UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
Amendment No. 1
The Issuing Entity is filing this Form 10-K/A to replace Exhibits 31, 33(a)
and 34(a) to the original Form 10-K filed on April 2, 2007. American Security
Insurance Company, Standard Guaranty Insurance Company and TrackSure Insurance
Agency, Inc. (formerly, "Safeco Financial Institution Solutions, Inc.")
("Assurant Inc.") recently provided the Issuing Entity with a revised report on
assessment of compliance with servicing criteria for asset-backed securities
and a related attestation. In the original assessment previously provided to
the Issuing Entity, Assurant Inc. excluded Item 1122(d)(4)(xii) from the scope
of its assessment. Assurant Inc. recently provided the Issuing Entity with a
revised assessment of compliance that assesses Assurant Inc.'s compliance with
Item 1122(d)(4)(xii) and identifies material instance of non compliance with
this criterion. This material instance of non compliance is noted in this Form
10-K/A under "Additional Disclosure Items Pursuant to General Instruction J."
The Issuing Entity has included this revised assessment of compliance under
Exhibit 33(a), the related attestation under Exhibit 34(a) and a revised Rule
13a-14(d)/15d-14(d) Certification under Exhibit 31. This Form 10-K/A does not
otherwise amend the original Form 10-K filed with the Commission on
April 2, 2007.
(Mark one)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2006
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number: 333-123741-20
ACE Securities Corp. Home Equity Loan Trust, Series 2006-SL2
(exact name of issuing entity as specified in its charter)
ACE Securities Corp.
(exact name of the depositor (as registrant on behalf of the issuing
entity) as specified in its charter)
DB Structured Products, Inc.
(exact name of the sponsor as specified in its charter)
Delaware 06-1442101
(State or other jurisdiction of Depositor
incorporation or organization) (I.R.S. Employer
Identification No.)
ACE Securities Corp.
6525 Morrison Boulevard Suite 318
Charlotte, NC 28211
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (704) 365-0569
Securities registered pursuant to Section 12(b) of the Act:
NONE.
Securities registered pursuant to Section 12(g) of the Act:
NONE.
Indicate by check mark if the registrant is a well-known seasoned issuer,
as defined in Rule 405 of the Securities Act.
Yes ___ No X
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act.
Yes ___ No X
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No ___
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K ( 229.405 of this chapter) is not contained
herein, and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by reference
in Part III of this Form 10-K or any amendment to this Form 10-K.
Not applicable.
Indicate by check mark whether the registrant is a large accelerated filer,
an accelerated filer, or a non-accelerated filer. See definition of
"accelerated filer and large accelerated filer" in Rule 12b-2 of the
Exchange Act. (Check one):
Large accelerated filer ___ Accelerated filer ___ Non-accelerated filer X
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Act).
Yes ___ No X
State the aggregate market value of the voting and non-voting common
equity held by non-affiliates computed by reference to the price at which
the common equity was last sold, or the average bid and asked price of
such common equity, as of the last business day of the registrant's most
recently completed second fiscal quarter.
Not applicable.
Documents Incorporated by Reference
List hereunder the following documents if incorporated by reference and
the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which the
document is incorporated: (1)Any annual report to security holders; (2)
Any proxy or information statement; and (3)Any prospectus filed pursuant
to Rule 424(b) or (c) under the Securities Act of 1933. The listed
documents should be clearly described for identification purposes (e.g.,
annual report to security holders for fiscal year ended December 24, 1980).
Not applicable.
PART I
Item 1. Business.
Omitted.
Item 1A. Risk Factors.
Omitted.
Item 1B. Unresolved Staff Comments.
None.
Item 2. Properties.
Omitted.
Item 3. Legal Proceedings.
Omitted.
Item 4. Submission of Matters to a Vote of Security Holders.
Omitted.
PART II
Item 5. Market for Registrant's Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities.
Omitted.
Item 6. Selected Financial Data.
Omitted.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Omitted.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Omitted.
Item 8. Financial Statements and Supplementary Data.
Omitted.
Item 9. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure.
Omitted.
Item 9A. Controls and Procedures.
Omitted.
Item 9A(T). Controls and Procedures.
Omitted.
