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                   OPTION ONE MORTGAGE ACCEPTANCE CORPORATION,
                                    Depositor


                        OPTION ONE MORTGAGE CORPORATION,
                                 Master Servicer


                                       and


                WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
                                     Trustee



                         POOLING AND SERVICING AGREEMENT

                           Dated as of January 1, 2003



                  --------------------------------------------


                      Option One Mortgage Loan Trust 2003-1

                    Asset-Backed Certificates, Series 2003-1



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<TABLE>
<CAPTION>

                                                 TABLE OF CONTENTS

                                                     ARTICLE I

                                                    DEFINITIONS

<S>               <C>                                                                                           <C>
SECTION 1.01.     Defined Terms...................................................................................4
SECTION 1.02.     Accounting.....................................................................................45
SECTION 1.03.     Allocation of Certain Interest Shortfalls......................................................46
SECTION 1.04.     Rights of the NIMS Insurer.....................................................................46

                                                    ARTICLE II

                                           CONVEYANCE OF MORTGAGE LOANS;
                                         ORIGINAL ISSUANCE OF CERTIFICATES

SECTION 2.01.     Conveyance of Mortgage Loans...................................................................47
SECTION 2.02.     Acceptance by Trustee..........................................................................50
SECTION 2.03.     Repurchase or Substitution of Mortgage Loans by the Originator.................................51
SECTION 2.04.     Intentionally Omitted..........................................................................54
SECTION 2.05.     Representations, Warranties and Covenants of the Master Servicer...............................54
SECTION 2.06.     Representations and Warranties of the Depositor................................................56
SECTION 2.07.     Issuance of Certificates.......................................................................58
SECTION 2.08.     Conveyance of the Subsequent Mortgage Loans....................................................58
SECTION 2.09.     Conveyance of  REMIC Regular Interests and Acceptance of REMIC 2
                           and REMIC 3 by the Trustee; Issuance of Certificates..................................61
SECTION 2.10.     Negative Covenants of the Trustee and the Master Servicer......................................62

                                                    ARTICLE III

                                           ADMINISTRATION AND SERVICING
                                               OF THE MORTGAGE LOANS

SECTION 3.01.     Master Servicer to Act as Master Servicer......................................................63
SECTION 3.02.     Sub-Servicing Agreements Between Master Servicer and
                           Sub-Servicers.........................................................................65
SECTION 3.03.     Successor Sub-Servicers........................................................................66
SECTION 3.04.     Liability of the Master Servicer...............................................................66
SECTION 3.05.     No Contractual Relationship Between Sub-Servicers and the NIMS
                           Insurer, the Trustee or Certificateholders............................................67
SECTION 3.06.     Assumption or Termination of Sub-Servicing Agreements by Trustee...............................67
SECTION 3.07.     Collection of Certain Mortgage Loan Payments...................................................67
SECTION 3.08.     Sub-Servicing Accounts.........................................................................68
SECTION 3.09.     Collection of Taxes, Assessments and Similar Items; Servicing
                           Accounts..............................................................................69
SECTION 3.10.     Collection Account, Initial Deposit Account and Distribution


                                                         i

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                           Account...............................................................................70
SECTION 3.11.     Withdrawals from the Collection Account and Distribution Account...............................72
SECTION 3.12.     Investment of Funds in the Interest Coverage Account, Collection
                           Account, Initial Deposit Account and the Distribution Account.........................75
SECTION 3.13.     [Reserved].....................................................................................76
SECTION 3.14.     Maintenance of Hazard Insurance and Errors and Omissions and
                           Fidelity Coverage.....................................................................76
SECTION 3.15.     Enforcement of Due-On-Sale Clauses; Assumption Agreements......................................77
SECTION 3.16.     Realization Upon Defaulted Mortgage Loans......................................................78
SECTION 3.17.     Trustee to Cooperate; Release of Mortgage Files................................................81
SECTION 3.18.     Servicing Compensation.........................................................................82
SECTION 3.19.     Reports to the Trustee; Collection Account Statements..........................................83
SECTION 3.20.     Statement as to Compliance.....................................................................83
SECTION 3.21.     Independent Public Accountants' Servicing Report...............................................83
SECTION 3.22.     Access to Certain Documentation; Filing of Reports by Trustee..................................84
SECTION 3.23.     Title, Management and Disposition of REO Property..............................................84
SECTION 3.24.     Obligations of the Master Servicer in Respect of Prepayment
                           Interest Shortfalls...................................................................88
SECTION 3.25.     [Reserved].....................................................................................88
SECTION 3.26.     Obligations of the Master Servicer in Respect of Mortgage Rates
                           and Monthly Payments..................................................................88
SECTION 3.27.     Solicitations..................................................................................88
SECTION 3.28.     Reserve Fund...................................................................................89
SECTION 3.29.     Advance Facility...............................................................................90
SECTION 3.30.     PMI Policy; Claims Under the PMI Policy........................................................91

                                                    ARTICLE IV

                                                   FLOW OF FUNDS

SECTION 4.01.     Distributions..................................................................................92
SECTION 4.02.     [Reserved].....................................................................................95
SECTION 4.03.     Statements.....................................................................................95
SECTION 4.04.     Remittance Reports; Advances...................................................................98
SECTION 4.05.     Pre-Funding Account...........................................................................100
SECTION 4.06.     Interest Coverage Account.....................................................................101
SECTION 4.07.     Distributions on the REMIC Regular Interests..................................................102
SECTION 4.08.     Allocation of Realized Losses.................................................................104



                                                        ii

<PAGE>



                                                     ARTICLE V

                                                 THE CERTIFICATES

SECTION 5.01.     The Certificates..............................................................................106
SECTION 5.02.     Registration of Transfer and Exchange of Certificates.........................................106
SECTION 5.03.     Mutilated, Destroyed, Lost or Stolen Certificates.............................................111
SECTION 5.04.     Persons Deemed Owners.........................................................................111
SECTION 5.05.     Appointment of Paying Agent...................................................................112

                                                    ARTICLE VI

                                       THE MASTER SERVICER AND THE DEPOSITOR

SECTION 6.01.     Liability of the Master Servicer and the Depositor............................................113
SECTION 6.02.     Merger or Consolidation of, or Assumption of the Obligations of, the
                           Master Servicer or the Depositor.....................................................113
SECTION 6.03.     Limitation on Liability of the Master Servicer and Others.....................................113
SECTION 6.04.     Master Servicer Not to Resign.................................................................114
SECTION 6.05.     Delegation of Duties..........................................................................115
SECTION 6.06.     [Reserved]....................................................................................115
SECTION 6.07.     Inspection....................................................................................115

                                                    ARTICLE VII

                                                      DEFAULT

SECTION 7.01.     Master Servicer Events of Termination.........................................................116
SECTION 7.02.     Trustee to Act; Appointment of Successor......................................................118
SECTION 7.03.     Waiver of Defaults............................................................................119
SECTION 7.04.     Notification to Certificateholders............................................................119
SECTION 7.05.     Survivability of Master Servicer Liabilities..................................................119

                                                   ARTICLE VIII

                                                    THE TRUSTEE

SECTION 8.01.     Duties of Trustee.............................................................................120
SECTION 8.02.     Certain Matters Affecting the Trustee.........................................................121
SECTION 8.03.     Trustee Not Liable for Certificates or Mortgage Loans.........................................122
SECTION 8.04.     Trustee May Own Certificates..................................................................123
SECTION 8.05.     Trustee Fee and Expenses......................................................................123
SECTION 8.06.     Eligibility Requirements for Trustee..........................................................124
SECTION 8.07.     Resignation or Removal of Trustee.............................................................124
SECTION 8.08.     Successor Trustee.............................................................................125
SECTION 8.09.     Merger or Consolidation of Trustee............................................................125


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SECTION 8.10.     Appointment of Co-Trustee or Separate Trustee.................................................126
SECTION 8.11.     Limitation of Liability.......................................................................127
SECTION 8.12.     Trustee May Enforce Claims Without Possession of Certificates.................................127
SECTION 8.13.     Suits for Enforcement.........................................................................128
SECTION 8.14.     Waiver of Bond Requirement....................................................................128
SECTION 8.15.     Waiver of Inventory, Accounting and Appraisal Requirement.....................................128

                                                    ARTICLE IX

                                               REMIC ADMINISTRATION

SECTION 9.01.     REMIC Administration..........................................................................129
SECTION 9.02.     Prohibited Transactions and Activities........................................................131
SECTION 9.03.     Indemnification with Respect to Certain Taxes and Loss of REMIC
                  Status........................................................................................131

                                            ARTICLE X

                                           TERMINATION

SECTION 10.01.    Termination...................................................................................133
SECTION 10.02.    Additional Termination Requirements...........................................................134

                                           ARTICLE XI

                                    MISCELLANEOUS PROVISIONS

SECTION 11.01.    Amendment.....................................................................................136
SECTION 11.02.    Recordation of Agreement; Counterparts........................................................137
SECTION 11.03.    Limitation on Rights of Certificateholders....................................................137
SECTION 11.04.    Governing Law; Jurisdiction...................................................................138
SECTION 11.05.    Notices.......................................................................................138
SECTION 11.06.    Severability of Provisions....................................................................139
SECTION 11.07.    Article and Section References................................................................139
SECTION 11.08.    Notice to the Rating Agencies and the NIMS Insurer............................................139
SECTION 11.09.    Further Assurances............................................................................140
SECTION 11.10.    Third Party Rights............................................................................140
SECTION 11.11.    Benefits of Agreement.........................................................................140
SECTION 11.12.    Acts of Certificateholders....................................................................140
SECTION 11.13     No Petition...................................................................................141


</TABLE>

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<TABLE>
<CAPTION>

EXHIBITS:

<S>               <C>
Exhibit A-1       Form of Class A-1 Certificates
Exhibit A-2       Form of Class A-2 Certificates
Exhibit A-3       Form of Class M-1 Certificates
Exhibit A-4       Form of Class M-2 Certificates
Exhibit A-5       Form of Class M-3 Certificates
Exhibit A-6       Form of Class M-4 Certificates
Exhibit A-7       Form of Class C Certificates
Exhibit A-8       Form of Class P Certificates
Exhibit A-9       Form of Class R Certificates
Exhibit B         [Reserved]
Exhibit C         Form of Mortgage Loan Purchase Agreement
Exhibit D         Mortgage Loan Schedule
Exhibit E         Request for Release
Exhibit F-1       Form of Trustee's Initial Certification
Exhibit F-2       Form of Trustee's Final Certification
Exhibit F-3       Form of Receipt of Mortgage Note
Exhibit G         Loss Mitigation Procedures
Exhibit H         Form of Lost Note Affidavit
Exhibit I         [Reserved]
Exhibit J         Form of Investment Letter
Exhibit K         Form of Class R Certificate Transfer Affidavit
Exhibit L         Form of Transferor Certificate
Exhibit M         Form of ERISA Representation Letter
Exhibit N         Form of Cap Contracts
Exhibit O         Form of Subsequent Transfer Instrument
Exhibit P         Form of Addition Notice
Exhibit R-1       Form of Certification to Be Provided by the Depositor with Form 10-K
Exhibit R-2       Form of Certification to Be Provided to Depositor by the Trustee

Schedule I        Prepayment Charge Schedule
Schedule II       PMI Mortgage Loans

</TABLE>


                                        v

<PAGE>



                  This Pooling and Servicing Agreement is dated as of January 1,
2003 (the "Agreement"), among OPTION ONE MORTGAGE ACCEPTANCE CORPORATION, as
depositor (the "Depositor"), OPTION ONE MORTGAGE CORPORATION, as master servicer
(the "Master Servicer") and WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, as
trustee (the "Trustee").

                             PRELIMINARY STATEMENT:

                  The Depositor intends to sell pass-through certificates
(collectively, the "Certificates"), to be issued hereunder in multiple classes,
which in the aggregate will evidence the entire beneficial ownership interest in
the Trust Fund created hereunder. The Certificates will consist of nine classes
of certificates, designated as (i) the Class A-1 Certificates, (ii) the Class
A-2 Certificatses, (iii) the Class M-1 Certificates, (iv) the Class M-2
Certificates, (v) the Class M-3 Certificates, (vi) the Class M-4 Certificates,
(vii) the Class P Certificates, (viii) the Class C Certificates and (ix) the
Class R Certificates.

                                     REMIC 1

         As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the Group I Mortgage Loans, the Group II
Mortgage Loans and certain other related assets subject to this Agreement (but
exclusive of the Pre-Funding Accounts, the Interest Coverage Accounts, the
Initial Deposit Accounts, the Net WAC Rate Carryover Reserve Account, the Excess
Net WAC Rate Reserve Account, the Master Servicer Prepayment Charge Payment
Amounts and any Subsequent Mortgage Loan Interest) as a real estate investment
conduit (a "REMIC") for federal income tax purposes, and such segregated pool of
assets will be designated as "REMIC 1." The Class R-1 Interest will represent
the sole class of "residual interests" in REMIC 1 for purposes of the REMIC
Provisions under federal income tax law. The following table irrevocably sets
forth the designation, the Uncertificated REMIC 1 Pass-Through Rate, the initial
Uncertificated Principal Balance, and solely for purposes of satisfying Treasury
regulation Section 1.860G-1(a)(4)(iii), the "latest possible maturity date" for
each of the REMIC 1 Regular Interests. None of the REMIC 1 Regular Interests
will be certificated.

<TABLE>
<CAPTION>

                           Uncertificated REMIC 1        Initial Uncertificated                Assumed Final
      Designation             Pass-Through Rate            Principal Balance                   Maturity Date(1)
-----------------          ----------------------        ----------------------               -----------------
<S>                         <C>                           <C>                                 <C>
          LT1A                  Variable(2)                 $ 427,190,317.56                   January 2033
          LT1B                  Variable(2)                 $ 142,965,156.50                   January 2033
          LT1C                  Variable(2)                 $ 773,864,528.88                   January 2033
          LT1D                  Variable(2)                 $ 257,029,618.74                   January 2033
          LT1P                  Variable(2)                 $         100.00                   January 2033
___________________
</TABLE>

(1)  Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
     regulations, the Distribution Date following the maturity date for the
     Mortgage Loan with the latest possible maturity date has been designated as
     the "latest possible maturity date" for each Uncertificated REMIC 1 Regular
     Interest.
(2)  Calculated in accordance with the definition of "Uncertificated REMIC 1
     Pass-Through Rate" herein.





<PAGE>






                                     REMIC 2

                  As provided herein, the Trustee will make an election to treat
the segregated pool of assets consisting of the REMIC 1 Regular Interests as a
REMIC for federal income tax purposes, and such segregated pool of assets will
be designated as "REMIC 2." The Class R-2 Interest will represent the sole class
of "residual interests" in REMIC 2 for purposes of the REMIC Provisions (as
defined herein) under federal income tax law. The following table irrevocably
sets forth the designation, the Uncertificated REMIC 2 Pass-Through Rate, the
initial Uncertificated Principal Balance, and solely for purposes of satisfying
Treasury regulation Section 1.860G-1(a)(4)(iii), the "latest possible maturity
date" for each of the REMIC 2 Regular Interests. None of the REMIC 2 Regular
Interests will be certificated.


<TABLE>
<CAPTION>

                           Uncertificated REMIC 2        Initial Uncertificated             Assumed Final
   Designation               Pass-Through Rate            Principal Balance                Maturity Date(1)
-----------------          ----------------------        ----------------------            -----------------
<S>                         <C>                           <C>                               <C>
       LT2AA                 Variable(2)                  $1,567,999,902.00                  January 2033
       LT2A1                 Variable(2)                   $ 5,000,000.00                    January 2033
       LT2A2                 Variable(2)                   $ 9,080,000.00                    January 2033
       LT2M1                 Variable(2)                    $ 720,000.00                     January 2033
       LT2M2                 Variable(2)                    $ 600,000.00                     January 2033
       LT2M3                 Variable(2)                    $ 360,000.00                     January 2033
       LT2M4                 Variable(2)                    $ 160,000.00                     January 2033
       LT2ZZ                 Variable(2)                   $ 16,079,998.00                   January 2033
       LT2P                  Variable(2)                      $ 100.00                       January 2033
___________________
</TABLE>

(1)  Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
     regulations, the Distribution Date following the maturity date for the
     Mortgage Loan with the latest maturity date has been designated as the
     "latest possible maturity date" for each REMIC 2 Regular Interest.
(2)  Calculated in accordance with the definition of "Uncertificated REMIC 2
     Pass-Through Rate" herein.






                                        2

<PAGE>



                                     REMIC 3

         As provided herein, the Trustee shall make an election to treat the
segregated pool of assets consisting of the REMIC 2 Regular Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC 3." The Class R-3 Interest represents the sole class of
"residual interests" in REMIC 3 for purposes of the REMIC Provisions.

         The following table sets forth (or describes) the Class designation,
Pass-Through Rate and Original Class Certificate Principal Balance for each
Class of Certificates that represents one or more of the "regular interests" in
REMIC 3 created hereunder:

<TABLE>
<CAPTION>


                                                                  Original Class
                                       Pass-Through             Certificate Principal           Assumed Final
      Class Designation                   Rate                        Balance                  Maturity Date(1)
-----------------------------         -------------             ----------------------        ----------------
<S>                                   <C>                       <C>                           <C>
Class A-1....................         Variable(2)                $500,000,000.00               January 2033
Class A-2....................         Variable(2)                $908,000,000.00               January 2033
Class M-1....................         Variable(2)                $ 72,000,000.00               January 2033
Class M-2....................         Variable(2)                $ 60,000,000.00               January 2033
Class M-3....................         Variable(2)                $ 36,000,000.00               January 2033
Class M-4....................         Variable(2)                $ 16,000,000.00               January 2033
Class C......................         Variable(2)                $  7,999,900.00(3)            January 2033
Class P......................            N/A(4)                  $        100.00               January 2033
__________________
</TABLE>

(1)  Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
     regulations, the Distribution Date following the maturity date for the
     Mortgage Loan with the latest maturity date has been designated as the
     "latest possible maturity date" for each Class of Certificates that
     represents one or more of the "regular interests" in REMIC 3.
(2)  Calculated in accordance with the definition of "Pass-Through Rate" herein.
(3)  The Class C Certificates will accrue interest at their variable
     Pass-Through Rate on the Notional Amount of the Class C Certificates
     outstanding from time to time which shall equal the aggregate of the
     Uncertificated Principal Balances of the REMIC 2 Regular Interests. The
     Class C Certificates will not accrue interest on their Class Certificate
     Principal Balance. The Class C Certificates will also be entitled to the
     Subsequent Mortgage Loan Interest, as a right with respect to a component
     of the Class C Certificates that will not be treated as a REMIC regular
     interest but rather as separate interest strips from the Subsequent
     Mortgage Loans for a specified period of time.
(4)  The Class P Certificates will not accrue interest.


                                        3

<PAGE>



                                    ARTICLE I

                                   DEFINITIONS

                  SECTION 1.01.             Defined Terms.

                  Whenever used in this Agreement or in the Preliminary
Statement, the following words and phrases, unless the context otherwise
requires, shall have the meanings specified in this Article. Unless otherwise
specified, all calculations in respect of interest on the Class A Certificates
and the Mezzanine Certificates shall be made on the basis of the actual number
of days elapsed on the basis of a 360-day year and all other calculations of
interest described herein shall be made on the basis of a 360-day year
consisting of twelve 30-day months. The Class P Certificates and the Class R
Certificates are not entitled to distributions in respect of interest and,
accordingly, will not accrue interest.

                  "1933 Act":  The Securities Act of 1933, as amended.

                  "Account":  Either of the Collection Account and Distribution
Account.

                  "Accrual Period": With respect to the Class A Certificates and
the Mezzanine Certificates and each Distribution Date, the period commencing on
the preceding Distribution Date (or in the case of the first such Accrual
Period, commencing on the Closing Date) and ending on the day preceding the
current Distribution Date. With respect to the Class C Certificates and each
Distribution Date, the calendar month prior to the month of such Distribution
Date.

                  "Addition Notice": With respect to the transfer of Subsequent
Mortgage Loans to the Trust Fund pursuant to Section 2.08, a notice of the
Depositor's designation of the Subsequent Mortgage Loans to be sold to the Trust
Fund and the aggregate principal balance of such Subsequent Mortgage Loans as of
the Subsequent Cut-off Date. The Addition Notice shall be given not later than
three Business Days prior to the related Subsequent Transfer Date and shall be
substantially in the form attached hereto as Exhibit P.

                  "Adjustable Rate Mortgage Loan": A first lien Mortgage Loan
which provides at any period during the life of such loan for the adjustment of
the Mortgage Rate payable in respect thereto. The Adjustable Rate Mortgage Loans
are identified as such on the Mortgage Loan Schedule.

                  "Adjusted Net Maximum Mortgage Rate": With respect to any
Mortgage Loan (or the related REO Property), as of any date of determination, a
per annum rate of interest equal to the applicable Maximum Mortgage Rate for
such Mortgage Loan (or the Mortgage Rate in the case of any Fixed Rate Mortgage
Loan) as of the first day of the month preceding the month in which the
Distribution Date occurs minus the sum of (i) the Trustee Fee Rate, (ii) the
Servicing Fee Rate and (iii) the PMI Insurer Fee Rate, if applicable.

                  "Adjusted Net Mortgage Rate":  With respect to any Mortgage
Loan (or the related REO Property), as of any date of determination, a per annum
rate of interest equal to the applicable Mortgage Rate for such Mortgage Loan as
of the first day of the month preceding the month in which



                                        4

<PAGE>




the related Distribution Date occurs minus the sum of (i) the Trustee Fee Rate,
(ii) the Servicing Fee Rate and (iii) the PMI Insurer Fee Rate, if applicable.

                  "Adjustment Date": With respect to each Adjustable Rate
Mortgage Loan, each adjustment date, on which the Mortgage Rate of such Mortgage
Loan changes pursuant to the related Mortgage Note. The first Adjustment Date
following the Cut-off Date as to each Adjustable Rate Mortgage Loan is set forth
in the Mortgage Loan Schedule.

                  "Advance":  As to any Mortgage Loan or REO Property, any
advance made by the Master Servicer in respect of any Distribution Date pursuant
to Section 4.04.

                  "Advancing Person":  As defined in Section 3.29 hereof.

                  "Adverse REMIC Event": As defined in Section 9.01(f) hereof.

                  "Affiliate": With respect to any Person, any other Person
controlling, controlled by or under common control with such Person. For
purposes of this definition, "control" means the power to direct the management
and policies of a Person, directly or indirectly, whether through ownership of
voting securities, by contract or otherwise and "controlling" and "controlled"
shall have meanings correlative to the foregoing.

                  "Agreement":  This Pooling and Servicing Agreement and all
amendments hereof and supplements hereto.

                  "Allocated Realized Loss Amount": With respect to any
Distribution Date and any Class of Mezzanine Certificates, the sum of (i) any
Realized Losses allocated to such Class of Certificates on such Distribution
Date and (ii) the amount of any Allocated Realized Loss Amount for such Class of
Certificates remaining unpaid from the previous Distribution Date.

                  "Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form (excepting therefrom, if applicable,
the mortgage recordation information which has not been required pursuant to
Section 2.01 hereof or returned by the applicable recorder's office), which is
sufficient under the laws of the jurisdiction wherein the related Mortgaged
Property is located to reflect or record the sale of the Mortgage.

                  "Assumed Final Maturity Date":  As to each Class of
Certificates, the date set forth as such in the Preliminary Statement.

                  "Available Funds": With respect to any Distribution Date, an
amount equal to the excess of (i) the sum of (a) the aggregate of the related
Monthly Payments received on or prior to the related Determination Date, (b)
Liquidation Proceeds, Insurance Proceeds, Principal Prepayments and other
unscheduled recoveries of principal and interest in respect of the Mortgage
Loans received during the related Prepayment Period, (c) the aggregate of any
amounts received in respect of a related REO Property withdrawn from any REO
Account and deposited in the Collection Account for such Distribution Date, (d)
the aggregate of any amounts deposited in the Collection Account by the Master
Servicer in respect of related Prepayment Interest Shortfalls for such
Distribution Date,

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<PAGE>



(e) the aggregate of any Advances made by the Master Servicer for such
Distribution Date, (f) the aggregate of any related advances made by the Trustee
for such Distribution Date pursuant to Section 7.02, (g) with respect to the
first Distribution Date, the Initial Deposit, (h) with respect to the
Distribution Date immediately following the end of the Funding Period, any
amounts in the Pre- Funding Accounts (exclusive of investment income) after
giving effect to any purchase of Subsequent Mortgage Loans, (i) with respect to
each Distribution Date during and the Distribution Date immediately following
the Funding Period, any amounts withdrawn by the Trustee from the Interest
Coverage Accounts for distribution on the Certificates and (j) the amount of any
Prepayment Charges collected by the Master Servicer in connection with the full
or partial prepayment of any of the Mortgage Loans and any Master Servicer
Prepayment Charge Payment Amount over (ii) the sum of (a) amounts reimbursable
or payable to the Master Servicer pursuant to Section 3.11(a) or the Trustee
pursuant to Section 3.11(b), (b) amounts deposited in the Collection Account or
the Distribution Account pursuant to clauses (a) through (j) above, as the case
may be, in error, (c) the amount of any Prepayment Charges collected by the
Master Servicer in connection with the full or partial prepayment of any of the
Mortgage Loans and any Master Servicer Prepayment Charge Payment Amount, (d) the
Trustee Fee payable from the Distribution Account pursuant to Section 8.05, (e)
the PMI Insurer Fee payable from the Distribution Account and (f) any
indemnification payments or expense reimbursements made by the Trust Fund
pursuant to Section 8.05.

                  "Balloon Mortgage Loan": A Mortgage Loan that provides for the
payment of the unamortized principal balance of such Mortgage Loan in a single
payment at the maturity of such Mortgage Loan that is substantially greater than
the preceding monthly payment.

                  "Balloon Payment": A payment of the unamortized principal
balance of a Mortgage Loan in a single payment at the maturity of such Mortgage
Loan that is substantially greater than the preceding Monthly Payment.

                  "Bankruptcy Code": The Bankruptcy Reform Act of 1978 (Title 11
of the United States Code), as amended.

                  "Book-Entry Certificates": Any of the Certificates that shall
be registered in the name of the Depository or its nominee, the ownership of
which is reflected on the books of the Depository or on the books of a Person
maintaining an account with the Depository (directly, as a "Depository
Participant", or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 5.02 hereof). On the Closing
Date, the Offered Certificates shall be Book-Entry Certificates.

                  "Business Day": Any day other than a Saturday, a Sunday or a
day on which banking or savings institutions in the Commonwealth of
Pennsylvania, State of Delaware, the State of New York, the State of Maryland,
the State of California, the State of Minnesota or in the city in which the
Corporate Trust Office of the Trustee is located are authorized or obligated by
law or executive order to be closed.

                  "Cap Contracts": The Cap Contracts between the Trustee and the
counterparty thereunder, for the benefit of the Holders of the Class A
Certificates and the Mezzanine Certificates, forms of which are attached hereto
as Exhibit N.


                                        6

<PAGE>



                  "Certificate": Any Regular Certificate or Class R Certificate.

                  "Certificateholder": The Person in whose name a Certificate is
registered in the Certificate Register, except that a Disqualified Organization
or non-U.S. Person shall not be a Holder of a Class R Certificate for any
purpose hereof and, solely for the purposes of giving any consent pursuant to
this Agreement, any Certificate registered in the name of the Depositor or the
Master Servicer or any Affiliate thereof shall be deemed not to be outstanding
and the Voting Rights to which it is entitled shall not be taken into account in
determining whether the requisite percentage of Voting Rights necessary to
effect any such consent has been obtained, except as otherwise provided in
Section 11.01. The Trustee and the NIMS Insurer may conclusively rely upon a
certificate of the Depositor or the Master Servicer in determining whether a
Certificate is held by an Affiliate thereof. All references herein to
"Certificateholders" shall reflect the rights of Certificate Owners as they may
indirectly exercise such rights through the Depository and participating members
thereof, except as otherwise specified herein; provided, however, that the
Trustee and the NIMS Insurer shall be required to recognize as a
"Certificateholder" only the Person in whose name a Certificate is registered in
the Certificate Register.

                  "Certificate Margin": With respect to the Class A-1
Certificates on each Distribution Date (A) on or prior to the Optional
Termination Date, 0.42% per annum and (B) after the Optional Termination Date,
0.84% per annum. With respect to the Class A-2 Certificates on each Distribution
Date (A) on or prior to the Optional Termination Date, 0.42% per annum and (B)
after the Optional Termination Date, 0.84% per annum. With respect to the Class
M-1 Certificates on each Distribution Date (A) on or prior to the Optional
Termination Date, 0.90% per annum and (B) after the Optional Termination Date,
1.35% per annum. With respect to the Class M-2 Certificates on each Distribution
Date (A) on or prior to the Optional Termination Date, 1.95% per annum and (B)
after the Optional Termination Date, 2.925% per annum. With respect to the Class
M-3 Certificates on each Distribution Date (A) on or prior to the Optional
Termination Date, 3.50% per annum and (B) after the Optional Termination Date,
5.25% per annum. With respect to the Class M-4 Certificates on each Distribution
Date, 4.25% per annum.

                  "Certificate Owner": With respect to each Book-Entry
Certificate, any beneficial owner thereof.

                  "Certificate Principal Balance": With respect to any Class of
Regular Certificates (other than the Class C Certificates) immediately prior to
any Distribution Date, will be equal to the Initial Certificate Principal
Balance thereof reduced by the sum of all amounts actually distributed in
respect of principal of such Class and, in the case of a Mezzanine Certificate,
Realized Losses allocated thereto on all prior Distribution Dates. With respect
to the Class C Certificates as of any date of determination, an amount equal to
the excess, if any, of (A) the then aggregate Uncertificated Principal Balances
of the REMIC 2 Regular Interests over (B) the then aggregate Certificate
Principal Balances of the Class A Certificates, the Mezzanine Certificates and
the Class P Certificates then outstanding.

                  "Certificate Register" and "Certificate Registrar": The
register maintained and registrar appointed pursuant to Section 5.02 hereof.

                                        7

<PAGE>





                  "Class": Collectively, Certificates which have the same
priority of payment and bear the same class designation and the form of which is
identical except for variation in the Percentage Interest evidenced thereby.

                  "Class A Certificateholder": Any Holder of a Class A
Certificate.

                  "Class A Certificates": Any Class A-1 Certificate or Class A-2
Certificate.

                  "Class A Principal Distribution Amount": With respect to any
Distribution Date, the sum of (i) the Class A-1 Principal Distribution Amount
and (ii) the Class A-2 Principal Distribution Amount.

