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____________________________________________________________________________________

EMC MORTGAGE CORPORATION
Owner

GMAC MORTGAGE CORPORATION
Servicer

SERVICING AGREEMENT

Dated as of May 1, 2001

____________________________________________________________________________________ 

[TPW: NYLEGAL:504985.1] 17297-00440 05/11/2006 05:34 PM

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THIS IS A SERVICING AGREEMENT, dated as of May 1, 2001, and is executed between
EMC Mortgage Corporation (the "Owner") and GMAC Mortgage Corporation (the
"Servicer").

W I T N E S S E T H :

WHEREAS, the Owner is the owner of the Mortgage Loans;

WHEREAS, the Owner and the Servicer wish to prescribe the permanent management,
servicing and control of the Mortgage Loans;

NOW, THEREFORE, in consideration of the mutual agreements hereinafter set forth,
and for other good and valuable consideration, the receipt and adequacy of which
is hereby acknowledged, the Owner and the Servicer agree as follows:

ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms
Whenever used in this Agreement, the following words and phrases, unless the
context otherwise requires, shall have the following meaning specified in this
Article:

Accepted Servicing Practices: With respect to any Mortgage Loan, those mortgage
servicing practices (including collection procedures) that are in accordance
with the Fannie Mae Guide.

Adjustment Date: As to each ARM Loan, the date on which the Mortgage Interest
Rate is adjusted in accordance with the terms of the related Mortgage Note.

Agreement: This Servicing Agreement including all exhibits hereto, amendments
hereof and supplements hereto.

ARM Loans: First lien, conventional, 1-4 family residential Mortgage Loans with
interest rates which adjust from time to time in accordance with the related
Index and are subject to Periodic Rate Caps and Lifetime Rate Caps and which do
not permit conversion to fixed interest rates.

BIF: The Bank Insurance Fund, or any successor thereto.

Business Day: Any day other than (i) a Saturday or Sunday, or (ii) a legal
holiday in the States of New York, Iowa or the Commonwealth of Pennsylvania, or
(iii) a day on which banks in the States of New York, Iowa or Pennsylvania are
authorized or obligated by law or executive order to be closed.

Code: The Internal Revenue Code of 1986, as it may be amended from time to time,
or any successor statute thereto, and applicable U.S. Department of the Treasury
regulations issued pursuant thereto.

Condemnation Proceeds: All awards or settlements in respect of a Mortgaged
Property, whether permanent or temporary, partial or entire, by exercise of the
power of eminent domain or condemnation, to the extent not required to be
released to a Mortgagor in accordance with the terms of the related Mortgage
Loan Documents.

Custodial Account: The separate demand account or accounts created and
maintained pursuant to Section 4.04 which shall be entitled "GMAC Mortgage
Corporation Custodial Account in trust for [Owner], Owner of Whole Loan
Mortgages and various Mortgagors" and shall be established at a Qualified
Depository, each of which accounts shall in no event contain funds in excess of
the FDIC insurance limits.

Custodian: Wells Fargo Bank Minnesota, N.A., or such other custodian as Owner
shall designate. 

Cut-off Date: As identified on the related Confirmation.

Determination Date: The 15th day (or if such 15th day is not a Business Day, the
Business Day immediately preceding such 15th day) of the month of the Remittance
Date.

Due Date: Each day on which payments of principal and interest are required to
be paid in accordance with the terms of the related Mortgage Note, exclusive of
any days of grace.

Due Period: With respect to any Remittance Date, the period commencing on the
second day of the month preceding the month of such Remittance Date and ending
on the first day of the month of the Remittance Date.

Effective Date: As identified on the related Confirmation.

Escrow Account: The separate trust account or accounts created and maintained
pursuant to Section 4.06 which shall be entitled "GMAC Mortgage Corporation
Escrow Account, in trust for [Owner], Owner of Whole Loan Mortgages and various
Mortgagors" and shall be established at a Qualified Depository, each of which
accounts shall in no event contain funds in excess of the FDIC insurance limits.

Escrow Payments: With respect to any Mortgage Loan, the amounts constituting
ground rents, taxes, assessments, water rates, sewer rents, municipal charges,
mortgage insurance premiums, fire and hazard insurance premiums, condominium
charges, and any other payments required to be escrowed by the Mortgagor with
the mortgagee pursuant to the Mortgage or any other document.

Event of Default: Any one of the conditions or circumstances enumerated in
Section 9.01.

Fannie Mae: Fannie Mae, or any successor thereto.

Fannie Mae Guide: The Fannie Mae Selling Guide and the Fannie Mae Servicing
Guide and all amendments or additions thereto.

FDIC: The Federal Deposit Insurance Corporation, or any successor thereto.

Fidelity Bond: A fidelity bond to be maintained by the Servicer pursuant to
Section 4.12.

FIRREA: The Financial Institutions Reform, Recovery, and Enforcement Act of
1989, as amended from time to time.

Freddie Mac: Freddie Mac, or any successor thereto.

Freddie Mac Guide: The Freddie Mac Selling Guide and the Freddie Mac Servicing
Guide and all amendments or additions thereto.

Full Principal Prepayment: A Principal Prepayment made by a Mortgagor of the
entire principal balance of a Mortgage Loan.

 
GAAP: Generally accepted accounting procedures, consistently applied.

HUD: The United States Department of Housing and Urban Development or any
successor.

Index: With respect to each ARM Loan, on the related Adjustment Date, the index
used to determine the Mortgage Interest Rate on each such ARM Loan.

Insurance Proceeds: With respect to each Mortgage Loan, proceeds of insurance
policies insuring the Mortgage Loan or the related Mortgaged Property.

Lifetime Rate Cap: With respect to each ARM Loan, the maximum Mortgage Interest
Rate over the term of such Mortgage Loan, as specified in the related Mortgage
Note.

Liquidation Proceeds: Cash received in connection with the liquidation of a
defaulted Mortgage Loan, whether through the sale or assignment of such Mortgage
Loan, trustee's sale, foreclosure sale or otherwise, other than amounts received
following the acquisition of an REO Property pursuant to Section 4.13.

Margin: With respect to each ARM Loan, the fixed percentage amount set forth in
each related Mortgage Note which is added to the Index in order to determine the
related Mortgage Interest Rate.

Monthly Advance: The aggregate of the advances made by the Servicer on any
Remittance Date pursuant to Section 5.03.

Monthly Payment: With respect to each Mortgage Loan, the scheduled monthly
payment of principal and interest thereon which is payable by the related
Mortgagor under the related Mortgage Note.

Mortgage: The mortgage, deed of trust or other instrument securing a Mortgage
Note which creates a first lien on an unsubordinated estate in fee simple in
real property securing the Mortgage Note.

Mortgage Interest Rate: The annual rate at which interest accrues on any
Mortgage Loan in accordance with the provisions of the related Mortgage Note,
and in the case of an ARM Loan, as adjusted from time to time on each Adjustment
Date for such Mortgage Loan to equal the Index for such Mortgage Loan plus the
Margin for such Mortgage Loan, and subject to the limitations on such interest
rate imposed by the Periodic Rate Cap and the Lifetime Rate Cap.

Mortgage Loan: An individual Mortgage Loan described herein, and as further
identified on the Mortgage Loan Schedule, which Mortgage Loan includes without
limitation the Mortgage Loan Documents, the Monthly Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
REO Disposition Proceeds, and all other rights, benefits, proceeds and
obligations arising from or in connection with such Mortgage Loan.

Mortgage Loan Documents: The original mortgage loan legal documents held by the
Custodian.

Mortgage Loan Remittance Rate: With respect to each Mortgage Loan, the annual
rate of interest remitted to the Owner, which shall be equal to the related
Mortgage Interest Rate minus the Servicing Fee Rate.

Mortgage Loan Schedule: The schedule of Mortgage Loans attached hereto as
Exhibit A, such schedule being acceptable to the Owner and the Servicer.

Mortgage Note: The note or other evidence of the indebtedness of a Mortgagor
secured by a Mortgage.

Mortgaged Property: The underlying real property securing repayment of a
Mortgage Note, consisting of a single parcel of real estate considered to be
real estate under the laws of the State in which such real property is located,
which may include condominium units and planned unit developments, improved by a
residential dwelling.

Mortgagor: The obligor on a Mortgage Note. The Mortgagor is a natural person who
is a party to the Mortgage Note and Mortgage in an individual capacity.

Nonrecoverable Advance: Any advance previously made by the Servicer pursuant to
Section 5.03 or any expenses incurred pursuant to Section 4.08 which, in the
good faith judgment of the Servicer, may not be ultimately recoverable by the
Servicer from Liquidation Proceeds. The determination by the Servicer that is
has made a Nonrecoverable Advance, shall be evidenced by an Officer’s
Certificate of the Servicer delivered to the Owner and detailing the reasons for
such determination.

OCC: Office of the Comptroller of the Currency, its successors and assigns.

Officers' Certificate: A certificate signed by the Chairman of the Board, the
Vice Chairman of the Board, the President, a Senior Vice President or a Vice
President or by the Treasurer or the Secretary or one of the Assistant
Treasurers or Assistant Secretaries of the Servicer, and delivered to the Owner
as required by this Agreement.

Opinion of Counsel: A written opinion of counsel, who may be an employee of the
party on behalf of whom the opinion is being given, reasonably acceptable to the
Owner.

  OTS: Office of Thrift Supervision, its successors and assigns.

Owner: EMC Mortgage Corporation, its successors in interest and assigns.

Partial Principal Prepayment: A Principal Prepayment by a Mortgagor of a partial
principal balance of a Mortgage Loan.

Pass-Through Transfer: The sale or transfer of same or all of the Mortgage Loans
to a trust as part of a publicly issued or privately placed, rated or unrated
Mortgage pass-through transaction.

Periodic Rate Cap: With respect to each ARM Loan, the maximum increase or
decrease in the Mortgage Interest Rate on any Adjustment Date.

Permitted Investments: Any one or more of the following obligations or
securities:

(i) direct obligations of, and obligations fully guaranteed by the United States
of America or any agency or instrumentality of the United States of America the
obligations of which are backed by the full faith and credit of the United
States of America; pro-vided that obligations of Freddie Mac or Fannie Mae shall
be Per-mitted Invest-ments only if, at the time of investment, they are rated in
one of the two highest rating categories by Standard & Poor's Rating Services, a
division of The McGraw-Hill Companies Inc., Moody's Investors Service, Inc. and
Fitch IBCA Inc.;

(ii) (a) demand or time deposits, federal funds or bankers' acceptances issued
by any depository institu-tion or trust company incorporated under the laws of
the United States of America or any state thereof and subject to supervision and
examination by federal and/or state banking authorities, provided that the
commercial paper and/or the short-term deposit rating and/or the long-term
unsecured debt obligations or deposits of such depository institution or trust
company at the time of such investment or contractual commitment providing for
such investment are rated in one of the two highest rating categories by
Standard & Poor's Rating Services, a division of The McGraw-Hill Companies Inc.,
Moody's Investors Service, Inc. and Fitch IBCA Inc. and (b) any other demand or
time deposit or certificate of deposit that is fully insured by the Federal
Deposit Insurance Cor-poration;

(iii) repurchase obligations with respect to (a) any security described in
clause (i) above or (b) any other security issued or guaranteed by an agency or
instrumen-tality of the United States of America, the obligations of which are
backed by the full faith and credit of the United States of America, in either
case entered into with a depository institution or trust company (acting as
principal) described in clause (ii)(a) above;

(iv) securities bearing interest or sold at a discount issued by any corporation
incorporated under the laws of the United States of America or any state thereof
that are rated in one of the two highest rating categories by Standard & Poor's
Rating Services, a division of The McGraw-Hill Companies Inc., Moody's Investors
Service, Inc. and Fitch IBCA Inc. at the time of such in-vestment or contractual
commitment providing for such investment; provided, however, that securities
issued by any particular corporation will not be Permitted Investments to the
extent that investments therein will cause the then outstanding principal amount
of secur-ities issued by such corporation and held as Permitted Investments to
exceed 10% of the aggregate outstand-ing principal balances and amounts of all
the Permitted Investments;

(v) commercial paper (including both non-interest-bearing discount obligations
and interest-bearing obliga-tions payable on demand or on a specified date not
more than one year after the date of issuance there-of) which are rated in one
of the two highest rating categories by Standard & Poor's Rating Services, a
division of The McGraw-Hill Companies Inc., Moody's Investors Service, Inc. and
Fitch IBCA Inc. at the time of such investment;

(vi) any other demand, money market or time deposit, obligation, security or
investment as may be acceptable to each of Standard & Poor's Rating Services, a
division of The McGraw-Hill Companies, Inc., Moody's Investors Service, Inc. and
Fitch IBCA Inc.;

(vii)  any money market funds the collateral of which consists of obligations
fully guaranteed by the United States of America or any agency or
instru-ment-al-ity of the United States of America the obligations of which are
backed by the full faith and credit of the United States of America (which may
include repurchase obligations secured by collateral described in clause (i))
and other securities and which money market funds are rated in one of the two
highest rating categories by Standard & Poor's Rating Services, a division of
The McGraw-Hill Companies Inc., Moody's Investors Service, Inc. and Fitch IBCA
Inc.; and

(viii) GMAC Variable Denomination Adjustable Rate Demand Notes constituting
unsecured, senior debt obligations of General Motors Acceptance Corporation as
outlined in the prospectus dated June 17, 1998 and rated by Moody’s in its
highest short-term rating category available and rated at least D-1 by Fitch;

provided, however, that no instrument or security shall be a Permitted
Investment if such instrument or security evidences a right to receive only
interest payments with respect to the ob-li-ga-tions underlying such instrument
or if such security provides for payment of both principal and interest with a
yield to matur-ity in excess of 120% of the yield to maturity at par.