Item 9B. Other Information.
None.
PART III
Item 10. Directors, Executive Officers and Corporate Governance.
Omitted.
Item 11. Executive Compensation.
Omitted.
Item 12. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters.
Omitted.
Item 13. Certain Relationships and Related Transactions, and Director
Independence.
Omitted.
Item 14. Principal Accounting Fees and Services.
Omitted.
ADDITIONAL DISCLOSURE ITEMS PURSUANT TO GENERAL INSTRUCTIONS J
Item 1112(b) of Regulation AB, Significant Obligor Financial Information.
None.
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, uses any derivative instruments or other support
for the certificates within this transaction as described under
Item 1114(a) of Regulation AB.
Item 1115(b) of Regulation AB, Certain Derivative Instruments.
The significance percentage related to each entity or group of
affiliated entities providing derivative instruments described in
Item 1115 of Regulation AB is less than 10%.
Item 1117 of Regulation AB, Legal Proceedings.
Fremont Investment & Loan
On March 7, 2006, Fremont Investment & Loan, its parent, Fremont
General Corporation and the company's wholly owned subsidiary,
Fremont General Credit Corporation consented to the terms of a
cease and desist order issued by the Federal Deposit Insurance
Corporation without admitting to the allegations contained therein.
The cease and desist order requires, among other things, Fremont to
cease and desist from the following:
(1) Operating with management whose policies and practices are
detrimental to Fremont; (2) operating Fremont without effective
risk management policies and procedures in place in relation to
Fremont's brokered subprime mortgage lending and commercial real
estate construction lending businesses; (3) operating with
inadequate underwriting criteria and excessive risk in relation to
the kind and quality of assets held by Fremont; (4) operating
without an accurate, rigorous and properly documented methodology
concerning its allowance for loan and lease losses; (5) operating
with a large volume of poor quality loans; (6) engaging in
unsatisfactory lending practices; (7) operating without an adequate
strategic plan in relation to the volatility of Fremont's business
lines and the kind and quality of assets held by Fremont; (8)
operating with inadequate capital in relation to the kind and
quality of assets held by Fremont; (9) operating in such a manner
as to produce low and unsustainable earnings; (10) operating with
inadequate provisions for liquidity in relation to the volatility
of Fremont's business lines and the kind and quality of assets held
by Fremont; (11) marketing and extending adjustable-rate mortgage
products to subprime borrowers in an unsafe and unsound manner that
greatly increases the risk that borrowers will default on the loans
or otherwise cause losses to Fremont, including (a) adjustable-rate
mortgage products that qualify borrowers for loans with low initial
payments based on an introductory rate that will expire after an
initial period, without adequate analysis of the borrower's ability
to repay at the fully indexed rate, (b) adjustable-rate mortgage
products containing features likely to require frequent refinancing
to maintain affordable monthly payment or to avoid foreclosure, and
(c)loans or loan arrangements with loan-to-value ratios approaching
or exceeding 100 percent of the value of the collateral; (12)making
mortgage loans without adequately considering the borrower's
ability to repay the mortgage according to its terms; (13)operating
in violation of Section 23B of the Federal Reserve Act, in that
Fremont engaged in transactions with its affiliates on terms and
under circumstances that in good faith would not be offered to, or
would not apply to, nonaffiliated companies; and (14) operating
inconsistently with the Federal Deposit Insurance Corporation's
Interagency Advisory on Mortgage Banking and Interagency Expanded
Guidance for Subprime Lending Programs. The cease and desist order
also requires Fremont to take a number of steps, including (1)
having and retaining qualified management; (2) limiting Fremont
General's and Fremont General Credit Corporation's representation
on Fremont's board of directors and requiring that independent
directors comprise a majority of Fremont's board of directors; (3)
revising and implementing written lending policies to provide
effective guidance and control over Fremont's residential lending
function; (4)revising and implementing policies governing
communications with consumers to ensure that borrowers are provided
with sufficient information; (5) implementing control systems to