                  "Class A-1 Allocation Percentage": With respect to any
Distribution Date, the percentage equivalent of a fraction, the numerator of
which is (i) the Group I Principal Remittance Amount for such Distribution Date,
and the denominator of which is (ii) the Principal Remittance Amount for such
Distribution Date.

                  "Class A-1 Certificate": Any one of the Class A-1 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-1, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 3.

                  "Class A-1 Principal Distribution Amount": The excess of (x)
the Certificate Principal Balance of the Class A-1 Certificates immediately
prior to such Distribution Date over (y) the lesser of (A) the product of (i)
76.00% and (ii) the aggregate Stated Principal Balance of the Group I Mortgage
Loans as of the last day of the related Due Period (after giving effect to
scheduled payments of principal due during the related Due Period, to the extent
received or advanced, and unscheduled collections of principal received during
the related Prepayment Period) and (B) the aggregate Stated Principal Balance of
the Group I Mortgage Loans as of the last day of the related Due Period (after
giving effect to scheduled payments of principal due during the related Due
Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) minus the
Overcollateralization Floor.

                  "Class A-2 Allocation Percentage": With respect to any
Distribution Date, the percentage equivalent of a fraction, the numerator of
which is (i) the Group II Principal Remittance Amount for such Distribution
Date, and the denominator of which is (ii) the Principal Remittance Amount for
such Distribution Date.

                  "Class A-2 Certificate": Any one of the Class A-2 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-2, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 3.

                  "Class A-2 Principal Distribution Amount": The excess of (x)
the Certificate Principal Balance of the Class A-2 Certificates immediately
prior to such Distribution Date over (y) the lesser of (A) the product of (i)
76.00% and (ii) the aggregate Stated Principal Balance of the

                                        8

<PAGE>


Group II Mortgage Loans as of the last day of the related Due Period (after
giving effect to scheduled payments of principal due during the related Due
Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) and (B) the aggregate
Stated Principal Balance of the Group II Mortgage Loans as of the last day of
the related Due Period (after giving effect to scheduled payments of principal
due during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period) minus the Overcollateralization Floor.

                  "Class C Certificate": Any one of the Class C Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-7, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 3.

                  "Class M-1 Certificate": Any one of the Class M-1 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-3, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 3.

                  "Class M-1 Principal Distribution Amount": The excess of (x)
the sum of (i) the aggregate Certificate Principal Balance of the Class A
Certificates (after taking into account the payment of the Class A Principal
Distribution Amount on such Distribution Date) and (ii) the Certificate
Principal Balance of the Class M-1 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 85.00% and (ii)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) minus the Overcollateralization Floor.

                  "Class M-2 Certificate": Any one of the Class M-2 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-4, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 3.

                  "Class M-2 Principal Distribution Amount": The excess of (x)
the sum of (i) the aggregate Certificate Principal Balance of the Class A
Certificates (after taking into account the payment of the Class A Principal
Distribution Amount on such Distribution Date), (ii) the Certificate Principal
Balance of the Class M-1 Certificates (after taking into account the payment of
the Class M-1 Principal Distribution Amount on such Distribution Date) and (iii)
the Certificate Principal Balance of the Class M-2 Certificates immediately
prior to such Distribution Date over (y) the lesser of (A) the product of (i)
92.50% and (ii) the aggregate Stated Principal Balance of the Mortgage
Loans as of the last day of the related Due Period (after giving effect to
scheduled payments of principal due during the related Due Period, to the extent
received or advanced, and unscheduled collections of principal received during
the related Prepayment Period) and (B) the aggregate Stated

                                       9

<PAGE>



Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) minus
the Overcollateralization Floor.

                  "Class M-3 Certificate": Any one of the Class M-3 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-5, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 3.

                  "Class M-3 Principal Distribution Amount": The excess of (x)
the sum of (i) the aggregate Certificate Principal Balance of the Class A
Certificates (after taking into account the payment of the Class A Principal
Distribution Amount on such Distribution Date), (ii) the Certificate Principal
Balance of the Class M-1 Certificates (after taking into account the payment of
the Class M-1 Principal Distribution Amount on such Distribution Date), (iii)
the Certificate Principal Balance of the Class M-2 Certificates (after taking
into account the payment of the Class M-2 Principal Distribution Amount on such
Distribution Date) and (iv) the Certificate Principal Balance of the Class M-3
Certificates immediately prior to such Distribution Date over (y) the lesser of
(A) the product of (i) 97.00% and (ii) the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of the related Due Period (after giving
effect to scheduled payments of principal due during the related Due Period, to
the extent received or advanced, and unscheduled collections of principal
received during the related Prepayment Period) and (B) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) minus
the Overcollateralization Floor.

                  "Class M-4 Certificate": Any one of the Class M-3 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-6, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 3.

                  "Class M-4 Principal Distribution Amount": The excess of (x)
the sum of (i) the aggregate Certificate Principal Balance of the Class A
Certificates (after taking into account the payment of the Class A Principal
Distribution Amount on such Distribution Date), (ii) the Certificate Principal
Balance of the Class M-1 Certificates (after taking into account the payment of
the Class M-1 Principal Distribution Amount on such Distribution Date), (iii)
the Certificate Principal Balance of the Class M-2 Certificates (after taking
into account the payment of the Class M-2 Principal Distribution Amount on such
Distribution Date), (iv) the Certificate Principal Balance of the Class M-3
Certificates (after taking into account the payment of the Class M-3 Principal
Distribution Amount on such Distribution Date) and (v) the Certificate Principal
Balance of the Class M-4 Certificates immediately prior to such Distribution
Date over (y) the lesser of (A) the product of (i) 99.00% and (ii) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of
the related Due Period (after giving effect to scheduled payments of principal
due during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the

                                       10

<PAGE>



Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) minus the Overcollateralization Floor.

                  "Class P Certificate": Any one of the Class P Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-8, representing
the right to distributions as set forth herein and therein and evidencing a
regular interest in REMIC 3.

                  "Class R Certificate": The Class R Certificate executed by the
Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-9 and evidencing the
ownership of the Class R-1 Interest, the Class R-2 Interest and the Class R-3
Interest.

                  "Class R-1 Interest": The uncertificated Residual Interest in
REMIC 1.

                  "Class R-2 Interest": The uncertificated Residual Interest in
REMIC 2.

                  "Class R-3 Interest": The uncertificated Residual Interest in
REMIC 3.

                  "Close of Business": As used herein, with respect to any
Business Day, 5:00 p.m. (New York time).

                  "Closing Date": January 15, 2003.

                  "Code":  The Internal Revenue Code of 1986.

                  "Collection Account": The account or accounts created and
maintained by the Master Servicer pursuant to Section 3.10(a), which shall be
entitled "Wells Fargo Bank Minnesota, National Association, as Trustee, in trust
for registered Holders of Option One Mortgage Loan Trust 2003-1, Asset-Backed
Certificates, Series 2003-1," which must be an Eligible Account.

                  "Compensating Interest":  As defined in Section 3.24 hereof.

                  "Convertible Mortgage Loan": Any Adjustable-Rate Mortgage Loan
which allows the Mortgagor thereunder to convert the Mortgage Rate thereon to a
fixed Mortgage Rate.

                  "Corporate Trust Office": The principal corporate trust office
of the Trustee at which at any particular time its corporate trust business in
connection with this Agreement shall be administered, which office at the date
of the execution of this instrument is located at Sixth and Marquette,
Minneapolis, Minnesota 55479-0113, Attention: Option One Series 2003-1, or at
such other address as the Trustee may designate from time to time by notice to
the Certificateholders, the Depositor, the Master Servicer, the Originator and
the Seller.


                                       11

<PAGE>





                  "Corresponding Certificate": With respect to (i) REMIC 2
Regular Interest LT2A1, (ii) REMIC 2 Regular Interest LT2A2, (iii) REMIC 2
Regular Interest LT2M1, (iv) REMIC 2 Regular Interest LT2M2, (v) REMIC 2 Regular
Interest LT2M3, (vi) REMIC 2 Regular Interest LT2M4 and (vii) REMIC 2 Regular
Interest LT2P, (i) the Class A-1 Certificates, (ii) the Class A-2 Certificates,
(iii) Class M-1 Certificates, (iv) Class M-2 Certificates, (v) Class M-3
Certificates, (vi) Class M-4 Certificates and (vii) Class P Certificates,
respectively.

                  "Credit Enhancement Percentage": For any Distribution Date,
the percentage equivalent of a fraction, the numerator of which is the sum of
the aggregate Certificate Principal Balances of the Mezzanine Certificates and
the Class C Certificates, and the denominator of which is the aggregate Stated
Principal Balance of the Mortgage Loans and any amounts remaining in the
Pre-Funding Accounts, calculated prior to taking into account payments of
principal on the Mortgage Loans and distribution of the Group I Principal
Distribution Amount and the Group II Principal Distribution Amount to the
Holders of the Certificates then entitled to distributions of principal on such
Distribution Date.

                  "Custodian": Wells Fargo Bank Minnesota, National Association,
as custodian of the Mortgage Files, and any successor thereto.

                  "Cut-off Date": With respect to each Initial Mortgage Loan,
the later of (i) the date of origination of such Mortgage Loan or (ii) January
1, 2003.

                  "Cut-off Date Principal Balance": With respect to any Mortgage
Loan, the unpaid principal balance thereof as of the Cut-off Date or Subsequent
Cut-off Date, as applicable (or as of the applicable date of substitution with
respect to a Qualified Substitute Mortgage Loan).

                  "Debt Service Reduction": With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code, except such a
reduction resulting from a Deficient Valuation.

                  "Deficient Valuation": With respect to any Mortgage Loan, a
valuation of the related Mortgaged Property by a court of competent jurisdiction
in an amount less than the then outstanding principal balance of the Mortgage
Loan, which valuation results from a proceeding initiated under the Bankruptcy
Code.

                  "Definitive Certificates": As defined in Section 5.02(c)
hereof.

                  "Deleted Mortgage Loan": A Mortgage Loan replaced or to be
replaced by one or more Qualified Substitute Mortgage Loans.

                   "Delinquency Master Servicer Termination Trigger": A
Delinquency Master Servicer Termination Trigger will have occurred with respect
to the Certificates on a Distribution Date if the Three Month Rolling
Delinquency Percentage for the Mortgage Loans exceeds 18.00%.

                                       12

<PAGE>





                  "Delinquency Percentage": For any Distribution Date, the
percentage obtained by dividing (x) the aggregate Principal Balance of Mortgage
Loans Delinquent 60 days or more by (y) the aggregate Principal Balance of the
Mortgage Loans, in each case, as of the last day of the previous calendar month.

                  "Delinquent": Any Mortgage Loan, the Monthly Payment due on a
Due Date which is not made by the Close of Business on the next scheduled Due
Date for such Mortgage Loan. For example, a Mortgage Loan is 60 or more days
Delinquent if the Monthly Payment due on a Due Date is not made by the Close of
Business on the second scheduled Due Date after such Due Date.

                  "Depositor": Option One Mortgage Acceptance Corporation, a
Delaware corporation, or any successor in interest.

                  "Depository": The initial Depository shall be The Depository
Trust Company and upon request, Clearstream Banking Luxembourg and the Euroclear
System, whose nominee is Cede & Co., or any other organization registered as a
"clearing agency" pursuant to Section 17A of the Securities Exchange Act of
1934, as amended. The Depository shall initially be the registered Holder of the
Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(3) of the Uniform Commercial Code of
the State of New York.

                  "Depository Participant": A broker, dealer, bank or other
financial institution or other person for whom from time to time a Depository
effects book-entry transfers and pledges of securities deposited with the
Depository.

                  "Determination Date": With respect to any Distribution Date,
the 15th day of the calendar month in which such Distribution Date occurs or, if
such 15th day is not a Business Day, the Business Day immediately preceding such
15th day.

                  "Directly Operate": With respect to any REO Property, the
furnishing or rendering of services to the tenants thereof, the management or
operation of such REO Property, the holding of such REO Property primarily for
sale to customers, the performance of any construction work thereon or any use
of such REO Property in a trade or business conducted by the REMIC other than
through an Independent Contractor; provided, however, that the Trustee (or the
Master Servicer on behalf of the Trustee) shall not be considered to Directly
Operate an REO Property solely because the Trustee (or the Master Servicer on
behalf of the Trustee) establishes rental terms, chooses tenants, enters into or
renews leases, deals with taxes and insurance, or makes decisions as to repairs
or capital expenditures with respect to such REO Property.

                  "Disqualified Organization": A "disqualified organization"
under Section 860E of the Code, which as of the Closing Date is any of: (i) the
United States, any state or political subdivision thereof, any foreign
government, any international organization, or any agency or instrumentality of
any of the foregoing, (ii) any organization (other than a cooperative described
in Section 521 of the Code) which is exempt from the tax imposed by Chapter 1 of
the Code unless such organization is subject to the tax imposed by Section 511
of the Code, (iii) any organization described in Section 1381(a)(2)(C) of the
Code, (iv) an "electing large partnership" within the meaning of Section 775 of
the Code or (v) any other Person so designated by the Trustee based upon


                                       13

<PAGE>



an Opinion of Counsel provided by nationally recognized counsel to the Trustee
that the holding of an ownership interest in a Class R Certificate by such
Person may cause any REMIC formed hereunder or any Person having an ownership
interest in any Class of Certificates (other than such Person) to incur
liability for any federal tax imposed under the Code that would not otherwise be
imposed but for the transfer of an ownership interest in the Class R Certificate
to such Person. A corporation will not be treated as an instrumentality of the
United States or of any state or political subdivision thereof, if all of its
activities are subject to tax and, a majority of its board of directors is not
selected by a governmental unit. The term "United States", "state" and
"international organizations" shall have the meanings set forth in Section 7701
of the Code.

                  "Distribution Account": The trust account or accounts created
and maintained by the Trustee pursuant to Section 3.10(b) which shall be
entitled "Distribution Account, Wells Fargo Bank Minnesota, National
Association, as Trustee, in trust for the registered Certificateholders of
Option One Mortgage Loan Trust 2003-1, Asset-Backed Certificates, Series 2003-1"
and which must be an Eligible Account.

                  "Distribution Date": The 25th day of any calendar month, or if
such 25th day is not a Business Day, the Business Day immediately following such
25th day, commencing in February 2003.

                  "Due Date": With respect to each Mortgage Loan and any
Distribution Date, the first day of the calendar month in which such
Distribution Date occurs on which the Monthly Payment for such Mortgage Loan was
due (or, in the case of any Mortgage Loan under the terms of which the Monthly
Payment for such Mortgage Loan was due on a day other than the first day of the
calendar month in which such Distribution Date occurs, the day during the
related Due Period on which such Monthly Payment was due), exclusive of any days
of grace.

                  "Due Period": With respect to any Distribution Date, the
period commencing on the second day of the month preceding the month in which
such Distribution Date occurs and ending on the first day of the month in which
such Distribution Date occurs.

                  "Eligible Account": Any of (i) an account or accounts
maintained with a federal or state chartered depository institution or trust
company the short-term unsecured debt obligations of which (or, in the case of a
depository institution or trust company that is the principal subsidiary of a
holding company, the short-term unsecured debt obligations of such holding
company) are rated P-1 by Moody's, F-1 by Fitch or A-1+ by S&P (or comparable
ratings if Moody's, Fitch and S&P are not the Rating Agencies) at the time any
amounts are held on deposit therein, (ii) an account or accounts the deposits in
which are fully insured by the FDIC (to the limits established by such
corporation), the uninsured deposits in which account are otherwise secured such
that, as evidenced by an Opinion of Counsel delivered to the NIMS Insurer, the
Trustee and to each Rating Agency, the Certificateholders will have a claim with
respect to the funds in such account or a perfected first priority security
interest against such collateral (which shall be limited to Permitted
Investments) securing such funds that is superior to claims of any other
depositors or creditors of the depository institution with which such account is
maintained, (iii) a trust account or accounts maintained with the trust
department of a federal or state chartered depository institution, national
banking association or trust company acting in its fiduciary capacity or (iv) an
account otherwise acceptable to each


                                       14

<PAGE>



Rating Agency without reduction or withdrawal of their then current ratings of
the Certificates as evidenced by a letter from each Rating Agency to the Trustee
and the NIMS Insurer. Eligible Accounts may bear interest.

                  "ERISA": The Employee Retirement Income Security Act of 1974,
as amended.

                  "Escrow Payments": The amounts constituting ground rents,
taxes, assessments, water rates, fire and hazard insurance premiums and other
payments required to be escrowed by the Mortgagor with the mortgagee pursuant to
any Mortgage Loan.

                  "Estate in Real Property": A fee simple estate in a parcel of
real property.

                  "Excess Group Net WAC Rate Amount": For any Distribution Date
and (x) the Class A-1 Certificates, the positive excess, if any, of (i) the
amount of interest accrued on the Class A-1 Certificates for such Distribution
Date calculated at the Net WAC Rate for the Class A-1 Certificates over (ii) the
amount of interest accrued on the Class A-1 Certificates at the Pool Net WAC
Rate and (y) the Class A-2 Certificates, the positive excess, if any, of (i) the
amount of interest accrued on the Class A-2 Certificates for such Distribution
Date calculated at the Net WAC Rate for the Class A-2 Certificates over (ii) the
amount of interest accrued on the Class A-2 Certificates at the Pool Net WAC
Rate.

                  "Excess Overcollateralized Amount": With respect to the Class
A Certificates and the Mezzanine Certificates and any Distribution Date, the
excess, if any, of (i) the Overcollateralized Amount for such Distribution Date,
assuming that 100% of the Principal Remittance Amount is applied as a principal
payment on such Distribution Date over (ii) the Overcollateralization Target
Amount for such Distribution Date.

                  "Excess Pool Net WAC Rate Amount": For any Distribution Date
and the Class A-1 Certificates, the positive excess, if any, of (i) the amount
of interest accrued on the Class A-1 Certificates for such Distribution Date
calculated at the Pool Net WAC Rate over (ii) the amount of interest accrued on
the Class A-1 Certificates at the Net WAC Rate for the Class A-1 Certificates.
For any Distribution Date and the Class A-2 Certificates, the positive excess,
if any, of (i) the amount of interest accrued on the Class A-2 Certificates for
such Distribution Date calculated at the Pool Net WAC Rate over (ii) the amount
of interest accrued on such Class A-2 Certificates at the Net WAC Rate for the
Class A-2 Certificates.

                  "Extra Principal Distribution Amount": With respect to any
Distribution Date, the lesser of (x) the Monthly Interest Distributable Amount
payable on the Class C Certificates on such Distribution Date as reduced by
Realized Losses allocated thereto with respect to such Distribution Date
pursuant to Section 4.08 and (y) the Overcollateralization Deficiency Amount for
such Distribution Date.

                  "Fannie Mae": Federal National Mortgage Association or any
successor thereto.

                  "FDIC": Federal Deposit Insurance Corporation or any successor
thereto.


                                       15

<PAGE>




                  "Final Recovery Determination": With respect to any defaulted
Mortgage Loan or any REO Property (other than a Mortgage Loan or REO Property
purchased by the Originator or the Master Servicer pursuant to or as
contemplated by Section 2.03 or 10.01), a determination made by the Master
Servicer that all Insurance Proceeds, Liquidation Proceeds and other payments or
recoveries which the Master Servicer, in its reasonable good faith judgment,
expects to be finally recoverable in respect thereof have been so recovered. The
Master Servicer shall maintain records, prepared by a Servicing Officer, of each
Final Recovery Determination made thereby.

                  "Fitch": Fitch Ratings, or its successor in interest.

                  "Fixed Rate Mortgage Loan": A first or second lien Mortgage
Loan which provides for a fixed Mortgage Rate payable with respect thereto. The
Fixed Rate Mortgage Loans are identified as such on the Mortgage Loan Schedule.

                  "Formula Rate": For any Distribution Date and the Class A
Certificates and the Mezzanine Certificates, the lesser of (i) LIBOR plus the
related Certificate Margin and (ii) the Maximum Cap Rate.

                  "Freddie Mac": The Federal Home Loan Mortgage Corporation, or
any successor thereto.

                  "Funding Period": The period beginning on the Closing Date and
ending on the earlier to occur of the date upon which (a) the amount on deposit
in the Pre-Funding Accounts (exclusive of investment income) has been reduced to
zero or (b) February 20, 2003.

                  "Gross Margin": With respect to each Adjustable Rate Mortgage
Loan, the fixed percentage set forth in the related Mortgage Note that is added
to the Index on each Adjustment Date in accordance with the terms of the related
Mortgage Note used to determine the Mortgage Rate for such Mortgage Loan.

                  "Group I Basic Principal Distribution Amount": With respect to
any Distribution Date, the excess of (i) the Group I Principal Remittance Amount
for such Distribution Date over (ii) the Overcollateralization Release Amount,
if any, for such Distribution Date multiplied by the Class A-1 Allocation
Percentage.

                  "Group I Initial Deposit Account": The Group I Initial Deposit
Account established in accordance with Section 3.10(b) hereof and maintained by
the Trustee, which shall be entitled "Wells Fargo Bank Minnesota, National
Association, as Trustee, in trust for registered Holders of Option One Mortgage
Loan Trust 2003-1, Asset-Backed Certificates, Series 2003-1 Group I Initial
Deposit Account," which must be an Eligible Account.

                  "Group I Interest Coverage Account": The account established
and maintained pursuant to Section 4.06, as defined therein.


                                       16

<PAGE>




                  "Group I Interest Remittance Amount": With respect to any
Distribution Date, that portion of the Available Funds for such Distribution
Date attributable to interest received or advanced with respect to the Group I
Mortgage Loans.

                  "Group I Mortgage Loan": A Mortgage Loan assigned to Loan
Group I with a principal balance that conforms to Fannie Mae and Freddie Mac
guidelines.

                  "Group I Pre-Funding Account": The account established and
maintained pursuant to Section 4.05, as defined herein.

                  "Group I Principal Distribution Amount": With respect to any
Distribution Date, the sum of (i) the Group I Basic Principal Distribution
Amount for such Distribution Date and (ii) the Extra Principal Distribution
Amount for such Distribution Date multiplied by the Class A-1 Allocation
Percentage.

                  "Group I Principal Remittance Amount": With respect to any
Distribution Date, the sum of (i) each scheduled payment of principal collected
or advanced on the Group I Mortgage Loans by the Master Servicer that were due
during the related Due Period, (ii) the principal portion of all partial and
full principal prepayments of the Group I Mortgage Loans received by the Master
Servicer during the related Prepayment Period, (iii) the principal portion of
all related Net Liquidation Proceeds and Insurance Proceeds received during such
Prepayment Period with respect to the Group I Mortgage Loans, (iv) that portion
of the Purchase Price, representing principal of any repurchased Group I
Mortgage Loan, deposited to the Collection Account during such Prepayment
Period, (v) the principal portion of any related Substitution Adjustments
deposited in the Collection Account during such Prepayment Period with respect
to the Group I Mortgage Loans, (vi) on the Distribution Date on which the Trust
Fund is to be terminated pursuant to Section 10.01, that portion of the
Termination Price, in respect of principal on the Group I Mortgage Loans and
(vii) on the Distribution Date immediately following the end of the Funding
Period, any remaining amounts in the Group I Pre-Funding Account (exclusive of
investment income therein) after giving effect to any purchase of Subsequent
Group I Mortgage Loans.

                  "Group II Basic Principal Distribution Amount": With respect
to any Distribution Date, the excess of (i) the Group II Principal Remittance
Amount for such Distribution Date over (ii) the Overcollateralization Release
Amount, if any, for such Distribution Date multiplied by the Class A-2
Allocation Percentage.

                  "Group II Initial Deposit Account": The Group II Initial
Deposit Account established in accordance with Section 3.10(b) hereof and
maintained by the Trustee, which shall be entitled "Wells Fargo Bank Minnesota,
National Association, as Trustee, in trust for registered Holders of Option One
Mortgage Loan Trust 2003-1, Asset-Backed Certificates, Series 2003-1 Group II
Initial Deposit Account," which must be an Eligible Account.

                  "Group II Interest Coverage Account": The account established
and maintained pursuant to Section 4.06, as defined therein.


                                       17

<PAGE>



                  "Group II Interest Remittance Amount": With respect to any
Distribution Date, that portion of the Available Funds for such Distribution
Date attributable to interest received or advanced with respect to the Group II
Mortgage Loans.

                  "Group II Mortgage Loan": A Mortgage Loan assigned to Loan
Group II with a principal balance that may or may not conform to Fannie Mae and
Freddie Mac guidelines.

                  "Group II Pre-Funding Account": The account established and
maintained pursuant to Section 4.05, as defined herein.

                  "Group II Principal Distribution Amount": With respect to any
Distribution Date, the sum of (i) the Group II Basic Principal Distribution
Amount for such Distribution Date and (ii) the Extra Principal Distribution
Amount for such Distribution Date multiplied by the Class A-2 Allocation
Percentage.

                  "Group II Principal Remittance Amount": With respect to any
Distribution Date, the sum of (i) each scheduled payment of principal collected
or advanced on the Group II Mortgage Loans by the Master Servicer that were due
during the related Due Period, (ii) the principal portion of all partial and
full principal prepayments of the Group II Mortgage Loans received by the Master
Servicer during the related Prepayment Period, (iii) the principal portion of
all related Net Liquidation Proceeds and Insurance Proceeds received during such
Prepayment Period with respect to the Group II Mortgage Loans, (iv) that portion
of the Purchase Price, representing principal of any repurchased Group II
Mortgage Loan, deposited to the Collection Account during such Prepayment
Period, (v) the principal portion of any related Substitution Adjustments
deposited in the Collection Account during such Prepayment Period with respect
to the Group II Mortgage Loans, (vi) on the Distribution Date on which the Trust
Fund is to be terminated pursuant to Section 10.01, that portion of the
Termination Price, in respect of principal on the Group II Mortgage Loans and
(vii) on the Distribution Date immediately following the end of the Funding
Period, any remaining amounts in the Group II Pre-Funding Account (exclusive of
investment income therein) after giving effect to any purchase of Subsequent
Group II Mortgage Loans.

                  "Holder":  See "Certificateholder."

                  "Independent": When used with respect to any specified Person,
any such Person who (a) is in fact independent of the Depositor, the Master
Servicer and their respective Affiliates, (b) does not have any direct financial
interest in or any material indirect financial interest in the Depositor or the
Master Servicer or any Affiliate thereof, and (c) is not connected with the
Depositor or the Master Servicer or any Affiliate thereof as an officer,
employee, promoter, underwriter, trustee, partner, director or Person performing
similar functions; provided, however, that a Person shall not fail to be
Independent of the Depositor or the Master Servicer or any Affiliate thereof
merely because such Person is the beneficial owner of 1% or less of any class of
securities issued by the Depositor or the Master Servicer or any Affiliate
thereof, as the case may be.

                  "Independent Contractor": Either (i) any Person (other than
the Master Servicer) that would be an "independent contractor" with respect to
any of the REMICs created hereunder within the meaning of Section 856(d)(3) of
the Code if such REMIC were a real estate investment trust

                                       18

<PAGE>



(except that the ownership tests set forth in that section shall be considered
to be met by any Person that owns, directly or indirectly, 35% or more of any
Class of Certificates), so long as each such REMIC does not receive or derive
any income from such Person and provided that the relationship between such
Person and such REMIC is at arm's length, all within the meaning of Treasury
Regulation Section 1.856-4(b)(5), or (ii) any other Person (including the Master
Servicer) if the Trustee has received an Opinion of Counsel to the effect that
the taking of any action in respect of any REO Property by such Person, subject
to any conditions therein specified, that is otherwise herein contemplated to be
taken by an Independent Contractor will not cause such REO Property to cease to
qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of
the Code (determined without regard to the exception applicable for purposes of
Section 860D(a) of the Code), or cause any income realized in respect of such
REO Property to fail to qualify as Rents from Real Property.

                  "Indenture": An indenture relating to the issuance of notes
secured by the Class C Certificates, the Class P Certificates and/or the Class R
Certificates (or any portion thereof) which may or may not be guaranteed by the
NIMS Insurer.

                  "Index": With respect to each Adjustable Rate Mortgage Loan
and with respect to each related Adjustment Date, the index as specified in the
related Mortgage Note.

                  "Initial Certificate Principal Balance": With respect to any
Regular Certificate, the amount designated "Initial Certificate Principal
Balance" on the face thereof.

                  "Initial Deposit": With respect to the Initial Group I
Mortgage Loans, $0.00 in cash to be deposited by the Depositor with the Trustee
for deposit into the Group I Initial Deposit Account on or before the Closing
Date, relating to Initial Group I Mortgage Loans having a first Due Date in the
Due Period relating to the Distribution Date in March 2003. With respect to the
Initial Group II Mortgage Loans, $1,062.38 in cash to be deposited by the
Depositor with the Trustee for deposit into the Group II Initial Deposit Account
on or before the Closing Date, relating to Initial Group II Mortgage Loans
having a first Due Date in the Due Period relating to the Distribution Date in
March 2003.

                  "Initial Deposit Accounts": The Group I Initial Deposit
Account and the Group II Initial Deposit Account.

                  "Initial Group I Mortgage Loan": Any of the Group I Mortgage
Loans included in the Trust Fund as of the Closing Date. The aggregate principal
balance of the Initial Group I Mortgage Loans as of the Cut-off Date is equal to
$427,190,417.56.

                  "Initial Group II Mortgage Loan": Any of the Group II Mortgage
Loans included in the Trust Fund as of the Closing Date. The aggregate principal
balance of the Initial Group II Mortgage Loans as of the Cut-off Date is equal
to $773,864,528.88.

                  "Initial Mortgage Loan": Any of the Initial Group I Mortgage
Loans or Initial Group II Mortgage Loans included in the Trust Fund as of the
Closing Date.

                                       19

<PAGE>


                  "Insurance Proceeds": Proceeds of any title policy, hazard
policy or other insurance policy covering a Mortgage Loan (including the PMI
Policy), to the extent such proceeds are received by the Master Servicer and are
not to be applied to the restoration of the related Mortgaged Property or
released to the Mortgagor in accordance with the procedures that the Master
Servicer would follow in servicing mortgage loans held for its own account,
subject to the terms and conditions of the related Mortgage Note and Mortgage.

                  "Interest Coverage Accounts": The Group I Interest Coverage
Account and the Group II Interest Coverage Account.

                  "Interest Coverage Amounts": The amount to be paid by the
Depositor to the Trustee for deposit in the Group I Interest Coverage Account on
the Closing Date pursuant to Section 4.06, which amount is $542,693.22 and the
amount to be paid by the Depositor to the Trustee for deposit in the Group II
Interest Coverage Account on the Closing Date pursuant to Section 4.06, which
amount is $973,892.00.