Person: Any individual, corporation, partnership, joint venture, association,
joint-stock company, limited liability company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
 
Prepayment Interest Shortfall: The sum of the differences between interest
actually received in a Due Period as a result of a full or partial prepayment or
other unscheduled receipt of principal (including as a result of a liquidation)
on each Mortgage Loan as to which such a payment is received and the interest
portion of the Monthly Payment of such Mortgage Loan scheduled to be due at the
applicable Mortgage Loan Remittance Rate; provided, however, Prepayment Interest
Shortfalls shall not include Full Principal Prepayments received on or before
the 15th day of the month in which a Remittance Date occurs which are remitted
by the Servicer to the Owner on such Remittance Date.

Primary Mortgage Insurance Policy: Each primary policy of mortgage insurance, or
any replacement policy therefor obtained by the Servicer pursuant to Section
4.08.

Prime Rate: The prime rate of U.S. money center banks as published from time to
time in
The Wall Street Journal.

Principal Prepayment: Any payment or other recovery of principal on a Mortgage
Loan, full or partial, which is received in advance of its scheduled Due Date,
including any prepayment penalty or premium thereon and which is not accompanied
by an amount of interest representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment.

Qualified Appraiser: An appraiser, duly appointed by the Servicer, who had no
interest, direct or indirect in the Mortgaged Property or in any loan made on
the security thereof, and whose compensation is not affected by the approval or
disapproval of the Mortgage Loan, which appraiser and the appraisal made by such
appraiser both satisfy the requirements of Title XI of FIRREA and the
regulations promulgated thereunder, all as in effect on the date the Mortgage
Loan was originated.

Qualified Depository: (a) The Custodian or (b) a depository, the accounts of
which are insured by the FDIC through the BIF or the SAIF and the short term
debt ratings and the long term deposit ratings of which are rated in one of the
two highest rating categories by Standard & Poor's Ratings Services, a division
of The McGraw-Hill Companies Inc., Moody's Investors Service, Inc., Fitch IBCA
Duff & Phelps.

Qualified Insurer: An insurance company duly qualified as such under the laws of
the states in which the Mortgaged Properties are located, duly authorized and
licensed in such states to transact the applicable insurance business and to
write the insurance provided, approved as an insurer by Fannie Mae and Freddie
Mac.

REMIC: A “real estate mortgage investment conduit” within the meaning of Section
860D of the Code.

REMIC Provisions: The provisions of the Federal income tax law relating to a
REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter 1,
Subtitle A of the Code, and related provisions, and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.

Remittance Date: The 18th day of any month, or if such 18th day is not a
Business Day, the first Business Day immediately preceding such 18th day.

REO Disposition: The final sale by the Servicer of any REO Property.

REO Disposition Proceeds: Amounts received by the Servicer in connection with a
related REO Disposition.

REO Property: A Mortgaged Property acquired by the Servicer on behalf of the
Owner as described in Section 4.13.

 
SAIF: The Savings Association Insurance Fund, or any successor thereto.

Servicer: GMAC Mortgage Corporation, or any of its successors in interest or any
successor under this Agreement appointed as herein provided.

Servicing Advances: All customary, reasonable and necessary "out of pocket"
costs and expenses (including reasonable attorneys' fees and disbursements)
incurred prior to, on and subsequent to the Effective Date in the performance by
the Servicer of its servicing obligations relating to each Mortgage Loan,
including, but not limited to, the cost of (a) the preservation, restoration and
protection of the Mortgaged Property, (b) any enforcement, administrative or
judicial proceedings, or any legal work or advice specifically related to
servicing the Mortgage Loans, including but not limited to, foreclosures,
bankruptcies, condemnations, drug seizures, elections, foreclosures by
subordinate or superior lienholders, and other legal actions incidental to the
servicing of the Mortgage Loans (provided that such expenses are reasonable and
that the Servicer specifies the Mortgage Loan(s) to which such expenses relate),
(c) the management and liquidation of the Mortgaged Property if the Mortgaged
Property is acquired in full or partial satisfaction of the Mortgage, (d) taxes,
assessments, water rates, sewer rates and other charges which are or may become
a lien upon the Mortgaged Property, and Primary Mortgage Insurance Policy
premiums and fire and hazard insurance coverage and (e) compliance with the
obligations under Section 4.08.

Servicing Fee: With respect to each Mortgage Loan, the amount of the annual fee
the Owner shall pay to the Servicer, which shall, for a period of one full
month, be equal to one--twelfth of the product of (a) the applicable Servicing
Fee Rate and (b) the outstanding principal balance of such Mortgage Loan. Such
fee shall be payable monthly, computed on the basis of the same principal amount
and period respecting which any related interest payment on a Mortgage Loan is
computed. The obligation of the Owner to pay the Servicing Fee is limited to,
and the Servicing Fee is payable solely from, the interest portion (not
including recoveries of interest from Liquidation Proceeds or otherwise) of such
Monthly Payment collected by the Servicer, or as otherwise provided under
Section 4.05.

Servicing Fee Rate: The Servicing Fee Rate shall be a rate per annum equal to
0.25%.

Servicing File: The documents, records and other items pertaining to a
particular Mortgage Loan, and any additional documents relating to such Mortgage
Loan as are in, or as may from time to time come into, the Servicer's
possession.

Servicing Officer: Any officer of the Servicer involved in, or responsible for,
the administration and servicing of the Mortgage Loans whose name appears on a
list of servicing officers furnished by the Servicer to the Owner upon request,
as such list may from time to time be amended.

Stated Principal Balance: As to each Mortgage Loan as of any date of
determination, (i) the principal balance of such Mortgage Loan after giving
effect to payments of principal due, whether or not received, minus (ii) all
amounts previously distributed to the Owner with respect to the Mortgage Loan
representing payments or recoveries of principal or advances in lieu thereof.

Whole Loan Transfer: The sale or transfer of some or all of the ownership
interest in the Mortgage Loans by the Owner to one or more third parties in
whole loan or participation format, which third party may be Fannie Mae or
Freddie Mac.

ARTICLE II
SERVICING OF MORTGAGE LOANS;
POSSESSION OF SERVICING FILES;
BOOKS AND RECORDS;
DELIVERY OF MORTGAGE LOAN DOCUMENTS

 
Section 2.01 Servicing of Mortgage Loans.

From and after the Effective Date, the Servicer does hereby agree to service the
Mortgage Loans, but subject to the terms of this Agreement. The rights of the
Owner to receive payments with respect to the Mortgage Loans shall be as set
forth in this Agreement.

Section 2.02 Maintenance of Servicing Files.

The Servicer shall maintain a Servicing File consisting of all documents
necessary to service the Mortgage Loans. The possession of each Servicing File
by the Servicer is for the sole purpose of servicing the Mortgage Loan, and such
retention and possession by the Servicer is in a custodial capacity only. The
Servicer acknowledges that the ownership of each Mortgage Loan, including the
Note, the Mortgage, all other Mortgage Loan Documents and all rights, benefits,
proceeds and obligations arising therefrom or in connection therewith, has been
vested in the Owner. All rights arising out of the Mortgage Loans including, but
not limited to, all funds received on or in connection with the Mortgage Loans
and all records or documents with respect to the Mortgage Loans prepared by or
which come into the possession of the Servicer shall be received and held by the
Servicer in trust for the exclusive benefit of the Owner as the owner of the
related Mortgage Loans. Any portion of the related Servicing Files retained by
the Servicer shall be appropriately identified in the Servicer's computer system
to clearly reflect the ownership of the related Mortgage Loans by the Owner. The
Servicer shall release its custody of the contents of the related Servicing
Files only in accordance with written instructions of the Owner, except when
such release is required as incidental to the Servicer's servicing of the
Mortgage Loans, such written instructions shall not be required.

Section 2.03 Books and Records.

The Servicer shall be responsible for maintaining, and shall maintain, a
complete set of books and records for the Mortgage Loans which shall be
appropriately identified in the Servicer's computer system to clearly reflect
the ownership of the Mortgage Loan by the Owner. In particular, the Servicer
shall maintain in its possession, available for inspection by the Owner, or its
designee and shall deliver to the Owner upon demand, evidence of compliance with
all federal, state and local laws, rules and regulations, and requirements of
Fannie Mae or Freddie Mac, as applicable, including but not limited to
documentation as to the method used in determining the applicability of the
provisions of the Flood Disaster Protection Act of 1973, as amended, to the
Mortgaged Property, documentation evidencing insurance coverage and eligibility
of any condominium project for approval by Fannie Mae and periodic inspection
reports as required by Section 4.13. To the extent that original documents are
not required for purposes of realization of Liquidation Proceeds or Insurance
Proceeds, documents maintained by the Servicer may be in the form of microfilm
or microfiche or such other reliable means of recreating original documents,
including but not limited to, optical imagery techniques so long as the Servicer
complies with the requirements of the Fannie Mae Guide.

The Servicer shall maintain with respect to each Mortgage Loan and shall make
available for inspection by any Owner or its designee the related Servicing File
(or copies thereof) upon reasonable request during the time the Owner retains
ownership of a Mortgage Loan and thereafter in accordance with applicable laws
and regulations.

 
Section 2.04. Transfer of Mortgage Loans.

The Servicer shall keep at its servicing office books and records in which,
subject to such reasonable regulations as it may prescribe from time to time,
the Servicer shall note transfers of Mortgage Loans. No transfer of a Mortgage
Loan may be made unless such transfer is in compliance with the terms hereof.
For the purposes of this Agreement, the Servicer shall be under no obligation to
deal with any person with respect to this Agreement or any Mortgage Loan unless
a notice of the transfer of such Mortgage Loan has been delivered to the
Servicer in accordance with this Section 2.04. The Owner may, subject to the
terms of this Agreement, sell and transfer one or more of the Mortgage Loans in
accordance with Sections 10.02 and 11.12, provided, however, that the transferee
will not be deemed to be an Owner hereunder binding upon the Servicer unless
such transferee shall agree in writing to be bound by the terms of this
Agreement and an assignment and assumption of this Agreement reasonably
acceptable to the Servicer. The Owner also shall advise the Servicer in writing
of the transfer. Upon receipt of notice of the permitted transfer, the Servicer
shall mark its books and records to reflect the ownership of the Mortgage Loans
of such assignee, and shall release the previous Owner from its obligations
hereunder with respect to the Mortgage Loans sold or transferred.

Section 2.05 Delivery of Mortgage Loan Documents.

The Servicer shall forward to the Custodian on behalf of the Owner original
documents evidencing an assumption, modification, consolidation or extension of
any Mortgage Loan entered into in accordance with Section 4.01 or 6.01 promptly
after their execution; provided, however, that the Servicer shall provide the
Custodian on behalf of the Owner with a certified true copy of any such document
submitted for recordation promptly after its execution, and shall provide the
original of any document submitted for recordation or a copy of such document
certified by the appropriate public recording office to be a true and complete
copy of the original within 180 days of its execution. If delivery is not
completed within 180 days solely due to delays in making such delivery by reason
of the fact that such documents shall not have been returned by the appropriate
recording office, the Servicer shall continue to use its best efforts to effect
delivery as soon as possible thereafter.

From time to time the Servicer may have a need for Mortgage Loan Documents to be
released by the Custodian. If the Servicer shall require any of the Mortgage
Loan Documents, the Servicer shall notify the Custodian in writing of such
request in the form of the request for release attached hereto as Exhibit D. The
Custodian shall deliver to the Servicer promptly, and in no event later than
within five (5) Business Days, any requested Mortgage Loan Document previously
delivered to the Custodian, provided that such documentation is promptly
returned to the Custodian when the Servicer no longer requires possession of the
document, and provided that during the time that any such documentation is held
by the Servicer, such possession is in trust for the benefit of the Owner.

 
Section 2.06 Quality Control Procedures.

The Servicer must have an internal quality control program that verifies, on a
regular basis, the existence and accuracy of the legal documents, credit
documents, property appraisals, and underwriting decisions. The program must be
capable of evaluating and monitoring the overall quality of its servicing
activities. The purpose of the program is to ensure that the Mortgage Loans are
serviced in accordance with prudent mortgage banking practices and accounting
principles; guard against dishonest, fraudulent, or negligent acts; and guard
against errors and omissions by officers, employees, or other authorized
persons.

