures are instituted to X
monitor any performance or other triggers
and events of default in accordance with
1122(d)(1)(i) the transaction agreements.
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If any material servicing activities are X
outsourced to third parties, policies and
procedures are instituted to monitor the
third party's performance and compliance with
1122(d)(1)(ii) such servicing activities.
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Any requirements in the transaction X
agreements to maintain a back-up
servicer for the pool assets are
1122(d)(1)(iii) maintained.
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A fidelity bond and errors and omissions X
policy is in effect on the party
participating in the servicing function
throughout the reporting period in the amount
of coverage required by and otherwise in
accordance with the terms of the transaction
1122(d)(1)(iv) agreements.
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Cash Collection and Administration
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Payments on pool assets are deposited into X
the appropriate custodial bank accounts and
related bank clearing accounts no more than
two business days following receipt, or such
other number of days specified in the
1122(d)(2)(i) transaction agreements.
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Disbursements made via wire transfer on X
behalf of an obligor or to an investor are
1122(d)(2)(ii) made only by authorized personnel.
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Advances of funds or guarantees regarding X
collections, cash flows or distributions, and
any interest or other fees charged for such
advances, are made, reviewed and approved as
1122(d)(2)(iii) specified in the transaction agreements.
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The related accounts for the transaction, X
such as cash reserve accounts or accounts
established as a form of
overcollateralization, are separately
maintained (e.g., with respect to
commingling of cash) as set forth in the
1122(d)(2)(iv) transaction agreements.
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Each custodial account is maintained at a X
federally insured depository institution as
set forth in the transaction agreements. For
purposes of this criterion, "federally
insured depository institution" with respect
to a foreign financial institution means a
foreign financial institution that meets the
requirements of Rule 13k-1(b)(1) of the
1122(d)(2)(v) Securities Exchange Act.
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Unissued checks are safeguarded so as to prevent X
1122(d)(2)(vi) unauthorized access.
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Reconciliations are prepared on a monthly X
basis for all asset-backed securities related
bank accounts, including custodial accounts
and related bank clearing accounts. These
reconciliations are (A) mathematically
accurate; (B) prepared within 30 calendar
days after the bank statement cutoff date, or
such other number of days specified in the
transaction agreements; (C) reviewed and
approved by someone other than the person who
prepared the reconciliation; and (D) contain
explanations for reconciling items. These
reconciling items are resolved within 90
calendar days of their original
identification, or such other number of days
1122(d)(2)(vii) specified in the transaction agreements.
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Certificate of Compliance - Regulation AB
Clayton Fixed Income Services; March 2007
[LOGO OF CLAYTON]
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Regulation AB Performed INAPPLICABLE
Section by SERVICING
Reference Criteria CFIS CRITERIA
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Investor Remittances and Reporting
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Reports to investors, including those to be X
filed with the Commission, are maintained in
accordance with the transaction agreements
and applicable Commission requirements.
Specifically, such reports (A) are prepared
in accordance with timeframes and other terms
set forth in the transaction agreements; (B)
provide information calculated in accordance
with the terms specified in the transaction
agreements; (C) are filed with the Commission
as required by its rules and regulations; and
(D) agree with investors' or the trustee's
records as to the total unpaid principal
balance and number of pool assets serviced by
1122(d)(3)(i) the Servicer.
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Amounts due to investors are allocated and X
remitted in accordance with timeframes,
distribution priority and other terms set
1122(d)(3)(ii) forth in the transaction agreements.
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Disbursements made to an investor are posted X
within two business days to the Servicer's
investor records, or such other number of
1122(d)(3)(iii) days specified in the transaction agreements.
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Amounts remitted to investors per the X
investor reports agree with cancelled
checks, or other form of payment, or
1122(d)(3)(iv) custodial bank statements.
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Pool Asset Administration
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Collateral or security on pool assets is X
maintained as required by the transaction
agreements or related mortgage loan
1122(d)(4)(i) documents.
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Pool assets and related documents are X
safeguarded as required by the transaction
1122(d)(4)(ii) agreements
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Any additions, removals or substitutions to X
the asset pool are made, reviewed and
approved in accordance with any conditions or
1122(d)(4)(iii) requirements in the transaction agreements.
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Payments on pool assets, including any X
payoffs, made in accordance with the related
pool asset documents are posted to the
Servicer's obligor records maintained no more
than two business days after receipt, or such
other number of days specified in the
transaction agreements, and allocated to
principal, interest or other items (e.g.,
escrow) in accordance with the related pool asset
1122(d)(4)(iv) documents.
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The Servicer's records regarding the pool X
assets agree with the Servicer's records
with respect to an obligor's unpaid
1122(d)(4)(v) principal balance.
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Changes with respect to the terms or status X
of an obligor's pool assets (e.g., loan
modifications or re-agings) are made, reviewed
and approved by authorized personnel in
accordance with the transaction agreements and
1122(d)(4)(vi) related pool asset documents.
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Loss mitigation or recovery actions (e.g., X
forbearance plans, modifications and deeds
in lieu of foreclosure, foreclosures and
repossessions, as applicable) are initiated,
conducted and concluded in accordance with
the timeframes or other requirements
1122(d)(4)(vii) established by the transaction agreements.
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Certificate of Compliance - Regulation AB
Clayton Fixed Income Services; March 2007
[LOGO OF CLAYTON]
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Regulation AB Performed INAPPLICABLE
Section by SERVICING
Reference Criteria CFIS CRITERIA
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Records documenting collection efforts are X
maintained during the period a pool asset is
delinquent in accordance with the transaction
agreements. Such records are maintained on at
least a monthly basis, or such other period
specified in the transaction agreements, and
describe the entity's activities in
monitoring delinquent pool assets including,
for example, phone calls, letters and payment
rescheduling plans in cases where delinquency
is deemed temporary (e.g., illness or
1122(d)(4)(viii) unemployment).
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Adjustments to interest rates or rates of X
return for pool assets with variable rates
are computed based on the related pool
1122(d)(4)(ix) asset documents.
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Regarding any funds held in trust for an X
obligor (such as escrow accounts): (A) such
funds are analyzed, in accordance with the
obligor's pool asset documents, on at least
an annual basis, or such other period
specified in the transaction agreements; (B)
interest on such funds is paid, or credited,
to obligors in accordance with applicable
pool asset documents and state laws; and (C)
such funds are returned to the obligor within
30 calendar days of full repayment of the
related pool assets, or such other number of
1122(d)(4)(x) days specified in the transaction agreements.
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Payments made on behalf of an obligor (such X
as tax or insurance payments) are made on or
before the related penalty or expiration
dates, as indicated on the appropriate bills
or notices for such payments, provided that
such support has been received by the
Servicer at least 30 calendar days prior to
these dates, or such other number of days
1122(d)(4)(xi) specified in the transaction agreements.
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Any late payment penalties in connection with X
any payment to be made on behalf of an
obligor are paid from the Servicer's funds
and not charged to the obligor, unless the
late payment was due to the obligor's error
1122(d)(4)(xii) or omission.
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Disbursements made on behalf of an obligor X
are posted within two business days to the
obligor's records maintained by the Servicer,
or such other number of days specified in the
1122(d)(4)(xiii) transaction agreements.
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Delinquencies, charge-offs and X
uncollectible accounts are recognized and
recorded in accordance with the transaction
1122(d)(4)(xiv) agreements.
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Any external enhancement or other support, X
identified in Item 1114(a)(1) through (3) or
Item 1115 of Regulation AB, is maintained as
1122(d)(4)(xv) set forth in the transaction agreements.
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Certificate of Compliance - Regulation AB
Clayton Fixed Income Services; March 2007