monitor whether Fremont's actual practices are consistent with its
policies and procedures; (6) implementing a third-party mortgage
broker monitoring program and plan; (7) developing a five-year
strategic plan, including policies and procedures for diversifying
Fremont's loan portfolio; (8) implementing a policy covering
Fremont's capital analysis on subprime residential loans; (9)
performing quarterly valuations and cash flow analyses on Fremont's
residual interests and mortgage servicing rights from its
residential lending operation, and obtaining annual independent
valuations of such interests and rights; (10) limiting extensions
of credit to certain commercial real estate borrowers; (11)
implementing a written lending and collection policy to provide
effective guidance and control over Fremont's commercial real
estate lending function, including a planned material reduction in
the volume of funded and unfunded nonrecourse lending and loans for
condominium conversion and construction as a percentage of Tier I
capital; (12) submitting a capital plan that will include a Tier I
capital ratio of not less than 14% of Fremont's total assets; (13)
implementing a written profit plan; (14) limiting the payment of
cash dividends by Fremont without the prior written consent of the
Federal Deposit Insurance Corporation and the Commissioner of the
California Department of Financial Institutions; (15) implementing
a written liquidity and funds management policy to provide
effective guidance and control over Fremont's liquidity position
and needs; (16) prohibiting the receipt, renewal or rollover of
brokered deposit accounts without obtaining a Brokered Deposit
Waiver approved by the Federal Deposit Insurance Corporation; (17)
reducing adversely classified assets; and (18) implementing a
comprehensive plan for the methodology for determining the adequacy
of the allowance for loan and lease losses.
Item 1119 of Regulation AB, Affiliations and Certain Relationships and
Related Transactions.
No applicable updates.
Item 1122 of Regulation AB, Compliance with Applicable Servicing Criteria.
See Item 15.
Assurant, Inc. previously excluded the applicable servicing
criteria set forth in Item 1122 (d)(4)(xii) from the scope of its
assessment of compliance. Assurant, Inc. has now assessed its
compliance with the Applicable Servicing Criteria for the Reporting
Period of January 1, 2006 through December 31, 2006 and has
identified a material instance of noncompliance with that servicing
criterion. Specifically, Assurant, Inc. did not have, during the
Reporting Period, sufficient policies and procedures to capture the
information with respect to the Platform Transactions necessary to
determine compliance with Item 1122(d)(4)(xii). Accordingly,
Assurant, Inc. has restated its previous assessment for the
Reporting Period, which excluded evaluation of the criterion,
to include the criterion and reflect the material noncompliance as
a result of its assessment.
The 1122 statements for First American Real Estate Solutions of
Texas, L.P. (as Sub-Contractor for Ocwen Loan Servicing, LLC) has
disclosed the following material instance of noncompliance with the
servicing criteria set forth in Item 1122(d)(2)(vii)(B) of
Regulation AB applicable to the Company during year ended December
31, 2006. Account reconciliations for all asset-backed securities
related bank accounts were not prepared within 30 calendar days
after the bank statement cutoff date, or such other number of days
specified in the transaction agreements as required by Item
1122(d)(2)(vii)(B) of Regulation AB.
The 1122 statements for Wells Fargo Bank, National Association
(Corporate Trust Services) has disclosed material noncompliance with
criterion 1122(d)(3)(i), as applicable to the Company during the
twelve months ended December 31, 2006. Certain monthly investor or
remittance reports included errors in the calculation and/or the
reporting of delinquencies for the pool assets.
Item 1123 of Regulation AB, Servicer Compliance Statement.
See Item 15.
PART IV
Item 15. Exhibits, Financial Statement Schedules.
(a) Exhibits
(4) Pooling and Servicing Agreement, dated as of March 1, 2006, among ACE
Securities Corp., as Depositor, Ocwen Loan Servicing, LLC as Servicer,
Wells Fargo Bank, National Association, as Master Servicer and
Securities Administrator and HSBC Bank USA, National Association, as
Trustee (incorporated herein by reference from Exhibit 4.1 of the
Current Report on Form 8-K of the registrant, as filed with the
Commission).
(31) Rule 13a-14(d)/15d-14(d) Certifications.
(33) Reports on assessment of compliance with servicing criteria for
asset-backed securities.