ARTICLE III

REPRESENTATIONS AND WARRANTIES
OF THE SERVICER

The Servicer represents, warrants and covenants to the Owner that as of the
Effective Date or as of such date specifically provided herein:

(a) The Servicer is a validly existing corporation in good standing under the
laws of the State of its organization and is qualified to transact business in,
is in good standing under the laws of, and possesses all licenses necessary for
the conduct of its business in, each state in which any Mortgaged Property is
located or is otherwise exempt or not required under applicable law to effect
such qualification or license and no demand for such qualification or license
has been made upon the Servicer by any such state, and in any event the Servicer
is in compliance with the laws of each such State to the extent necessary to
ensure the enforceability of each Mortgage Loan and the servicing of the
Mortgage Loans in accordance with the terms of this Agreement;

(b) The Servicer has full power and authority to execute, deliver and perform,
and to enter into and consummate all transactions contemplated by this Agreement
and to conduct its business as presently conducted, has duly authorized the
execution, delivery and performance of this Agreement, has duly executed and
delivered this Agreement, and this Agreement constitutes a legal, valid and
binding obligation of the Servicer, enforceable against it in accordance with
its terms subject to bankruptcy laws and other similar laws of general
application affecting rights of creditors and subject to the application of the
rules of equity, including those respecting the availability of specific
performance;

(c) None of the execution and delivery of this Agreement, the consummation of
the transactions contemplated thereby and hereby, or the fulfillment of or
compliance with the terms and conditions of this Agreement will conflict with
any of the terms, conditions or provisions of the Servicer's articles of
incorporation or by-laws or materially conflict with or result in a material
breach of any of the terms, conditions or provisions of any legal restriction or
any agreement or instrument to which the Servicer is now a party or by which it
is bound, or constitute a default or result in an acceleration under any of the
foregoing, or result in the material violation of any law, rule, regulation,
order, judgment or decree to which the Servicer or its property is subject;

(d) There is no litigation pending or, to the Seller’s knowledge, threatened
with respect to the Servicer which is reasonably likely to have a material
adverse effect on the execution, delivery or enforceability of this Agreement,
or which is reasonably likely to have a material adverse effect on the financial
condition of the Servicer;

(e) No consent, approval, authorization or order of any court or governmental
agency or body is required for the execution, delivery and performance by the
Servicer of or compliance by the Servicer with this Agreement or the
consummation of the transactions contemplated by this Agreement except for
consents, approvals, authorizations and orders which have been obtained;

(f) The collection and servicing practices used by the Servicer, with respect to
each Mortgage Note and Mortgage have been in all material respects legal. With
respect to escrow deposits and payments that the Servicer collects, all such
payments are in the possession of, or under the control of, the Servicer, and
there exist no deficiencies in connection therewith for which customary
arrangements for repayment thereof have not been made. No escrow deposits or
other charges or payments due under the Mortgage Note have been capitalized
under any Mortgage or the related Mortgage Note;

  (g) The Servicer is in good standing to service mortgage loans for Fannie Mae
and Freddie Mac and no event has occurred which would make the Servicer unable
to comply with eligibility requirements or which would require notification to
either Fannie Mae or Freddie Mac;

(h) No written statement, report or other document furnished or to be furnished
pursuant to the Agreement contains or will contain any statement that is or will
be inaccurate or misleading in any material respect or omits to state a material
fact required to be stated therein or necessary to make the information and
statements therein not misleading;

(i) No fraud or misrepresentation of a material fact with respect to the
servicing of a Mortgage Loan has taken place on the part of the Servicer;

(j) At the time Servicer commenced servicing the Mortgage Loans, either (i) each
Mortgagor was properly notified with respect to Servicer's servicing of the
related Mortgage Loan in accordance with the Cranston Gonzalez National
Affordable Housing Act of 1990, as the same may be amended from time to time,
and the regulations provided in accordance with the Real Estate Settlement
Procedures Act or (ii) such notification was not required;

(k) At the time Servicer commenced servicing the Mortgage Loans, all applicable
taxing authorities and insurance companies (including primary mortgage insurance
policy insurers, if applicable) and/or agents were notified of the transfer of
the servicing of the Mortgage Loans to Servicer, or its designee, and Servicer
currently receives all related notices, tax bills and insurance statements.
Additionally, any and all costs, fees and expenses associated with the
Servicer’s commencement of the servicing of the Mortgage Loans, including the
costs of any insurer notifications, the transfer or implementation of tax
service contracts, flood certification contracts, and any and all other
servicing transfer-related costs and expenses have been paid for by the Servicer
and will, in no event, be the responsibility of the Owner; and

(l) The collection and servicing practices with respect to each Mortgage Note
and Mortgage have been in all material respects legal. With respect to escrow
deposits and payments that the Servicer collects, all such payments are in the
possession of, or under the control of, the Servicer, and there exist no
deficiencies in connection therewith for which customary arrangements for
repayment thereof have not been made. No escrow deposits or other charges or
payments due under the Mortgage Note have been capitalized under any Mortgage or
the related Mortgage Note.

 

ARTICLE IV
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS

 
Section 4.01 Servicer to Act as Servicer.

The Servicer, as independent contract servicer, shall service and administer the
Mortgage Loans in accordance with this Agreement and with Accepted Servicing
Practices (giving due consideration to the Owner's reliance on the Servicer),
and shall have full power and authority, acting alone, to do or cause to be done
any and all things in connection with such servicing and administration which
the Servicer may deem necessary or desirable and consistent with the terms of
this Agreement and with Accepted Servicing Practices and shall exercise the same
care that it customarily employs for its own account. Except as set forth in
this Agreement, the Servicer shall service the Mortgage Loans in accordance with
Accepted Servicing Practices in compliance with the servicing provisions of the
Fannie Mae Guide, which include, but are not limited to, provisions regarding
the liquidation of Mortgage Loans, the collection of Mortgage Loan payments, the
payment of taxes, insurance and other charges, the maintenance of hazard
insurance with a Qualified Insurer, the maintenance of fidelity bond and errors
and omissions insurance, inspections, the restoration of Mortgaged Property, the
maintenance of Primary Mortgage Insurance Policies, insurance claims, and title
insurance, management of REO Property, permitted withdrawals with respect to REO
Property, liquidation reports, and reports of foreclosures and abandonments of
Mortgaged Property, the transfer of Mortgaged Property, the release of Mortgage
Loan Documents, annual statements, and examination of records and facilities. In
the event of any conflict, inconsistency or discrepancy between any of the
servicing provisions of this Agreement and any of the servicing provisions of
the Fannie Mae Guide, the provisions of this Agreement shall control and be
binding upon the Owner and the Servicer. The Owner shall, upon reasonable
request, deliver powers-of-attorney to the Servicer sufficient to allow the
Servicer as servicer to execute all documentation requiring execution on behalf
of Owner with respect to the servicing of the Mortgage Loans, including
satisfactions, partial releases, modifications and foreclosure documentation or,
in the alternative, shall as promptly as reasonably possible, execute and return
such documentation to the Servicer.

Consistent with the terms of this Agreement, the Servicer may waive, modify or
vary any term of any Mortgage Loan or consent to the postponement of any such
term or in any manner grant indulgence to any Mortgagor if in the Servicer's
reasonable and prudent determination such waiver, modification, postponement or
indulgence is not materially adverse to the Owner, provided, however, that
unless the Servicer has obtained the prior written consent of the Owner, the
Servicer shall not permit any modification with respect to any Mortgage Loan
that would change the Mortgage Interest Rate, forgive the payment of principal
or interest, reduce or increase the outstanding principal balance (except for
actual payments of principal) or change the final maturity date on such Mortgage
Loan. In the event of any such modification which has been agreed to in writing
by the Owner and which permits the deferral of interest or principal payments on
any Mortgage Loan, the Servicer shall, on the Business Day immediately preceding
the related Remittance Date in any month in which any such principal or interest
payment has been deferred, deposit in the Custodial Account from its own funds,
in accordance with Section 4.04 and Section 5.03, the difference between (a)
such month's principal and one month's interest at the related Mortgage Loan
Remittance Rate on the unpaid principal balance of such Mortgage Loan and (b)
the amount paid by the Mortgagor. The Servicer shall be entitled to
reimbursement for such advances to the same extent as for all other advances
pursuant to Section 4.05. Without limiting the generality of the foregoing, the
Servicer shall continue, and is hereby authorized and empowered, to prepare,
execute and deliver, all instruments of satisfaction or cancellation, or of
partial or full release, discharge and all other comparable instruments, with
respect to the Mortgage Loans and with respect to the Mortgaged Properties.

The Servicer shall perform all of its servicing responsibilities hereunder or
may, with the Owner's prior written approval, cause a subservicer to perform any
such servicing responsibilities on its behalf, but the use by the Servicer of a
subservicer shall not release the Servicer from any of its obligations hereunder
and the Servicer shall remain responsible hereunder for all acts and omissions
of each subservicer as fully as if such acts and omissions were those of the
Servicer. Any such subservicer that the Owner shall be requested to consent to
must be a Fannie Mae approved seller/servicer or a Freddie Mac seller/servicer
in good standing and no event shall have occurred, including but not limited to,
a change in insurance coverage, which would make it unable to comply with the
eligibility requirements for lenders imposed by Fannie Mae or for
seller/servicers by Freddie Mac, or which would require notification to Fannie
Mae or Freddie Mac. The Servicer shall pay all fees and expenses of each
subservicer from its own funds, and a subservicer's fee shall not exceed the
Servicing Fee.

At the cost and expense of the Servicer, without any right of reimbursement from
the Custodial Account, the Servicer shall be entitled to terminate the rights
and responsibilities of a subservicer and arrange, with the Owner's prior
written approval, for any servicing responsibilities to be performed by a
successor subservicer meeting the requirements in the preceding paragraph,
provided, however, that nothing contained herein shall be deemed to prevent or
prohibit the Servicer, at the Servicer's option, from electing to service the
related Mortgage Loans itself. In the event that the Servicer's responsibilities
and duties under this Agreement are terminated pursuant to Section 8.04, 9.01 or
10.01, and if requested to do so by the Owner, the Servicer shall at its own
cost and expense terminate the rights and responsibilities of each subservicer
effective as of the date of termination of the Servicer. The Servicer shall pay
all fees, expenses or penalties necessary in order to terminate the rights and
responsibilities of each subservicer from the Servicer's own funds without
reimbursement from the Owner.

Notwithstanding any of the provisions of this Agreement relating to agreements
or arrangements between the Servicer and a subservicer or any reference herein
to actions taken through a subservicer or otherwise, the Servicer shall not be
relieved of its obligations to the Owner and shall be obligated to the same
extent and under the same terms and conditions as if it alone were servicing and
administering the Mortgage Loans. The Servicer shall be entitled to enter into
an agreement with a subservicer for indemnification of the Servicer by the
subservicer and nothing contained in this Agreement shall be deemed to limit or
modify such indemnification.

Any subservicing agreement and any other transactions or services relating to
the Mortgage Loans involving a subservicer shall be deemed to be between such
subservicer and Servicer alone, and the Owner shall have no obligations, duties
or liabilities with respect to such Subservicer including no obligation, duty or
liability of Owner to pay such subservicer's fees and expenses. For purposes of
distributions and advances by the Servicer pursuant to this Agreement, the
Servicer shall be deemed to have received a payment on a Mortgage Loan when a
subservicer has received such payment.

Section 4.02 Collection of Mortgage Loan Payments.

Continuously from the Effective Date until the date each Mortgage Loan ceases to
be subject to this Agreement, the Servicer will proceed with reasonable
diligence to collect all payments due under each Mortgage Loan when the same
shall become due and payable and shall, to the extent such procedures shall be
consistent with this Agreement and the terms and provisions of related Primary
Mortgage Insurance Policy, follow such collection procedures as it follows with
respect to mortgage loans comparable to the Mortgage Loans and held for its own
account. Further, the Servicer will take reasonable care in ascertaining and
estimating annual ground rents, taxes, assessments, water rates, fire and hazard
insurance premiums, mortgage insurance premiums, and all other charges that, as
provided in the Mortgage, will become due and payable to the end that the
installments payable by the Mortgagors will be sufficient to pay such charges as
and when they become due and payable.

Section 4.03 Realization Upon Defaulted Mortgage Loans.