                  "Interest Determination Date": With respect to the Class A
Certificates and the Mezzanine Certificates and each Accrual Period, the second
LIBOR Business Day preceding the commencement of such Accrual Period.

                  "Late Collections": With respect to any Mortgage Loan, all
amounts received subsequent to the Determination Date immediately following any
related Due Period, whether as late payments of Monthly Payments or as Insurance
Proceeds, Liquidation Proceeds or otherwise, which represent late payments or
collections of principal and/or interest due (without regard to any acceleration
of payments under the related Mortgage and Mortgage Note) but delinquent on a
contractual basis for such Due Period and not previously recovered.

                  "LIBOR": With respect to each Accrual Period, the rate
determined by the Trustee on the related Interest Determination Date on the
basis of the London interbank offered rate for one- month United States dollar
deposits, as such rate appears on the Telerate Page 3750, as of 11:00 a.m.
(London time) on such Interest Determination Date. If such rate does not appear
on Telerate Page 3750, the rate for such Interest Determination Date will be
determined on the basis of the offered rates of the Reference Banks for
one-month United States dollar deposits, as of 11:00 a.m. (London time) on such
Interest Determination Date. The Trustee will request the principal London
office of each of the Reference Banks to provide a quotation of its rate. On
such Interest Determination Date, LIBOR for the related Accrual Period will be
established by the Trustee as follows:

                  (i) If on such Interest Determination Date two or more
         Reference Banks provide such offered quotations, LIBOR for the related
         Accrual Period shall be the arithmetic mean of such offered quotations
         (rounded upwards if necessary to the nearest whole multiple of 1/16 of
         1%); and

                  (ii) If on such Interest Determination Date fewer than two
         Reference Banks provide such offered quotations, LIBOR for the related
         Accrual Period shall be the higher of (i) LIBOR as determined on the
         previous Interest Determination Date and (ii) the Reserve Interest
         Rate.

                                       20

<PAGE>




                  "LIBOR Business Day": Any day on which banks in London,
England and The City of New York are open and conducting transactions in foreign
currency and exchange.

                  "Liquidated Mortgage Loan": As to any Distribution Date, any
Mortgage Loan in respect of which the Master Servicer has determined, in
accordance with the servicing procedures specified herein, as of the end of the
related Prepayment Period, that all Liquidation Proceeds which it expects to
recover with respect to the liquidation of the Mortgage Loan or disposition of
the related REO Property have been recovered.

                  "Liquidation Event": With respect to any Mortgage Loan, any of
the following events: (i) such Mortgage Loan is paid in full, (ii) a Final
Recovery Determination is made as to such Mortgage Loan or (iii) such Mortgage
Loan is removed from the Trust Fund by reason of its being purchased, sold or
replaced pursuant to or as contemplated by Section 2.03 or Section 10.01. With
respect to any REO Property, either of the following events: (i) a Final
Recovery Determination is made as to such REO Property or (ii) such REO Property
is removed from the Trust Fund by reason of its being sold or purchased pursuant
to Section 3.23 or Section 10.01.

                  "Liquidation Proceeds": The amount (other than amounts
received in respect of the rental of any REO Property prior to REO Disposition)
received by the Master Servicer in connection with (i) the taking of all or a
part of a Mortgaged Property by exercise of the power of eminent domain or
condemnation, (ii) the liquidation of a defaulted Mortgage Loan by means of a
trustee's sale, foreclosure sale or otherwise or (iii) the repurchase,
substitution or sale of a Mortgage Loan or an REO Property pursuant to or as
contemplated by Section 2.03, Section 3.23 or Section 10.01.

                  "Loan-to-Value Ratio": As of any date and as to any Mortgage
Loan, the fraction, expressed as a percentage, the numerator of which is the
Principal Balance of the Mortgage Loan (and, with respect to any second lien
Mortgage Loan, the Principal Balance of the related first lien Mortgage Loan
plus the Principal Balance of such second lien Mortgage Loan), and the
denominator of which is the Value of the related Mortgaged Property.

                  "Loan Group": Either Loan Group I or Loan Group II, as the
context requires.

                  "Loan Group I": The group of Mortgage Loans with principal
balances that conform to Fannie Mae and Freddie Mac guidelines identified in the
Mortgage Loan Schedule as having been assigned to Loan Group I.

                  "Loan Group II": The group of Mortgage Loans with principal
balances that may or may not conform to Fannie Mae and Freddie Mac guidelines
identified in the Mortgage Loan Schedule as having been assigned to Loan Group
II.

                  "Losses":  As defined in Section 9.03.

                  "Loss Mitigation Procedures": The policies and procedures set
forth in Exhibit G hereto relating to the realization on delinquent Mortgage
Loans.
                                       21

<PAGE>




                  "Lost Note Affidavit": With respect to any Mortgage Loan as to
which the original Mortgage Note has been permanently lost, misplaced or
destroyed and has not been replaced, an affidavit from the Originator certifying
that the original Mortgage Note has been lost, misplaced or destroyed (together
with a copy of the related Mortgage Note) and indemnifying the Trust against any
loss, cost or liability resulting from the failure to deliver the original
Mortgage Note in the form of Exhibit H hereto.

                  "Majority Certificateholders": The Holders of Certificates
evidencing at least 51% of the Voting Rights.

                  "Marker Rate": With respect to the Class C Certificates and
any Distribution Date, a per annum rate equal to two (2) times the weighted
average of the Uncertificated REMIC 2 Pass- Through Rates for REMIC 2 Regular
Interest LT2A1, REMIC 2 Regular Interest LT2A2, REMIC 2 Regular Interest LT2M1,
REMIC 2 Regular Interest LT2M2, REMIC 2 Regular Interest LT2M3, REMIC 2 Regular
Interest LT2M4 and REMIC 2 Regular Interest LT2ZZ, with the rate on REMIC 2
Regular Interest LT2A1 subject to a cap equal to the lesser of (i) LIBOR plus
the Certificate Margin of the Class A-1 Certificates and (ii) the Maximum Cap
Rate for the purpose of this calculation; with the rate on REMIC 2 Regular
Interest LT2A2 subject to a cap equal to the lesser of (i) LIBOR plus the
Certificate Margin of the Class A-2 Certificates and (ii) the Maximum Cap Rate
for the purpose of this calculation; with the rate on REMIC 2 Regular Interest
LT2M1 subject to a cap equal to the lesser of (i) LIBOR plus the Certificate
Margin of the Class M-1 Certificates and (ii) the Maximum Cap Rate for the
purpose of this calculation; with the rate on REMIC 2 Regular Interest LT2M2
subject to a cap equal to the lesser of (i) LIBOR plus the Certificate Margin of
the Class M-2 Certificates and (ii) the Maximum Cap Rate for the purpose of this
calculation; with the rate on REMIC 2 Regular Interest LT2M3 subject to a cap
equal to the lesser of (i) LIBOR plus the Certificate Margin of the Class M-3
Certificates and (ii) the Maximum Cap Rate for the purpose of this calculation;
with the rate on REMIC 2 Regular Interest LT2M4 subject to a cap equal to the
lesser of (i) LIBOR plus the Certificate Margin of the Class M-4 Certificates
and (ii) the Maximum Cap Rate for the purpose of this calculation; and with the
rate on REMIC 2 Regular Interest LT2ZZ subject to a cap of zero for the purpose
of this calculation; provided, however, that for this purpose, calculations of
the Uncertificated REMIC 2 Pass-Through Rate and the related caps with respect
to REMIC 2 Regular Interest LT2A1, REMIC 2 Regular Interest LT2A2, REMIC 2
Regular Interest LT2M1, REMIC 2 Regular Interest LT2M2, REMIC 2 Regular Interest
LT2M3 and REMIC 2 Regular Interest LT2M4 shall be multiplied by a fraction, the
numerator of which is the actual number of days in the Accrual Period and the
denominator of which is 30.

                  "Master Servicer": Option One Mortgage Corporation, a
California corporation, or any successor servicer appointed as herein provided,
in its capacity as Master Servicer hereunder.

                  "Master Servicer Affiliate": A Person (i) controlling,
controlled by or under common control with the Master Servicer or which is 50%
or more owned by the Master Servicer and (ii) which is qualified to service
residential mortgage loans.

                  "Master Servicer Event of Termination": One or more of the
events described in Section 7.01.


                                       22

<PAGE>



                  "Master Servicer Optional Purchase Delinquency Trigger": A
Master Servicer Optional Purchase Delinquency Trigger has occurred with respect
to a Distribution Date if the Delinquency Percentage exceeds 65.00% of the
Credit Enhancement Percentage.

                  "Master Servicer Prepayment Charge Payment Amount": The
amounts payable by the Master Servicer in respect of any waived Prepayment
Charges pursuant to Section 2.05 or Section 3.01.

                  "Master Servicer Remittance Date": With respect to any
Distribution Date, the Business Day prior to such Distribution Date.

                  "Maximum Cap Rate": For any Distribution Date and the Class
A-1 Certificates, a per annum rate equal to the product of (x) the weighted
average of the Adjusted Net Maximum Mortgage Rates of the Group I Mortgage
Loans, weighted on the basis of the outstanding Principal Balances of the Group
I Mortgage Loans as of the first day of the month preceding the month of such
Distribution Date and (y) a fraction, the numerator of which is 30 and the
denominator of which is the actual number of days elapsed in the related Accrual
Period.

                  For any Distribution Date and the Class A-2 Certificates, a
per annum rate equal to the product of (x) the weighted average of the Adjusted
Net Maximum Mortgage Rates of the Group II Mortgage Loans, weighted on the basis
of the outstanding Principal Balances of the Group II Mortgage Loans as of the
first day of the month preceding the month of such Distribution Date and (y) a
fraction, the numerator of which is 30 and the denominator of which is the
actual number of days elapsed in the related Accrual Period.

                  For any Distribution Date and the Mezzanine Certificates, a
per annum rate equal to the product of (x) the weighted average of the Adjusted
Net Maximum Mortgage Rates of the Mortgage Loans, weighted on the basis of the
outstanding Principal Balances of the Mortgage Loans as of the first day of the
month preceding the month of such Distribution Date and (y) a fraction, the
numerator of which is 30 and the denominator of which is the actual number of
days elapsed in the related Accrual Period.

                  "Maximum LT2ZZ Uncertificated Accrued Interest Deferral
Amount": With respect to any Distribution Date, the excess of (a) accrued
interest at the Uncertificated REMIC 2 Pass- Through Rate applicable to REMIC 2
Regular Interest LT2ZZ for such Distribution Date on a balance equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2ZZ minus the
REMIC 2 Overcollateralized Amount, in each case for such Distribution Date, over
(b) Uncertificated Accrued Interest on REMIC 2 Regular Interest LT2A1 with the
rate on REMIC 2 Regular Interest LT2A1 subject to a cap equal to the lesser of
(i) LIBOR plus the Certificate Margin of the Class A-1 Certificates and (ii) the
Maximum Cap Rate for the purpose of this calculation, Uncertificated Accrued
Interest on REMIC 2 Regular Interest LT2A2 with the rate on REMIC 2 Regular
Interest LT2A2 subject to a cap equal to the lesser of (i) LIBOR plus the
Certificate Margin of the Class A-2 Certificates and (ii) the Maximum Cap Rate;
for the purpose of this calculation


                                       23

<PAGE>



Uncertificated Accrued Interest on REMIC 2 Regular Interest LT2M1 with the rate
on REMIC 2 Regular Interest LT2M1 subject to a cap equal to the lesser of (i)
LIBOR plus the Certificate Margin of the Class M-1 Certificates and (ii) the
Maximum Cap Rate for the purpose of this calculation, Uncertificated Accrued
Interest on REMIC 2 Regular Interest LT2M2 with the rate on REMIC 2 Regular
Interest LT2M2 subject to a cap equal to the lesser of (i) LIBOR plus the
Certificate Margin of the Class M-2 Certificates and (ii) the Maximum Cap Rate
for the purpose of this calculation, Uncertificated Accrued Interest on REMIC 2
Regular Interest LT2M3 with the rate on REMIC 2 Regular Interest LT2M3 subject
to a cap equal to the lesser of (i) LIBOR plus the Certificate Margin of the
Class M-3 Certificates and (ii) the Maximum Cap Rate for the purpose of this
calculation, and Uncertificated Accrued Interest on REMIC 2 Regular Interest
LT2M4 with the rate on REMIC 2 Regular Interest LT2M4 subject to a cap equal to
the lesser of (i) LIBOR plus the Certificate Margin of the Class M-4
Certificates and (ii) the Maximum Cap Rate for the purpose of this calculation
for such Distribution Date; provided, however, that for this purpose,
calculations of the Uncertificated REMIC 2 Pass-Through Rate and the related
caps with respect to REMIC 2 Regular Interest LT2A1, REMIC 2 Regular Interest
LT2A2, REMIC 2 Regular Interest LT2M1, REMIC 2 Regular Interest LT2M2, REMIC 2
Regular Interest LT2M3 and REMIC 2 Regular Interest LT2M4 shall be multiplied by
a fraction, the numerator of which is the actual number of days in the Accrual
Period and the denominator of which is 30.

                  "Maximum Mortgage Rate": With respect to each Adjustable Rate
Mortgage Loan, the percentage set forth in the related Mortgage Note as the
maximum Mortgage Rate thereunder.

                  "Mezzanine Certificate": Any Class M-1 Certificate, Class M-2
Certificate, Class M- 3 Certificate or Class M-4 Certificate.

                  "Minimum Mortgage Rate": With respect to each Adjustable Rate
Mortgage Loan, the percentage set forth in the related Mortgage Note as the
minimum Mortgage Rate thereunder.

                  "Monthly Interest Distributable Amount": With respect to the
Class A Certificates, the Mezzanine Certificates, the Class C Certificates and
any Distribution Date, (i) the amount of interest accrued during the related
Accrual Period at the related Pass-Through Rate on the Certificate Principal
Balance (or Notional Amount in the case of the Class C Certificates) of such
Class immediately prior to such Distribution Date plus (ii) in the case of
either Class of Class A Certificates and solely for federal income tax purposes,
the amount of any Excess Group Net WAC Rate Amount, if any, for such Class for
such Distribution Date, in each case, reduced by (x) any Net Prepayment Interest
Shortfalls and Relief Act Interest Shortfalls and in the case of the Class C
Certificates, amounts payable to the PMI Insurer pursuant to Section 4.01(d)(ix)
(allocated to such Certificate based on its respective entitlements to interest
irrespective of any Net Prepayment Interest Shortfalls and Relief Act Interest
Shortfalls for such Distribution Date) and (y) in the case of either Class of
Class A Certificates and solely for federal income tax purposes, the amount of
the Excess Pool Net WAC Rate Amount, if any, for such Class for such
Distribution Date.

                  "Monthly Payment": With respect to any Mortgage Loan, the
scheduled monthly payment of principal and interest on such Mortgage Loan which
is payable by the related Mortgagor from time to time under the related Mortgage
Note, determined: (a) after giving effect to (i) any Deficient Valuation and/or
Debt Service Reduction with respect to such Mortgage Loan and (ii) any
reduction in the amount of interest collectible from the related Mortgagor
pursuant to the Relief Act; (b) without giving effect to any extension granted
or agreed to by the Master Servicer pursuant to

                                       24

<PAGE>



Section 3.01; and (c) on the assumption that all other amounts, if any, due
under such Mortgage Loan are paid when due.

                  "Moody's": Moody's Investors Service, Inc. or its successor in
interest.

                  "Mortgage": The mortgage, deed of trust or other instrument
creating a first lien or second lien on, or first or second priority security
interest in, a Mortgaged Property securing a Mortgage Note.

                  "Mortgage File": The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.

                  "Mortgage Loan": Each mortgage loan transferred and assigned
to the Trustee pursuant to Section 2.01, Section 2.03(d) or Section 2.08 as from
time to time held as a part of the Trust Fund, the Mortgage Loans so held being
identified in the Mortgage Loan Schedule.

                  "Mortgage Loan Purchase Agreement": The agreements among the
Master Servicer, in its capacity as Originator, the Seller and the Depositor,
regarding the transfer of the Mortgage Loans by the Seller to or at the
direction of the Depositor, substantially in the forms attached hereto as
Exhibit C.

                  "Mortgage Loan Schedule": As of any date, the list of Mortgage
Loans included in REMIC 1 on such date, separately identifying the Group I
Mortgage Loans and the Group II Mortgage Loans, attached hereto as Exhibit D, as
supplemented by each schedule of Subsequent Mortgage Loans attached to a
Subsequent Transfer Instrument. The Mortgage Loan Schedule shall be prepared by
the Originator and shall set forth the following information with respect to
each Mortgage Loan, as applicable:

                  (1) the Mortgage Loan identifying number;

                  (2) the Mortgagor's name;

                  (3) the street address of the Mortgaged Property including the
         state and zip code;

                  (4) a code indicating whether the Mortgaged Property was
         represented by the borrower, at the time of origination, as being
         owner-occupied;

                  (5) the type of Residential Dwelling constituting the
         Mortgaged Property;

                  (6) the original months to maturity;

                  (7) the stated remaining months to maturity from the Cut-off
         Date (or Subsequent Cut-off Date, with respect to a Subsequent Mortgage
         Loan) based on the original amortization schedule;

                                       25

<PAGE>




                  (8) the Loan-to-Value Ratio at origination;

                  (9) the Mortgage Rate in effect immediately following the
         Cut-off Date (or Subsequent Cut-off Date, with respect to a Subsequent
         Mortgage Loan);

                  (10) the date on which the first Monthly Payment was due on
         the Mortgage Loan;

                  (11) the stated maturity date;

                  (12) the amount of the Monthly Payment at origination;

                  (13) the amount of the Monthly Payment due on the first Due
         Date after the Cut- off Date (or Subsequent Cut-off Date, with respect
         to a Subsequent Mortgage Loan);

                  (14) the last Due Date on which a Monthly Payment was actually
         applied to the unpaid Stated Principal Balance;

                  (15) the original principal amount of the Mortgage Loan;

                  (16) the Stated Principal Balance of the Mortgage Loan as of
         the Close of Business on the Cut-off Date (or Subsequent Cut-off Date,
         with respect to a Subsequent Mortgage Loan);

                  (17) a code indicating the purpose of the Mortgage Loan (I.E.,
         purchase financing, rate/term refinancing, cash-out refinancing);

                  (18) the Mortgage Rate at origination;

                  (19) a code indicating the documentation program (I.E., full
         documentation, limited documentation, stated income documentation);

                  (20) the risk grade;

                  (21) the Value of the Mortgaged Property;

                  (22) the sale price of the Mortgaged Property, if applicable;

                  (23) the actual unpaid principal balance of the Mortgage Loan
         as of the Cut-off Date (or Subsequent Cut-off Date, with respect to a
         Subsequent Mortgage Loan);

                  (24)     the type and term of the related Prepayment Charge;

                  (25) the rounding code;

                  (26) the program code;


                                       26

<PAGE>



                  (27) a code indicating the lien priority for Mortgage Loans;

                  (28) with respect to each Adjustable Rate Mortgage Loan, the
         Minimum Mortgage Rate;

                  (29) with respect to each Adjustable Rate Mortgage Loan, the
         Maximum Mortgage Rate;

                  (30) with respect to each Adjustable Rate Mortgage Loan, the
         Gross Margin;

                  (31) with respect to each Adjustable Rate Mortgage Loan, the
         next Adjustment Date;

                  (32) with respect to each Adjustable Rate Mortgage Loan, the
         Periodic Rate Cap;

                  (33) whether such Mortgage Loan is covered under the PMI
         Policy; and

                  (34) the credit score ("FICO") of such Mortgage Loan.

                  The Mortgage Loan Schedule shall set forth the following
information, with respect to the Mortgage Loans in the aggregate and for each
Loan Group as of the Cut-off Date (or Subsequent Cut-off Date, with respect to a
Subsequent Mortgage Loan): (1) the number of Mortgage Loans (separately
identifying the number of Fixed-Rate Mortgage Loans and the number of
Adjustable-Rate Mortgage Loans); (2) the current Principal Balance of the
Mortgage Loans; (3) the weighted average Mortgage Rate of the Mortgage Loans and
(4) the weighted average maturity of the Mortgage Loans. The Mortgage Loan
Schedule shall be amended from time to time by the Originator in accordance with
the provisions of this Agreement. With respect to any Qualified Substitute
Mortgage Loan, Cut-off Date shall refer to the related Cut-off Date for such
Mortgage Loan, determined in accordance with the definition of Cut-off Date
herein.

                  "Mortgage Note": The original executed note or other evidence
of indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage
Loan.

                  "Mortgage Pool": The pool of Mortgage Loans, identified on
Exhibit D from time to time, and any REO Properties acquired in respect thereof
and as supplemented by any Subsequent Mortgage Loans identified on each schedule
of Subsequent Mortgage Loans attached to a Subsequent Transfer Instrument.

                  "Mortgage Rate": With respect to each Fixed Rate Mortgage
Loan, the rate set forth in the related Mortgage Note. With respect to each
Adjustable Rate Mortgage Loan, the annual rate at which interest accrues on such
Mortgage Loan from time to time in accordance with the provisions of the related
Mortgage Note, which rate (A) as of any date of determination until the first
Adjustment Date following the Cut-off Date (or Subsequent Cut-off Date, with
respect to a Subsequent Mortgage Loan) shall be the rate set forth in the
Mortgage Loan Schedule as the Mortgage Rate in effect immediately following the
Cut-off Date (or Subsequent Cut-off Date, with respect to a Subsequent Mortgage
Loan) and (B) as of any date of determination thereafter shall be

                                       27

<PAGE>



the rate as adjusted on the most recent Adjustment Date, to equal the sum,
rounded to the next highest or nearest 0.125% (as provided in the Mortgage
Note), of the Index, determined as set forth in the related Mortgage Note, plus
the related Gross Margin subject to the limitations set forth in the related
Mortgage Note. With respect to each Mortgage Loan that becomes an REO Property,
as of any date of determination, the annual rate determined in accordance with
the immediately preceding sentence as of the date such Mortgage Loan became an
REO Property.

                  "Mortgaged Property": The underlying property securing a
Mortgage Loan, including any REO Property, consisting of an Estate in Real
Property improved by a Residential Dwelling.

                  "Mortgagor":  The obligor on a Mortgage Note.

                  "Net Liquidation Proceeds": With respect to any Liquidated
Mortgage Loan or any other disposition of related Mortgaged Property (including
REO Property) the related Liquidation Proceeds and Insurance Proceeds net of
Advances, Servicing Advances, Servicing Fees and any other accrued and unpaid
servicing fees received and retained in connection with the liquidation of such
Mortgage Loan or Mortgaged Property.

                  "Net Monthly Excess Cashflow": With respect to each
Distribution Date, the sum of (a) any Overcollateralization Release Amount for
such Distribution Date and (b) the excess of (x) Available Funds for such
Distribution Date over (y) the sum for such Distribution Date of (A) the Monthly
Interest Distributable Amounts for the Offered Certificates, (B) the Unpaid
Interest Shortfall Amounts for the Class A Certificates and (C) the Principal
Remittance Amount.

                  "Net Mortgage Rate": With respect to any Mortgage Loan (or the
related REO Property), as of any date of determination, a per annum rate of
interest equal to the then applicable Mortgage Rate for such Mortgage Loan minus
the Servicing Fee Rate.

                  "Net Prepayment Interest Shortfall": With respect to any
Distribution Date, the excess, if any, of any Prepayment Interest Shortfalls for
such date over the related Compensating Interest.

                  "Net WAC Rate": With respect to each Distribution Date and the
Class A-1 Certificates, a per annum rate equal to the product of (x) the
weighted average of the Adjusted Net Mortgage Rates of the Group I Mortgage
Loans, weighted on the basis of the outstanding Principal Balances of the Group
I Mortgage Loans as of the first day of the month preceding the month of such
Distribution Date and (y) a fraction, the numerator of which is 30 and the
denominator of which is the actual number of days elapsed in the related Accrual
Period.

                  With respect to each Distribution Date and the Class A-2
Certificates, a per annum rate equal to the product of (x) the weighted average
of the Adjusted Net Mortgage Rates of the Group II Mortgage Loans, weighted on
the basis of the outstanding Principal Balances of the Group II Mortgage Loans
as of the first day of the month preceding the month of such Distribution Date
and (y) a fraction, the numerator of which is 30 and the denominator of which is
the actual number of days elapsed in the related Accrual Period.


                                       28

<PAGE>





                  With respect to each Distribution Date and the Mezzanine
Certificates, a per annum rate equal to the product of (x) the weighted average
of the Adjusted Net Mortgage Rates of the Mortgage Loans, weighted on the basis
of the outstanding Principal Balances of the Mortgage Loans as of the first day
of the month preceding the month of such Distribution Date and (y) a fraction,
the numerator of which is 30 and the denominator of which is the actual number
of days elapsed in the related Accrual Period.

                  "Net WAC Rate Carryover Amount": With respect to the Class A
Certificates and the Mezzanine Certificates and any Distribution Date, the sum
of (A) the positive excess of (i) the amount of interest accrued to such Class
of Certificates for such Distribution Date calculated at the related Formula
Rate over (ii) the amount of interest accrued on such Class of Certificates at
the related Net WAC Rate for such Distribution Date and (B) the related Net WAC
Rate Carryover Amount for the previous Distribution Date not previously paid,
together with interest thereon at a rate equal to the related Formula Rate, in
each case for such Distribution Date and for such Accrual Period.

                  "Net WAC Rate Carryover Reserve Account": The reserve account
established and maintained pursuant to Section 3.28.

                  "New Lease": Any lease of REO Property entered into on behalf
of the Trust, including any lease renewed or extended on behalf of the Trust if
the Trust has the right to renegotiate the terms of such lease.

                  "NIMS Insurer": Any insurer that is guaranteeing certain
payments under notes secured by collateral which includes all or a portion of
the Class C Certificates, the Class P Certificates and/or the Class R
Certificates.

                  "Nonrecoverable Advance": Any Advance or Servicing Advance
previously made or proposed to be made in respect of a Mortgage Loan or REO
Property that, in the good faith business judgment of the Master Servicer, will
not be ultimately recoverable from Late Collections, Insurance Proceeds,
Liquidation Proceeds or condemnation proceeds on such Mortgage Loan or REO
Property as provided herein.

                  "Notional Amount": Immediately prior to any Distribution Date,
with respect to the Class C Certificates, the aggregate of the Uncertificated
Principal Balances of the REMIC 2 Regular Interests.

                  "Offered Certificates": The Class A Certificates and the
Mezzanine Certificates offered to the public pursuant to the Prospectus
Supplement.

                  "Officers' Certificate": A certificate signed by the Chairman
of the Board, the Vice Chairman of the Board, the President or a vice president
(however denominated), and by the Treasurer, the Secretary, or one of the
assistant treasurers or assistant secretaries or Servicing Officers of the
Master Servicer, the Originator or the Depositor, as applicable.


                                       29

<PAGE>





                  "Opinion of Counsel": A written opinion of counsel, who may,
without limitation, be a salaried counsel for the Depositor or the Master
Servicer, acceptable to the Trustee, except that any opinion of counsel relating
to (a) the qualification of any REMIC as a REMIC or (b) compliance with the
REMIC Provisions must be an opinion of Independent counsel.

                  "Optional Termination Date": The first Distribution Date on
which the Master Servicer or the NIMS Insurer may opt to terminate the Trust
Fund pursuant to Section 10.01.

                  "Original Class Certificate Principal Balance": With respect
to the Class A Certificates, the Mezzanine Certificates, the Class C
Certificates and the Class P Certificates, the corresponding amounts set forth
opposite such Class above in the Preliminary Statement.

                  "Original Notional Amount": With respect to the Class C
Certificates, $1,600,000,000.

                  "Original Group I Pre-Funded Amount": The amount deposited by
the Depositor in the Group I Pre-Funding Account on the Closing Date, which
amount is $142,965,156.50.

                  "Original Group II Pre-Funded Amount": The amount deposited by
the Depositor in the Group II Pre-Funding Account on the Closing Date, which
amount is $257,029,618.74.

                  "Original Pre-Funded Amounts": The Original Group I Pre-Funded
Amount and the Original Group II Pre-Funded Amount.

                  "Originator": Option One Mortgage Corporation, a California
corporation, or its successor in interest, in its capacity as originator under
the Mortgage Loan Purchase Agreement.

                  "Overcollateralization Deficiency Amount": With respect to any
Distribution Date, the amount, if any, by which the Overcollateralization Target
Amount exceeds the Overcollateralized Amount on such Distribution Date (after
giving effect to distributions in respect of the Group I Basic Principal
Distribution Amount and the Group II Basic Principal Distribution Amount on such
Distribution Date).

                  "Overcollateralization Floor": With respect to (i) the Class
A-1 Certificates, $2,840,909.09, (ii) the Class A-2 Certificates, $5,159,090.91
and (iii) the Mezzanine Certificates, $8,000,000.

                  "Overcollateralization Release Amount": With respect to any
Distribution Date, the lesser of (x) the Principal Remittance Amount for such
Distribution Date and (y) the Excess Overcollateralized Amount.

                  "Overcollateralization Target Amount": With respect to any
Distribution Date, $8,000,000.

                  "Overcollateralized Amount": For any Distribution Date, is the
amount, equal to (i) the sum of the aggregate Principal Balance of the Mortgage
Loans as of the last day of the related

                                       30

<PAGE>



Due Period (after giving effect to scheduled payments of principal due during
the related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) and any
funds on deposit in the Pre-Funding Accounts on the related Determination Date
minus (ii) the sum of the aggregate Certificate Principal Balance of the Class A
Certificates, the Mezzanine Certificates and the Class P Certificates as of such
Distribution Date (after giving effect to distributions to be made on such
Distribution Date).

                  "Ownership Interest": As to any Certificate, any ownership or
security interest in such Certificate, including any interest in such
Certificate as the Holder thereof and any other interest therein, whether direct
or indirect, legal or beneficial, as owner or as pledgee.

                  "Pass-Through Rate":

                  With respect to the Class A Certificates and the Mezzanine
Certificates and any Distribution Date, the lesser of (x) the related Formula
Rate for such Distribution Date and (y) the Pool Net WAC Rate for such
Distribution Date.