<s> <c>
a) Assurant Inc. as Sub-Contractor for Ocwen Loan Servicing, LLC <F1>
b) Deutsche Bank National Trust Company, as Custodian <F1>
c) First American Real Estate Solutions of Texas, L.P. as Sub-Contractor for Ocwen Loan Servicing, LLC <F1>
d) Ocwen Loan Servicing, LLC, as Servicer <F1>
e) Regulus Group LLC as Sub-Contractor for Ocwen Loan Servicing, LLC <F1>
f) Wells Fargo Bank, N.A., as Master Servicer <F1>
g) Wells Fargo Bank, N.A., as Securities Administrator <F1>
h) Wells Fargo Bank, N.A., as Paying Agent <F1>
i) Wells Fargo Bank, N.A., as Custodian <F1>
(34) Attestation reports on assessment of compliance with servicing
criteria for asset-backed securities.
<s> <c>
a) Assurant Inc. as Sub-Contractor for Ocwen Loan Servicing, LLC <F1>
b) Deutsche Bank National Trust Company, as Custodian <F1>
c) First American Real Estate Solutions of Texas, L.P. as Sub-Contractor for Ocwen Loan Servicing, LLC <F1>
d) Ocwen Loan Servicing, LLC, as Servicer <F1>
e) Regulus Group LLC as Sub-Contractor for Ocwen Loan Servicing, LLC <F1>
f) Wells Fargo Bank, N.A., as Master Servicer <F1>
g) Wells Fargo Bank, N.A., as Securities Administrator <F1>
h) Wells Fargo Bank, N.A., as Paying Agent <F1>
i) Wells Fargo Bank, N.A., as Custodian <F1>
(35) Servicer compliance statement.
<s> <c>
a) Ocwen Loan Servicing, LLC, as Servicer <F1>
b) Wells Fargo Bank, N.A., as Master Servicer <F1>
c) Wells Fargo Bank, N.A., as Securities Administrator <F1>
(b) See Exhibits identified in Paragraph (a) above.
(c) Not applicable.
<F1> Filed herewith.
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.
ACE Securities Corp. Home Equity Loan Trust, Series 2006-SL2
(Issuing Entity)
Wells Fargo Bank, N.A.
(Master Servicer)
/s/ Kristen Ann Cronin
Kristen Ann Cronin, Vice President
(senior officer in charge of the servicing function of the master servicer)
Date: May 28, 2008
Exhibit Index
Exhibit No.
(31) Rule 13a-14(d)/15d-14(d) Certifications.
(33) Reports on assessment of compliance with servicing criteria for
asset-backed securities.
<s> <c>
a) Assurant Inc. as Sub-Contractor for Ocwen Loan Servicing, LLC
b) Deutsche Bank National Trust Company, as Custodian
c) First American Real Estate Solutions of Texas, L.P. as Sub-Contractor for Ocwen Loan Servicing, LLC
d) Ocwen Loan Servicing, LLC, as Servicer
e) Regulus Group LLC as Sub-Contractor for Ocwen Loan Servicing, LLC
f) Wells Fargo Bank, N.A., as Master Servicer
g) Wells Fargo Bank, N.A., as Securities Administrator
h) Wells Fargo Bank, N.A., as Paying Agent
i) Wells Fargo Bank, N.A., as Custodian
(34) Attestation reports on assessment of compliance with servicing
criteria for asset-backed securities.
<s> <c>
a) Assurant Inc. as Sub-Contractor for Ocwen Loan Servicing, LLC
b) Deutsche Bank National Trust Company, as Custodian
c) First American Real Estate Solutions of Texas, L.P. as Sub-Contractor for Ocwen Loan Servicing, LLC
d) Ocwen Loan Servicing, LLC, as Servicer
e) Regulus Group LLC as Sub-Contractor for Ocwen Loan Servicing, LLC
f) Wells Fargo Bank, N.A., as Master Servicer
g) Wells Fargo Bank, N.A., as Securities Administrator
h) Wells Fargo Bank, N.A., as Paying Agent
i) Wells Fargo Bank, N.A., as Custodian
(35) Servicer compliance statement.
<s> <c>
a) Ocwen Loan Servicing, LLC, as Servicer
b) Wells Fargo Bank, N.A., as Master Servicer
c) Wells Fargo Bank, N.A., as Securities Administrator