The Servicer shall use its reasonable efforts, consistent with the procedures
that the Servicer would use in servicing loans for its own account and the
requirements of the Fannie Mae Guide, to foreclose upon or otherwise comparably
convert the ownership of properties securing such of the Mortgage Loans as come
into and continue in default and as to which no satisfactory arrangements can be
made for collection of delinquent payments pursuant to Section 4.01. The
Servicer shall use its reasonable efforts to realize upon defaulted Mortgage
Loans in such manner as will maximize the receipt of principal and interest by
the Owner, taking into account, among other things, the timing of foreclosure
proceedings. The foregoing is subject to the provisions that, in any case in
which Mortgaged Property shall have suffered damage, the Servicer shall not be
required to expend its own funds toward the restoration of such property unless
it shall determine in its discretion (i) that such restoration will increase the
proceeds of liquidation of the related Mortgage Loan to the Owner after
reimbursement to itself for such expenses, and (ii) that such expenses will be
recoverable by the Servicer through Insurance Proceeds or Liquidation Proceeds
from the related Mortgaged Property, as contemplated in Section 4.05. The
Servicer shall notify the Owner in writing of the commencement of foreclosure
proceedings. The Servicer shall be responsible for all costs and expenses
incurred by it in any such proceedings or functions as Servicing Advances;
provided, however, that it shall be entitled to reimbursement therefor from the
related Mortgaged Property, as contemplated in Section 4.05. Notwithstanding
anything to the contrary contained herein, in connection with a foreclosure or
acceptance of a deed in lieu of foreclosure, in the event the Servicer has
reasonable cause to believe that a Mortgaged Property is contaminated by
hazardous or toxic substances or wastes, or if the Owner otherwise requests an
environmental inspection or review of such Mortgaged Property, such an
inspection or review is to be conducted by a qualified inspector. Upon
completion of the inspection, the Servicer shall promptly provide the Owner with
a written report of the environmental inspection. After reviewing the
environmental inspection report, the Owner shall determine how the Servicer
shall proceed with respect to the Mortgaged Property.

Section 4.04 Establishment of Custodial Accounts; Deposits in Custodial
Accounts.

The Servicer shall segregate and hold all funds collected and received pursuant
to each Mortgage Loan separate and apart from any of its own funds and general
assets and shall establish and maintain one or more Custodial Accounts. Each
Custodial Account shall be established with a Qualified Depository. To the
extent such funds are not deposited in a Custodial Account, such funds may be
invested in Permitted Investments for the benefit of the Owner (with any income
earned thereon for the benefit of the Servicer). Funds deposited in the
Custodial Account may be drawn on by the Servicer in accordance with Section
4.05. The creation of any Custodial Account shall be evidenced by a letter
agreement in the form shown in Exhibit B hereto. The original of such letter
agreement shall be furnished to the Owner upon request. The Servicer
acknowledges and agrees that the Servicer shall bear any losses incurred with
respect to Permitted Investments. The amount of any such losses shall be
immediately deposited by the Servicer in the Custodial Account, as appropriate,
out of the Servicer's own funds, with no right to reimbursement therefor.

The Servicer shall deposit in a mortgage clearing account on a daily basis, and
in the Custodial Account or Accounts no later than the second Business Day after
receipt of funds and retain therein the following payments and collections:

(i) all payments on account of principal, including Principal Prepayments, on
the Mortgage Loans received after the Cut-off Date;

(ii) all payments on account of interest on the Mortgage Loans adjusted to the
related Mortgage Loan Remittance Rate received after the Cut-off Date;

(iii) all Liquidation Proceeds and REO Disposition Proceeds received after the
Cut-off Date;

(iv) any net amounts received by the Servicer after the Cut-off Date in
connection with any REO Property pursuant to Section 4.13;

(v) all Insurance Proceeds received after the Cut-off Date including amounts
required to be deposited pursuant to Sections 4.08 and 4.10, other than proceeds
to be held in the Escrow Account and applied to the restoration or repair of the
Mortgaged Property or released to the Mortgagor in accordance with the
Servicer's normal servicing procedures, the loan documents or applicable law;

(vi) all Condemnation Proceeds affecting any Mortgaged Property received after
the Cut-off Date other than proceeds to be held in the Escrow Account and
applied to the restoration or repair of the Mortgaged Property or released to
the Mortgagor in accordance with the Servicer's normal servicing procedures, the
loan documents or applicable law;

(vii) any Monthly Advances as provided in Section 5.03;

(viii) any amounts received after the Cut-off Date and required to be deposited
in the Custodial Account pursuant to 6.02; and

(ix) with respect to each full or partial Principal Prepayment received after
the Cut-off date, any Prepayment Interest Shortfalls, to the extent of the
Servicer’s aggregate Servicing Fee received with respect to the related Due
Period.

The foregoing requirements for deposit in the Custodial Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of late payment charges and assumption
fees, to the extent permitted by Section 6.01, need not be deposited by the
Servicer in the Custodial Account. Any interest paid on funds deposited in the
Custodial Account by the Qualified Depository shall accrue to the benefit of the
Servicer and the Servicer shall be entitled to retain and withdraw such interest
from the Custodial Account pursuant to Section 4.05(iv).

Section 4.05 Permitted Withdrawals From the Custodial Account.

The Servicer may, from time to time, make withdrawals from the Custodial Account
for the following purposes:

(i) to make payments to the Owner in the amounts and in the manner provided for
in Section 5.01;

(ii) to reimburse itself for Monthly Advances, the Servicer's right to reimburse
itself pursuant to this subclause (ii) being limited to amounts received on the
related Mortgage Loan which represent late collections (net of the related
Servicing Fees) of principal and/or interest respecting which any such advance
was made;

(iii) to reimburse itself for unreimbursed Servicing Advances and unreimbursed
Monthly Advances, the Servicer's right to reimburse itself pursuant to this
subclause (iii) with respect to any Mortgage Loan being limited to Liquidation
Proceeds, Condemnation Proceeds and Insurance Proceeds received after the
Cut-off Date related to such Mortgage Loan;

(iv) to pay to itself as servicing compensation (a) any interest earned on funds
in the Custodial Account (all such interest to be withdrawn monthly not later
than each Remittance Date) and (b) any payable Servicing Fee;

(v) to reimburse itself for any Nonrecoverable Advances:

(vi) to transfer funds to another Qualified Depository in accordance with
Section 4.09 hereof;

(vii) to remove funds inadvertently placed in the Custodial Account in error by
the Servicer; and

(viii) to clear and terminate the Custodial Account upon the termination of this
Agreement.

Section 4.06 Establishment of Escrow Accounts; Deposits in Escrow Accounts.

The Servicer shall segregate and hold all funds collected and received pursuant
to each Mortgage Loan which constitute Escrow Payments separate and apart from
any of its own funds and general assets and shall establish and maintain one or
more Escrow Accounts. Each Escrow Account shall be established with a Qualified
Depository. To the extent such funds are not deposited in an Escrow Account,
such funds may be invested in Permitted Investments. Funds deposited in an
Escrow Account may be drawn on by the Servicer in accordance with Section 4.07.
The creation of any Escrow Account shall be evidenced by a letter agreement in
the form shown in Exhibit C. The original of such letter agreement shall be
furnished to the Owner upon request. The Servicer acknowledges and agrees that
the Servicer shall bear any losses incurred with respect to Permitted
Investments. The amount of any such losses shall be immediately deposited by the
Servicer in the Escrow Account, as appropriate, out of the Servicer's own funds,
with no right to reimbursement therefor.

The Servicer shall deposit in a mortgage clearing account on a daily basis, and
in the Escrow Account or Accounts no later than the second Business Day after
receipt of funds and retain therein:

(i) all Escrow Payments collected on account of the Mortgage Loans, for the
purpose of effecting timely payment of any items as are required under the terms
of this Agreement;

(ii) all Insurance Proceeds which are to be applied to the restoration or repair
of any Mortgaged Property; and

(iii) all Servicing Advances for Mortgagors whose Escrow Payments are
insufficient to cover escrow disbursements.

The Servicer shall make withdrawals from an Escrow Account only to effect such
payments as are required under this Agreement, and for such other purposes as
shall be as set forth in and in accordance with Section 4.07. The Servicer shall
be entitled to retain any interest paid on funds deposited in an Escrow Account
by the Qualified Depository other than interest on escrowed funds required by
law to be paid to the Mortgagor and, to the extent required by law, the Servicer
shall pay interest on escrowed funds to the Mortgagor notwithstanding that the
Escrow Account is non-interest bearing or that interest paid thereon is
insufficient for such purposes.

Section 4.07 Permitted Withdrawals From Escrow Account.

Withdrawals from the Escrow Account may be made by the Servicer only:

(i) to effect timely payments of ground rents, taxes, assessments, water rates,
fire and hazard insurance premiums, Primary Mortgage Insurance Policy premiums,
if applicable, and comparable items;

(ii) to reimburse Servicer for any Servicing Advance made by Servicer with
respect to a related Mortgage Loan but only from amounts received on the related
Mortgage Loan which represent late payments or collections of Escrow Payments
thereunder;

(iii) to refund to the Mortgagor any funds as may be determined to be overages;

(iv) for transfer to the Custodial Account in connection with an acquisition of
REO Property;

(v) for application to restoration or repair of the Mortgaged Property;

(vi) to pay to the Servicer, or to the Mortgagor to the extent required by law,
any interest paid on the funds deposited in the Escrow Account;

(vii) to pay to the Mortgagors or other parties Insurance Proceeds deposited in
accordance with Section 4.06;

(viii) to remove funds inadvertently placed in an Escrow Account in error by the
Servicer; and

(ix) to clear and terminate the Escrow Account on the termination of this
Agreement.

As part of its servicing duties, the Servicer shall pay to the Mortgagors
interest on funds in an Escrow Account, to the extent required by law, and to
the extent that interest earned on funds in the Escrow Account is insufficient,
shall pay such interest from its own funds, without any reimbursement therefor.

Section 4.08 Payment of Taxes, Insurance and Other Charges; Maintenance of
Primary Mortgage Insurance Policies; Collections Thereunder.

With respect to each Mortgage Loan, the Servicer shall maintain accurate records
reflecting the status of ground rents, taxes, assessments, water rates and other
charges which are or may become a lien upon the Mortgaged Property and the
status of Primary Mortgage Insurance Policy premiums and fire and hazard
insurance coverage and shall obtain, from time to time, all bills for the
payment of such charges, including renewal premiums and shall effect payment
thereof prior to the applicable penalty or termination date and at a time
appropriate for securing maximum discounts allowable, employing for such purpose
deposits of the Mortgagor in the Escrow Account which shall have been estimated
and accumulated by the Servicer in amounts sufficient for such purposes, as
allowed under the terms of the Mortgage or applicable law. To the extent that
the Mortgage does not provide for Escrow Payments, the Servicer shall determine
that any such payments are made by the Mortgagor at the time they first become
due. The Servicer assumes full responsibility for the timely payment of all such
bills and shall effect timely payments of all such bills irrespective of the
Mortgagor's faithful performance in the payment of same or the making of the
Escrow Payments and shall make advances from its own funds to effect such
payments.

The Servicer will maintain in full force and effect Primary Mortgage Insurance
Policies issued by a Qualified Insurer with respect to each Mortgage Loan for
which such coverage is herein required. Such coverage will be maintained until
the ratio of the current outstanding principal balance of the related Mortgage
Loan to the appraised value of the related Mortgaged Property, based on the most
recent appraisal of the Mortgaged Property performed by a Qualified Appraiser,
such appraisal to be included in the Servicing File, is reduced to 80.00% or
less. The Servicer will not cancel or refuse to renew any Primary Mortgage
Insurance Policy that is required to be kept in force under this Agreement
unless a replacement Primary Mortgage Insurance Policy for such canceled or
nonrenewed policy is obtained from and maintained with a Qualified Insurer. The
Servicer shall not take any action which would result in non-coverage under any
applicable Primary Mortgage Insurance Policy of any loss which, but for the
actions of the Servicer would have been covered thereunder. In connection with
any assumption or substitution agreement entered into or to be entered into
pursuant to Section 6.01, the Servicer shall promptly notify the insurer under
the related Primary Mortgage Insurance Policy, if any, of such assumption or
substitution of liability in accordance with the terms of such policy and shall
take all actions which may be required by such insurer as a condition to the
continuation of coverage under the Primary Mortgage Insurance Policy. If such
Primary Mortgage Insurance Policy is terminated as a result of such assumption
or substitution of liability, the Servicer shall obtain a replacement Primary
Mortgage Insurance Policy as provided above.

In connection with its activities as servicer, the Servicer agrees to prepare
and present, on behalf of itself and the Owner, claims to the insurer under any
Private Mortgage Insurance Policy in a timely fashion in accordance with the
terms of such Primary Mortgage Insurance Policy and, in this regard, to take
such action as shall be necessary to permit recovery under any Primary Mortgage
Insurance Policy respecting a defaulted Mortgage Loan. Pursuant to Section 4.04,
any amounts collected by the Servicer under any Primary Mortgage Insurance
Policy shall be deposited in the Custodial Account, subject to withdrawal
pursuant to Section 4.05.

Section 4.09 Transfer of Accounts.
 
The Servicer may transfer the Custodial Account or the Escrow Account to a
different Qualified Depository from time to time. The Servicer shall notify the
Owner of any such transfer within 15 Business Days of transfer.

Section 4.10 Maintenance of Hazard Insurance.