                  With respect to the Class C Certificates and any Distribution
Date, a per annum rate equal to the percentage equivalent of a fraction, the
numerator of which is the sum of the amounts calculated pursuant to clauses (A)
through (I) below, and the denominator of which is the aggregate of the
Uncertificated Principal Balances of REMIC 2 Regular Interest LT2AA, REMIC 2
Regular Interest LT2A1, REMIC 2 Regular Interest LT2A2, REMIC 2 Regular Interest
LT2M1, REMIC 2 Regular Interest LT2M2, REMIC 2 Regular Interest LT2M3, REMIC 2
Regular Interest LT2M4, REMIC 2 Regular Interest LT2ZZ and REMIC 2 Regular
Interest LT2P. For purposes of calculating the Pass-Through Rate for the Class C
Certificates, the numerator is equal to the sum of the following components:

                  (A) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2AA minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2AA;

                  (B) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2A1 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2A1;

                  (C) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2A2 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2A2;

                  (D) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2M1 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2M1;

                  (E) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2M2 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2M2;


                                       31

<PAGE>


                  (F) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2M3 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2M3;

                  (G) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2M4 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2M4;

                  (H) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2ZZ minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2ZZ; and

                  (I) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2P minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2P.

                  "Paying Agent": Any paying agent appointed pursuant to Section
5.05.

                  "Percentage Interest": With respect to any Certificate (other
than a Class R Certificate), a fraction, expressed as a percentage, the
numerator of which is the Initial Certificate Principal Balance or Notional
Amount represented by such Certificate and the denominator of which is the
Original Class Certificate Principal Balance or initial Notional Amount of the
related Class. With respect to a Class R Certificate, the portion of the Class
evidenced thereby, expressed as a percentage, as stated on the face of such
Certificate; provided, however, that the sum of all such percentages for each
such Class totals 100%.

                  "Periodic Rate Cap": With respect to each Adjustable Rate
Mortgage Loan and any Adjustment Date therefor, the fixed percentage set forth
in the related Mortgage Note, which is the maximum amount by which the Mortgage
Rate for such Mortgage Loan may increase or decrease (without regard to the
Maximum Mortgage Rate or the Minimum Mortgage Rate) on such Adjustment Date from
the Mortgage Rate in effect immediately prior to such Adjustment Date.

                  "Permitted Investments": Any one or more of the following
obligations or securities acquired at a purchase price of not greater than par,
regardless of whether issued or managed by the Depositor, the Master Servicer,
the NIMS Insurer, the Trustee or any of their respective Affiliates or for which
an Affiliate of the NIMS Insurer or Trustee serves as an advisor:

                  (i) direct obligations of, or obligations fully guaranteed as
         to timely payment of principal and interest by, the United States or
         any agency or instrumentality thereof, provided such obligations are
         backed by the full faith and credit of the United States;

                  (ii) (A) demand and time deposits in, certificates of deposit
         of, bankers' acceptances issued by or federal funds sold by any
         depository institution or trust company (including the Trustee or its
         agent acting in their respective commercial capacities) 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
         authorities, so long as, at the time of


                                       32

<PAGE>



         such investment or contractual commitment providing for such
         investment, such depository institution or trust company (or, if the
         only Rating Agency is S&P, in the case of the principal depository
         institution in a depository institution holding company, debt
         obligations of the depository institution holding company) or its
         ultimate parent has a short-term uninsured debt rating in the highest
         available rating category of Moody's, Fitch and S&P and provided that
         each such investment has an original maturity of no more than 365
         days; and provided further that, if the only Rating Agency is S&P and
         if the depository or trust company is a principal subsidiary of a bank
         holding company and the debt obligations of such subsidiary are not
         separately rated, the applicable rating shall be that of the bank
         holding company; and, provided further that, if the original maturity
         of such short-term obligations of a domestic branch of a foreign
         depository institution or trust company shall exceed 30 days, the
         short-term rating of such institution shall be A-1+ in the case of S&P
         if S&P is the Rating Agency; and (B) any other demand or time deposit
         or deposit which is fully insured by the FDIC;

                  (iii) repurchase obligations with a term not to exceed 30 days
         with respect to any security described in clause (i) above and entered
         into with a depository institution or trust company (acting as
         principal) rated A-1+ or higher by S&P, F-1+ or higher by Fitch and A2
         or higher by Moody's, provided, however, that collateral transferred
         pursuant to such repurchase obligation must be of the type described in
         clause (i) above and must (A) be valued daily at current market prices
         plus accrued interest, (B) pursuant to such valuation, be equal, at all
         times, to 105% of the cash transferred by the Trustee in exchange for
         such collateral and (C) be delivered to the Trustee or, if the Trustee
         is supplying the collateral, an agent for the Trustee, in such a manner
         as to accomplish perfection of a security interest in the collateral by
         possession of certificated securities;

                  (iv) securities bearing interest or sold at a discount that
         are issued by any corporation incorporated under the laws of the United
         States of America or any State thereof and that are rated by a Rating
         Agency in its highest long-term unsecured rating category at the time
         of such investment or contractual commitment providing for such
         investment;

                  (v) commercial paper (including both non-interest-bearing
         discount obligations and interest-bearing obligations payable on demand
         or on a specified date not more than 30 days after the date of
         acquisition thereof) that is rated by a Rating Agency in its highest
         short-term unsecured debt rating available at the time of such
         investment;

                  (vi) units of money market funds, including those managed or
         advised by the Trustee or its Affiliates, that have been rated "AAA" by
         S&P, "AAA" by Fitch and "Aaa" by Moody's; and

                  (vii) if previously confirmed in writing to the Trustee, any
         other demand, money market or time deposit, or any other obligation,
         security or investment, as may be acceptable to the Rating Agencies in
         writing as a permitted investment of funds backing securities having
         ratings equivalent to its highest initial rating of the Class A
         Certificates;

provided, that no instrument described hereunder shall evidence either the right
to receive (a) only interest with respect to the obligations underlying such
instrument or (b) both principal and interest

                                       33

<PAGE>




payments derived from obligations underlying such instrument and the interest
and principal payments with respect to such instrument provide a yield to
maturity at par greater than 120% of the yield to maturity at par of the
underlying obligations.

                  "Permitted Transferee": Any transferee of a Residual
Certificate other than a Disqualified Organization or a non-U.S. Person.

                  "Person": Any individual, corporation, limited liability
company, partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.

                  "Plan": Any employee benefit plan or certain other retirement
plans and arrangements, including individual retirement accounts and annuities,
Keogh plans and bank collective investment funds and insurance company general
or separate accounts in which such plans, accounts or arrangements are invested,
that are subject to ERISA and Section 4975 of the Code.

                  "PMI Insurer": Radian Guaranty Inc., a Pennsylvania
corporation, or its successors in interest.

                  "PMI Insurer Fee": The amount payable to the PMI Insurer on
each Distribution Date, which amount shall equal one twelfth of the product of
(i) the PMI Insurer Fee Rate, multiplied by (ii) the aggregate Principal Balance
of the PMI Mortgage Loans and any related REO Properties as of the first day of
the related Due Period (after giving effect to scheduled payments of principal
due during the Due Period relating to the previous Distribution Date, to the
extent received or advanced) plus any applicable premium taxes on PMI Mortgage
Loans located in West Virginia and Kentucky.

                  "PMI Insurer Fee Rate": 1.05% per annum.

                  "PMI Mortgage Loans": The list of Mortgage Loans insured by
the PMI Insurer attached hereto as Schedule II.

                  "PMI Policy": The Primary Mortgage Insurance Policy No. 46300
(policy reference number: 03-998003) with respect to the PMI Mortgage Loans,
including all endorsements thereto dated the Closing Date, issued by the PMI
Insurer and the Commitment Letter, dated January 13, 2003, between the PMI
Insurer and the Originator.

                  "Pool Balance": As of any date of determination, the aggregate
principal balance of the Mortgage Loans in both Loan Groups as of such date.

                  "Pool Net WAC Rate": A per annum rate (not less than zero)
equal to the weighted average of:


                                       34

<PAGE>




                  (a) the Uncertificated REMIC 1 Pass-Through Rate with respect
         to REMIC 1 Regular Interest LT1A for such Distribution Date weighted on
         the basis of the Uncertificated Principal Balance of REMIC 1 Regular
         Interest LT1A;

                  (b) the Uncertificated REMIC 1 Pass-Through Rate with respect
         to REMIC 1 Regular Interest LT1B for such Distribution Date weighted on
         the basis of the Uncertificated Principal Balance of REMIC 1 Regular
         Interest LT1B;

                  (c) the Uncertificated REMIC 1 Pass-Through Rate with respect
         to REMIC 1 Regular Interest LT1C for such Distribution Date weighted on
         the basis of the Uncertificated Principal Balance of REMIC 1 Regular
         Interest LT1C;

                  (d) the Uncertificated REMIC 1 Pass-Through Rate with respect
         to REMIC 1 Regular Interest LT1D for such Distribution Date weighted on
         the basis of the Uncertificated Principal Balance of REMIC 1 Regular
         Interest LT1D; and

                  (e) the Uncertificated REMIC 1 Pass-Through Rate with respect
         to REMIC 1 Regular Interest LT1P for such Distribution Date weighted on
         the basis of the Uncertificated Principal Balance of REMIC 1 Regular
         Interest LT1P.

                  "Pre-Funding Accounts": The Group I Pre-Funding Account and
the Group II Pre- Funding Account.

                  "Prepayment Assumption": As defined in the Prospectus
Supplement.

                  "Prepayment Charge": With respect to any Mortgage Loan, the
charges or premiums, if any, due in connection with a full or partial prepayment
of such Mortgage Loan in accordance with the terms thereof (other than any
Master Servicer Prepayment Charge Payment Amount).

                  "Prepayment Charge Schedule": As of any date, the list of
Prepayment Charges on the Mortgage Loans included in the Trust Fund on such
date, attached hereto as Schedule I (including the Prepayment Charge Summary
attached thereto). The Prepayment Charge Schedule shall be prepared by the
Master Servicer (in its capacity as Originator) and set forth the following
information with respect to each Prepayment Charge:

                  (i)  the Mortgage Loan identifying number;

                  (ii) a code indicating the type of Prepayment Charge;

                  (iii) the state of origination of the related Mortgage Loan;

                  (iv) the date on which the first monthly payment was due on
                       the related Mortgage Loan;

                  (v)  the term of the related Prepayment Charge; and

                                     35

<PAGE>




                  (vi) the principal balance of the related Mortgage Loan as
                       of the Cut-off Date (or Subsequent Cut-off Date, with
                       respect to a Subsequent Mortgage Loan).

                  The Prepayment Charge Schedule shall be amended from time to
time by the Master Servicer in accordance with the provisions of this Agreement
and a copy of such amended Prepayment Charge Schedule shall be furnished by the
Master Servicer to the NIMS Insurer.

                  "Prepayment Interest Excess": With respect to any Distribution
Date, for each Mortgage Loan that was the subject of a Principal Prepayment in
full during the portion of the related Prepayment Period occurring between the
first day and the Determination Date of the calendar month in which such
Distribution Date occurs, an amount equal to interest (to the extent received)
at the applicable Net Mortgage Rate on the amount of such Principal Prepayment
for the number of days commencing on the first day of the calendar month in
which such Distribution Date occurs and ending on the date on which such
prepayment is so applied.

                  "Prepayment Interest Shortfall": With respect to any
Distribution Date, for each Mortgage Loan that was the subject of a Principal
Prepayment in full during the portion of the related Prepayment Period occurring
between the first day of the related Prepayment Period and the last day of the
calendar month preceding the month in which such Distribution Date occurs, an
amount equal to interest at the applicable Net Mortgage Rate on the amount of
such Principal Prepayment for the number of days commencing on the date on which
the prepayment is applied and ending on the last day of the calendar month
preceding the month in which such Distribution Date occurs. The obligations of
the Master Servicer in respect of any Prepayment Interest Shortfall are set
forth in Section 3.24.

                  "Prepayment Period": With respect to any Distribution Date,
the period commencing on the day after the Determination Date in the calendar
month preceding the calendar month in which such Distribution Date occurs (or,
in the case of the first Distribution Date, commencing on January 1, 2003) and
ending on the Determination Date of the calendar month in which such
Distribution Date occurs.

                  "Principal Balance": As to any Mortgage Loan other than a
Liquidated Mortgage Loan, and any day, the related Cut-off Date Principal
Balance, MINUS all collections credited against the Principal Balance of any
such Mortgage Loan. For purposes of this definition, a Liquidated Mortgage Loan
shall be deemed to have a Principal Balance equal to the Principal Balance of
the related Mortgage Loan as of the final recovery of related Liquidation
Proceeds and a Principal Balance of zero thereafter. As to any REO Property and
any day, the Principal Balance of the related Mortgage Loan immediately prior to
such Mortgage Loan becoming REO Property minus any REO Principal Amortization
received with respect thereto on or prior to such day.

                  "Principal Prepayment": Any payment of principal made by the
Mortgagor on a Mortgage Loan which is received in advance of its scheduled Due
Date and which is not accompanied by an amount of interest representing the full
amount of scheduled interest due on any Due Date in any month or months
subsequent to the month of prepayment.


                                       36

<PAGE>




                  "Principal Remittance Amount": With respect to any
Distribution Date, the sum of (i) the Group I Principal Remittance Amount and
(ii) the Group II Principal Remittance Amount.

                  "Prospectus Supplement": That certain Prospectus Supplement
dated January 13, 2003 relating to the public offering of the Offered
Certificates.

                  "Purchase Price": With respect to any Mortgage Loan or REO
Property to be purchased pursuant to or as contemplated by Section 2.03 or
10.01, and as confirmed by an Officers' Certificate from the Master Servicer to
the Trustee, an amount equal to the sum of (i) 100% of the Principal Balance
thereof as of the date of purchase (or such other price as provided in Section
10.01), (ii) in the case of (x) a Mortgage Loan, accrued interest on such
Principal Balance at the applicable Mortgage Rate in effect from time to time
from the Due Date as to which interest was last covered by a payment by the
Mortgagor or an advance by the Master Servicer, which payment or advance had as
of the date of purchase been distributed pursuant to Section 4.01, through the
end of the calendar month in which the purchase is to be effected, and (y) an
REO Property, the sum of (1) accrued interest on such Principal Balance at the
applicable Mortgage Rate in effect from time to time from the Due Date as to
which interest was last covered by a payment by the Mortgagor or an advance by
the Master Servicer through the end of the calendar month immediately preceding
the calendar month in which such REO Property was acquired, plus (2) REO Imputed
Interest for such REO Property for each calendar month commencing with the
calendar month in which such REO Property was acquired and ending with the
calendar month in which such purchase is to be effected, net of the total of all
net rental income, Insurance Proceeds, Liquidation Proceeds and Advances that as
of the date of purchase had been distributed as or to cover REO Imputed Interest
pursuant to Section 4.04, (iii) any unreimbursed Servicing Advances and Advances
and any unpaid Servicing Fees allocable to such Mortgage Loan or REO Property,
(iv) any amounts previously withdrawn from the Collection Account in respect of
such Mortgage Loan or REO Property pursuant to Section 3.23 and (v) in the case
of a Mortgage Loan required to be purchased pursuant to Section 2.03, expenses
reasonably incurred or to be incurred by the Master Servicer, the NIMS Insurer
or the Trustee in respect of the breach or defect giving rise to the purchase
obligation.

                  "Qualified Insurer": Any insurance company acceptable to
Fannie Mae.

                  "Qualified Substitute Mortgage Loan": A mortgage loan
substituted for a Deleted Mortgage Loan pursuant to the terms of this Agreement
or the Mortgage Loan Purchase Agreement which must, on the date of such
substitution, (i) have an outstanding principal balance (or in the case of a
substitution of more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate principal balance), after application of all scheduled payments of
principal and interest due during or prior to the month of substitution, not in
excess of, and not more than 5% less than, the outstanding principal balance of
the Deleted Mortgage Loan as of the Due Date in the calendar month during which
the substitution occurs, (ii) have a Mortgage Rate not less than (and not more
than one percentage point in excess of) the Mortgage Rate of the Deleted
Mortgage Loan, (iii) if the Qualified Substitute Mortgage Loan is an Adjustable
Rate Mortgage Loan, have a Maximum Mortgage Rate not less than the Maximum
Mortgage Rate on the Deleted Mortgage Loan, (iv) if the Qualified Substitute
Mortgage Loan is an Adjustable Rate Mortgage Loan, have a Minimum Mortgage Rate
not less than the Minimum Mortgage Rate of the Deleted Mortgage Loan, (v) if the
Qualified Substitute Mortgage Loan is an Adjustable Rate Mortgage Loan, have a
Gross Margin


                                       37

<PAGE>



equal to or greater than the Gross Margin of the Deleted Mortgage Loan, (vi) if
the Qualified Substitute Mortgage Loan is an Adjustable Rate Mortgage Loan, have
a next Adjustment Date not more than two months later than the next Adjustment
Date on the Deleted Mortgage Loan, (vii) have a remaining term to maturity not
greater than (and not more than one year less than) that of the Deleted Mortgage
Loan, (viii) be current as of the date of substitution, (ix) have a
Loan-to-Value Ratio as of the date of substitution equal to or lower than the
Loan-to-Value Ratio of the Deleted Mortgage Loan as of such date, (x) have a
risk grading determined by the Originator at least equal to the risk grading
assigned on the Deleted Mortgage Loan, (xi) have been underwritten or
reunderwritten by the Originator in accordance with the same underwriting
criteria and guidelines as the Deleted Mortgage Loan, (xii) be covered by the
PMI Policy if the Deleted Mortgage Loan was covered by the PMI Policy, (xiii)
have a Prepayment Charge provision at least equal to the Prepayment Charge
provision of the Deleted Mortgage Loan, (xiv) conform to each representation and
warranty set forth in Section 3.01 of the Mortgage Loan Purchase Agreement
applicable to the Deleted Mortgage Loan, (xv) have the same Due Date as the
Deleted Mortgage Loan and (xvi) not be a Convertible Mortgage Loan unless that
Deleted Mortgage Loan was a Convertible Mortgage Loan. In the event that one or
more mortgage loans are substituted for one or more Deleted Mortgage Loans, the
amounts described in clause (i) hereof shall be determined on the basis of
aggregate principal balances, the Mortgage Rates described in clauses (ii)
through (vi) hereof shall be satisfied for each such mortgage loan, the risk
gradings described in clause (x) hereof shall be satisfied as to each such
mortgage loan, the terms described in clause (vii) hereof shall be determined on
the basis of weighted average remaining term to maturity (provided that no such
mortgage loan may have a remaining term to maturity longer than the Deleted
Mortgage Loan), the Loan-to-Value Ratios described in clause (ix) hereof shall
be satisfied as to each such mortgage loan and, except to the extent otherwise
provided in this sentence, the representations and warranties described in
clause (xii) hereof must be satisfied as to each Qualified Substitute Mortgage
Loan or in the aggregate, as the case may be.

                  "Rating Agency or Rating Agencies": Moody's, Fitch and S&P or
their successors. If such agencies or their successors are no longer in
existence, "Rating Agencies" shall be such nationally recognized statistical
rating agencies, or other comparable Persons, designated by the Depositor,
notice of which designation shall be given to the Trustee and Master Servicer.

                  "Realized Loss": With respect to any Liquidated Mortgage Loan,
the amount of loss realized equal to the portion of the Principal Balance
remaining unpaid after application of all Net Liquidation Proceeds in respect of
such Mortgage Loan.

                  "Record Date": With respect to (i) the Class P Certificates,
the Class C Certificates and the Class R Certificates, the Close of Business on
the last Business Day of the calendar month preceding the month in which the
related Distribution Date occurs and (ii) with respect to the Class A
Certificates and the Mezzanine Certificates, the Close of Business on the
Business Day immediately preceding the related Distribution Date; provided,
however, that following the date on which Definitive Certificates for a Class A
Certificate or a Mezzanine Certificate are available pursuant to Section 5.02,
the Record Date for such Certificates shall be the last Business Day of the
calendar month preceding the month in which the related Distribution Date
occurs.


                                       38

<PAGE>





                  "Reference Banks": Those banks (i) with an established place
of business in London, England, (ii) not controlling, under the control of or
under common control with the Depositor, the Originator or the Master Servicer
or any affiliate thereof and (iii) which have been designated as such by the
Depositor; provided, however, that if fewer than two of such banks provide a
LIBOR rate, then any leading banks selected by the Depositor which are engaged
in transactions in United States dollar deposits in the international
Eurocurrency market.

                  "Regular Certificate": Any of the Class A Certificates,
Mezzanine Certificates, Class C Certificates or Class P Certificates.

                  "Relief Act": The Soldiers' and Sailors' Civil Relief Act of
1940, as amended.

                  "Relief Act Interest Shortfall": With respect to any
Distribution Date, for any Mortgage Loan with respect to which there has been a
reduction in the amount of interest collectible thereon for the most recently
ended Due Period as a result of the application of the Relief Act, the amount by
which (i) interest collectible on such Mortgage Loan during such Due Period is
less than (ii) one month's interest on the Principal Balance of such Mortgage
Loan at the Mortgage Rate for such Mortgage Loan before giving effect to the
application of the Relief Act.

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

                  "REMIC 1": The segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be administered hereunder,
with respect to which a REMIC election is to be made consisting of: (i) such
Mortgage Loans as from time to time are subject to this Agreement, together with
the Mortgage Files relating thereto, and together with all collections thereon
and proceeds thereof, (ii) any REO Property, together with all collections
thereon and proceeds thereof, (iii) the Trustee's rights with respect to the
Mortgage Loans under all insurance policies, including the PMI Policy, required
to be maintained pursuant to this Agreement and any proceeds thereof, (iv) the
Depositor's rights under the Mortgage Loan Purchase Agreement (including any
security interest created thereby) and (v) the Collection Account, the
Distribution Account (subject to the last sentence of this definition) and any
REO Account and such assets that are deposited therein from time to time and any
investments thereof, together with any and all income, proceeds and payments
with respect thereto. Notwithstanding the foregoing, however, a REMIC election
will not be made with respect to the Interest Coverage Accounts, Pre-Funding
Accounts, the Net WAC Rate Carryover Reserve Account, the Initial Deposit
Accounts, the Excess Net WAC Rate Reserve Account, the Master Servicer
Prepayment Charge Payment Amounts or any Subsequent Mortgage Loan Interest.

                  "REMIC 1 Regular Interest LT1A": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1A shall
accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.



                                       39

<PAGE>




                  "REMIC 1 Regular Interest LT1B": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1B shall
accrue interest at the related Uncertificated REMIC 1 Pass- Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.

                  "REMIC 1 Regular Interest LT1C": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1C shall
accrue interest at the related Uncertificated REMIC 1 Pass- Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.

                  "REMIC 1 Regular Interest LT1D": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1D shall
accrue interest at the related Uncertificated REMIC 1 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.

                  "REMIC 1 Regular Interest LT1P": One of the separate
non-certificated beneficial ownership interests in REMIC 1 issued hereunder and
designated as a Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1P shall
accrue interest at the related Uncertificated REMIC 1 Pass- Through Rate in
effect from time to time, and shall be entitled to any Prepayment Charges
collected by the Master Servicer and to a distribution of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

                  "REMIC 1 Regular Interests": REMIC 1 Regular Interest LT1A,
REMIC 1 Regular Interest LT1B, REMIC 1 Regular Interest LT1C, REMIC 1 Regular
Interest LT1D and REMIC 1 Regular Interest LT1P.

                  "REMIC 2": The segregated pool of assets consisting of all of
the REMIC 1 Regular Interests and conveyed in trust to the Trustee, for the
benefit of REMIC 3, as holder of the REMIC 2 Regular Interests, and the Class R
Certificateholders, as Holders of the Class R-2 Interest, pursuant to Article II
hereunder, and all amounts deposited therein, with respect to which a separate
REMIC election is to be made.

                  "REMIC 2 Interest Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to (a) the product of (i) the sum of the
aggregate Principal Balance of the Mortgage Loans and related REO Properties
then outstanding and the amount on deposit in the Pre-Funding Accounts and (ii)
the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular Interest LT2AA
minus the Marker Rate, divided by (b) 12.


                                       40

<PAGE>





                  "REMIC 2 Overcollateralization Target Amount": 1% of the
Overcollateralization Target Amount.

                  "REMIC 2 Overcollateralized Amount": With respect to any date
of determination, (i) 1% of the aggregate Uncertificated Principal Balances of
the REMIC 2 Regular Interests minus (ii) the aggregate of the Uncertificated
Principal Balances of REMIC 2 Regular Interest LT2A1, REMIC 2 Regular Interest
LT2A2, REMIC 2 Regular Interest LT2M1, REMIC 2 Regular Interest LT2M2, REMIC 2
Regular Interest LT2M3 and REMIC 2 Regular Interest LT2M4, in each case as of
such date of determination.

                  "REMIC 2 Principal Loss Allocation Amount": With respect to
any Distribution Date, an amount equal to (a) the product of (i) the sum of the
aggregate Principal Balance of the Mortgage Loans and related REO Properties
then outstanding and the amount on deposit in the Pre- Funding Accounts and (ii)
1 minus a fraction, the numerator of which is two times the aggregate of the
Uncertificated Principal Balances of REMIC 2 Regular Interest LT2A1, REMIC 2
Regular Interest LT2A2, REMIC 2 Regular Interest LT2M1, REMIC 2 Regular Interest
LT2M2, REMIC 2 Regular Interest LT2M3 and REMIC 2 Regular Interest LT2M4 and the
denominator of which is the aggregate of the Uncertificated Principal Balances
of REMIC 2 Regular Interest LT2A1, REMIC 2 Regular Interest LT2A2, REMIC 2
Regular Interest LT2M1, REMIC 2 Regular Interest LT2M2, REMIC 2 Regular Interest
LT2M3, REMIC 2 Regular Interest LT2M4 and REMIC 2 Regular Interest LT2ZZ.

                  "REMIC 2 Regular Interest LT2AA": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2AA
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.

                  "REMIC 2 Regular Interest LT2A1": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2A1
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.

                  "REMIC 2 Regular Interest LT2A2": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2A2
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.

                  "REMIC 2 Regular Interest LT2M1": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2M1
shall accrue interest at the related Uncertificated REMIC 2

                                       41

<PAGE>



Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.

                  "REMIC 2 Regular Interest LT2M2": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2M2
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.

                  "REMIC 2 Regular Interest LT2M3": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2M3
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.

                  "REMIC 2 Regular Interest LT2M4": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2M4
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.

                  "REMIC 2 Regular Interest LT2P": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2P shall
accrue interest at the related Uncertificated REMIC 2 Pass- Through Rate in
effect from time to time, and shall be entitled to any amounts distributed to
REMIC 2 Regular Interest LT2P.

                  "REMIC 2 Regular Interest LT2ZZ": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a Regular Interest in REMIC 2. REMIC 2 Regular Interest LT2ZZ
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate in
effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.

                  "REMIC 2 Regular Interests": REMIC 2 Regular Interest LT2AA,
REMIC 2 Regular Interest LT2A1, REMIC 2 Regular Interest LT2A2, REMIC 2 Regular
Interest LT2M1, REMIC 2 Regular Interest LT2M2, REMIC 2 Regular Interest LT2M3,
REMIC 2 Regular Interest LT2M4, REMIC 2 Regular Interest LT2ZZ and REMIC 2
Regular Interest LT2P.

                  "REMIC 3": The segregated pool of assets consisting of all of
the REMIC 2 Regular Interests conveyed in trust to the Trustee, for the benefit
of the Holders of the Regular Certificates

                                       42

<PAGE>



and the Class R Certificate (in respect of the Class R-3 Interest), pursuant to
Article II hereunder, and all amounts deposited therein, with respect to which a
separate REMIC election is to be made.

                  "REMIC Provisions": Provisions of the federal income tax law
relating to real estate mortgage investment conduits which appear at Section
860A through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and regulations and rulings promulgated thereunder, as the foregoing
may be in effect from time to time.

                  "REMIC Regular Interests": The REMIC 1 Regular Interests and
REMIC 2 Regular Interests.

                  "Remittance Report": A report prepared by the Master Servicer
and delivered to the Trustee and the NIMS Insurer pursuant to Section 4.04.

                  "Rents from Real Property": With respect to any REO Property,
gross income of the character described in Section 856(d) of the Code.

                  "REO Account": The account or accounts maintained by the
Master Servicer in respect of an REO Property pursuant to Section 3.23.

                  "REO Disposition": The sale or other disposition of an REO
Property on behalf of the Trust Fund.

                  "REO Imputed Interest": As to any REO Property, for any
calendar month during which such REO Property was at any time part of the Trust
Fund, one month's interest at the applicable Net Mortgage Rate on the Principal
Balance of such REO Property (or, in the case of the first such calendar month,
of the related Mortgage Loan if appropriate) as of the Close of Business on the
Distribution Date in such calendar month.

                  "REO Principal Amortization": With respect to any REO
Property, for any calendar month, the excess, if any, of (a) the aggregate of
all amounts received in respect of such REO Property during such calendar month,
whether in the form of rental income, sale proceeds (including, without
limitation, that portion of the Termination Price paid in connection with a
purchase of all of the Mortgage Loans and REO Properties pursuant to Section
10.01 that is allocable to such REO Property) or otherwise, net of any portion
of such amounts (i) payable pursuant to Section 3.23 in respect of the proper
operation, management and maintenance of such REO Property or (ii) payable or
reimbursable to the Master Servicer pursuant to Section 3.23 for unpaid
Servicing Fees in respect of the related Mortgage Loan and unreimbursed
Servicing Advances and Advances in respect of such REO Property or the related
Mortgage Loan, over (b) the REO Imputed Interest in respect of such REO Property
for such calendar month.

                  "REO Property": A Mortgaged Property acquired by the Master
Servicer on behalf of the Trust Fund through foreclosure or deed-in-lieu of
foreclosure, as described in Section 3.23.

                  "Request for Release": A release signed by a Servicing
Officer, in the form of Exhibit E attached hereto.


                                       43

<PAGE>



                  "Reserve Interest Rate": With respect to any Interest
Determination Date, the rate per annum that the Trustee determines to be either
(i) the arithmetic mean (rounded upwards if necessary to the nearest whole
multiple of 1/16 of 1%) of the one-month United States dollar lending rates
which banks in The City of New York selected by the Depositor are quoting on the
relevant Interest Determination Date to the principal London offices of leading
banks in the London interbank market or (ii) in the event that the Trustee can
determine no such arithmetic mean, in the case of any Interest Determination
Date after the initial Interest Determination Date, the lowest one-month United
States dollar lending rate which such New York banks selected by the Depositor
are quoting on such Interest Determination Date to leading European banks.

                  "Residential Dwelling": Any one of the following: (i) a
detached one-family dwelling, (ii) a detached two- to four-family dwelling,
(iii) a one-family dwelling unit in a Fannie Mae eligible condominium project,
(iv) a manufactured home, or (v) a detached one-family dwelling in a planned
unit development, none of which is a co-operative or mobile home.

                  "Residual Certificate":  The Class R Certificates.

                  "Residual Interest": The sole class of "residual interests" in
a REMIC within the meaning of Section 860G(a)(2) of the Code.