The Servicer shall cause to be maintained for each Mortgage Loan fire and hazard
insurance with extended coverage as is customary in the area where the Mortgaged
Property is located in an amount which is equal to the lesser of (i) the maximum
insurable value of the improvements securing such Mortgage Loan or (ii) the
greater of (a) the outstanding principal balance of the Mortgage Loan, and (b)
the percentage such that the proceeds thereof shall be sufficient to prevent the
Mortgagor and/or the Mortgagee from becoming a co-insurer. If the Mortgaged
Property is in an area identified in the Federal Register by the Federal
Emergency Management Agency as being a special flood hazard area that has
federally-mandated flood insurance requirements, the Servicer will cause to be
maintained a flood insurance policy meeting the requirements of the current
guidelines of the Federal Insurance Administration with a generally acceptable
insurance carrier, in an amount representing coverage not less than the least of
(i) the outstanding principal balance of the Mortgage Loan, (ii) the maximum
insurable value of the improvements securing such Mortgage Loan or (iii) the
maximum amount of insurance which is available under the Flood Disaster
Protection Act of 1973, as amended. The Servicer shall also maintain on the REO
Property, fire and hazard insurance with extended coverage in an amount which is
at least equal to the maximum insurable value of the improvements which are a
part of such property, liability insurance and, to the extent required and
available under the Flood Disaster Protection Act of 1973, as amended, flood
insurance in an amount as provided above. Any amounts collected by the Servicer
under any such policies other than amounts to be deposited in the Escrow Account
and applied to the restoration or repair of the Mortgaged Property or REO
Property, or released to the Mortgagor in accordance with the Servicer's normal
servicing procedures, shall be deposited in the Custodial Account, subject to
withdrawal pursuant to Section 4.05. It is understood and agreed that no other
additional insurance need be required by the Servicer or the Mortgagor or
maintained on property acquired in respect of the Mortgage Loans, other than
pursuant to the Fannie Mae Guide or such applicable state or federal laws and
regulations as shall at any time be in force and as shall require such
additional insurance. All such policies shall be endorsed with standard
mortgagee clauses with loss payable to the Servicer and its successors and/or
assigns and shall provide for at least thirty days prior written notice of any
cancellation, reduction in the amount or material change in coverage to the
Servicer. The Servicer shall not interfere with the Mortgagor's freedom of
choice in selecting either his insurance carrier or agent, provided, however,
that the Servicer shall not accept any such insurance policies from insurance
companies unless such companies currently reflect a General Policy Rating in
Best's Key Rating Guide currently acceptable to Fannie Mae and are licensed to
do business in the state wherein the property subject to the policy is located.

Section 4.11 Adjustments to Mortgage Interest Rate and Monthly Payment.

On each applicable Adjustment Date, the Mortgage Interest Rate shall be
adjusted, in compliance with the requirements of the related Mortgage and
Mortgage Note, to equal the sum of the Index plus the Margin (rounded in
accordance with the related Mortgage Note) subject to the applicable Periodic
Rate Cap and Lifetime Rate Cap, as set forth in the Mortgage Note. The Servicer
shall execute and deliver the notices required by each Mortgage and Mortgage
Note and applicable laws and regulations regarding interest rate adjustments.

Section 4.12 Fidelity Bond, Errors and Omissions Insurance.

The Servicer shall maintain, at its own expense, a blanket fidelity bond and an
errors and omissions insurance policy, with broad coverage with responsible
companies on all officers, employees or other persons acting in any capacity
with regard to the Mortgage Loans and who handle funds, money, documents and
papers relating to the Mortgage Loans. The Fidelity Bond and errors and
omissions insurance shall be in the form of the Mortgage Banker's Blanket Bond
and shall protect and insure the Servicer against losses, including forgery,
theft, embezzlement, fraud, errors and omissions and negligent acts of such
persons. Such Fidelity Bond and errors and omissions insurance shall also
protect and insure the Servicer against losses in connection with the failure to
maintain any insurance policies required pursuant to this Agreement and the
release or satisfaction of a Mortgage Loan without having obtained payment in
full of the indebtedness secured thereby. No provision of this Section 4.12
requiring the Fidelity Bond and errors and omissions insurance shall diminish or
relieve the Servicer from its duties and obligations as set forth in this
Agreement. The minimum coverage under any such Fidelity Bond and insurance
policy shall be at least equal to the corresponding amounts required by Fannie
Mae in the Fannie Mae Guide or by Freddie Mac in the Freddie Mac Guide. The
Servicer shall, upon request of Owner, deliver to the Owner a certificate from
the surety and the insurer as to the existence of the Fidelity Bond and errors
and omissions insurance policy and shall obtain a statement from the surety and
the insurer that such Fidelity Bond or insurance policy shall in no event be
terminated or materially modified without thirty days prior written notice to
the Owner. The Servicer shall notify the Owner within five Business Days of
receipt of notice that such Fidelity Bond or insurance policy will be, or has
been, materially modified or terminated. The Owner and its successors or assigns
as their interests may appear must be named as loss payees on the Fidelity Bond
and as additional insured on the errors and omissions policy.
 
Section 4.13 Title, Management and Disposition of REO Property.

In the event that title to any Mortgaged Property is acquired in foreclosure or
by deed in lieu of foreclosure, the deed or certificate of sale shall be taken
in the name of the Owner or its designee. Any such Person or Persons holding
such title other than the Owner shall acknowledge in writing that such title is
being held as nominee for the benefit of the Owner.

The Servicer shall notify the Owner in accordance with prudent servicing
practices of each acquisition of REO Property upon such acquisition, and
thereafter assume the responsibility for marketing such REO Property in
accordance with Accepted Servicing Practices. Thereafter, the Servicer shall
continue to provide certain administrative services to the Owner relating to
such REO Property as set forth in this Section 4.13. The REO Property must be
sold within three years following the end of the calendar year of the date of
acquisition, unless a REMIC election has been made with respect to the
arrangement under which the Mortgage Loans and REO Property are held and (i) the
Owner shall have been supplied with an Opinion of Counsel to the effect that the
holding by the related trust of such Mortgaged Property subsequent to such
three-year period (and specifying the period beyond such three-year period for
which the Mortgaged Property may be held) will not result in the imposition of
taxes on “prohibited transactions” of the related trust as defined in Section
860F of the Code, or cause the related REMIC to fail to qualify as a REMIC, in
which case the related trust may continue to hold such Mortgaged Property
(subject to any conditions contained in such Opinion of Counsel), or (ii) the
Owner (at the Servicer’s expense) or the Servicer shall have applied for, prior
to the expiration of such three-year period, an extension of such three-year
period in the manner contemplated by Section 856(e)(3) of the Code, in which
case the three-year period shall be extended by the applicable period. If a
period longer than three years is permitted under the foregoing sentence and is
necessary to sell any REO Property, (i) the Servicer shall report monthly to the
Owner as to progress being made in selling such REO Property and (ii) if, with
the written consent of the Owner, a purchase money mortgage is taken in
connection with such sale, such purchase money mortgage shall name the Servicer
as mortgagee, and such purchase money mortgage shall not be held pursuant to
this Agreement, but instead a separate participation agreement between the
Servicer and Owner shall be entered into with respect to such purchase money
mortgage.

The Servicer shall not permit the creation of any “interests” (within the
meaning of Section 860G of the Code) in any REMIC. The Servicer shall not enter
into any arrangement by which a REMIC will receive a fee or other compensation
for services nor permit a REMIC to receive any income from assets other than
“qualified mortgages” as defined in Section 860G(a)(3) of the Code or “permitted
investments” as defined in Section 860G(a)(5) of the Code.

Notwithstanding any other provision of this Agreement, if a REMIC election has
been made, no Mortgaged Property held by a REMIC shall be rented (or allowed to
continue to be rented) or otherwise used for the production of income by or on
behalf of the related trust or sold in such a manner or pursuant to any terms
that would (i) cause such Mortgaged Property to fail to qualify at any time as
“foreclosure property” within a meaning of Section 860G(a)(8) of the Code, (ii)
subject the related trust to the imposition of any federal or state income taxes
on “net income from foreclosure property” with respect to such Mortgaged
Property within the meaning of Section 860G(c) of the Code, or (iii) cause the
sale of such Mortgaged Property to result in the receipt by the related trust or
any income from non-permitted assets as described in Section 860F(a) (2)(B) of
the Code, unless the Servicer has agreed to indemnify and hold harmless the
related trust with respect to the imposition of any such taxes.

The Servicer shall, either itself or through an agent selected by the Servicer,
and in accordance with the Fannie Mae Guide, manage, conserve, protect and
operate each REO Property in the same manner that it manages, conserves,
protects and operates other foreclosed property for its own account, and in the
same manner that similar property in the same locality as the REO Property is
managed. Each REO Disposition shall be carried out by the Servicer at such price
and upon such terms and conditions as the Servicer deems to be in the best
interest of the Owner. The REO Disposition Proceeds from the sale of the REO
Property shall be promptly deposited in the Custodial Account. As soon as
practical thereafter, the expenses of such sale shall be paid and the Servicer
shall reimburse itself for any related Servicing Advances, or Monthly Advances
made pursuant to Section 5.03.

The Servicer shall cause each REO Property to be inspected promptly upon the
acquisition of title thereto and shall cause each REO Property to be inspected
at least monthly thereafter or more frequently as may be required by the
circumstances. The Servicer shall make or cause the inspector to make a written
report of each such inspection. Such reports shall be retained in the Servicing
File and copies thereof shall be forwarded by the Servicer to the Owner.

Notwithstanding anything to the contrary set forth in this Section 4.13, the
parties hereto hereby agree that the Owner, at its option, shall be entitled to
manage, conserve, protect and operate each REO Property for its own benefit
(such option, an "REO Option"). In connection with the exercise of an REO
Option, the prior two paragraphs and the related provisions of Section 4.03 and
Section 4.04(iii) (such provisions, the “REO Marketing Provisions”) shall be
revised as follows. Following the acquisition of any Mortgaged Property, the
Servicer shall submit a detailed invoice to the Owner for all related Servicing
Advances and, upon exercising the REO Option, the Owner shall promptly reimburse
the Servicer for such amounts. In the event the REO Option is exercised with
respect to an REO Property, Section 4.04 (iii) shall not be applicable thereto.
References made in Section 4.03 with respect to the reimbursement of Servicing
Advances shall, for purposes of such REO Property, be deemed to be covered by
this paragraph. The Owner acknowledges that, in the event it exercises an REO
Option, with respect to the related REO Property, there shall be no breach by
the Servicer based upon or arising out of the Servicer's failure to comply with
the REO Marketing Provisions.

ARTICLE V

PAYMENTS TO THE OWNER

Section 5.01 Remittances.

On each Remittance Date, the Servicer shall remit to the Owner (i) all amounts
credited to the Custodial Account as of the close of business on the related
preceding Determination Date, except (a) Partial Principal Prepayments received
on or after the first day of the month in which the Remittance Date occurs shall
be remitted to the Owner on the next following Remittance Date, (b) Full
Principal Prepayments received on or before the 15th day of the month in which a
Remittance Date occurs shall be remitted to the Owner on the Remittance Date of
such month, and (c) Full Principal Prepayments received after the 15th day of
the month shall be remitted to the Owner on the next following Remittance Date,
each net of charges against or withdrawals from the Custodial Account pursuant
to Section 4.05, plus, to the extent not already deposited in the Custodial
Account, the sum of (ii) all Monthly Advances, if any, which the Servicer is
obligated to distribute pursuant to Section 5.03 and (iii) all Prepayment
Interest Shortfalls the Servicer is required to make up pursuant to Section
4.04, minus (iv) any amounts attributable to Monthly Payments collected after
the Cut-off Date but due on a Due Date or Dates subsequent to the last day of
the related Due Period, which amounts shall be remitted on the related
Remittance Date next succeeding the Due Period for such amounts.

With respect to any remittance received by the Owner after the Business Day on
which such payment was due, the Servicer shall pay to the Owner interest on any
such late payment at an annual rate equal to the Prime Rate, adjusted as of the
date of each change, plus two percentage points, but in no event greater than
the maximum amount permitted by applicable law. Such interest shall be deposited
in the Custodial Account by the Servicer on the date such late payment is made
and shall cover the period commencing with the day following such Business Day
and ending with the Business Day on which such payment is made, both inclusive.
Such interest shall be remitted along with the distribution payable on the next
succeeding related Remittance Date. The payment by the Servicer of any such
interest shall not be deemed an extension of time for payment or a waiver of any
Event of Default by the Servicer.

Section 5.02 Statements to the Owner.

The Servicer shall furnish to the Owner an individual Mortgage Loan accounting
report (a “Report”), as of the last Business Day of each month, in the
Servicer's assigned loan number order to document Mortgage Loan payment activity
on an individual Mortgage Loan basis. With respect to each month, such Report
shall be received by the Owner (i) no later than the fifth Business Day of the
following month of the related Remittance Date on a disk or tape or other
computer-readable format, in such format as may be mutually agreed upon by both
the Owner and the Servicer, and (ii) no later than the tenth Business Day of the
following month of the related Remittance Date in hard copy, which Report shall
contain the following:

(i)  
with respect to each Monthly Payment, the amount of such remittance allocable to
interest

(ii)  
the amount of servicing compensation received by the Servicer during the prior
distribution period;

(iii)  
the aggregate Stated Principal Balance of the Mortgage Loans;

(iv)  
the number and aggregate outstanding principal balances of Mortgage Loans (a)
delinquent (1) 30 to 59 days, (2) 60 to 89 days, (3) 90 days or more; (b) as to
which foreclosure has commenced; and (c) as to which REO Property has been
acquired; and

(v)  
such other reports as may reasonably be required by the Owner.