                  "Responsible Officer": When used with respect to the Trustee,
the Chairman or Vice Chairman of the Board of Directors or Trustees, the
Chairman or Vice Chairman of the Executive or Standing Committee of the Board of
Directors or Trustees, the President, any vice president, any assistant vice
president, the Secretary, any assistant secretary, the Treasurer, any assistant
treasurer, the Cashier, any assistant cashier, any trust officer or assistant
trust officer, the Controller and any assistant controller or any other officer
of the Trustee customarily performing functions similar to those performed by
any of the above designated officers and, with respect to a particular matter,
to whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject.

                  "S&P": Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc., or its successor in interest.

                  "Seller": Any one or all of: (i) Option One Mortgage
Corporation, a California corporation or (ii) Option One Owner Trust 2001-1A,
Option One Owner Trust 2001-1B, Option One Owner Trust 2001-2 and/or Option One
Owner Trust 2002-3, each a Delaware statutory trust.

                  "Servicing Account": The account or accounts created and
maintained pursuant to Section 3.09.

                  "Servicing Advances": All customary, reasonable and necessary
"out of pocket" costs and expenses (including reasonable attorneys' fees and
expenses) incurred by the Master Servicer in the performance of its servicing
obligations, including, but not limited to, the cost of (i) the preservation,
restoration, inspection and protection of the Mortgaged Property, (ii) any
enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of the REO Property and (iv) compliance with the
obligations under Sections 3.01, 3.09, 3.16, and 3.23.

                                       44

<PAGE>





                  "Servicing Fee": With respect to each Mortgage Loan and for
any calendar month, an amount equal to one month's interest (or in the event of
any payment of interest which accompanies a Principal Prepayment in full or in
part made by the Mortgagor during such calendar month, interest for the number
of days covered by such payment of interest) at the Servicing Fee Rate on the
same principal amount on which interest on such Mortgage Loan accrues for such
calendar month. A portion of such Servicing Fee may be retained by any
Sub-Servicer as its servicing compensation.

                  "Servicing Fee Rate": 0.30% per annum for the first 10 Due
Periods, 0.40% per annum for the 11th through 30th Due Periods, 0.65% for the
31st through 48th Due Periods and 0.80% per annum for all Due Periods
thereafter.

                  "Servicing Officer": Any officer of the Master Servicer
involved in, or responsible for, the administration and servicing of Mortgage
Loans, whose name and specimen signature appear on a list of servicing officers
furnished by the Master Servicer to the Trustee and the Depositor on the Closing
Date, as such list may from time to time be amended.

                  "Servicing Standard": Shall mean the standards set forth in
Section 3.01.

                  "Servicing Transfer Costs": Shall mean all reasonable costs
and expenses incurred by the Trustee in connection with the transfer of
servicing from a predecessor servicer, including, without limitation, any
reasonable costs or expenses associated with the complete transfer of all
servicing data and the completion, correction or manipulation of such servicing
data as may be required by the Trustee to correct any errors or insufficiencies
in the servicing data or otherwise to enable the Trustee to service the Mortgage
Loans properly and effectively.

                  "Startup Day": As defined in Section 9.01(b) hereof.

                  "Stated Principal Balance": With respect to any Mortgage Loan:
(a) as of any date of determination up to but not including the Distribution
Date on which the proceeds, if any, of a Liquidation Event with respect to such
Mortgage Loan would be distributed, the outstanding principal balance of such
Mortgage Loan as of the Cut-off Date (or Subsequent Cut-off Date, as
applicable), as shown in the Mortgage Loan Schedule, minus the sum of (i) the
principal portion of each Monthly Payment due on a Due Date subsequent to the
Cut-off Date (or Subsequent Cut-off Date, as applicable), to the extent received
from the Mortgagor or advanced by the Master Servicer and distributed pursuant
to Section 4.01 on or before such date of determination, (ii) all Principal
Prepayments received after the Cut-off Date (or Subsequent Cut-off Date, as
applicable), to the extent distributed pursuant to Section 4.01 on or before
such date of determination, (iii) all Liquidation Proceeds and Insurance
Proceeds to the extent distributed pursuant to Section 4.01 on or before such
date of determination, and (iv) any Realized Loss incurred with respect thereto
as a result of a Deficient Valuation made during or prior to the Due Period for
the most recent Distribution Date coinciding with or preceding such date of
determination; and (b) as of any date of determination coinciding with or
subsequent to the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such Mortgage Loan would be distributed, zero.
With respect to any REO Property: (a) as of any date of determination up to but
not including the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such REO Property would


                                       45

<PAGE>




be distributed, an amount (not less than zero) equal to the Stated Principal
Balance of the related Mortgage Loan as of the date on which such REO Property
was acquired on behalf of the Trust Fund, minus the aggregate amount of REO
Principal Amortization in respect of such REO Property for all previously ended
calendar months, to the extent distributed pursuant to Section 4.01 on or before
such date of determination; and (b) as of any date of determination coinciding
with or subsequent to the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such REO Property would be distributed, zero.

                  "Stepdown Date": The earlier to occur of (a) the Distribution
Date on which the aggregate Certificate Principal Balance of the Class A
Certificates has been reduced to zero and (b) the later to occur of (i) the
Distribution Date occurring in February 2006 and (ii) the first Distribution
Date on which the Credit Enhancement Percentage (calculated for this purpose
only after taking into account payments of principal on the Mortgage Loans and
distribution of the Group I Principal Distribution Amount and the Group II
Principal Distribution Amount to the Certificates then entitled to distributions
of principal on such Distribution Date) is equal to or greater than 24.00%. The
Overcollateralization Target Amount will not be permitted to "step down" on the
Stepdown Date or on any other date.

                  "Subsequent Cut-off Date": With respect to those Subsequent
Mortgage Loans sold to the Trust Fund pursuant to a Subsequent Transfer
Instrument, the later of (i) first day of the month in which the related
Subsequent Transfer Date occurs or (ii) the date of origination of such Mortgage
Loan.

                  "Subsequent Group I Mortgage Loan": A Subsequent Mortgage Loan
to be included in Loan Group I.

                  "Subsequent Group II Mortgage Loan": A Subsequent Mortgage
Loan to be included in Loan Group II.

                  "Subsequent Mortgage Loan": A Mortgage Loan sold by the
Depositor to the Trust Fund pursuant to Section 2.08, such Mortgage Loan being
identified on the Mortgage Loan Schedule attached to a Subsequent Transfer
Instrument.

                  "Subsequent Mortgage Loan Interest": Any amount constituting a
monthly payment of interest received or advanced at the Net Mortgage Rate (less
the Trustee Fee Rate) with respect to (i) a Subsequent Group I Mortgage Loan
during the Due Period relating to the Distribution Date in February 2003 in
excess of 1.9805% per annum and (ii) a Subsequent Group II Mortgage Loan during
the Due Period relating to the Distribution Date in February 2003 in excess of
1.9805% per annum. The Subsequent Mortgage Loan Interest shall be distributable
to the Class C Certificates. The Subsequent Mortgage Loan Interest shall not be
an asset of any Trust REMIC.

                  "Subsequent Mortgage Loan Purchase Agreement": The agreement
among the Depositor, the Originator and the Seller, regarding the transfer of
the Subsequent Mortgage Loans by the Seller to the Depositor.

                  "Subsequent Transfer Date": With respect to each Subsequent
Transfer Instrument, the date on which the related Subsequent Mortgage Loans are
sold to the Trust Fund.
                                       46

<PAGE>





                  "Subsequent Transfer Instrument": Each Subsequent Transfer
Instrument, dated as of a Subsequent Transfer Date, executed by the Trustee and
the Depositor substantially in the form attached hereto as Exhibit O, by which
Subsequent Mortgage Loans are transferred to the Trust Fund.

                  "Sub-Servicer": Any Person with which either Master Servicer
has entered into a Sub-Servicing Agreement and which meets the qualifications of
a Sub-Servicer pursuant to Section 3.02.

                  "Sub-Servicing Account": An account established by a
Sub-Servicer which meets the requirements set forth in Section 3.08 and is
otherwise acceptable to the applicable Master Servicer.

                  "Sub-Servicing Agreement": The written contract between either
Master Servicer and a Sub-Servicer relating to servicing and administration of
certain Mortgage Loans as provided in Section 3.02.

                  "Supplemental Net WAC Rate": As defined in Section 4.01(d)
hereof.

                  "Substitution Adjustment": As defined in Section 2.03(d)
hereof.

                  "Tax Matters Person": The tax matters person appointed
pursuant to Section 9.01(e) hereof.

                  "Tax Returns": The federal income tax return on Internal
Revenue Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income
Tax Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of the REMIC Taxable Income or Net Loss Allocation, or any successor
forms, to be filed by the Trustee on behalf of each REMIC, together with any and
all other information reports or returns that may be required to be furnished to
the Certificateholders or filed with the Internal Revenue Service or any other
governmental taxing authority under any applicable provisions of federal, state
or local tax laws.

                  "Termination Price":  As defined in Section 10.01(a) hereof.

                  "Three Month Rolling Delinquency Percentage": With respect to
the Mortgage Loans and any Distribution Date, the average for the three most
recent calendar months of the fraction, expressed as a percentage, the numerator
of which is (x) the sum (without duplication) of the aggregate of the Principal
Balances of all Mortgage Loans that are (i) 60 or more days Delinquent, (ii) in
bankruptcy and 60 or more days Delinquent, (iii) in foreclosure and 60 or more
days Delinquent or (iv) REO Properties, and the denominator of which is (y) the
sum of the Principal Balances of the Mortgage Loans, in the case of both (x) and
(y), as of the Close of Business on the last Business Day of each of the three
most recent calendar months.

                  "Trigger Event": A Trigger Event is in effect with respect to
any Distribution Date if:

                  (a) the percentage obtained by dividing (x) the principal
amount of Mortgage Loans Delinquent 60 days or more by (y) the aggregate
principal balance of the Mortgage Loans, in


                                       47

<PAGE>



each case, as of the last day of the previous calendar month, exceeds 70.00% of
the Credit Enhancement Percentage or

                  (b) the aggregate amount of Realized Losses incurred since the
Cut-off Date through the last day of the related Due Period divided by the
aggregate principal balance of the Initial Mortgage Loans as of the Cut-off Date
plus the Original Pre-Funded Amounts exceeds the applicable percentages set
forth below with respect to such Distribution Date:



     DISTRIBUTION DATE OCCURRING IN              PERCENTAGE
-----------------------------------              ----------
February 2006 through January 2007                  1.75%
February 2007 through January 2008                  2.75%
February 2008 through January 2009                  3.50%
February 2010 through January 2011                  4.00%
February 2011 and thereafter                        4.25%

                  "Trust": Option One Mortgage Loan Trust 2003-1, the trust
created hereunder.

                  "Trust Fund": All of the assets of the Trust, which is the
trust created hereunder consisting of REMIC 1, REMIC 2 and REMIC 3, the Interest
Coverage Accounts, the Pre-Funding Accounts, the Net WAC Rate Carryover Reserve
Account and the Initial Deposit Accounts.

                  "Trustee": Wells Fargo Bank Minnesota, National Association, a
national banking association, or any successor trustee appointed as herein
provided.

                  "Trustee Fee": The amount payable to the Trustee on each
Distribution Date pursuant to Section 8.05 as compensation for all services
rendered by it in the execution of the trust hereby created and in the exercise
and performance of any of the powers and duties of the Trustee hereunder, which
amount shall equal one twelfth of the product of (i) the Trustee Fee Rate,
multiplied by (ii) the aggregate Principal Balance of the Mortgage Loans and any
REO Properties (after giving effect to scheduled payments of principal due
during the Due Period relating to the previous Distribution Date, to the extent
received or advanced) and any amount in the Pre-Funding Accounts as of the first
day of the calendar month prior to the month of such Distribution Date (or, in
the case of the initial Distribution Date, as of the Cut-off Date).

                  "Trustee Fee Rate": 0.003% per annum.

                  "Uncertificated Accrued Interest": With respect to each REMIC
Regular Interest on each Distribution Date, an amount equal to one month's
interest at the related Uncertificated Pass- Through Rate on the Uncertificated
Principal Balance of such REMIC Regular Interest. In each case, Uncertificated
Accrued Interest will be reduced by any Net Prepayment Interest Shortfalls and
Relief Act Interest Shortfalls (allocated to such REMIC Regular Interests based
on their respective entitlements to interest irrespective of any Net Prepayment
Interest Shortfalls and Relief Act Interest Shortfalls for such Distribution
Date).

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                  "Uncertificated Pass-Through Rate": The Uncertificated REMIC 1
Pass-Through Rate and Uncertificated REMIC 2 Pass-Through Rate.

                  "Uncertificated Principal Balance": With respect to each REMIC
Regular Interest, the amount of such REMIC Regular Interest outstanding as of
any date of determination. As of the Closing Date, the Uncertificated Principal
Balance of each REMIC Regular Interest shall equal the amount set forth in the
Preliminary Statement hereto as its initial Uncertificated Principal Balance. On
each Distribution Date, the Uncertificated Principal Balance of each REMIC
Regular Interest shall be reduced by all distributions of principal made on such
REMIC Regular Interest on such Distribution Date pursuant to Section 4.08 and,
if and to the extent necessary and appropriate, shall be further reduced on such
Distribution Date by Realized Losses as provided in Section 4.08, and the
Uncertificated Principal Balances of REMIC 2 Regular Interest LT2ZZ shall be
increased by interest deferrals as provided in Section 4.08. The Uncertificated
Principal Balance of each REMIC Regular Interest that has an Uncertificated
Principal Balance shall never be less than zero.

                  "Uncertificated REMIC 1 Pass-Through Rate": With respect to
REMIC 1 Regular Interest LT1A, REMIC 1 Regular Interest LT1B and REMIC 1 Regular
Interest LT1P, the weighted average of the Adjusted Net Mortgage Rates of the
Initial Group I Mortgage Loans for such Distribution Date; provided, however,
with respect to REMIC 1 Regular Interest LT1B, (i) for the first Distribution
Date, 1.9805% and (ii) for each Distribution Date thereafter, the weighted
average of the Adjusted Net Mortgage Rates of the Group I Mortgage Loans for
such Distribution Date. With respect to REMIC 1 Regular Interests LT1C and LT1D,
the weighted average of the Adjusted Net Mortgage Rates of the Initial Group II
Mortgage Loans for such Distribution Date; provided, however, with respect to
REMIC 1 Regular Interest LT2D, (i) for the first Distribution Date, 1.9805% and
(ii) for each Distribution Date thereafter, the weighted average of the Adjusted
Net Mortgage Rates of the Group II Mortgage Loans for such Distribution Date.

                  "Uncertificated REMIC 2 Pass-Through Rate": With respect to
each REMIC 2 Regular Interest and each Distribution Date, the Pool Net WAC Rate.

                  "Underwriters": Each of Banc of America Securities, LLC,
Greenwich Capital Markets, Inc., Banc One Capital Markets, Inc., JP Morgan
Securities Inc. and UBS Warburg LLC.

                  "Uninsured Cause": Any cause of damage to a Mortgaged Property
such that the complete restoration of such property is not fully reimbursable by
the hazard insurance policies required to be maintained pursuant to Section
3.14.

                  "United States Person" or "U.S. Person": A citizen or resident
of the United States, a corporation, partnership (or other entity treated as a
corporation or partnership for United States federal income tax purposes)
created or organized in, or under the laws of, the United States, any state
thereof, or the District of Columbia (except in the case of a partnership, to
the extent provided in Treasury regulations) provided that, for purposes solely
of the restrictions on the transfer of Class R Certificates, no partnership or
other entity treated as a partnership for United States federal income tax
purposes shall be treated as a United States Person unless all persons that own
an interest in such partnership either directly or through any entity that is
not a corporation for United States federal income tax purposes are required by
the applicable operative agreement to be United States Persons,

                                       49

<PAGE>



or an estate the income of which from sources without the United States is
includible in gross income for United States federal income tax purposes
regardless of its connection with the conduct of a trade or business within the
United States, or a trust if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more United States persons have authority to control all substantial decisions
of the trust. The term "United States" shall have the meaning set forth in
Section 7701 of the Code or successor provisions.

                  "Unpaid Interest Shortfall Amount": With respect to the
Offered Certificates and (i) the first Distribution Date, zero, and (ii) any
Distribution Date after the first Distribution Date, the amount, if any, by
which (a) the sum of (1) the Monthly Interest Distributable Amount for such
Class for the immediately preceding Distribution Date and (2) the outstanding
Unpaid Interest Shortfall Amount, if any, for such Class for such preceding
Distribution Date exceeds (b) the aggregate amount distributed on such Class in
respect of interest pursuant to clause (a) of this definition on such preceding
Distribution Date, plus interest on the amount of interest due but not paid on
the Certificates of such Class on such preceding Distribution Date, to the
extent permitted by law, at the Pass-Through Rate for such Class for the related
Accrual Period.

                  "Value": With respect to any Mortgage Loan, and the related
Mortgaged Property, the lesser of:

          (i)  the lesser of (a) the value thereof as determined by an appraisal
               made for the originator of the Mortgage Loan at the time of
               origination of the Mortgage Loan by an appraiser who met the
               minimum requirements of Fannie Mae and Freddie Mac, and (b) the
               value thereof as determined by a review appraisal conducted by
               the Originator in the event any such review appraisal determines
               an appraised value more than 10% lower than the value thereof, in
               the case of a Mortgaged Loan with a Loan- to-Value Ratio less
               than or equal to 80%, or more than 5% lower than the value
               thereof, in the case of a Mortgage Loan with a Loan-to-Value
               Ratio greater than 80%, as determined by the appraisal referred
               to in clause (i)(a) above; and

          (ii) the purchase price paid for the related Mortgaged Property by the
               Mortgagor with the proceeds of the Mortgage Loan; provided,
               however, that in the case of a refinanced Mortgage Loan (which is
               a Mortgage Loan the proceeds of which were not used to purchase
               the related Mortgaged Property) or a Mortgage Loan originated in
               connection with a "lease option purchase" if the "lease option
               purchase price" was set 12 months or more prior to origination,
               such value of the Mortgaged Property is based solely upon clause
               (i) above.

                  "Voting Rights": The portion of the voting rights of all of
the Certificates which is allocated to any Certificate. At all times the Class A
Certificates, the Mezzanine Certificates and the Class C Certificates shall have
98% of the Voting Rights (allocated among the Holders of the Class A
Certificates, the Mezzanine Certificates and the Class C Certificates in
proportion to the then outstanding Certificate Principal Balances of their
respective Certificates), the Class P Certificates shall have 1% of the Voting
Rights and the Class R Certificates shall have 1% of the Voting Rights. The
Voting Rights allocated to any Class of Certificates (other than the Class P
Certificates and the Class R Certificates) shall be allocated among all Holders
of each such Class in proportion to the

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<PAGE>


outstanding Certificate Principal Balance or Notional Amount of such
Certificates and the Voting Rights allocated to the Class P Certificates and the
Class R Certificates shall be allocated among all Holders of each such Class in
proportion to such Holders' respective Percentage Interest; provided, however
that when none of the Regular Certificates are outstanding, 100% of the Voting
Rights shall be allocated among Holders of the Class R Certificates in
accordance with such Holders' respective Percentage Interests in the
Certificates of such Class.

                  SECTION 1.02. Accounting.

                  Unless otherwise specified herein, for the purpose of any
definition or calculation, whenever amounts are required to be netted,
subtracted or added or any distributions are taken into account such definition
or calculation and any related definitions or calculations shall be determined
without duplication of such functions.

                  SECTION 1.03. Allocation of Certain Interest Shortfalls.

                  For purposes of calculating the amount of the Monthly Interest
Distributable Amount for each of the Class A Certificates, the Mezzanine
Certificates and the Class C Certificates for any Distribution Date, (1) the
aggregate amount of any Net Prepayment Interest Shortfalls and any Relief Act
Interest Shortfalls incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated first, among the Class C Certificates on a
PRO RATA basis based on, and to the extent of, one month's interest at the then
applicable Pass-Through Rate on the Notional Amount of each such Certificate
and, thereafter, among the Offered Certificates on a PRO RATA basis based on,
and to the extent of, one month's interest at the then applicable respective
Pass-Through Rate on the respective Certificate Principal Balance or Notional
Amount of each such Certificate and (2) the aggregate amount of any Realized
Losses and Net WAC Rate Carryover Amounts incurred for any Distribution Date
shall be allocated among the Class C Certificates on a PRO RATA basis based on,
and to the extent of, one month's interest at the then applicable Pass-Through
Rate on the Notional Amount of each such Certificate.

                  For purposes of calculating the amount of Uncertificated
Accrued Interest for the REMIC 1 Regular Interests for any Distribution Date,
the aggregate amount of any Net Prepayment Interest Shortfalls and any Relief
Act Interest Shortfalls incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated (i) with respect to the Group I Mortgage
Loans, to REMIC 1 Regular Interest LT1A and REMIC 1 Regular Interest LT1B, in
each case to the extent of one month's interest at the then applicable
respective Uncertificated REMIC 1 Pass-Through Rate on the respective
Uncertificated Principal Balance of each such Uncertificated REMIC 1 Interest;
provided, however, with respect to the first Distribution Date, such amounts
relating to the Initial Group I Mortgage Loans shall be allocated to REMIC 1
Regular Interest LT1A and such amounts relating to the Subsequent Group I
Mortgage Loans shall be allocated to REMIC 1 Regular Interest LT1B and (ii) with
respect to the Group II Mortgage Loans, to REMIC 1 Regular Interest LT1C and
REMIC 1 Regular Interest LT1D, in each case to the extent of one month's
interest at the then applicable respective Uncertificated REMIC 1 Pass-Through
Rate on the respective Uncertificated Principal Balance of each such
Uncertificated REMIC 1 Interest; provided, however, with respect to the first
Distribution Date, such amounts relating to the Initial Group II Mortgage Loans
shall be


                                       51

<PAGE>



allocated to REMIC 1 Regular Interest LT1C and such amounts relating to the
Subsequent Group II Mortgage Loans shall be allocated to REMIC 1 Regular
Interest LT1D.

                  For purposes of calculating the amount of Uncertificated
Accrued Interest for the REMIC 2 Regular Interests for any Distribution Date,
the aggregate amount of any Net Prepayment Interest Shortfalls and any Relief
Act Interest Shortfalls incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated first, to Uncertificated Accrued Interest
payable to REMIC 2 Regular Interest LT2AA and REMIC 2 Regular Interest LT2ZZ up
to an aggregate amount equal to the REMIC 2 Interest Loss Allocation Amount, 98%
and 2%, respectively, and thereafter among REMIC 2 Regular Interest LT2AA, REMIC
2 Regular Interest LT2A1, REMIC 2 Regular Interest LT2A2, REMIC 2 Regular
Interest LT2M1, REMIC 2 Regular Interest LT2M2, REMIC 2 Regular Interest LT2M3,
REMIC 2 Regular Interest LT2M4 and REMIC 2 Regular Interest LT2ZZ PRO RATA based
on, and to the extent of, one month's interest at the then applicable respective
Uncertificated REMIC 2 Pass-Through Rate on the respective Uncertificated
Principal Balance of each such REMIC 2 Regular Interest.

                  SECTION 1.04. Rights of the NIMS Insurer.

                  Each of the rights of the NIMS Insurer set forth in this
Agreement shall exist so long as (i) the NIMS Insurer has undertaken to
guarantee certain payments of notes issued pursuant to an Indenture and (ii) any
series of notes issued pursuant to one or more Indentures remain outstanding or
the NIMS Insurer is owed amounts in respect of its guarantee of payment on such
notes; provided, however, the NIMS Insurer shall not have any rights hereunder
(except pursuant to Section 11.01 in the case of clause (ii) below) so long as
(i) the NIMS Insurer has not undertaken to guarantee certain payments of notes
issued pursuant to the Indenture or (ii) any default has occurred and is
continuing under the insurance policy issued by the NIMS Insurer with respect to
such notes.


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<PAGE>



                                   ARTICLE II

                          CONVEYANCE OF MORTGAGE LOANS;
                        ORIGINAL ISSUANCE OF CERTIFICATES

                  SECTION 2.01. Conveyance of Mortgage Loans.

                  The Depositor, concurrently with the execution and delivery
hereof, does hereby transfer, assign, set over and otherwise convey in trust to
the Trustee without recourse for the benefit of the Certificateholders all the
right, title and interest of the Depositor, including any security interest
therein for the benefit of the Depositor, in and to (i) each Mortgage Loan
identified on the Mortgage Loan Schedule, including the related Cut-off Date
Principal Balance, all interest accruing thereon on and after the Cut-off Date
and all collections in respect of interest and principal due after the Cut-off
Date; (ii) property which secured each such Mortgage Loan and which has been
acquired by foreclosure or deed in lieu of foreclosure; (iii) its interest in
any insurance policies (including the PMI Policy) in respect of the Mortgage
Loans; (iv) the rights of the Depositor under the Mortgage Loan Purchase
Agreement, (v) all other assets included or to be included in the Trust Fund,
(vi) the Initial Deposit and (vii) all proceeds of any of the foregoing. Such
assignment includes all interest and principal due and collected by the
Depositor or the Master Servicer after the Cut-off Date with respect to the
Mortgage Loans.

                  In connection with such transfer and assignment, the
Depositor, does hereby deliver to, and deposit with the Trustee, or its
designated agent (the "Custodian"), the following documents or instruments with
respect to each Initial Mortgage Loan so transferred and assigned and the
Originator, on behalf of the Depositor, shall, in accordance with Section 2.08,
deliver or caused to be delivered to the Trustee with respect to each Subsequent
Mortgage Loan, the following documents or instruments (with respect to each
Mortgage Loan, a "Mortgage File") :

                  (i) the original Mortgage Note, endorsed either (A) in blank,
         in which case the Trustee shall cause the endorsement to be completed
         or (B) in the following form: "Pay to the order of Wells Fargo Bank
         Minnesota, National Association, as Trustee, without recourse", or with
         respect to any lost Mortgage Note, an original Lost Note Affidavit
         stating that the original mortgage note was lost, misplaced or
         destroyed, together with a copy of the related mortgage note; provided,
         however, that such substitutions of Lost Note Affidavits for original
         Mortgage Notes may occur only with respect to Mortgage Loans, the
         aggregate Cut- off Date Principal Balance or Subsequent Cut-off Date
         Principal Balance, as applicable, of which is less than or equal to
         1.00% of the Pool Balance as of the Cut-off Date or Subsequent Cut-off
         Date, as applicable;

                  (ii) the original Mortgage with evidence of recording thereon,
         and the original recorded power of attorney, if the Mortgage was
         executed pursuant to a power of attorney, with evidence of recording
         thereon or, if such Mortgage or power of attorney has been submitted
         for recording but has not been returned from the applicable public
         recording office, has been lost or is not otherwise available, a copy
         of such Mortgage or power of attorney, as the case may be, certified to
         be a true and complete copy of the original submitted for recording;


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<PAGE>



                  (iii) an original Assignment, in form and substance acceptable
         for recording. The Mortgage shall be assigned either (A) in blank or
         (B) to "Wells Fargo Bank Minnesota, National Association, as Trustee,
         without recourse";

                  (iv) an original copy of any intervening assignment of
         Mortgage showing a complete chain of assignments;

                  (v) the original or a certified copy of lender's title
         insurance policy; and

                  (vi) the original or copies of each assumption, modification,
         written assurance or substitution agreement, if any.

                  The Trustee agrees to execute and deliver (or cause the
Custodian to execute and deliver) to the Depositor and the NIMS Insurer on or
prior to the Closing Date an acknowledgment of receipt of the original Mortgage
Note (with any exceptions noted), substantially in the form attached as Exhibit
F-3 hereto.

                  If any of the documents referred to in Section 2.01(ii), (iii)
or (iv) above has as of the Closing Date (or Subsequent Transfer Date, with
respect to Subsequent Mortgage Loans) been submitted for recording but either
(x) has not been returned from the applicable public recording office or (y) has
been lost or such public recording office has retained the original of such
document, the obligations of the Depositor to deliver such documents shall be
deemed to be satisfied upon (1) delivery to the Trustee or the Custodian no
later than the Closing Date (or Subsequent Closing Date, with respect to
Subsequent Mortgage Loans), of a copy of each such document certified by the
Master Servicer, in its capacity as Originator, in the case of (x) above or the
applicable public recording office in the case of (y) above to be a true and
complete copy of the original that was submitted for recording and (2) if such
copy is certified by the Master Servicer, in its capacity as Originator,
delivery to the Trustee or the Custodian, promptly upon receipt thereof of
either the original or a copy of such document certified by the applicable
public recording office to be a true and complete copy of the original. If the
original lender's title insurance policy, or a certified copy thereof, was not
delivered pursuant to Section 2.01(v) above, the Master Servicer, in its
capacity as Originator, shall deliver or cause to be delivered to the Trustee or
the Custodian, the original or a copy of a written commitment or interim binder
or preliminary report of title issued by the title insurance or escrow company
or an original attorney's opinion of title, with the original or a certified
copy thereof to be delivered to the Trustee or the Custodian, promptly upon
receipt thereof. The Master Servicer or the Depositor shall deliver or cause to
be delivered to the Trustee or the Custodian promptly upon receipt thereof any
other documents constituting a part of a Mortgage File received with respect to
any Mortgage Loan, including, but not limited to, any original documents
evidencing an assumption or modification of any Mortgage Loan.

                  Upon discovery or receipt of notice of any materially
defective document in, or that a document is missing from, a Mortgage File, the
Master Servicer, in its capacity as Originator, shall have 120 days to cure such
defect or deliver such missing document to the Trustee or the Custodian. If the
Originator does not cure such defect or deliver such missing document within
such time period, the Master Servicer, in its capacity as Originator, shall
either repurchase or substitute for such Mortgage Loan in accordance with
Section 2.03.


                                       54

<PAGE>



                  The Depositor (at the expense of the Master Servicer, in its
capacity as Originator) shall cause the Assignments which were delivered in
blank to be completed and shall cause all Assignments referred to in Section
2.01(iii) hereof and, to the extent necessary, in Section 2.01(iv) hereof to be
recorded. The Depositor shall be required to deliver such Assignments for
recording within 90 days of the Closing Date (or Subsequent Transfer Date, with
respect to a Subsequent Mortgage Loan). Notwithstanding the foregoing, however,
for administrative convenience and facilitation of servicing and to reduce
closing costs, the Assignments of Mortgage shall not be required to be submitted
for recording (except with respect to any Mortgage Loan located in Maryland)
unless the Trustee and the Depositor receives notice that such failure to record
would result in a withdrawal or a downgrading by any Rating Agency of the rating
on any Class of Certificates; provided, however, each Assignment shall be
submitted for recording by the Depositor in the manner described above, at no
expense to the Trust Fund or Trustee, upon the earliest to occur of: (i)
reasonable direction by Holders of Certificates entitled to at least 25% of the
Voting Rights, (ii) the occurrence of a Master Servicer Event of Termination,
(iii) the occurrence of a bankruptcy, insolvency or foreclosure relating to the
Master Servicer, (iv) the occurrence of a servicing transfer as described in
Section 7.02 hereof, (v) if the Originator is not the Master Servicer and with
respect to any one Assignment the occurrence of a bankruptcy, insolvency or
foreclosure relating to the Mortgagor under the related Mortgage, (vi) any
Mortgage Loan that is 90 days or more Delinquent and (vii) reasonable direction
by the NIMS Insurer. Upon (a) receipt of written notice from the Trustee that
recording of the Assignments is required pursuant to one or more of the
conditions (excluding (v) and (vi) above) set forth in the preceding sentence or
(b) upon the occurrence of condition (v) or (vi) in the preceding sentence, the
Depositor shall be required to deliver such Assignments for recording as
provided above, promptly and in any event within 30 days following receipt of
such notice. Notwithstanding the foregoing, if the Originator fails to pay the
cost of recording the Assignments, such expense will be paid by the Trustee and
the Trustee shall be reimbursed for such expenses by the Trust. The Depositor
shall furnish the Trustee, or its designated agent, with a copy of each
Assignment submitted for recording. In the event that any such Assignment is
lost or returned unrecorded because of a defect therein, the Depositor shall
promptly have a substitute Assignment prepared or have such defect cured, as the
case may be, and thereafter cause each such Assignment to be duly recorded. In
the event that any Mortgage Note is endorsed in blank as of the Closing Date (or
Subsequent Transfer Date, with respect to Subsequent Mortgage Loans), within
ninety (90) days of the Closing Date (or Subsequent Transfer Date, with respect
to Subsequent Mortgage Loans) the Depositor shall cause to be completed such
endorsements "Pay to the order of Wells Fargo Bank Minnesota, National
Association, as Trustee, without recourse."

                  The Depositor herewith delivers to the Trustee an executed
copy of the Mortgage Loan Purchase Agreement and the PMI Policy.

                  The Master Servicer shall forward to the Custodian original
documents evidencing an assumption, modification, consolidation or extension of
any Mortgage Loan entered into in accordance with this Agreement within two
weeks of their execution; provided, however, that the Master Servicer shall
provide the Custodian with a certified true copy of any such document submitted
for recordation within two weeks of 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 365 days of its submission for recordation. In the
event that the Master Servicer cannot provide a copy of such document certified


                                       55

<PAGE>



by the public recording office within such 365 day period, an Officers'
Certificate of the Master Servicer which shall (A) identify the recorded
document, (B) state that the recorded document has not been delivered to the
Custodian due solely to a delay caused by the public recording office, (C) state
the amount of time generally required by the applicable recording office to
record and return a document submitted for recordation, if known and (D) specify
the date the applicable recorded document is expected to be delivered to the
Custodian, and, upon receipt of a copy of such document certified by the public
recording office, the Master Servicer shall immediately deliver such document to
the Custodian. In the event the appropriate public recording office will not
certify as to the accuracy of such document, the Master Servicer shall deliver a
copy of such document certified by an officer of the Master Servicer to be a
true and complete copy of the original to the Custodian.

                  SECTION 2.02. Acceptance by Trustee.

                  Subject to the provisions of Section 2.01 and subject to the
review described below and any exceptions noted on the exception report
described in the next paragraph below, the Trustee acknowledges receipt of the
documents referred to in Section 2.01 above and all other assets included in the
definition of "Trust Fund" and declares that it holds and will hold such
documents and the other documents delivered to it constituting a Mortgage File,
and that it holds or will hold all such assets and such other assets included in
the definition of "Trust Fund" in trust for the exclusive use and benefit of all
present and future Certificateholders.

                  The Trustee agrees, for the benefit of the Certificateholders,
to review, or that it has reviewed pursuant to Section 2.01 (or to cause the
Custodian to review or that it has caused the Custodian to have reviewed) each
Mortgage File on or prior to the Closing Date, with respect to each Initial
Mortgage Loan or the Subsequent Transfer Date, with respect to each Subsequent
Mortgage Loan (or, with respect to any document delivered after the Startup Day,
within 45 days of receipt and with respect to any Qualified Substitute Mortgage,
within 45 days after the assignment thereof). The Trustee further agrees, for
the benefit of the Certificateholders, to certify to the Depositor, the Master
Servicer and the NIMS Insurer in substantially the form attached hereto as
Exhibit F-1, within 45 days after the Closing Date, with respect to each Initial
Mortgage Loan and the Subsequent Transfer Date, with respect to each Subsequent
Mortgage Loan (or, with respect to any document delivered after the Startup Day,
within 45 days of receipt and with respect to any Qualified Substitute Mortgage,
within 45 days after the assignment thereof) that, as to each Mortgage Loan
listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full
or any Mortgage Loan specifically identified in the exception report annexed
thereto as not being covered by such certification), (i) all documents required
to be delivered to it pursuant Section 2.01 of this Agreement are in its
possession, (ii) such documents have been reviewed by it and have not been
mutilated, damaged or torn and relate to such Mortgage Loan and (iii) based on
its examination and only as to the foregoing, the information set forth in the
Mortgage Loan Schedule that corresponds to items (1) and (2) of the Mortgage
Loan Schedule accurately reflects information set forth in the Mortgage File. It
is herein acknowledged that, in conducting such review, the Trustee (or the
Custodian, as applicable) is under no duty or obligation to inspect, review or
examine any such documents, instruments, certificates or other papers to
determine that they are genuine, enforceable, or appropriate for the represented
purpose or that they have actually been recorded or that they are other than
what they purport to be on their face.



                                       56

<PAGE>



                  Prior to the first anniversary date of this Agreement the
Trustee shall deliver (or cause the Custodian to deliver) to the Depositor, the
Master Servicer and the NIMS Insurer a final certification in the form annexed
hereto as Exhibit F-2 evidencing the completeness of the Mortgage Files, with
any applicable exceptions noted thereon.

                  If in the process of reviewing the Mortgage Files and making
or preparing, as the case may be, the certifications referred to above, the
Trustee (or the Custodian, as applicable) finds any document or documents
constituting a part of a Mortgage File to be missing or defective in any
material respect, at the conclusion of its review the Trustee shall so notify
the Originator the Depositor, the NIMS Insurer and the Master Servicer. In
addition, upon the discovery by the Originator, the Depositor, the NIMS Insurer
or the Master Servicer (or upon receipt by the Trustee of written notification
of such breach) of a breach of any of the representations and warranties made by
the Originator in the Mortgage Loan Purchase Agreement in respect of any
Mortgage Loan which materially adversely affects such Mortgage Loan or the
interests of the related Certificateholders in such Mortgage Loan, the party
discovering such breach shall give prompt written notice to the other parties to
this Agreement.

                  The Depositor and the Trustee intend that the assignment and
transfer herein contemplated constitute a sale of the Mortgage Loans, the
related Mortgage Notes and the related documents, conveying good title thereto
free and clear of any liens and encumbrances, from the Depositor to the Trustee
in trust for the benefit of the Certificateholders and that such property not be
part of the Depositor's estate or property of the Depositor in the event of any
insolvency by the Depositor. In the event that such conveyance is deemed to be,
or to be made as security for, a loan, the parties intend that the Depositor
shall be deemed to have granted and does hereby grant to the Trustee a first
priority perfected security interest in all of the Depositor's right, title and
interest in and to the Mortgage Loans, the related Mortgage Notes and the
related documents, and that this Agreement shall constitute a security agreement
under applicable law.

                  SECTION 2.03. Repurchase or Substitution of Mortgage Loans by
                                the Originator.

                  (a) Upon discovery or receipt of written notice of any
materially defective document in, or that a document is missing from, a Mortgage
File or of the breach by the Originator of any representation, warranty or
covenant under the Mortgage Loan Purchase Agreement in respect of any Mortgage
Loan which materially adversely affects the value of such Mortgage Loan or the
interest therein of the Certificateholders, the Trustee shall promptly notify
the Originator, the NIMS Insurer and the Master Servicer of such defect, missing
document or breach and request that the Originator deliver such missing document
or cure such defect or breach within 120 days from the date the Originator was
notified of such missing document, defect or breach, and if the Originator does
not deliver such missing document or cure such defect or breach in all material
respects during such period, the Trustee shall enforce the Originator's
obligation under the Mortgage Loan Purchase Agreement and cause the Originator
to repurchase such Mortgage Loan from the Trust Fund at the Purchase Price on or
prior to the Determination Date following the expiration of such 120 day period
(subject to Section 2.03(e)); provided that, in connection with any such breach
that could not reasonably have been cured within such 120 day period, if the
Originator shall have commenced to cure such breach within such 120 day period,
the Originator shall be permitted to proceed thereafter


                                       57

<PAGE>



diligently and expeditiously to cure the same within the additional period
provided under the Mortgage Loan Purchase Agreement. The Purchase Price for the
repurchased Mortgage Loan shall be deposited in the Collection Account, and the
Trustee, upon receipt of written certification from the Master Servicer of such
deposit, shall release to the Originator the related Mortgage File and shall
execute and deliver such instruments of transfer or assignment, in each case
without recourse, as the Originator shall furnish to it and as shall be
necessary to vest in the Originator any Mortgage Loan released pursuant hereto
and the Trustee shall have no further responsibility with regard to such
Mortgage File (it being understood that the Trustee shall have no responsibility
for determining the sufficiency of such assignment for its intended purpose). In
lieu of repurchasing any such Mortgage Loan as provided above, the Originator
may cause such Mortgage Loan to be removed from the Trust Fund (in which case it
shall become a Deleted Mortgage Loan) and substitute one or more Qualified
Substitute Mortgage Loans in the manner and subject to the limitations set forth
in Section 2.03(d). It is understood and agreed that the obligation of the
Originator to cure or to repurchase (or to substitute for) any Mortgage Loan as
to which a document is missing, a material defect in a constituent document
exists or as to which such a breach has occurred and is continuing shall
constitute the sole remedy against the Originator respecting such omission,
defect or breach available to the Trustee on behalf of the Certificateholders.

                  (b) Within 90 days of the earlier of discovery by the
Depositor or receipt of notice by the Depositor of the breach of any
representation, warranty or covenant of the Depositor set forth in Section 2.06
which materially and adversely affects the interests of the Certificateholders
in any Mortgage Loan, the Depositor shall cure such breach in all material
respects.

                  (c) Within 90 days of the earlier of discovery by the Master
Servicer or receipt of notice by the Master Servicer of the breach of any
representation, warranty or covenant of the Master Servicer set forth in Section
2.05 which materially and adversely affects the interests of the
Certificateholders in any Mortgage Loan, the Master Servicer shall cure such
breach in all material respects.

                  (d) Any substitution of Qualified Substitute Mortgage Loans
for Deleted Mortgage Loans made pursuant to Section 2.03(a) must be effected
prior to the last Business Day that is within two years after the Closing Date.
As to any Deleted Mortgage Loan for which the Originator substitutes a Qualified
Substitute Mortgage Loan or Loans, such substitution shall be effected by the
Originator delivering to the Trustee, for such Qualified Substitute Mortgage
Loan or Loans, the Mortgage Note, the Mortgage and the Assignment to the
Trustee, and such other documents and agreements, with all necessary
endorsements thereon, as are required by Section 2.01, together with an
Officers' Certificate providing that each such Qualified Substitute Mortgage
Loan satisfies the definition thereof and specifying the Substitution Adjustment
(as described below), if any, in connection with such substitution. The Trustee
shall acknowledge receipt for such Qualified Substitute Mortgage Loan or Loans
and, within ten Business Days thereafter, shall review such documents as
specified in Section 2.02 and deliver to the Master Servicer and the NIMS
Insurer, with respect to such Qualified Substitute Mortgage Loan or Loans, a
certification substantially in the form attached hereto as Exhibit F-1, with any
applicable exceptions noted thereon. Within one year of the date of
substitution, the Trustee shall deliver to the Master Servicer and the NIMS
Insurer a certification substantially in the form of Exhibit F-2 hereto with
respect to such Qualified Substitute Mortgage Loan or Loans, with any applicable
exceptions noted thereon. Monthly Payments due with


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respect to Qualified Substitute Mortgage Loans in the month of substitution are
not part of the Trust Fund and will be retained by the Originator. For the month
of substitution, distributions to Certificateholders will reflect the
collections and recoveries in respect of such Deleted Mortgage Loan in the Due
Period preceding the month of substitution and the Originator shall thereafter
be entitled to retain all amounts subsequently received in respect of such
Deleted Mortgage Loan. The Originator shall give or cause to be given written
notice to the Certificateholders and the NIMS Insurer that such substitution has
taken place, shall amend the Mortgage Loan Schedule to reflect the removal of
such Deleted Mortgage Loan from the terms of this Agreement and the substitution
of the Qualified Substitute Mortgage Loan or Loans and shall deliver a copy of
such amended Mortgage Loan Schedule to the NIMS Insurer and the Trustee. Upon
such substitution by the Originator, such Qualified Substitute Mortgage Loan or
Loans shall constitute part of the Mortgage Pool and shall be subject in all
respects to the terms of this Agreement and the Mortgage Loan Purchase
Agreement, including all applicable representations and warranties thereof
included in the Mortgage Loan Purchase Agreement as of the date of substitution.

                  For any month in which the Originator substitutes one or more
Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the
Master Servicer will determine the amount (the "Substitution Adjustment"), if
any, by which the aggregate Purchase Price of all such Deleted Mortgage Loans
exceeds the aggregate, as to each such Qualified Substitute Mortgage Loan, of
the principal balance thereof as of the date of substitution, together with one
month's interest on such principal balance at the applicable Net Mortgage Rate.
On the date of such substitution, the Originator will deliver or cause to be
delivered to the Master Servicer for deposit in the Collection Account an amount
equal to the Substitution Adjustment, if any, and the Trustee, upon receipt of
the related Qualified Substitute Mortgage Loan or Loans and certification by the
Master Servicer of such deposit, shall release to the Originator the related
Mortgage File or Files and shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, as the Originator shall
deliver to it and as shall be necessary to vest therein any Deleted Mortgage
Loan released pursuant hereto.

                  In addition, the Originator shall obtain at its own expense
and deliver to the Trustee and the NIMS Insurer an Opinion of Counsel to the
effect that such substitution will not cause (a) any federal tax to be imposed
on the Trust Fund, including without limitation, any federal tax imposed on
"prohibited transactions" under Section 860F(a)(l) of the Code or on
"contributions after the startup date" under Section 860G(d)(l) of the Code or
(b) any REMIC to fail to qualify as a REMIC at any time that any Certificate is
outstanding. If such Opinion of Counsel can not be delivered, then such
substitution may only be effected at such time as the required Opinion of
Counsel can be given.

                  (e) Upon discovery by the Originator, the Master Servicer, the
NIMS Insurer or the Trustee that any Mortgage Loan does not constitute a
"qualified mortgage" within the meaning of Section 860G(a)(3) of the Code, the
party discovering such fact shall within two Business Days give written notice
thereof to the other parties. In connection therewith, the Originator or the
Depositor, as the case may be, shall repurchase or, subject to the limitations
set forth in Section 2.03(d), substitute one or more Qualified Substitute
Mortgage Loans for the affected Mortgage Loan within 90 days of the earlier of
discovery or receipt of such notice with respect to such affected Mortgage Loan.
Such repurchase or substitution shall be made (i) by the Originator if the
affected


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Mortgage Loan's status as a non-qualified mortgage is or results from a breach
of any representation, warranty or covenant made by the Originator under the
Mortgage Loan Purchase Agreement or (ii) the Depositor, if the affected Mortgage
Loan's status as a non-qualified mortgage is a breach of any representation or
warranty of the Depositor set forth in Section 2.06, or if its status as a
non-qualified mortgage is a breach of no representation or warranty. Any such
repurchase or substitution shall be made in the same manner as set forth in
Section 2.03(a), if made by the Originator, or Section 2.03(b), if made by the
Depositor. The Trustee shall reconvey to the Depositor or the Originator, as the
case may be, the Mortgage Loan to be released pursuant hereto in the same
manner, and on the same terms and conditions, as it would a Mortgage Loan
repurchased for breach of a representation or warranty.

                  SECTION 2.04. Intentionally Omitted.

                  SECTION 2.05. Representations, Warranties and Covenants of the
                                Master Servicer.

                  The Master Servicer hereby represents, warrants and covenants
to the Trustee, for the benefit of each of the Trustee and the
Certificateholders and to the Depositor that as of the Closing Date or as of
such date specifically provided herein:

                  (i) The Master Servicer is duly organized, validly existing,
         and in good standing under the laws of the jurisdiction of its
         formation and has all licenses necessary to carry on its business as
         now being conducted and is licensed, qualified and in good standing in
         the states where the Mortgaged Property is located if the laws of such
         state require licensing or qualification in order to conduct business
         of the type conducted by the Master Servicer or to ensure the
         enforceability or validity of each Mortgage Loan; the Master Servicer
         has the power and authority to execute and deliver this Agreement and
         to perform in accordance herewith; the execution, delivery and
         performance of this Agreement (including all instruments of transfer to
         be delivered pursuant to this Agreement) by the Master Servicer and the
         consummation of the transactions contemplated hereby have been duly and
         validly authorized; this Agreement evidences the valid, binding and
         enforceable obligation of the Master Servicer, subject to applicable
         bankruptcy, insolvency, reorganization, moratorium or other similar
         laws affecting the enforcement of creditors' rights generally; and all
         requisite corporate action has been taken by the Master Servicer to
         make this Agreement valid and binding upon the Master Servicer in
         accordance with its terms;

                  (ii) The consummation of the transactions contemplated by this
         Agreement are in the ordinary course of business of the Master Servicer
         and will not result in the breach of any term or provision of the
         charter or by-laws of the Master Servicer or result in the breach of
         any term or provision of, or conflict with or constitute a default
         under or result in the acceleration of any obligation under, any
         agreement, indenture or loan or credit agreement or other instrument to
         which the Master Servicer or its property is subject, or result in the
         violation of any law, rule, regulation, order, judgment or decree to
         which the Master Servicer or its property is subject;



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                  (iii) The execution and delivery of this Agreement by the
         Master Servicer and the performance and compliance with its obligations
         and covenants hereunder do not require the consent or approval of any
         governmental authority or, if such consent or approval is required, it
         has been obtained;

                  (iv) This Agreement, and all documents and instruments
         contemplated hereby which are executed and delivered by the Master
         Servicer, constitute and will constitute valid, legal and binding
         obligations of the Master Servicer, enforceable in accordance with
         their respective terms, except as the enforcement thereof may be
         limited by applicable bankruptcy laws and general principles of equity;

                  (v)      [Reserved];

                  (vi) The Master Servicer does not believe, nor does it have
         any reason or cause to believe, that it cannot perform each and every
         covenant contained in this Agreement;

                  (vii) There is no action, suit, proceeding or investigation
         pending or, to its knowledge, threatened against the Master Servicer
         that, either individually or in the aggregate, (A) may result in any
         change in the business, operations, financial condition, properties or
         assets of the Master Servicer that might prohibit or materially and
         adversely affect the performance by such Master Servicer of its
         obligations under, or validity or enforceability of, this Agreement, or
         (B)may result in any material impairment of the right or ability of the
         Master Servicer to carry on its business substantially as now
         conducted, or (C) may result in any material liability on the part of
         the Master Servicer, or (D) would draw into question the validity or
         enforceability of this Agreement or of any action taken or to be taken
         in connection with the obligations of the Master Servicer contemplated
         herein, or (E) would otherwise be likely to impair materially the
         ability of the Master Servicer to perform under the terms of this
         Agreement;

                  (viii) Neither this Agreement nor any information, certificate
         of an officer, statement furnished in writing or report delivered to
         the Trustee by the Master Servicer in connection with the transactions
         contemplated hereby contains any untrue statement of a material fact;

                  (ix) The Master Servicer covenants that its computer and other
         systems used in servicing the Mortgage Loans operate in a manner such
         that the Master Servicer can service the Mortgage Loans in accordance
         with the terms of this Agreement;

                  (x) The information set forth in the Prepayment Charge
         Schedule (including the Prepayment Charge Summary attached thereto) is
         complete, true and correct in all material respects on the date or
         dates when such information is furnished and each Prepayment Charge is
         permissible and enforceable in accordance with its terms (except to the
         extent that the enforceability thereof may be limited by bankruptcy,
         insolvency, moratorium, receivership and other similar laws affecting
         creditor's rights generally or the collectibility thereof may be
         limited due to acceleration in connection with a foreclosure) under
         applicable state law;


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                  (xi) The Master Servicer will not waive any Prepayment Charge
         unless it is waived in accordance with the standard set forth in
         Section 3.01; and

                  (xii) The Master Servicer will accurately and fully report its
         borrower credit files to each of the Credit Repositories in a timely
         manner.

                  It is understood and agreed that the representations,
warranties and covenants set forth in this Section 2.05 shall survive delivery
of the Mortgage Files to the Trustee and shall inure to the benefit of the
Trustee, the Depositor and the Certificateholders. Upon discovery by any of the
Depositor, the NIMS Insurer, the Master Servicer, the Originator or the Trustee
of a breach of any of the foregoing representations, warranties and covenants
which materially and adversely affects the value of any Mortgage Loan,
Prepayment Charge or the interests therein of the Certificateholders, the party
discovering such breach shall give prompt written notice (but in no event later
than two Business Days following such discovery) to the Master Servicer, the
Originator, the NIMS Insurer and the Trustee. Notwithstanding the foregoing,
within 90 days of the earlier of discovery by the Master Servicer or receipt of
notice by the Master Servicer of the breach of the representation or covenant of
the Master Servicer (in its capacity as Originator) set forth in Sections
2.05(x) or 2.05(xi) above which materially and adversely affects the interests
of the Holders of the Class P Certificates in any Prepayment Charge, the Master
Servicer shall remedy such breach as follows: (a) if the representation made by
the Master Servicer (in its capacity as Originator) in Section 2.05(x) above is
breached and a Principal Prepayment has occurred in the applicable Prepayment
Period or if a change of law subsequent to the Closing Date limits the
enforceability of a Prepayment Charge (other than in the circumstances provided
in Section 2.05(x) above), the Master Servicer (in its capacity as Originator)
must pay the amount of the scheduled Prepayment Charge, for the benefit of the
Holders of the Class P Certificates, by depositing such amount into the
Collection Account, net of any amount previously collected by the Master
Servicer and paid by the Master Servicer, for the benefit of the Holders of the
Class P Certificates, in respect of such Prepayment Charge; and (b) if any of
the covenants made by the Master Servicer in Section 2.05(xi) above is breached,
the Master Servicer must pay the amount of such waived Prepayment Charge, for
the benefit of the Holders of the Class P Certificates, by depositing such
amount into the Collection Account. The foregoing shall not, however, limit any
remedies available to the Certificateholders, the Depositor or the Trustee on
behalf of the Certificateholders, pursuant to the Mortgage Loan Purchase
Agreement signed by the Master Servicer in its capacity as Originator,
respecting a breach of the representations, warranties and covenants of the
Master Servicer in its capacity as Originator contained in the Mortgage Loan
Purchase Agreement.

                  SECTION 2.06. Representations and Warranties of the Depositor.

                  The Depositor represents and warrants to the Trust and the
Trustee on behalf of the Certificateholders as follows:

                  (i) This Agreement constitutes a legal, valid and binding
         obligation of the Depositor, enforceable against the Depositor in
         accordance with its terms, except as enforceability may be limited by
         applicable bankruptcy, insolvency, reorganization, moratorium or other
         similar laws now or hereafter in effect affecting the enforcement of


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         creditors' rights in general and except as such enforceability may be
         limited by general principles of equity (whether considered in a
         proceeding at law or in equity);

                  (ii) Immediately prior to the sale and assignment by the
         Depositor to the Trustee on behalf of the Trust of each Mortgage Loan,
         the Depositor had good and marketable title to each Mortgage Loan
         (insofar as such title was conveyed to it by the Seller) subject to no
         prior lien, claim, participation interest, mortgage, security interest,
         pledge, charge or other encumbrance or other interest of any nature;

                  (iii) As of the Closing Date, the Depositor has transferred
         all right, title and interest in the Mortgage Loans to the Trustee on
         behalf of the Trust;

                  (iv) The Depositor has not transferred the Mortgage Loans to
         the Trustee on behalf of the Trust with any intent to hinder, delay or
         defraud any of its creditors;

                  (v) The Depositor has been duly incorporated and is validly
         existing as a corporation in good standing under the laws of Delaware,
         with full corporate power and authority to own its assets and conduct
         its business as presently being conducted;

                  (vi) The Depositor is not in violation of its articles of
         incorporation or by-laws or in default in the performance or observance
         of any material obligation, agreement, covenant or condition contained
         in any contract, indenture, mortgage, loan agreement, note, lease or
         other instrument to which the Depositor is a party or by which it or
         its properties may be bound, which default might result in any material
         adverse changes in the financial condition, earnings, affairs or
         business of the Depositor or which might materially and adversely
         affect the properties or assets, taken as a whole, of the Depositor;

                  (vii) The execution, delivery and performance of this
         Agreement by the Depositor, and the consummation of the transactions
         contemplated thereby, do not and will not result in a material breach
         or violation of any of the terms or provisions of, or, to the knowledge
         of the Depositor, constitute a default under, any indenture, mortgage,
         deed of trust, loan agreement or other agreement or instrument to which
         the Depositor is a party or by which the Depositor is bound or to which
         any of the property or assets of the Depositor is subject, nor will
         such actions result in any violation of the provisions of the articles
         of incorporation or by-laws of the Depositor or, to the best of the
         Depositor's knowledge without independent investigation, any statute or
         any order, rule or regulation of any court or governmental agency or
         body having jurisdiction over the Depositor or any of its properties or
         assets (except for such conflicts, breaches, violations and defaults as
         would not have a material adverse effect on the ability of the
         Depositor to perform its obligations under this Agreement);

                  (viii) To the best of the Depositor's knowledge without any
         independent investigation, no consent, approval, authorization, order,
         registration or qualification of or with any court or governmental
         agency or body of the United States or any other jurisdiction is
         required for the issuance of the Certificates, or the consummation by
         the Depositor of the other transactions contemplated by this Agreement,
         except such consents, approvals, authorizations, registrations or
         qualifications as (a) may be required under State securities


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<PAGE>



         or Blue Sky laws, (b) have been previously obtained or (c) the
         failure of which to obtain would not have a material adverse effect on
         the performance by the Depositor of its obligations under, or the
         validity or enforceability of, this Agreement; and

                  (ix) There are no actions, proceedings or investigations
         pending before or, to the Depositor's knowledge, threatened by any
         court, administrative agency or other tribunal to which the Depositor
         is a party or of which any of its properties is the subject: (a) which
         if determined adversely to the Depositor would have a material adverse
         effect on the business, results of operations or financial condition of
         the Depositor; (b) asserting the invalidity of this Agreement or the
         Certificates; (c) seeking to prevent the issuance of the Certificates
         or the consummation by the Depositor of any of the transactions
         contemplated by this Agreement, as the case may be; or (d) which might
         materially and adversely affect the performance by the Depositor of its
         obligations under, or the validity or enforceability of, this
         Agreement.

                  SECTION 2.07. Issuance of Certificates.

                  The Trustee acknowledges the assignment to it of the Mortgage
Loans and the delivery to it of the Mortgage Files, subject to the provisions of
Sections 2.01 and 2.02, together with the assignment to it of all other assets
included in the Trust Fund, receipt of which is hereby acknowledged.
Concurrently with such assignment and delivery and in exchange therefor, the
Trustee, pursuant to the written request of the Depositor executed by an officer
of the Depositor, has executed, authenticated and delivered to or upon the order
of the Depositor, the Certificates in authorized denominations. The interests
evidenced by the Certificates, constitute the entire beneficial ownership
interest in the Trust Fund.

                  SECTION 2.08. Conveyance of the Subsequent Mortgage Loans.

                  (a) Subject to the conditions set forth in paragraph (b) below
in consideration of the Trustee's delivery on the Subsequent Transfer Dates to
or upon the order of the Depositor of all or a portion of the balance of funds
in the Pre-Funding Accounts, the Depositor shall on any Subsequent Transfer Date
sell, transfer, assign, set over and convey without recourse to the Trust Fund
but subject to the other terms and provisions of this Agreement all of the
right, title and interest of the Depositor in and to (i) the Subsequent Mortgage
Loans identified on the Mortgage Loan Schedule attached to the related
Subsequent Transfer Instrument delivered by the Depositor on such Subsequent
Transfer Date, (ii) all interest accruing thereon on and after the Subsequent
Cut-off Date and all collections in respect of interest and principal due after
the Subsequent Cut-off Date and (iii) all items with respect to such Subsequent
Mortgage Loans to be delivered pursuant to Section 2.01 and the other items in
the related Mortgage Files; provided, however, that the Depositor reserves and
retains all right, title and interest in and to principal received and interest
accruing on the Subsequent Mortgage Loans prior to the related Subsequent
Cut-off Date. The transfer to the Trustee for deposit in the Mortgage Pool by
the Depositor of the Subsequent Mortgage Loans identified on the Mortgage Loan
Schedule shall be absolute and is intended by the Depositor, the Master
Servicer, the Trustee and the Certificateholders to constitute and to be treated
as a sale of the Subsequent Mortgage Loans by the Depositor to the Trust Fund.
The related Mortgage File for each Subsequent Mortgage Loan


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shall be delivered to the Trustee at least three Business Days prior to the
related Subsequent Transfer Date.

                  The purchase price paid by the Trustee from amounts released
from the Group I Pre- Funding Account or the Group II Pre-Funding Account, as
applicable, shall be one-hundred percent (100%) of the aggregate Stated
Principal Balance of the related Subsequent Mortgage Loans so transferred (as
identified on the Mortgage Loan Schedule provided by the Depositor). This
Agreement shall constitute a fixed-price purchase contract in accordance with
Section 860G(a)(3)(A)(ii) of the Code.