The Servicer shall also provide a trial balance, sorted in the Owner's assigned
loan number order, and such other loan level scheduled-scheduled remittance
information as described on Exhibit E, in electronic tape form, with each such
Report.

The Servicer shall prepare and file any and all information statements or other
filings required to be delivered to any governmental taxing authority or to
Owner pursuant to any applicable law with respect to the Mortgage Loans and the
transactions contemplated hereby. In addition, the Servicer shall provide the
Owner with such information concerning the Mortgage Loans as is necessary for
the Owner to prepare its federal income tax return as the Owner may reasonably
request from time to time.

In addition, not more than 60 days after the end of each calendar year, the
Servicer shall furnish to each Person who was an Owner at any time during such
calendar year an annual statement in accordance with the requirements of
applicable federal income tax law as to the aggregate of remittances of
principal and interest for the applicable portion of such year.

Section 5.03 Monthly Advances by the Servicer.

Not later than the close of business on the Business Day preceding each
Remittance Date, the Servicer shall deposit in the Custodial Account an amount
equal to all payments not previously advanced by the Servicer, whether or not
deferred pursuant to Section 4.01, of Monthly Payments, adjusted to the related
Mortgage Loan Remittance Rate, which are delinquent at the close of business on
the related Determination Date; provided, however, that the amount of any such
deposit may be reduced by (i) the Amount Held for Future Distribution (as
defined below) then on deposit in the Custodial Account, plus (ii) with respect
to the initial Remittance Date, the Non-held Early Pay Amount (as defined
below). Any portion of the Amount Held for Future Distribution used to pay
Monthly Advances shall be replaced by the Servicer by deposit into the Custodial
Account on any future Remittance Date to the extent that the funds that are
available in the Custodial Account for remittance to the Owner on such
Remittance Date are less than the amount of payments required to be made to the
Owner on such Remittance Date.

The “Amount Held for Future Distribution” as to any Remittance Date shall be the
total of the amounts held in the Custodial Account at the close of business on
the preceding Determination Date which were received after the Cut-off Date on
account of (i) Liquidation Proceeds, Insurance Proceeds, and Partial Principal
Prepayments received or made in the month of such Remittance Date, (ii) Full
Principal Payments received after the 15th day of the month in the month of such
Remittance Date, and (iii) payments which represent early receipt of scheduled
payments of principal and interest due on a date or dates subsequent to the
related Due Date. The "Non-held Early Pay Amount" shall be the total of the
amounts on account of payments which represent early receipt of scheduled
payments of principal and interest received on or prior to the Cut-off Date.

The Servicer's obligation to make such Monthly Advances as to any Mortgage Loan
will continue through the final disposition or liquidation of the Mortgaged
Property, unless the Servicer deems such advance to be nonrecoverable from
Liquidation Proceeds, REO Disposition Proceeds or Insurance Proceeds with
respect to the applicable Mortgage Loan. In such latter event, the Servicer
shall deliver to the Owner an Officer's Certificate of the Servicer to the
effect that an officer of the Servicer has reviewed the related Servicing File
and has obtained a recent appraisal and has made the reasonable determination
that any additional advances are nonrecoverable from Liquidation or Insurance
Proceeds with respect to the applicable Mortgage Loan.

Section 5.04 Liquidation Reports.

Upon the foreclosure sale of any Mortgaged Property or the acquisition thereof
by the Owner pursuant to a deed-in--lieu of foreclosure, the Servicer shall
submit to the Owner a liquidation report with respect to such Mortgaged Property
in such form as the Servicer and the Owner shall agree. The Servicer shall also
provide reports on the status of REO Property containing such information as
Owner may reasonably require.

ARTICLE VI

GENERAL SERVICING PROCEDURES

Section 6.01 Assumption Agreements.

The Servicer will, to the extent it has knowledge of any conveyance or
prospective conveyance by any Mortgagor of a Mortgaged Property (whether by
absolute conveyance or by contract of, sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under any
"due-on-sale" clause to the extent permitted by law; provided, however, that the
Servicer shall not exercise any such rights if prohibited by law or the terms of
the Mortgage Note from doing so or if the exercise of such rights would impair
or threaten to impair any recovery under the related Primary Mortgage Insurance
Policy, if any. If the Servicer reasonably believes it is unable under
applicable law to enforce such "due-on-sale" clause, the Servicer, with the
approval of the Owner (such approval not to be unreasonably withheld), will
enter into an assumption agreement with the person to whom the Mortgaged
Property has been conveyed or is proposed to be conveyed, pursuant to which such
person becomes liable under the Mortgage Note and, to the extent permitted by
applicable state law, the Mortgagor remains liable thereon. Where an assumption
is allowed pursuant to this Section 6.01, the Servicer, with the prior consent
of the primary mortgage insurer, if any, is authorized to enter into a
substitution of liability agreement with the person to whom the Mortgaged
Property has been conveyed or is proposed to be conveyed pursuant to which the
original mortgagor is released from liability and such Person is substituted as
mortgagor and becomes liable under the related Mortgage Note. Any such
substitution of liability agreement shall be in lieu of an assumption agreement.

In connection with any such assumption or substitution of liability, the
Servicer shall follow the underwriting practices and procedures of the Fannie
Mae Guide. With respect to an assumption or substitution of liability, the
Mortgage Interest Rate borne by the related Mortgage Note and the amount of the
Monthly Payment may not be changed. The Servicer shall notify the Owner that any
such substitution of liability or assumption agreement has been completed by
forwarding to the Owner the original of any such substitution of liability or
assumption agreement, which document shall be added to the related Mortgage Loan
Documents and shall, for all purposes, be considered a part of such related
mortgage file to the same extent as all other documents and instruments
constituting a part thereof. All fees collected by the Servicer for entering
into an assumption or substitution of liability agreement shall belong to the
Servicer.

Notwithstanding the foregoing paragraphs of this section or any other provision
of this Agreement, the Servicer shall not be deemed to be in default, breach or
any other violation of its obligations hereunder by reason of any assumption of
a Mortgage Loan by operation of law or any assumption which the Servicer may be
restricted by law from preventing, for any reason whatsoever. For purposes of
this Section 6.01, the term "assumption" is deemed to also include a sale of the
Mortgaged Property subject to the Mortgage that is not accompanied by an
assumption or substitution of liability agreement.

Section 6.02 Satisfaction of Mortgages and Release of Mortgage Loan Documents.

Upon the payment in full of any Mortgage Loan, the Servicer will immediately
notify the Custodian with a certification and request for release by a Servicing
Officer, which certification shall include a statement to the effect that all
amounts received in connection with such payment which are required to be
deposited in the Custodial Account pursuant to Section 4.04 have been so
deposited, and a request for delivery to the Servicer of the portion of the
Mortgage Loan Documents held by the Custodian, and unless the related Mortgage
Loans are the subject of a Pass-Through Transfer, such request is to be
acknowledged by the Owner. Upon receipt of such certification and request, the
Owner shall promptly release or cause the Custodian to promptly release the
related Mortgage Loan Documents to the Servicer and the Servicer shall prepare
and deliver for execution by the Owner or at the Owner's option execute under
the authority of a power of attorney delivered to the Servicer by the Owner any
satisfaction or release. No expense incurred in connection with any instrument
of satisfaction or deed of reconveyance shall be chargeable to the Custodial
Account.

In the event the Servicer satisfies or releases a Mortgage without having
obtained payment in full of the indebtedness secured by the Mortgage or should
it otherwise prejudice any right the Owner may have under the mortgage
instruments, the Servicer, upon written demand, shall remit within two Business
Days to the Owner the then outstanding principal balance of the related Mortgage
Loan by deposit thereof in the Custodial Account. The Servicer shall maintain
the Fidelity Bond insuring the Servicer against any loss it may sustain with
respect to any Mortgage Loan not satisfied in accordance with the procedures set
forth herein.

From time to time and as appropriate for the servicing or foreclosure of the
Mortgage Loans, including for the purpose of collection under any Primary
Mortgage Insurance Policy, upon request of the Servicer and delivery to the
Custodian of a servicing receipt signed by a Servicing Officer (and unless the
related Mortgage Loans are the subject of a Pass-Through Transfer, acknowledged
by the Owner), the Custodian shall release the portion of the Mortgage Loan
Documents held by the Custodian to the Servicer. Such servicing receipt shall
obligate the Servicer to promptly return the related Mortgage Loan Documents to
the Custodian, when the need therefor by the Servicer no longer exists, unless
the Mortgage Loan has been liquidated and the Liquidation Proceeds relating to
the Mortgage Loan have been deposited in the Custodial Account or such documents
have been delivered to an attorney, or to a public trustee or other public
official as required by law, for purposes of initiating or pursuing legal action
or other proceedings for the foreclosure of the Mortgaged Property either
judicially or non-judicially, and the Servicer has promptly delivered to the
Owner or the Custodian a certificate of a Servicing Officer certifying as to the
name and address of the Person to which such documents were delivered and the
purpose or purposes of such delivery. Upon receipt of a certificate of a
Servicing Officer stating that such Mortgage Loan was liquidated, the servicing
receipt shall be released by the Owner or the Custodian, as applicable, to the
Servicer.

Section 6.03 Servicing Compensation.

As compensation for its services hereunder, the Servicer shall be entitled to
withdraw from the Custodial Account or to retain from interest payments on the
Mortgage Loans the amounts provided for as the Servicer's Servicing Fee.
Additional servicing compensation in the form of assumption fees, as provided in
Section 6.01, late payment charges and other ancillary fees shall be retained by
the Servicer to the extent not required to be deposited in the Custodial
Account. The Servicer shall be required to pay all expenses incurred by it in
connection with its servicing activities hereunder and shall not be entitled to
reimbursement therefor except as specifically provided for.

Section 6.04 Annual Statement as to Compliance.

The Servicer will deliver to the Owner not later than 90 days following the end
of each fiscal year of the Servicer, an Officers' Certificate stating, as to
each signatory thereof, that (i) a review of the activities of the Servicer
during the preceding calendar year and of performance under this Agreement has
been made under such officers' supervision, and (ii) to the best of such
officers' knowledge, based on such review, the Servicer has fulfilled all of its
obligations under this Agreement throughout such year, or, if there has been a
default in the fulfillment of any such obligation, specifying each such default
known to such officers and the nature and status thereof except for such
defaults as such Officers in their good faith judgment believe to be immaterial.

Section 6.05 Annual Independent Certified Public Accountants' Servicing Report.

Not later than 90 days following the end of each fiscal year of the Servicer,
the Servicer at its expense shall cause a firm of independent public accountants
which is a member of the American Institute of Certified Public Accountants to
furnish a statement to the Owner to the effect that such firm has examined
certain documents and records relating to the Servicer's servicing of mortgage
loans of the same type as the Mortgage Loans pursuant to servicing agreements
substantially similar to this Agreement, which agreements may include this
Agreement, and that, on the basis of such an examination, conducted
substantially in accordance with the Uniform Single Attestation Program for
Mortgage Bankers, such firm is of the opinion that the Servicer's servicing has
been conducted in compliance with the agreements examined pursuant to this
Section 6.05, except for (i) such exceptions as such firm shall believe to be
immaterial, and (ii) such other exceptions as shall be set forth in such
statement.

Section 6.06 Owner's Right to Examine Servicer Records.

The Owner shall have the right to examine and audit, at its expense, upon
reasonable notice to the Servicer, during business hours or at such other times
as might be reasonable under applicable circumstances, any and all of the books,
records, documentation or other information of the Servicer, or held by another
for the Servicer or on its behalf or otherwise, which relate to the performance
or observance by the Servicer of the terms, covenants or conditions of this
Agreement.

The Servicer shall provide to the Owner and any supervisory agents or examiners
representing a state or federal governmental agency having jurisdiction over the
Owner, including but not limited to OTS, FDIC and other similar entities, access
to any documentation regarding the Mortgage Loans in the possession of the
Servicer which may be required by any applicable regulations. Such access shall
be afforded without charge, upon reasonable request, during normal business
hours and at the offices of the Servicer, and in accordance with the applicable
federal government agency, FDIC, OTS, or any other similar regulations.

Section 6.07 Compliance with REMIC Provisions.

If a REMIC election has been made with respect to the arrangement under which
the Mortgage Loans and REO Property are held, the Servicer shall not take any
action, cause the REMIC to take any action or fail to take (or fail to cause to
be taken) any action that, under the REMIC Provisions, if taken or not taken, as
the case may be could (i) endanger the status of the REMIC as a REMIC or (ii)
result in the imposition of a tax upon the REMIC (including but not limited to
the tax on “prohibited transactions” as defined in Section 860F(a)(2) of the
Code and the tax on “contribution” to a REMIC set forth in Section 860G(d) of
the Code unless the Servicer has received an Opinion of Counsel (at the expense
of the party seeking to take such actions) to the effect that the contemplated
action will not endanger such REMIC status or result in the imposition of any
such tax.

Section 6.08 Non-solicitation.

The Servicer shall not knowingly conduct any solicitation exclusively targeted
to the Mortgagors for the purpose of inducing or encouraging the early
prepayment or refinancing of the related Mortgage Loans. It is understood and
agreed that promotions undertaken by the Servicer or any agent or affiliate of
the Servicer which are directed to the general public at large, including,
without limitation, mass mailings based on commercially acquired mailing lists,
newspaper, radio and television advertisements shall not constitute solicitation
under this section. Nothing contained herein shall prohibit the Servicer from
(i) distributing to Mortgagors any general advertising including information
brochures, coupon books, or other similar documentation which indicates services
the Seller offers, including refinances or (ii) providing financing of home
equity loans to Mortgagors at the Mortgagor’s request.

ARTICLE VII

REPORTS TO BE PREPARED BY SERVICER

Section 7.01 Servicer Shall Provide Information as Reasonably Required.

The Servicer shall furnish to the Owner upon request, during the term of this
Agreement, such periodic, special or other reports or information, whether or
not provided for herein, as shall be necessary, reasonable or appropriate with
respect to the purposes of this Agreement. The Servicer may negotiate with the
Owner for a reasonable fee for providing such report or information, unless (i)
the Servicer is required to supply such report or information pursuant to any
other section of this Agreement, or (ii) the report or information has been
requested in connection with Internal Revenue Service, OTS, FDIC or other
regulatory agency requirements. All such reports or information shall be
provided by and in accordance with all reasonable instructions and directions
given by the Owner. The Servicer agrees to execute and deliver all such
instruments and take all such action as the Owner, from time to time, may
reasonably request in order to effectuate the purpose and to carry out the terms
of this Agreement.

ARTICLE VIII

THE SERVICER

Section 8.01 Indemnification; Third Party Claims.

The Servicer agrees to indemnify the Owner and hold it harmless from and against
any and all claims, losses, damages, penalties, fines, forfeitures, legal fees
and related costs, judgments, and any other costs, fees and expenses that the
Owner may sustain in any way related to the failure of the Servicer to perform
in any way its duties and service the Mortgage Loans in strict compliance with
the terms of this Agreement and for breach of any representation or warranty of
the Servicer contained herein. The Servicer shall immediately notify the Owner
if a claim is made by a third party with respect to this Agreement or the
Mortgage Loans, assume (with the consent of the Owner and with counsel
reasonably satisfactory to the Owner) the defense of any such claim and pay all
expenses in connection therewith, including counsel fees, and promptly pay,
discharge and satisfy any judgment or decree which may be entered against it or
the Owner in respect of such claim but failure to so notify the Owner shall not
limit its obligations hereunder. The Servicer agrees that it will not enter into
any settlement of any such claim without the consent of the Owner unless such
settlement includes an unconditional release of the Owner from all liability
that is the subject matter of such claim. The provisions of this Section 8.01
shall survive termination of this Agreement. In no event will either Purchaser
or Seller be liable to the other party to this Agreement for incidental or
consequential damages, including, without limitation, loss of profit or loss of
business or business opportunity, regardless of the form of action whether in
contract, tort or otherwise.
 

Section 8.02 Merger or Consolidation of the Servicer.

The Servicer will keep in full effect its existence, rights and franchises as a
corporation under the laws of the state of its incorporation except as permitted
herein, and will obtain and preserve its qualification to do business as a
foreign corporation in each jurisdiction in which such qualification is or shall
be necessary to protect the validity and enforceability of this Agreement or any
of the Mortgage Loans and to perform its duties under this Agreement.

Any Person into which the Servicer may be merged or consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Servicer shall be a party, or any Person succeeding to the business of the
Servicer whether or not related to loan servicing, shall be the successor of the
Servicer hereunder, without the execution or filing of any paper or any further
act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor or surviving Person shall
be an institution (i) having a GAAP net worth of not less than $25,000,000, (ii)
the deposits of which are insured by the FDIC, SAIF and/or BIF, or which is a
HUD-approved mortgagee whose primary business is in origination and servicing of
first lien mortgage loans, and (iii) which is a Fannie Mae or Freddie Mac
approved seller/servicer in good standing.

 
Section 8.03 Limitation on Liability of the Servicer and Others.

Neither the Servicer nor any of the officers, employees or agents of the
Servicer shall be under any liability to the Owner for any action taken or for
refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment made in good faith; provided, however, that
this provision shall not protect the Servicer or any such person against any
breach of warranties or representations made herein, or failure to perform in
any way its obligations in compliance with any standard of care set forth in
this Agreement, or any liability which would otherwise be imposed by reason of
negligence or any breach of the terms and conditions of this Agreement. The
Servicer and any officer, employee or agent of the Servicer may rely in good
faith on any document of any kind prima facie properly executed and submitted by
the Owner respecting any matters arising hereunder. The Servicer shall not be
under any obligation to appear in, prosecute or defend any legal action which is
not incidental to its duties to service the Mortgage Loans in accordance with
this Agreement and which in its opinion may involve it in any expenses or
liability; provided, however, that the Servicer may, with the consent of the
Owner, which consent shall not be unreasonably withheld, undertake any such
action which it may deem necessary or desirable with respect to this Agreement
and the rights and duties of the parties hereto. In such event, the reasonable
legal expenses and costs of such action and any liability resulting therefrom
shall be expenses, costs and liabilities for which the Owner will be liable, and
the Servicer shall be entitled to be reimbursed therefor from the Owner upon
written demand.

 
Section 8.04 Servicer Not to Resign.

The Servicer shall not resign from the obligations and duties hereby imposed on
it except by mutual consent of the Servicer and the Owner or upon the
determination that its duties hereunder are no longer permissible under
applicable law and such incapacity cannot be cured by the Servicer. Any such
determination permitting the resignation of the Servicer shall be evidenced by
an Opinion of Counsel to such effect delivered to the Owner which Opinion of
Counsel shall be in form and substance acceptable to the Owner. No such
resignation shall become effective until a successor shall have assumed the
Servicer's responsibilities and obligations hereunder in the manner provided in
Section 11.01.

Section 8.05 No Transfer of Servicing.

  With respect to the retention of the Servicer to service the Mortgage Loans
hereunder, the Servicer acknowledges that the Owner has acted in reliance upon
the Servicer's independent status, the adequacy of its servicing facilities,
plan, personnel, records and procedures, its integrity, reputation and financial
standing and the continuance thereof. Without in any way limiting the generality
of this section, the Servicer shall not either assign this Agreement or the
servicing hereunder or delegate its rights or duties hereunder or any portion
thereof, or sell or otherwise dispose of all or substantially all of its
property or assets, without the prior written approval of the Owner, which
approval shall not be unreasonably withheld; provided that the Servicer may
assign the Agreement and the servicing hereunder without the consent of Owner to
an affiliate of the Servicer to which all servicing of the Servicer is assigned
so long as (i) such affiliate is a Fannie Mae and Freddie Mac approved servicer
and (ii) if it is intended that such affiliate be spun off to the shareholders
of the Servicer, such affiliate have a GAAP net worth of at least $10,000,000
and (iii) such affiliate shall deliver to the Owner a certification pursuant to
which such affiliate shall agree to be bound by the terms and conditions of this
Agreement and shall certify that such affiliate is a Fannie Mae and Freddie Mac
approved servicer in good standing.

ARTICLE IX
DEFAULT 
Section 9.01 Events of Default.
In case one or more of the following Events of Default by the Servicer shall
occur and be continuing, that is to say:

(i) any failure by the Servicer to remit to the Owner any payment required to be
made under the terms of this Agreement which continues unremedied for a period
of three (3) Business Days after written notice thereof (it being understood
that this subparagraph shall not affect Servicer's obligation pursuant to
Section 5.01 to pay default interest on any remittance received by the Owner
after the Business Day on which such payment was due); or

(ii) any failure on the part of the Servicer duly to observe or perform in any
material respect any other of the covenants or agreements on the part of the
Servicer set forth in this Agreement, the breach of which has a material adverse
effect and which continue unremedied for a period of sixty days (except that
such number of days shall be fifteen in the case of a failure to pay any premium
for any insurance policy required to be maintained under this Agreement and such
failure shall be deemed to have a material adverse effect) after the date on
which written notice of such failure, requiring the same to be remedied, shall
have been given to the Servicer by the Owner; or

(iii) a decree or order of a court or agency or supervisory authority having
jurisdiction for the appointment of a conservator or receiver or liquidator in
any insolvency, bankruptcy, readjustment of debt, marshaling of assets and
liabilities or similar proceedings, or for the winding-up or liquidation of its
affairs, shall have been entered against the Servicer and such decree or order
shall have remained in force undischarged or unstayed for a period of sixty
days; or

(iv) the Servicer shall consent to the appointment of a conservator or receiver
or liquidator in any insolvency, bankruptcy, readjustment of debt, marshaling of
assets and liabilities or similar proceedings of or relating to the Servicer or
of or relating to all or substantially all of its property; or

(v) the Servicer shall admit in writing its inability to pay its debts generally
as they become due, file a petition to take advantage of any applicable
insolvency or reorganization statute, make an assignment for the benefit of its
creditors, or voluntarily suspend payment of its obligations; or

(vi) the Servicer ceases to be approved by either Fannie Mae or Freddie Mac (to
the extent such entities are then operating in a capacity similar to that in
which they operate on the Closing Date) as a mortgage loan servicer for more
than thirty days to the extent such entities perform similar functions; or

(vii) the Servicer attempts to assign its right to servicing compensation
hereunder or the Servicer attempts, without the consent of the Owner, to sell or
otherwise dispose of all or substantially all of its property or assets or to
assign this Agreement or the servicing responsibilities hereunder or to delegate
its duties hereunder or any portion thereof except as otherwise permitted
herein.
 
then, and in each and every such case, so long as an Event of Default shall not
have been remedied, the Owner, by notice in writing to the Servicer may, in
addition to whatever rights the Owner may have under Section 8.01 and at law or
equity to damages, including injunctive relief and specific performance,
terminate all the rights and obligations of the Servicer under this Agreement
and in and to the Mortgage Loans and the proceeds thereof without compensating
the Servicer for the same. On or after the receipt by the Servicer of such
written notice, all authority and power of the Servicer under this Agreement,
whether with respect to the Mortgage Loans or otherwise, shall pass to and be
vested in the successor appointed pursuant to Section 11.01. Upon written
request from the Owner, the Servicer shall prepare, execute and deliver, any and
all documents and other instruments, place in such successor's possession all
Servicing Files, and do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise, at the Servicer's sole expense. The Servicer
agrees to cooperate with the Owner and such successor in effecting the
termination of the Servicer's responsibilities and rights hereunder, including,
without limitation, the transfer to such successor for administration by it of
all cash amounts which shall at the time be credited by the Servicer to the
Custodial Account or Escrow Account or thereafter received with respect to the
Mortgage Loans or any REO Property.

 
Section 9.02 Waiver of Defaults.

The Owner may waive only by written notice any default by the Servicer in the
performance of its obligations hereunder and its consequences. Upon any such
waiver of a past default, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been remedied for every
purpose of this Agreement. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereon except to the extent
expressly so waived in writing.

ARTICLE X

TERMINATION

Section 10.01 Termination.

The respective obligations and responsibilities of the Servicer shall terminate
upon: (i) the later of the final payment or other liquidation (or any advance
with respect thereto) of the last Mortgage Loan or the disposition of all REO
Property and the remittance of all funds due hereunder; or (ii) by mutual
consent of the Servicer and the Owner in writing; or (iii) termination by the
Owner pursuant to Section 9.01. Simultaneously with any such termination and the
transfer of servicing hereunder, the Servicer shall be entitled to be reimbursed
for any outstanding Servicing Advances and Monthly Advances.

Section 10.02 Removal of Mortgage Loans from Inclusion under this Agreement upon
a Whole  Loan Transfer or a Pass-Through Transfer.

The Servicer acknowledges and the Owner agrees that with respect to some or all
of the Mortgage Loans, the Owner may effect either (1) one or more Whole Loan
Transfers, or (2) one or more Pass-Through Transfers.

The Servicer shall cooperate with the Owner in connection with any Whole Loan
Transfer or Pass-Through Transfer contemplated by the Owner pursuant to this
Section. In connection therewith, and without limitation, the Owner shall
deliver any reconstitution agreement or other document related to the Whole Loan
Transfer or Pass-Through Transfer to the Servicer at least 15 days prior to such
transfer (or 30 days if such transfer is to take place in March, June, September
or December) and the Servicer shall execute any such reconstitution agreement
which contains provisions substantially similar to those herein or otherwise
reasonably acceptable to the Owner and the Servicer and which restates the
representations and warranties contained in Article III as of the date of
transfer (except to the extent any such representation or warranty is not
accurate on such date).