                  (b) The Depositor shall transfer to the Trustee for deposit in
the Mortgage Pool the Subsequent Mortgage Loans and the other property and
rights related thereto as described in paragraph (a) above, and the Trustee
shall release funds from the Group I Pre-Funding Account or the Group II
Pre-Funding Account, as applicable, only upon the satisfaction of each of the
following conditions on or prior to the related Subsequent Transfer Date:

                  (i) the Depositor shall have provided the Trustee, the NIMS
         Insurer and the Rating Agencies with a timely Addition Notice and shall
         have provided any information reasonably requested by the Trustee with
         respect to the Subsequent Mortgage Loans;

                  (ii) the Depositor shall have delivered to the Trustee and the
         NIMS Insurer a duly executed Subsequent Transfer Instrument, which
         shall include a Mortgage Loan Schedule listing the Subsequent Mortgage
         Loans, and the Master Servicer, in its capacity as Originator, shall
         have delivered a computer file containing such Mortgage Loan Schedule
         to the Trustee at least three Business Days prior to the related
         Subsequent Transfer Date;

                  (iii) as of each Subsequent Transfer Date, as evidenced by
         delivery of the Subsequent Transfer Instrument, substantially in the
         form of Exhibit O, the Depositor shall not be insolvent nor shall it
         have been rendered insolvent by such transfer nor shall it be aware of
         any pending insolvency;

                  (iv) such sale and transfer shall not result in a material
         adverse tax consequence to the Trust Fund or the Certificateholders;

                  (v) the Funding Period shall not have terminated;

                  (vi) the Depositor shall not have selected the Subsequent
         Mortgage Loans in a manner that it believed to be adverse to the
         interests of the Certificateholders;

                  (vii) the Depositor shall have delivered to the Trustee and
         the NIMS Insurer a Subsequent Transfer Instrument confirming the
         satisfaction of the conditions precedent specified in this Section 2.08
         and, pursuant to the Subsequent Transfer Instrument, assigned to the
         Trustee without recourse for the benefit of the Certificateholders all
         the right, title and interest of the Depositor, in, to and under the
         Subsequent Mortgage Loan Purchase Agreement, to the extent of the
         Subsequent Mortgage Loans;



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                  (viii) with respect to the last Subsequent Transfer Date, the
         Depositor shall have delivered to the Trustee and the NIMS Insurer a
         letter from an Independent accountant (with copies provided to each
         Rating Agency) stating that the characteristics of the Subsequent
         Mortgage Loans conform to the characteristics set forth in clauses (i)
         through (ix) of paragraph (c) below and to the characteristics set
         forth in paragraph (d) below;

                  (ix) the Depositor shall have delivered to the Trustee, the
         Underwriters and the NIMS Insurer an Opinion of Counsel addressed to
         the Trustee and the Rating Agencies with respect to the transfer of the
         Subsequent Mortgage Loans substantially in the form of the Opinion of
         Counsel delivered to the Trustee on the Closing Date regarding the true
         sale of the Subsequent Mortgage Loans; and

                  (x) the Depositor shall have received the consent of the NIMS
         Insurer to the transfer of such Subsequent Mortgage Loans.

                  (c) The obligation of the Trust Fund to purchase a Subsequent
Mortgage Loan on any Subsequent Transfer Date is subject to the satisfaction of
the conditions set forth in the immediately following paragraph and the accuracy
of the following representations and warranties with respect to each such
Subsequent Mortgage Loan determined as of the applicable Subsequent Cut-off
Date: (i) such Subsequent Mortgage Loan may not be 30 or more days delinquent as
of the last day of the month preceding the Subsequent Cut-off Date; (ii) the
original term to stated maturity of such Subsequent Mortgage Loan will not be
less than 120 months and will not exceed 360 months; (iii) such Subsequent
Mortgage Loan will not have a loan-to-value ratio greater than 100.00%; (iv)
such Subsequent Mortgage Loans will have, as of the Subsequent Cut-off Date, a
weighted average term since origination not in excess of 360 months; (v) such
Subsequent Mortgage Loan, if a Fixed Rate Mortgage Loan, shall have a Mortgage
Rate that is not less than 4.75% per annum or greater than 14.35% per annum;
(vi) such Subsequent Mortgage Loan must have a first payment date occurring on
or before March 1, 2003; (vii) if the Subsequent Mortgage Loan is an Adjustable
Rate Mortgage Loan, the Subsequent Mortgage Loan will have a Gross Margin not
less than 2.50% per annum; (viii) if the Subsequent Mortgage Loan is an
Adjustable Rate Mortgage Loan, the Subsequent Mortgage Loan will have a Maximum
Mortgage Rate not less than 10.80% per annum; (ix) if the Subsequent Mortgage
Loan is an Adjustable Rate Mortgage Loan, the Subsequent Mortgage Loan will have
a Minimum Mortgage Rate not less than 4.49% per annum, (x) the Subsequent
Mortgage Loan may not provide for negative amortization; (xi) such Subsequent
Mortgage Loan shall have been serviced by the Master Servicer since origination,
the date of purchase or the date of acquisition of the servicing and (xii) such
Subsequent Mortgage Loan shall have been underwritten in accordance with the
criteria set forth under "Option One Mortgage Corporation--Underwriting
Standards" in the Prospectus Supplement.

                  (d) Following the purchase of any Subsequent Group I Mortgage
Loan by the Trust, the Group I Mortgage Loans (including such Subsequent Group I
Mortgage Loans) will: (i) have a weighted average original term to stated
maturity of not more than 360 months; (ii) have a weighted average Mortgage Rate
of not less than 7.95% per annum and not more than 8.10% per annum; (iii) have a
weighted average Loan-to-Value Ratio of not more than 79.00%; (iv) have no
Mortgage Loan with a Principal Balance which does not conform to Fannie Mae and
Freddie Mac guidelines; (v) will consist of Mortgage Loans covered by the PMI
Policy representing no less than


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61.00% by aggregate Principal Balance of the Group I Mortgage Loans; (v) will
consist of Mortgage Loans with Prepayment Charges representing no less than
80.00% by aggregate Principal Balance of the Group I Mortgage Loans; and (vi)
have no more than 30.00% of Fixed Rate Mortgage Loans by aggregate Principal
Balance of the Group I Mortgage Loans. In addition, the Adjustable Rate Group I
Mortgage Loans will have a weighted average Gross Margin not less than 5.20% per
annum. For purposes of the calculations described in this paragraph, percentages
of the Group I Mortgage Loans will be based on the Principal Balance of the
Initial Group I Mortgage Loans as of the Cut-off Date and the Principal Balance
of the Subsequent Group I Mortgage Loans as of the related Subsequent Cut-off
Date.

                  Following the purchase of any Subsequent Group II Mortgage
Loan by the Trust, the Group II Mortgage Loans (including such Subsequent Group
II Mortgage Loans) will: (i) have a weighted average original term to stated
maturity of not more than 360 months; (ii) have a weighted average Mortgage Rate
of not less than 7.50% per annum and not more than 8.00% per annum; (iii) have a
weighted average Loan-to-Value Ratio of not more than 81.00%; (iv) have no
Mortgage Loan with a principal balance in excess of $1,015,000; (v) will consist
of Mortgage Loans covered by the PMI Policy representing no less than 70.00% by
aggregate Principal Balance of the Group II Mortgage Loans; (v) will consist of
Mortgage Loans with Prepayment Charges representing no less than 75.00% by
aggregate Principal Balance of the Group II Mortgage Loans; and (vi) have no
more than 30.00% of Fixed Rate Mortgage Loans by aggregate Principal Balance of
the Group II Mortgage Loans. In addition, the Adjustable Rate Group II Mortgage
Loans will have a weighted average Gross Margin not less than 4.90% per annum.
For purposes of the calculations described in this paragraph, percentages of the
Group II Mortgage Loans will be based on the Principal Balance of the Initial
Group II Mortgage Loans as of the Cut-off Date and the Principal Balance of the
Subsequent Group II Mortgage Loans as of the related Subsequent Cut-off Date.

                  (e) Notwithstanding the foregoing, any Subsequent Mortgage
Loan may be rejected by (i) the NIMS Insurer or (ii) any Rating Agency if the
inclusion of any such Subsequent Mortgage Loan would adversely affect the
ratings of any Class of Certificates. At least one Business Day prior to the
Subsequent Transfer Date, each Rating Agency shall notify the Trustee as to
which Subsequent Mortgage Loans, if any, shall not be included in the transfer
on the Subsequent Transfer Date; provided, however, that the Master Servicer, in
its capacity as Originator, shall have delivered to each Rating Agency at least
three Business Days prior to such Subsequent Transfer Date a computer file
acceptable to each Rating Agency describing the characteristics specified in
paragraphs (c) and (d) above.

                  SECTION 2.09. Conveyance of REMIC Regular Interests and
                                Acceptance of REMIC 2 and REMIC 3 by the
                                Trustee; Issuance of Certificates.

                  (a) The Depositor, concurrently with the execution and
delivery hereof, does hereby transfer, assign, set over and otherwise convey in
trust to the Trustee without recourse all the right, title and interest of the
Depositor in and to the assets described in the definition of REMIC 1for the
benefit of the holders of the REMIC 1 Regular Interests (which are
uncertificated) and the Class R Certificates (in respect of the Class R-1
Interest). The Trustee acknowledges receipt of the assets described in the
definition of REMIC 1 and declares that it holds and will hold the same in trust
for


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the exclusive use and benefit of the holders of the REMIC 1 Regular Interests
and the Class R Certificates (in respect of the Class R-1 Interest). The
interests evidenced by the Class R-1 Interest, together with the REMIC 1 Regular
Interests, constitute the entire beneficial ownership interest in REMIC 1.

                  (b) The Depositor, concurrently with the execution and
delivery hereof, does hereby transfer, assign, set over and otherwise convey in
trust to the Trustee without recourse all the right, title and interest of the
Depositor in and to the REMIC 1 Regular Interests for the benefit of the holders
of the REMIC 2 Regular Interests (which are uncertificated) and the Class R
Certificates (in respect of the Class R-2 Interest). The Trustee acknowledges
receipt of the REMIC 1 Regular Interests and declares that it holds and will
hold the same in trust for the exclusive use and benefit of the holders of the
REMIC 2 Regular Interests and the Class R Certificates (in respect of the Class
R-2 Interest). The interests evidenced by the Class R-2 Interest, together with
the REMIC 2 Regular Interests, constitute the entire beneficial ownership
interest in REMIC 2.

                  (c) The Depositor, concurrently with the execution and
delivery hereof, does hereby transfer, assign, set over and otherwise convey in
trust to the Trustee without recourse all the right, title and interest of the
Depositor in and to the REMIC 2 Regular Interests (which are uncertificated) for
the benefit of the Holders of the Regular Certificates and the Class R
Certificates (in respect of the Class R-3 Interest). The Trustee acknowledges
receipt of the REMIC 2 Regular Interests and declares that it holds and will
hold the same in trust for the exclusive use and benefit of the Holders of the
Regular Certificates and the Class R Certificates (in respect of the Class R-3
Interest). The interests evidenced by the Class R-3 Interest, together with the
Regular Certificates, constitute the entire beneficial ownership interest in
REMIC 3.

                  (d) Concurrently with (i) the assignment and delivery to the
Trustee of REMIC 1 and the acceptance by the Trustee thereof, pursuant to
Section 2.01 and Section 2.02, (ii) the assignment and delivery to the Trustee
of REMIC 2 (including the Residual Interest therein represented by the Class R-2
Interest) and the acceptance by the Trustee thereof, pursuant to Section 2.07,
(iii) the assignment and delivery to the Trustee of REMIC 3 (including the
Residual Interest therein represented by the Class R-3 Interest) and the
acceptance by the Trustee thereof, pursuant to Section 2.07(c), the Trustee,
pursuant to the written request of the Depositor executed by an officer of the
Depositor, has executed, authenticated and delivered to or upon the order of the
Depositor, the Class R Certificates in authorized denominations evidencing the
Class R-1 Interest, the Class R-2 Interest and the Class R-3 Interest.

                  SECTION 2.10. Negative Covenants of the Trustee and the Master
                                Servicer.

                  Except as otherwise expressly permitted by this Agreement, the
Trustee and the Master Servicer shall not cause the Trust Fund to:

                  (i) sell, transfer, exchange or otherwise dispose of any of
         the assets of the Trust Fund;

                  (ii) dissolve or liquidate the Trust Fund in whole or in part;



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                  (iii) engage, directly or indirectly, in any business other
         than that arising out of the issue of the Certificates, and the actions
         contemplated or required to be performed under this Agreement;

                  (iv) incur, create or assume any indebtedness for borrowed
         money;

                  (v) voluntarily file a petition for bankruptcy,
         reorganization, assignment for the benefit of creditors or similar
         proceeding; or

                  (vi) merge, convert or consolidate with any other Person.



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                                   ARTICLE III

                          ADMINISTRATION AND SERVICING
                              OF THE MORTGAGE LOANS

                  SECTION 3.01. Master Servicer to Act as Master Servicer.

                  The Master Servicer shall service and administer the Mortgage
Loans on behalf of the Trust and in the best interests of and for the benefit of
the Certificateholders (as determined by the Master Servicer in its reasonable
judgment) in accordance with the terms of this Agreement and the Mortgage Loans
and, to the extent consistent with such terms, in the same manner in which it
services and administers similar mortgage loans for its own portfolio, giving
due consideration to customary and usual standards of practice of mortgage
lenders and loan servicers administering similar mortgage loans but without
regard to:

                  (A) any relationship that the Master Servicer, any
         Sub-Servicer or any Affiliate of the Master Servicer or any
         Sub-Servicer may have with the related Mortgagor;

                  (B) the ownership or non-ownership of any Certificate by the
         Master Servicer or any Affiliate of the Master Servicer;

                  (C) the Master Servicer's obligation to make Advances or
         Servicing Advances; or

                  (D) the Master Servicer's or any Sub-Servicer's right to
         receive compensation for its services hereunder or with respect to any
         particular transaction.

                  To the extent consistent with the foregoing, the Master
Servicer (a) shall seek the timely and complete recovery of principal and
interest on the Mortgage Notes and (b) shall waive (or permit a Sub-Servicer to
waive) a Prepayment Charge only under the following circumstances: (i) such
waiver is standard and customary in servicing similar Mortgage Loans and (ii)
either (A) such waiver relates to a default or a reasonably foreseeable default
and would, in the reasonable judgement of the Master Servicer, maximize recovery
of total proceeds taking into account the value of such Prepayment Charge and
the related Mortgage Loan or (B) such waiver is made in connection with a
refinancing of the related Mortgage Loan unrelated to a default or a reasonably
foreseeable default where (x) the related Mortgagor has stated to the Master
Servicer or an applicable Sub- Servicer an intention to refinance the related
Mortgage Loan and (y) the Master Servicer has concluded in its reasonable
judgement that the waiver of such Prepayment Charge would induce such mortgagor
to refinance with the Master Servicer; provided, however, that the Master
Servicer shall waive no more than 5.00% of the Prepayment Charges (by number of
Prepayment Charges) set forth on the Prepayment Charge Schedule in accordance
with clause (ii)(B) above. If a Prepayment Charge is waived as permitted by
meeting the standards described in clauses (i) and (ii)(B) above, then the
Master Servicer is required to pay the amount of such waived Prepayment Charge,
for the benefit of the Holders of the Class P Certificates, by depositing such
amount into the Collection Account together with and at the time that the amount
prepaid on the related Mortgage Loan is


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required to be deposited into the Collection Account. Notwithstanding any other
provisions of this Agreement, any payments made by the Master Servicer in
respect of any waived Prepayment Charges pursuant to clauses (i) and (ii)(B)
above shall be deemed to be paid outside of the Trust Fund. Subject only to the
above-described servicing standards and the terms of this Agreement and of the
Mortgage Loans, the Master Servicer shall have full power and authority, acting
alone or through Sub-Servicers as provided in Section 3.02, to do or cause to be
done any and all things in connection with such servicing and administration
which it may deem necessary or desirable. Without limiting the generality of the
foregoing, the Master Servicer in its own name or in the name of a Sub-Servicer
is hereby authorized and empowered by the Trustee when the Master Servicer
believes it appropriate in its best judgment in accordance with the servicing
standards set forth above, to execute and deliver, on behalf of the
Certificateholders and the Trustee, and upon notice to the Trustee, any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge, and all other comparable instruments, with respect to the Mortgage
Loans and the Mortgaged Properties and to institute foreclosure proceedings or
obtain a deed-in-lieu of foreclosure so as to convert the ownership of such
properties, and to hold or cause to be held title to such properties, on behalf
of the Trustee and Certificateholders. The Master Servicer shall service and
administer the Mortgage Loans in accordance with applicable state and federal
law and shall provide to the Mortgagors any reports required to be provided to
them thereby. The Master Servicer shall also comply in the performance of this
Agreement with all reasonable rules and requirements of each insurer under any
standard hazard insurance policy. Subject to Section 3.17, within 15 days of the
Closing Date, the Trustee shall execute, at the written request of the Master
Servicer, and furnish to the Master Servicer and any Sub-Servicer any special or
limited powers of attorney for each county in which a Mortgaged Property is
located and other documents necessary or appropriate to enable the Master
Servicer or any Sub-Servicer to carry out their servicing and administrative
duties hereunder; provided, such limited powers of attorney or other documents
shall be prepared by the Master Servicer and submitted to the Trustee for
execution. The Trustee shall not be liable for the actions of the Master
Servicer or any Sub-Servicers under such powers of attorney.

                  Subject to Section 3.09 hereof, in accordance with the
standards of the preceding paragraph, the Master Servicer shall advance or cause
to be advanced funds as necessary for the purpose of effecting the timely
payment of taxes and assessments on the Mortgaged Properties, which advances
shall be Servicing Advances reimbursable in the first instance from related
collections from the Mortgagors pursuant to Section 3.09, and further as
provided in Section 3.11. Any cost incurred by the Master Servicer or by
Sub-Servicers in effecting the timely payment of taxes and assessments on a
Mortgaged Property shall not, for the purpose of calculating distributions to
Certificateholders, be added to the unpaid Principal Balance of the related
Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit.

                  Notwithstanding anything in this Agreement to the contrary,
the Master Servicer may not make any future advances with respect to a Mortgage
Loan (except as provided in Section 4.04) and the Master Servicer shall not (i)
permit any modification with respect to any Mortgage Loan that would change the
Mortgage Rate, reduce or increase the Principal Balance (except for reductions
resulting from actual payments of principal) or change the final maturity date
on such Mortgage Loan (unless, as provided in Section 3.07, the Mortgagor is in
default with respect to the Mortgage Loan or such default is, in the judgment of
the Master Servicer, reasonably foreseeable) or (ii) permit any modification,
waiver or amendment of any term of any Mortgage Loan that would both (A) effect


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an exchange or reissuance of such Mortgage Loan under Section 1001 of the Code
(or Treasury regulations promulgated thereunder) and (B) cause any REMIC created
hereunder to fail to qualify as a REMIC under the Code or the imposition of any
tax on "prohibited transactions" or "contributions after the startup date" under
the REMIC Provisions.

                  SECTION 3.02. Sub-Servicing Agreements Between Master Servicer
                                and Sub-Servicers.

                  (a) The Master Servicer may enter into Sub-Servicing
Agreements with Sub- Servicers for the servicing and administration of the
Mortgage Loans; provided, however, that (i) such agreements would not result in
a withdrawal or a downgrading by any Rating Agency of the rating on any Class of
Certificates and (ii) the NIMS Insurer shall have consented to such Sub-
Servicing Agreement. The Trustee is hereby authorized to acknowledge, at the
request of the Master Servicer, any Sub-Servicing Agreement that meets the
requirements applicable to Sub-Servicing Agreements set forth in this Agreement
and that is otherwise permitted under this Agreement.

                  Each Sub-Servicer shall be (i) authorized to transact business
in the state or states where the related Mortgaged Properties it is to service
are situated, if and to the extent required by applicable law to enable the
Sub-Servicer to perform its obligations hereunder and under the Sub- Servicing
Agreement and (ii) a Freddie Mac or Fannie Mae approved mortgage servicer. Each
Sub- Servicing Agreement must impose on the Sub-Servicer requirements conforming
to the provisions set forth in Section 3.08 and provide for servicing of the
Mortgage Loans consistent with the terms of this Agreement. The Master Servicer
will examine each Sub-Servicing Agreement and will be familiar with the terms
thereof. The terms of any Sub-Servicing Agreement will not be inconsistent with
any of the provisions of this Agreement. The Master Servicer and the
Sub-Servicers may enter into and make amendments to the Sub-Servicing Agreements
or enter into different forms of Sub- Servicing Agreements; provided, however,
that any such amendments or different forms shall be consistent with and not
violate the provisions of this Agreement, and that no such amendment or
different form shall be made or entered into which could be reasonably expected
to be materially adverse to the interests of the Certificateholders without the
consent of the Holders of Certificates entitled to at least 66% of the Voting
Rights; provided, further, that the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights shall not be required (i) to cure
any ambiguity or defect in a Sub-Servicing Agreement, (ii) to correct, modify or
supplement any provisions of a Sub-Servicing Agreement, or (iii) to make any
other provisions with respect to matters or questions arising under a
Sub-Servicing Agreement, which, in each case, shall not be inconsistent with the
provisions of this Agreement. Any variation without the consent of the Holders
of Certificates entitled to at least 66% of the Voting Rights from the
provisions set forth in Section 3.08 relating to insurance or priority
requirements of Sub-Servicing Accounts, or credits and charges to the
Sub-Servicing Accounts or the timing and amount of remittances by the
Sub-Servicers to the Master Servicer, are conclusively deemed to be inconsistent
with this Agreement and therefore prohibited. The Master Servicer shall deliver
to the NIMS Insurer and the Trustee copies of all Sub- Servicing Agreements, and
any amendments or modifications thereof, promptly upon the Master Servicer's
execution and delivery of such instruments.

         (b) As part of its servicing activities hereunder, the Master Servicer,
for the benefit of the Trustee and the Certificateholders, shall enforce the
obligations of each Sub-Servicer


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under the related Sub-Servicing Agreement and of the Originator under the
Mortgage Loan Purchase Agreement, including, without limitation, any obligation
to make advances in respect of delinquent payments as required by a
Sub-Servicing Agreement, or to purchase a Mortgage Loan on account of missing or
defective documentation or on account of a breach of a representation, warranty
or covenant, as described in Section 2.03(a). Such enforcement, including,
without limitation, the legal prosecution of claims, termination of
Sub-Servicing Agreements, and the pursuit of other appropriate remedies, shall
be in such form and carried out to such an extent and at such time as the Master
Servicer, in its good faith business judgment, would require were it the owner
of the related Mortgage Loans. The Master Servicer shall pay the costs of such
enforcement at its own expense, and shall be reimbursed therefor only (i) from a
general recovery resulting from such enforcement, to the extent, if any, that
such recovery exceeds all amounts due in respect of the related Mortgage Loans,
or (ii) from a specific recovery of costs, expenses or attorneys' fees against
the party against whom such enforcement is directed. Enforcement of the Mortgage
Loan Purchase Agreement against the Originator shall be effected by the Master
Servicer to the extent it is not the Originator, and otherwise by the Trustee in
accordance with the foregoing provisions of this paragraph.

                  SECTION 3.03. Successor Sub-Servicers.

                  The Master Servicer, with the consent of the NIMS Insurer,
shall be entitled to terminate any Sub-Servicing Agreement and the rights and
obligations of any Sub-Servicer pursuant to any Sub-Servicing Agreement in
accordance with the terms and conditions of such Sub-Servicing Agreement. In the
event of termination of any Sub-Servicer, all servicing obligations of such Sub-
Servicer shall be assumed simultaneously by the Master Servicer without any act
or deed on the part of such Sub-Servicer or the Master Servicer, and the Master
Servicer either shall service directly the related Mortgage Loans or shall enter
into a Sub-Servicing Agreement with a successor Sub-Servicer which qualifies
under Section 3.02.

                  Any Sub-Servicing Agreement shall include the provision that
such agreement may be immediately terminated by the Master Servicer or the
Trustee (if the Trustee is acting as Master Servicer) without fee, in accordance
with the terms of this Agreement, in the event that the Master Servicer (or the
Trustee, if such party is then acting as Master Servicer) shall, for any reason,
no longer be the Master Servicer (including termination due to a Master Servicer
Event of Termination).

                  SECTION 3.04. Liability of the Master Servicer.

                  Notwithstanding any Sub-Servicing Agreement or the provisions
of this Agreement relating to agreements or arrangements between the Master
Servicer and a Sub-Servicer or reference to actions taken through a Sub-Servicer
or otherwise, the Master Servicer shall remain obligated and primarily liable to
the Trustee and the Certificateholders for the servicing and administering of
the Mortgage Loans in accordance with the provisions of Section 3.01 without
diminution of such obligation or liability by virtue of such Sub-Servicing
Agreements or arrangements or by virtue of indemnification from the Sub-Servicer
and to the same extent and under the same terms and conditions as if the Master
Servicer alone were servicing and administering the Mortgage Loans. The Master
Servicer shall be entitled to enter into any agreement with a Sub-Servicer for
indemnification of the Master Servicer by such Sub-Servicer and nothing
contained in this Agreement shall be deemed to limit or modify such
indemnification.


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                  SECTION 3.05. No Contractual Relationship Between
                                Sub-Servicers and the NIMS Insurer, the Trustee
                                or Certificateholders.

                  Any Sub-Servicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Sub-Servicer
in its capacity as such shall be deemed to be between the Sub-Servicer and the
Master Servicer alone, and the NIMS Insurer, the Trustee or Certificateholders
shall not be deemed parties thereto and shall have no claims, rights,
obligations, duties or liabilities with respect to the Sub-Servicer except as
set forth in Section 3.06. The Master Servicer shall be solely liable for all
fees owed by it to any Sub-Servicer, irrespective of whether the Master
Servicer's compensation pursuant to this Agreement is sufficient to pay such
fees.

                  SECTION 3.06.  Assumption or Termination of Sub-Servicing
                                 Agreements by Trustee.

                  In the event the Master Servicer shall for any reason no
longer be the servicer (including by reason of the occurrence of a Master
Servicer Event of Termination), the Trustee shall thereupon assume all of the
rights and obligations of the Master Servicer under each Sub-Servicing Agreement
that the Master Servicer may have entered into, unless the Trustee elects to
terminate any Sub-Servicing Agreement in accordance with its terms as provided
in Section 3.03. Upon such assumption, the Trustee (or the successor servicer
appointed pursuant to Section 7.02) shall be deemed, subject to Section 3.03, to
have assumed all of the departing Master Servicer's interest therein and to have
replaced the departing Master Servicer as a party to each Sub-Servicing
Agreement to the same extent as if each Sub-Servicing Agreement had been
assigned to the assuming party, except that (i) the departing Master Servicer
shall not thereby be relieved of any liability or obligations under any
Sub-Servicing Agreement that arose before it ceased to be the Master Servicer
and (ii) neither the Trustee nor any successor Master Servicer shall be deemed
to have assumed any liability or obligation of the Master Servicer that arose
before it ceased to be the Master Servicer.

                  The Master Servicer at its expense shall, upon request of
Trustee, deliver to the assuming party all documents and records relating to
each Sub-Servicing Agreement and the Mortgage Loans then being serviced and an
accounting of amounts collected and held by or on behalf of it, and otherwise
use its best efforts to effect the orderly and efficient transfer of the Sub-
Servicing Agreements to the assuming party. All Servicing Transfer Costs shall
be paid by the predecessor Master Servicer upon presentation of reasonable
documentation of such costs, and if such predecessor Master Servicer defaults in
its obligation to pay such costs, such costs shall be paid by the successor
Master Servicer or the Trustee (in which case the successor Master Servicer or
the Trustee, as applicable, shall be entitled to reimbursement therefor from the
assets of the Trust).

                  SECTION 3.07. Collection of Certain Mortgage Loan Payments.

                  The Master Servicer shall make reasonable efforts to collect
all payments called for under the terms and provisions of the Mortgage Loans,
and shall, to the extent such procedures shall be consistent with this Agreement
and the terms and provisions of any applicable insurance policies, follow such
collection procedures as it would follow with respect to mortgage loans
comparable to


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the Mortgage Loans and held for its own account. Consistent with the foregoing,
the Master Servicer may in its discretion (i) waive any late payment charge or,
if applicable, any penalty interest, or (ii) extend the due dates for the
Monthly Payments due on a Mortgage Note for a period of not greater than 180
days; provided, however, that any extension pursuant to clause (ii) above shall
not affect the amortization schedule of any Mortgage Loan for purposes of any
computation hereunder, except as provided below; provided further that the NIMS
Insurer's prior written consent shall be required for any modification, waiver
or amendment if the aggregate number of outstanding Mortgage Loans which have
been modified, waived or amended exceeds 5% of the number of Mortgage Loans as
of the Cut-off Date and any Subsequent Cut-off Date. In the event of any such
arrangement pursuant to clause (ii) above, the Master Servicer shall make timely
advances on such Mortgage Loan during such extension pursuant to Section 4.04
and in accordance with the amortization schedule of such Mortgage Loan without
modification thereof by reason of such arrangement. Notwithstanding the
foregoing, in the event that any Mortgage Loan is in default or, in the judgment
of the Master Servicer, such default is reasonably foreseeable, the Master
Servicer, consistent with the standards set forth in Section 3.01, may also
waive, modify or vary any term of such Mortgage Loan (including modifications
that would change the Mortgage Rate, forgive the payment of principal or
interest or extend the final maturity date of such Mortgage Loan), accept
payment from the related Mortgagor of an amount less than the Stated Principal
Balance in final satisfaction of such Mortgage Loan, or consent to the
postponement of strict compliance with any such term or otherwise grant
indulgence to any Mortgagor (any and all such waivers, modifications, variances,
forgiveness of principal or interest, postponements, or indulgences collectively
referred to herein as "forbearance"), provided, however, that in no event shall
the Master Servicer grant any such forbearance (other than as permitted by the
second sentence of this Section) with respect to any one Mortgage Loan more than
once in any 12 month period or more than three times over the life of such
Mortgage Loan, and provided, further, that in determining which course of action
permitted by this sentence it shall pursue, the Master Servicer shall adhere to
the Loss Mitigation Procedures. The Master Servicer's analysis supporting any
forbearance and the conclusion that any forbearance meets the standards of
Section 3.01 and the Loss Mitigation Procedures shall be reflected in writing in
the Mortgage File.

                  SECTION 3.08. Sub-Servicing Accounts.

                  In those cases where a Sub-Servicer is servicing a Mortgage
Loan pursuant to a Sub- Servicing Agreement, the Sub-Servicer will be required
to establish and maintain one or more accounts (collectively, the "Sub-Servicing
Account"). The Sub-Servicing Account shall be an Eligible Account and shall
comply with all requirements of this Agreement relating to the Collection
Account. The Sub-Servicer shall deposit in the clearing account in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after the Sub-Servicer's receipt thereof, all
proceeds of Mortgage Loans received by the Sub-Servicer less its servicing
compensation to the extent permitted by the Sub-Servicing Agreement, and shall
thereafter deposit such amounts in the Sub-Servicing Account, in no event more
than two Business Days after the receipt of such amounts. The Sub-Servicer shall
thereafter deposit such proceeds in the Collection Account or remit such
proceeds to the Master Servicer for deposit in the Collection Account not later
than two Business Days after the deposit of such amounts in the Sub-Servicing
Account. For purposes of this Agreement, the Master Servicer shall be deemed to
have received payments on the Mortgage Loans when the Sub-Servicer receives such
payments.