With respect to each Whole Loan Transfer or Pass--Through Transfer, as the case
may be, effected by the Owner, Owner (i) shall reimburse Servicer for all
reasonable out-of-pocket third party costs and expenses related thereto and (ii)
shall pay Servicer a reasonable amount representing time and effort expended by
Servicer related thereto (which amount shall be reasonably agreed upon by
Servicer and Owner prior to the expenditure of such time and effort); provided,
however, that for each Whole Loan Transfer and/or Pass--Through Transfer, the
sum of such amounts described in subsections (i) and (ii) above shall in no
event exceed $5,000. For purposes of this paragraph, all Whole Loan Transfers
and/or Pass--Through Transfers made to the same entity within the same
accounting cycle shall be considered one Whole Loan Transfer or Pass--Through
Transfer.

All Mortgage Loans not sold or transferred pursuant to a Whole Loan Transfer or
Pass-Through Transfer shall be subject to this Agreement and shall continue to
be serviced in accordance with the terms of this Agreement and with respect
thereto this Agreement shall remain in full force and effect.

 
ARTICLE XI

MISCELLANEOUS PROVISIONS

Section 11.01 Successor to the Servicer.

Prior to termination of the Servicer's responsibilities and duties under this
Agreement pursuant to Sections 8.04, 9.01 or 10.01(ii), the Owner shall (i)
succeed to and assume all of the Servicer's responsibilities, rights, duties and
obligations under this Agreement, or (ii) appoint a successor having the
characteristics set forth in Section 8.02 hereof and which shall succeed to all
rights and assume all of the responsibilities, duties and liabilities of the
Servicer under this Agreement prior to the termination of the Servicer's
responsibilities, duties and liabilities under this Agreement. In connection
with such appointment and assumption, the Owner may make such arrangements for
the compensation of such successor out of payments on Mortgage Loans as the
Owner and such successor shall agree. In the event that the Servicer's duties,
responsibilities and liabilities under this Agreement should be terminated
pursuant to the aforementioned sections, the Servicer shall discharge such
duties and responsibilities during the period from the date it acquires
knowledge of such termination until the effective date thereof with the same
degree of diligence and prudence which it is obligated to exercise under this
Agreement, and shall take no action whatsoever that might impair or prejudice
the rights or financial condition of its successor. The resignation or removal
of the Servicer pursuant to the aforementioned sections shall not become
effective until a successor shall be appointed pursuant to this section and
shall in no event relieve the Servicer of the representations and warranties
made pursuant to Article III and the remedies available to the Owner under
Section 8.01, it being understood and agreed that the provisions of such Article
III and Section 8.01 shall be applicable to the Servicer notwithstanding any
such resignation or termination of the Servicer, or the termination of this
Agreement.

Any successor appointed as provided herein shall execute, acknowledge and
deliver to the Servicer and to the Owner an instrument accepting such
appointment, whereupon such successor shall become fully vested with all the
rights, powers, duties, responsibilities, obligations and liabilities of the
Servicer, with like effect as if originally named as a party to this Agreement.
Any termination or resignation of the Servicer or this Agreement pursuant to
Section 8.04, 9.01 or 10.01 shall not affect any claims that the Owner may have
against the Servicer arising prior to any such termination or resignation.

The Servicer shall promptly deliver to the successor the funds in the Custodial
Account and the Escrow Account and the Servicing Files and related documents and
statements held by it hereunder and the Servicer shall account for all funds.
The Servicer shall execute and deliver such instruments and do such other things
all as may reasonably be required to more fully and definitely vest and confirm
in the successor all such rights, powers, duties, responsibilities, obligations
and liabilities of the Servicer. The successor shall make such arrangements as
it may deem appropriate to reimburse the Servicer for unrecovered Servicing
Advances which the successor retains hereunder and which would otherwise have
been recovered by the Servicer pursuant to this Agreement but for the
appointment of the successor servicer.

Upon a successor's acceptance of appointment as such, the Servicer shall notify
the Owner of such appointment.

Section 11.02 Amendment.
 
This Agreement may be amended from time to time by the Servicer and the Owner by
written agreement signed by the Servicer and the Owner.

Section 11.03 Recordation of Agreement.

To the extent permitted by applicable law, this Agreement is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any of all the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Owner at the Owner's expense on direction of the Owner accompanied by an opinion
of counsel to the effect that such recordation materially and beneficially
affects the interest of the Owner or is necessary for the administration or
servicing the Mortgage Loans.

Section 11.04 Governing Law.
 
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF
CONFLICTS OF LAWS. THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

Section 11.05 Notices.

Any demands, notices or other communications permitted or required hereunder
shall be in writing and shall be deemed conclusively to have been given if
personally delivered at or mailed by registered mail, postage prepaid, and
return receipt requested or transmitted by telecopier and confirmed by a similar
mailed writing, as follows:

(i) if to the Servicer:

500 Enterprise Road
Horsham, Pennsylvania 19044
Attention: Mr. Frank Ruhl
Telecopier No.: (215) 682-3396

(ii) if to the Owner:

Mac Arthur Ridge II,
909 Hidden Ridge Drive, Suite 200
Irving, Texas 75038
Attention: Mr. Edward Raice
Telecopier No.: (972) 444-2810

or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice, or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
address (as evidenced, in the case of registered or certified mail, by the date
noted on the return receipt).

Section 11.06 Severability of Provisions.

Any part, provision, representation or warranty of this Agreement which is
prohibited or which is held to be void or unenforceable shall be ineffective to
the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof. Any part, provision, representation or warranty of
this Agreement which is prohibited or unenforceable or is held to be void or
unenforceable in any jurisdiction shall be ineffective, as to such jurisdiction,
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity of any
part, provision, representation or warranty of this Agreement shall deprive any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate, in good faith, to develop a structure the economic
effect of which is nearly as possible the same as the economic effect of this
Agreement without regard to such invalidity.

Section 11.07 Exhibits.
 
The exhibits to this Agreement are hereby incorporated and made a part hereof
and are an integral part of this Agreement.

Section 11.08 General Interpretive Principles.

For purposes of this Agreement, except as otherwise expressly provided or unless
the context otherwise requires:

(i) the terms defined in this Agreement have the meanings assigned to them in
this Agreement and include the plural as well as the singular, and the use of
any gender herein shall be deemed to include the other gender;

(ii) accounting terms not otherwise defined herein have the meanings assigned to
them in accordance with generally accepted accounting principles;

(iii) references herein to "Articles," "Sections," "Subsections," "Paragraphs,"
and other subdivisions without reference to a document are to designated
Articles, Sections, Subsections, Paragraphs and other subdivisions of this
Agreement;

(iv) a reference to a Subsection without further reference to a Section is a
reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;

(v) the words "herein," "hereof," "hereunder" and other words of similar import
refer to this Agreement as a whole and not to any particular provision; and

(vi) the term "include" or "including" shall mean without limitation by reason
of enumeration.

Section 11.09 Reproduction of Documents.

This Agreement and all documents relating hereto, including, without limitation,
(i) consents, waivers and modifications which may hereafter be executed, (ii)
documents received by any party at the closing, and (iii) financial statements,
certificates and other information previously or hereafter furnished, may be
reproduced by any photographic, photostatic, microfilm, micro-card, miniature
photographic or other similar process. The parties agree that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding, whether or not the original is in
existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.

Section 11.10 Confidentiality of Information.

Each party recognizes that, in connection with this Agreement, it may become
privy to non-public information regarding the financial condition, operations
and prospects of the other party. Except as required to be disclosed by law,
each party agrees to keep all non-public information regarding the other party
strictly confidential, and to use all such information solely in order to
effectuate the purpose of this Agreement.

Section 11.11 Recordation of Assignments of Mortgage.

To the extent permitted by applicable law, each of the Assignments of Mortgage
is subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the Mortgaged Properties are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Servicer at the Owner's expense.

Section 11.12 Assignment by the Owner.

The Owner shall have the right, without the consent of the Servicer hereof, to
assign, in whole or in part, its interest under this Agreement with respect to
some or all of the Mortgage Loans, and designate any person to exercise any
rights of the Owner hereunder, by executing an assignment and assumption
agreement reasonably acceptable to the Servicer and the assignee or designee
shall accede to the rights and obligations hereunder of the Owner with respect
to such Mortgage Loans. In no event shall Owner sell a partial interest in any
Mortgage Loan. All references to the Owner in this Agreement shall be deemed to
include its assignees or designees. It is understood and agreed between the
Owners and the Servicer that no more than five (5) Persons shall have the right
of owner under this Agreement at any one time.

Section 11.13 No Partnership.

Nothing herein contained shall be deemed or construed to create a co-partnership
or joint venture between the parties hereto and the services of the Servicer
shall be rendered as an independent contractor and not as agent for Owner.

Section 11.14 Execution; Successors and Assigns.

This Agreement may be executed in one or more counterparts and by the different
parties hereto on separate counterparts, each of which, when so executed, shall
be deemed to be an original; such counterparts, together, shall constitute one
and the same agreement. Subject to Section 8.04, this Agreement shall inure to
the benefit of and be binding upon the Servicer and the Owner and their
respective successors and assigns.

Section 11.15 Entire Agreement.

Each of the Servicer and the Owner acknowledge that no representations,
agreements or promises were made to it by the other party or any of its
employees other than those representations, agreements or promises specifically
contained herein. This Agreement sets forth the entire understanding between the
parties hereto and shall be binding upon all successors of both parties.

[TPW: NYLEGAL:504985.1] 17297-00440 05/11/2006 05:34 PM

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IN WITNESS WHEREOF, the Servicer and the Owner have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of the
date and year first above written.

GMAC MORTGAGE CORPORATION
Servicer

By: ________________________________________
Name:
Title:

EMC MORTGAGE CORPORATION
Owner

By:     

[TPW: NYLEGAL:504985.1] 17297-00440 05/11/2006 05:34 PM

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EXHIBIT A

MORTGAGE LOAN SCHEDULE

[TPW: NYLEGAL:504985.1] 17297-00440 05/11/2006 05:34 PM

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EXHIBIT B
 
CUSTODIAL ACCOUNT LETTER AGREEMENT
 
(date)

To:______________________
_________________________
_________________________
(the "Depository")

As "Servicer" under the Servicing Agreement, dated as of  , (the "Agreement"),
we hereby authorize and request you to establish an account, as a Custodial
Account pursuant to Section 4.04 of the Agreement, to be designated as
"[Servicer] Custodial Account, in trust for [Owner], Owner of Whole Loan
Mortgages, and various Mortgagors." All deposits in the account shall be subject
to withdrawal therefrom by order signed by the Servicer. You may refuse any
deposit which would result in violation of the requirement that the account be
fully insured as described below. This letter is submitted to you in duplicate.
Please execute and return one original to us.

  

By:____________________
Name:__________________
Title:_________________

The undersigned, as "Depository", hereby certifies that the above described
account has been established under Account Number __________, at the office of
the depository indicated above, and agrees to honor withdrawals on such account
as provided above. The full amount deposited at any time in the account will be
insured up to applicable limits by the Federal Deposit Insurance Corporation
through the Bank Insurance Fund or the Savings Association Insurance Fund or
will be invested in Permitted Investments as defined in the Agreement.

[ ]
(name of Depository)
By:____________________
Name:__________________
Title:_________________

[TPW: NYLEGAL:504985.1] 17297-00440 05/11/2006 05:34 PM

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EXHIBIT C
 
ESCROW ACCOUNT LETTER AGREEMENT
 
(date)

To:___________________________
______________________________
______________________________
(the "Depository")

As "Servicer" under the Servicing Agreement, dated as of   (the "Agreement"), we
hereby authorize and request you to establish an account, as an Escrow Account
pursuant to Section 4.06 of the Agreement, to be designated as "[Servicer]
Escrow Account, in trust for [Owner], Owner of Whole Loan Mortgages, and various
Mortgagors." All deposits in the account shall be subject to withdrawal
therefrom by order signed by the Servicer. You may refuse any deposit which
would result in violation of the requirement that the account be fully insured
as described below. This letter is submitted to you in duplicate. Please execute
and return one original to us.

  

By:____________________
Name:__________________
Title:_________________

The undersigned, as "Depository", hereby certifies that the above described
account has been established under Account Number __________, at the office of
the depository indicated above, and agrees to honor withdrawals on such account
as provided above. The full amount deposited at any time in the account will be
insured up to applicable limits by the Federal Deposit Insurance Corporation
through the Bank Insurance Fund or the Savings Association Insurance Fund or
will be invested in Permitted Investments as defined in the Agreement.

[ ]
(name of Depository)
By:____________________
Name:__________________
Title:_________________

[TPW: NYLEGAL:504985.1] 17297-00440 05/11/2006 05:34 PM

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EXHIBIT D

REQUEST FOR RELEASE

[TPW: NYLEGAL:504985.1] 17297-00440 05/11/2006 05:34 PM

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EXHIBIT E

LOAN LEVEL SCHEDULED-SCHEDULED
REMITTANCE TAPE LAYOUT

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