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                  SECTION 3.09. Collection of Taxes, Assessments and Similar
                                Items; Servicing Accounts.

                  The Master Servicer shall establish and maintain, or cause to
be established and maintained, one or more accounts (the "Servicing Accounts"),
into which all Escrow Payments shall be deposited and retained. Servicing
Accounts shall be Eligible Accounts. The Master Servicer shall deposit in the
clearing account in which it customarily deposits payments and collections on
mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Master
Servicer's receipt thereof, all Escrow Payments collected on account of the
Mortgage Loans and shall thereafter deposit such Escrow Payments in the
Servicing Accounts, in no event more than two Business Days after the receipt of
such Escrow Payments, all Escrow Payments collected on account of the Mortgage
Loans for the purpose of effecting the timely payment of any such items as
required under the terms of this Agreement. Withdrawals of amounts from a
Servicing Account may be made only to (i) effect payment of taxes, assessments,
hazard insurance premiums, and comparable items in a manner and at a time that
assures that the lien priority of the Mortgage is not jeopardized (or, with
respect to the payment of taxes, in a manner and at a time that avoids the loss
of the Mortgaged Property due to a tax sale or the foreclosure as a result of a
tax lien); (ii) reimburse the Master Servicer (or a Sub-Servicer to the extent
provided in the related Sub-Servicing Agreement) out of related collections for
any Servicing Advances made pursuant to Section 3.01 (with respect to taxes and
assessments) and Section 3.14 (with respect to hazard insurance); (iii) refund
to Mortgagors any sums as may be determined to be overages; (iv) pay interest,
if required and as described below, to Mortgagors on balances in the Servicing
Account; or (v) clear and terminate the Servicing Account at the termination of
the Master Servicer's obligations and responsibilities in respect of the
Mortgage Loans under this Agreement in accordance with Article X. In the event
the Master Servicer shall deposit in a Servicing Account any amount not required
to be deposited therein, it may at any time withdraw such amount from such
Servicing Account, any provision herein to the contrary notwithstanding. The
Master Servicer will be responsible for the administration of the Servicing
Accounts and will be obligated to make Servicing Advances to such accounts when
and as necessary to avoid the lapse of insurance coverage on the Mortgaged
Property, or which the Master Servicer knows, or in the exercise of the required
standard of care of the Master Servicer hereunder should know, is necessary to
avoid the loss of the Mortgaged Property due to a tax sale or the foreclosure as
a result of a tax lien. If any such payment has not been made and the Master
Servicer receives notice of a tax lien with respect to the Mortgage being
imposed, the Master Servicer will, within 10 business days of such notice,
advance or cause to be advanced funds necessary to discharge such lien on the
Mortgaged Property. As part of its servicing duties, the Master Servicer or
Sub-Servicers shall pay to the Mortgagors interest on funds in the Servicing
Accounts, to the extent required by law and, to the extent that interest earned
on funds in the Servicing Accounts is insufficient, to pay such interest from
its or their own funds, without any reimbursement therefor. The Master Servicer
may pay to itself any excess interest on funds in the Servicing Accounts, to the
extent such action is in conformity with the Servicing Standard, is permitted by
law and such amounts are not required to be paid to Mortgagors or used for any
of the other purposes set forth above.


                  SECTION 3.10. Collection Account, Initial Deposit Accounts and
                                Distribution Account.


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                  (a) On behalf of the Trust Fund, the Master Servicer shall
establish and maintain, or cause to be established and maintained, one or more
accounts (such account or accounts, the "Collection Account"), held in trust for
the benefit of the Trustee and the Certificateholders. On behalf of the Trust
Fund, the Master Servicer shall deposit or cause to be deposited in the clearing
account in which it customarily deposits payments and collections on mortgage
loans in connection with its mortgage loan servicing activities on a daily
basis, and in no event more than one Business Day after the Master Servicer's
receipt thereof, and shall thereafter deposit in the Collection Account, in no
event more than two Business Days after the Master Servicer's receipt thereof,
as and when received or as otherwise required hereunder, the following payments
and collections received or made by it subsequent to the Cut-off Date or
Subsequent Cut-off Date, as applicable, (other than in respect of principal or
interest on the Mortgage Loans due on or before the Cut-off Date or Subsequent
Cut-off Date, as applicable) or payments (other than Principal Prepayments)
received by it on or prior to the Cut-off Date or Subsequent Cut-off Date, as
applicable, but allocable to a Due Period subsequent thereto:

                  (i) all payments on account of principal, including Principal
         Prepayments (but not Prepayment Charges), on the Mortgage Loans;

                  (ii) all payments on account of interest (net of the related
         Servicing Fee) on each Mortgage Loan;

                  (iii) all Insurance Proceeds, Liquidation Proceeds and
         condemnation proceeds (other than proceeds collected in respect of any
         particular REO Property and amounts paid in connection with a purchase
         of Mortgage Loans and REO Properties pursuant to Section 10.01);

                  (iv) any amounts required to be deposited pursuant to Section
         3.12 in connection with any losses realized on Permitted Investments
         with respect to funds held in the Collection Account;

                  (v) any amounts required to be deposited by the Master
         Servicer pursuant to the second paragraph of Section 3.14(a) in respect
         of any blanket policy deductibles;

                  (vi) all proceeds of any Mortgage Loan repurchased or
         purchased in accordance with Section 2.03 or Section 10.01;

                  (vii) all amounts required to be deposited in connection with
         Substitution Adjustments pursuant to Section 2.03;

                  (viii) all Prepayment Charges collected by the Master Servicer
         and any Master Servicer Prepayment Charge Payment Amounts in connection
         with the Principal Prepayment of any of the Mortgage Loans; and

                  (ix) without duplication, all payments of claims under the PMI
         Policy.



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                  The foregoing requirements for deposit in the Collection
Account shall be exclusive, it being understood and agreed that, without
limiting the generality of the foregoing, payments in the nature of Servicing
Fees, late payment charges, assumption fees, insufficient funds charges and
ancillary income (other than Prepayment Charges) need not be deposited by the
Master Servicer in the Collection Account and may be retained by the Master
Servicer as additional compensation. In the event the Master Servicer shall
deposit in the Collection Account any amount not required to be deposited
therein, it may at any time withdraw such amount from the Collection Account,
any provision herein to the contrary notwithstanding.

                  (b) On behalf of the Trust Fund, the Trustee shall establish
and maintain one or more accounts (such account or accounts, the "Distribution
Account"), held in trust for the benefit of the Trustee and the
Certificateholders. On behalf of the Trust Fund, the Master Servicer shall
deliver to the Trustee in immediately available funds for deposit in the
Distribution Account on or before 1:00 p.m. New York time (i) on the Master
Servicer Remittance Date, that portion of the Available Funds (calculated
without regard to the references in the definition thereof to amounts that may
be withdrawn from the Distribution Account) for the related Distribution Date
then on deposit in the Collection Account, the amount of all Prepayment Charges
collected during the applicable Prepayment Period by the Master Servicer and
Master Servicer Prepayment Charge Payment Amounts in connection with the
Principal Prepayment of any of the Mortgage Loans then on deposit in the
Collection Account and the amount of any funds reimbursable to an Advancing
Person pursuant to Section 3.29, and (ii) on each Business Day as of the
commencement of which the balance on deposit in the Collection Account exceeds
$75,000 following any withdrawals pursuant to the next succeeding sentence, the
amount of such excess, but only if the Collection Account constitutes an
Eligible Account solely pursuant to clause (ii) of the definition of "Eligible
Account." If the balance on deposit in the Collection Account exceeds $75,000 as
of the commencement of business on any Business Day and the Collection Account
constitutes an Eligible Account solely pursuant to clause (ii) of the definition
of "Eligible Account," the Master Servicer shall, on or before 1:00 p.m. New
York time on such Business Day, withdraw from the Collection Account any and all
amounts payable or reimbursable to the Master Servicer, the Trustee, the
Originator or any Sub- Servicer pursuant to Section 3.11 and shall pay such
amounts to the Persons entitled thereto.

                  On behalf of the Trust Fund, the Trustee shall establish and
maintain the Initial Deposit Accounts, held in trust for the benefit of
Certificateholders. On the Closing Date, the Depositor shall remit or cause to
be remitted to the Trustee, for deposit in the Initial Deposit Accounts, and the
Trustee shall deposit the Initial Deposit, to the extent received by it, into
the Initial Deposit Accounts. The Initial Deposit Accounts shall be treated as
"outside reserve funds" under applicable Treasury regulations and shall not be
part of any REMIC. Any investment earnings on funds in the Initial Deposit
Accounts shall be treated as owned by the Depositor and will be taxable to the
Depositor. The Trustee shall be required to withdraw such earnings from the
Initial Deposit Accounts and remit the same to the Depositor on the first
Distribution Date (or as soon as received if such funds are not available on
such Distribution Date), and shall thereupon terminate such account.

                  (c) Funds in the Collection Account, the Initial Deposit
Accounts and the Distribution Account may be invested in Permitted Investments
in accordance with the provisions set forth in Section 3.12. The Master Servicer
shall give notice to the NIMS Insurer and the Trustee


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of the location of the Collection Account maintained by it when established and
prior to any change thereof. The Trustee shall give notice to the NIMS Insurer,
the Master Servicer and the Depositor of the location of the Distribution
Account and the Initial Deposit Accounts when established and prior to any
change thereof.

                  (d) Funds held in the Collection Account at any time may be
delivered by the Master Servicer to the Trustee for deposit in an account (which
may be the Distribution Account and must satisfy the standards for the
Distribution Account as set forth in the definition thereof) and for all
purposes of this Agreement shall be deemed to be a part of the Collection
Account; provided, however, that the Trustee shall have the sole authority to
withdraw any funds held pursuant to this subsection (d). In the event the Master
Servicer shall deliver to the Trustee for deposit in the Distribution Account
any amount not required to be deposited therein, it may at any time request that
the Trustee withdraw such amount from the Distribution Account and remit to it
any such amount, any provision herein to the contrary notwithstanding. In
addition, the Master Servicer, with respect to items (i) through (iv) below,
shall deliver to the Trustee from time to time for deposit, and the Trustee,
with respect to items (i) through (iv) below, shall so deposit, in the
Distribution Account:

                  (i) any Advances, as required pursuant to Section 4.04;

                  (ii) any amounts required to be deposited pursuant to Section
         3.23(d) or (f) in connection with any REO Property;

                  (iii) any amounts to be paid in connection with a purchase of
         Mortgage Loans and REO Properties pursuant to Section 10.01;

                  (iv) any Compensating Interest to be deposited pursuant to
         Section 3.24 in connection with any Prepayment Interest Shortfall; and

                  (v) any amounts required to be paid to the Trustee pursuant to
         the Agreement, including, but not limited to Section 3.06 and Section
         7.02.

                  (e)      [Reserved].

                  (f) The Master Servicer shall deposit in the Collection
Account any amounts required to be deposited pursuant to Section 3.12(b) in
connection with losses realized on Permitted Investments with respect to funds
held in the Collection Account.

                  SECTION 3.11. Withdrawals from the Collection Account and
                                Distribution Account.

                  (a) The Master Servicer shall, from time to time, make
withdrawals from the Collection Account for any of the following purposes or as
described in Section 4.04:

                  (i) to remit to the Trustee for deposit in the Distribution
         Account the amounts required to be so remitted pursuant to Section
         3.10(b) or permitted to be so remitted pursuant to the first sentence
         of Section 3.10(d);



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                  (ii) subject to Section 3.16(d), to reimburse the Master
         Servicer for (a) any unreimbursed Advances to the extent of amounts
         received which represent Late Collections (net of the related Servicing
         Fees) of Monthly Payments, Liquidation Proceeds and Insurance Proceeds
         on Mortgage Loans with respect to which such Advances were made in
         accordance with the provisions of Section 4.04; (b) any unreimbursed
         Advances with respect to the final liquidation of a Mortgage Loan that
         are Nonrecoverable Advances, but only to the extent that Late
         Collections, Liquidation Proceeds and Insurance Proceeds received with
         respect to such Mortgage Loan are insufficient to reimburse the Master
         Servicer for such unreimbursed Advances; or (c) subject to Section
         4.04(b), any unreimbursed Advances to the extent of funds held in the
         Collection Account for future distribution that were not included in
         Available Funds for the preceding Distribution Date;

                  (iii) subject to Section 3.16(d), to pay the Master Servicer
         or any Sub-Servicer (a) any unpaid Servicing Fees, (b) any unreimbursed
         Servicing Advances with respect to each Mortgage Loan, but only to the
         extent of any Late Collections, Liquidation Proceeds, Insurance
         Proceeds and condemnation proceeds received with respect to such
         Mortgage Loan, and (c) any Servicing Advances with respect to the final
         liquidation of a Mortgage Loan that are Nonrecoverable Advances, but
         only to the extent that Late Collections, Liquidation Proceeds and
         Insurance Proceeds received with respect to such Mortgage Loan are
         insufficient to reimburse the Master Servicer or any Sub-Servicer for
         Servicing Advances;

                  (iv) to pay to the Master Servicer as servicing compensation
         (in addition to the Servicing Fee) on the Master Servicer Remittance
         Date any interest or investment income earned on funds deposited in the
         Collection Account;

                  (v) to pay to the Originator, with respect to each Mortgage
         Loan that has previously been purchased or replaced pursuant to Section
         2.03 or Section 3.16(c) all amounts received thereon subsequent to the
         date of purchase or substitution, as the case may be;

                  (vi) to reimburse the Master Servicer for any Advance or
         Servicing Advance previously made which the Master Servicer has
         determined to be a Nonrecoverable Advance in accordance with the
         provisions of Section 4.04;

                  (vii) to pay, or to reimburse the Master Servicer for
         Servicing Advances in respect of, expenses incurred in connection with
         any Mortgage Loan pursuant to Section 3.16(b);

                  (viii) to reimburse the Master Servicer for expenses incurred
         by or reimbursable to the Master Servicer pursuant to Section 6.03;


                  (ix) to reimburse the NIMS Insurer, the Master Servicer (if
         the Master Servicer is not an Affiliate of the Originator) or the
         Trustee, as the case may be, for enforcement expenses reasonably
         incurred in respect of the breach or defect giving rise to the purchase
         obligation under Section 2.03 of this Agreement that were included in
         the Purchase Price of

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          the Mortgage Loan, including any expenses arising out of the
          enforcement of the purchase obligation;

                  (ix) to pay itself any Prepayment Interest Excess; and

                  (x) to clear and terminate the Collection Account pursuant to
         Section 10.01.

                  The foregoing requirements for withdrawal from the Collection
Account shall be exclusive. In the event the Master Servicer shall deposit in
the Collection Account any amount not required to be deposited therein, it may
at any time withdraw such amount from the Collection Account, any provision
herein to the contrary notwithstanding.

                  The Master Servicer shall keep and maintain separate
accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose of
justifying any withdrawal from the Collection Account, to the extent held by or
on behalf of it, pursuant to subclauses (ii), (iii), (iv), (v), (vi) and (vii)
above. The Master Servicer shall provide written notification to the NIMS
Insurer and the Trustee, on or prior to the next succeeding Master Servicer
Remittance Date, upon making any withdrawals from the Collection Account
pursuant to subclause (vi) above; provided that an Officers' Certificate in the
form described under Section 4.04(d) shall suffice for such written notification
to the Trustee in respect hereof.

                  (b) The Trustee shall, from time to time, make withdrawals
from the Distribution Account, for any of the following purposes, without
priority:

                  (i) to make distributions in accordance with Section 4.01;

                  (ii) to pay itself the Trustee Fee and any other amounts owed
         to it pursuant to Section 8.05;

                  (iii) to pay any amounts in respect of taxes pursuant to
         Section 9.01(g);

                  (iv) to clear and terminate the Distribution Account pursuant
         to Section 10.01;

                  (v) to pay any amounts required to be paid to the Trustee
         pursuant to this Agreement, including but not limited to funds required
         to be paid pursuant to Section 3.06 and Section 7.02;

                  (vi) to pay to the Trustee, any interest or investment income
         earned on funds deposited in the Distribution Account;

                  (vii) to pay to an Advancing Person reimbursements for
         Advances and/or Servicing Advances pursuant to Section 3.29; and

                  (viii) to pay the PMI Insurer the PMI Insurer Fee.

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                  SECTION 3.12. Investment of Funds in the Interest Coverage
                                Accounts, Collection Account, Initial Deposit
                                Accounts and the Distribution Account.

                  (a) The Master Servicer may direct any depository institution
maintaining the Interest Coverage Accounts, the Collection Account or the
Initial Deposit Accounts to invest the funds on deposit in such accounts, and
the Trustee may invest the funds on deposit in the Distribution Account (each
such account, for the purposes of this Section 3.12 an "Investment Account").
All investments pursuant to this Section 3.12 shall be in one or more Permitted
Investments bearing interest or sold at a discount, and maturing, unless payable
on demand, (i) no later than the Business Day immediately preceding the date on
which such funds are required to be withdrawn from such account pursuant to this
Agreement, if a Person other than the Trustee is the obligor thereon or if such
investment is managed or advised by a Person other than the Trustee or an
Affiliate of the Trustee, and (ii) no later than the date on which such funds
are required to be withdrawn from such account pursuant to this Agreement, if
the Trustee is the obligor thereon or if such investment is managed or advised
by the Trustee or any Affiliate. All such Permitted Investments shall be held to
maturity, unless payable on demand. Any investment of funds in an Investment
Account shall be made in the name of the Trustee (in its capacity as such), or
in the name of a nominee of the Trustee. The Trustee shall be entitled to sole
possession (except with respect to investment direction of funds held in the
Interest Coverage Accounts, the Initial Deposit Accounts and the Collection
Account and any income and gain realized thereon) over each such investment, and
any certificate or other instrument evidencing any such investment shall be
delivered directly to the Trustee or its agent, together with any document of
transfer necessary to transfer title to such investment to the Trustee or its
nominee. In the event amounts on deposit in an Investment Account are at any
time invested in a Permitted Investment payable on demand, the Trustee shall:

                  (x)      consistent with any notice required to be given
                           thereunder, demand that payment thereon be made on
                           the last day such Permitted Investment may otherwise
                           mature hereunder in an amount equal to the lesser of
                           (1) all amounts then payable thereunder and (2) the
                           amount required to be withdrawn on such date; and

                  (y)      demand payment of all amounts due thereunder promptly
                           upon determination by a Responsible Officer of the
                           Trustee that such Permitted Investment would not
                           constitute a Permitted Investment in respect of funds
                           thereafter on deposit in the Investment Account.

                  (b) All income and gain realized from the investment of funds
deposited in the Interest Coverage Accounts, the Collection Account and any REO
Account held by or on behalf of the Master Servicer shall be for the benefit of
the Master Servicer and shall be subject to its withdrawal in accordance with
Section 3.11 or Section 3.23, as applicable. The Master Servicer shall deposit
in the Interest Coverage Accounts, the Collection Account or any REO Account, as
applicable, the amount of any loss of principal incurred in respect of any such
Permitted Investment made with funds in such account immediately upon
realization of such loss.


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                  (c) All income and gain realized from the investment of funds
deposited in the Distribution Account shall be for the benefit of the Trustee.
The Trustee shall deposit in the Distribution Account the amount of any loss of
principal incurred in respect of any such Permitted Investment made with funds
in such accounts immediately upon realization of such loss. All income and gain
realized from the investment of funds deposited in the Initial Deposit Accounts
shall be for the benefit of the Depositor. The Depositor shall remit from its
own funds to the Trustee for deposit in the Initial Deposit Accounts the amount
of any loss of principal incurred in respect of any such Permitted Investment
made with funds in such accounts immediately upon realization of such loss.

                  (d) Except as otherwise expressly provided in this Agreement,
if any default occurs in the making of a payment due under any Permitted
Investment, or if a default occurs in any other performance required under any
Permitted Investment, the Trustee may and, subject to Section 8.01 and Section
8.02(a)(v), upon the request of the NIMS Insurer or the Holders of Certificates
representing more than 50% of the Voting Rights allocated to any Class of
Certificates, shall take such action as may be appropriate to enforce such
payment or performance, including the institution and prosecution of appropriate
proceedings.

                  SECTION 3.13. [Reserved].

                  SECTION 3.14. Maintenance of Hazard Insurance and Errors and
                                Omissions and Fidelity Coverage.

                  (a) The Master Servicer shall cause to be maintained for each
Mortgage Loan hazard insurance with extended coverage on the Mortgaged Property
in an amount which is at least equal to the lesser of (i) the current Principal
Balance of such Mortgage Loan and (ii) the amount necessary to fully compensate
for any damage or loss to the improvements that are a part of such property on a
replacement cost basis, in each case in an amount not less than such amount as
is necessary to avoid the application of any coinsurance clause contained in the
related hazard insurance policy. The Master Servicer shall also cause to be
maintained hazard insurance with extended coverage on each REO Property in an
amount which is at least equal to the lesser of (i) the maximum insurable value
of the improvements which are a part of such property and (ii) the outstanding
Principal Balance of the related Mortgage Loan at the time it became an REO
Property. The Master Servicer will comply in the performance of this Agreement
with all reasonable rules and requirements of each insurer under any such hazard
policies. Any amounts to be collected by the Master Servicer under any such
policies (other than amounts to be applied to the restoration or repair of the
property subject to the related Mortgage or amounts to be released to the
Mortgagor in accordance with the procedures that the Master Servicer would
follow in servicing loans held for its own account, subject to the terms and
conditions of the related Mortgage and Mortgage Note) shall be deposited in the
Collection Account, subject to withdrawal pursuant to Section 3.11, if received
in respect of a Mortgage Loan, or in the REO Account, subject to withdrawal
pursuant to Section 3.23, if received in respect of an REO Property. Any cost
incurred by the Master Servicer in maintaining any such insurance shall not, for
the purpose of calculating distributions to Certificateholders, be added to the
unpaid Principal Balance of the related Mortgage Loan, notwithstanding that the
terms of such Mortgage Loan so permit. It is understood and agreed that no
earthquake or other additional insurance is to be required of any Mortgagor
other than pursuant to such applicable laws and regulations as shall at any time
be in force and as shall require such


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additional insurance. If the Mortgaged Property or REO Property is at any time
in an area identified in the Federal Register by the Federal Emergency
Management Agency as having special flood hazards and flood insurance has been
made available, the Master Servicer will cause to be maintained a flood
insurance policy in respect thereof. Such flood insurance shall be in an amount
equal to the lesser of (i) the unpaid Principal Balance of the related Mortgage
Loan and (ii) the maximum amount of such insurance available for the related
Mortgaged Property under the national flood insurance program (assuming that the
area in which such Mortgaged Property is located is participating in such
program).

                  In the event that the Master Servicer shall obtain and
maintain a blanket policy with an insurer having a General Policy Rating of
B:III or better in Best's Key Rating Guide (or such other rating that is
comparable to such rating) insuring against hazard losses on all of the Mortgage
Loans, it shall conclusively be deemed to have satisfied its obligations as set
forth in the first two sentences of this Section 3.14, it being understood and
agreed that such policy may contain a deductible clause, in which case the
Master Servicer shall, in the event that there shall not have been maintained on
the related Mortgaged Property or REO Property a policy complying with the first
two sentences of this Section 3.14, and there shall have been one or more losses
which would have been covered by such policy, deposit to the Collection Account
from its own funds the amount not otherwise payable under the blanket policy
because of such deductible clause. In connection with its activities as
administrator and servicer of the Mortgage Loans, the Master Servicer agrees to
prepare and present, on behalf of itself, the Trustee and Certificateholders,
claims under any such blanket policy in a timely fashion in accordance with the
terms of such policy.

                  (b) The Master Servicer shall keep in force during the term of
this Agreement a policy or policies of insurance covering errors and omissions
for failure in the performance of the Master Servicer's obligations under this
Agreement, which policy or policies shall be in such form and amount that would
meet the requirements of Fannie Mae or Freddie Mac if it were the purchaser of
the Mortgage Loans, unless the Master Servicer has obtained a waiver of such
requirements from Fannie Mae or Freddie Mac. The Master Servicer shall provide
the Trustee and the NIMS Insurer, upon request, with copies of such insurance
policies and fidelity bond. The Master Servicer shall also maintain a fidelity
bond in the form and amount that would meet the requirements of Fannie Mae or
Freddie Mac, unless the Master Servicer has obtained a waiver of such
requirements from Fannie Mae or Freddie Mac. The Master Servicer shall be deemed
to have complied with this provision if an Affiliate of the Master Servicer has
such errors and omissions and fidelity bond coverage and, by the terms of such
insurance policy or fidelity bond, the coverage afforded thereunder extends to
the Master Servicer. Any such errors and omissions policy and fidelity bond
shall by its terms not be cancelable without thirty days' prior written notice
to the Trustee and the NIMS Insurer. The Master Servicer shall also cause each
Sub-Servicer to maintain a policy of insurance covering errors and omissions and
a fidelity bond which would meet such requirements.

                  SECTION 3.15. Enforcement of Due-On-Sale Clauses; Assumption
                                Agreements.

                  The Master Servicer will, to the extent it has knowledge of
any conveyance or prospective conveyance of any Mortgaged Property by any
Mortgagor (whether by absolute conveyance or by contract of sale, and whether or
not the Mortgagor remains or is to remain liable


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under the Mortgage Note and/or the Mortgage), exercise its rights to accelerate
the maturity of such Mortgage Loan under the "due-on-sale" clause, if any,
applicable thereto; provided, however, that the Master Servicer shall not be
required to take such action if in its sole business judgment the Master
Servicer believes it is not in the best interests of the Trust Fund and shall
not exercise any such rights if prohibited by law from doing so. If the Master
Servicer reasonably believes it is unable under applicable law to enforce such
"due-on-sale" clause, or if any of the other conditions set forth in the proviso
to the preceding sentence apply, the Master Servicer will enter into an
assumption and modification agreement from or with the person to whom such
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. The Master Servicer
is also authorized to enter into a substitution of liability agreement with such
person, pursuant to which the original Mortgagor is released from liability and
such person is substituted as the Mortgagor and becomes liable under the
Mortgage Note, provided that no such substitution shall be effective unless such
person satisfies the underwriting criteria of the Master Servicer and has a
credit risk rating at least equal to that of the original Mortgagor. In
connection with any assumption or substitution, the Master Servicer shall apply
such underwriting standards and follow such practices and procedures as shall be
normal and usual in its general mortgage servicing activities and as it applies
to other mortgage loans owned solely by it. The Master Servicer shall not take
or enter into any assumption and modification agreement, however, unless (to the
extent practicable in the circumstances) it shall have received confirmation, in
writing, of the continued effectiveness of any applicable hazard insurance
policy. Any fee collected by the Master Servicer in respect of an assumption,
modification or substitution of liability agreement shall be retained by the
Master Servicer as additional servicing compensation. In connection with any
such assumption, no material term of the Mortgage Note (including but not
limited to the related Mortgage Rate and the amount of the Monthly Payment) may
be amended or modified, except as otherwise required pursuant to the terms
thereof. The Master Servicer shall notify the Trustee that any such
substitution, modification or assumption agreement has been completed by
forwarding to the Trustee the executed original of such substitution,
modification or assumption agreement, which document shall be added to the
related Mortgage File and shall, for all purposes, be considered a part of such
Mortgage File to the same extent as all other documents and instruments
constituting a part thereof.

                  The Master Servicer shall be entitled to any Prepayment
Interest Excess which it may withdraw from the Collection Account pursuant to
Section 3.11(a).

                  Notwithstanding the foregoing paragraph or any other provision
of this Agreement, the Master 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 by the terms of the
Mortgage Note or any assumption which the Master Servicer may be restricted by
law from preventing, for any reason whatever. For purposes of this Section 3.15,
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 3.16. Realization Upon Defaulted Mortgage Loans.

                  (a) The Master Servicer shall use its best efforts, in as
practical a time frame as possible and consistent with Servicing Standard, to
foreclose upon or otherwise comparably convert


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the ownership of properties securing such of the Mortgage Loans (including, if
such is the action to be taken that results from adherence to the Loss
Mitigation Procedures, selling any such Mortgage Loans other than converting the
ownership of the related properties as provided in Section 3.16(e) below) 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 3.07. The
Master Servicer shall be responsible for all costs and expenses incurred by it
in any such proceedings; provided, however, that such costs and expenses will be
recoverable as Servicing Advances by the Master Servicer as contemplated in
Section 3.11 and Section 3.23. The foregoing is subject to the provision that,
in any case in which a Mortgaged Property shall have suffered damage from an
Uninsured Cause, the Master Servicer shall not be required to expend its own
funds toward the restoration of such property unless it shall determine in its
discretion that such restoration will increase the proceeds of liquidation of
the related Mortgage Loan after reimbursement to itself for such expenses.

                  (b) Notwithstanding the foregoing provisions of this Section
3.16 or any other provision of this Agreement, with respect to any Mortgage Loan
as to which the Master Servicer has received actual notice of, or has actual
knowledge of, the presence of any toxic or hazardous substance on the related
Mortgaged Property, the Master Servicer shall not, on behalf of the Trustee,
either (i) obtain title to such Mortgaged Property as a result of or in lieu of
foreclosure or otherwise, or (ii) otherwise acquire possession of, or take any
other action with respect to, such Mortgaged Property, if, as a result of any
such action, the Trustee, the Trust Fund or the Certificateholders would be
considered to hold title to, to be a "mortgagee-in-possession" of, or to be an
"owner" or "operator" of such Mortgaged Property within the meaning of the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended from time to time, or any comparable law, unless the Master Servicer has
also previously determined, based on its reasonable judgment and a report
prepared by a Person who regularly conducts environmental audits using customary
industry standards, that:

                  (1) such Mortgaged Property is in compliance with applicable
environmental laws or, if not, that it would be in the best economic interest of
the Trust Fund to take such actions as are necessary to bring the Mortgaged
Property into compliance therewith; and

                  (2) there are no circumstances present at such Mortgaged
Property relating to the use, management or disposal of any hazardous
substances, hazardous materials, hazardous wastes, or petroleum-based materials
for which investigation, testing, monitoring, containment, clean-up or
remediation could be required under any federal, state or local law or
regulation, or that if any such materials are present for which such action
could be required, that it would be in the best economic interest of the Trust
Fund to take such actions with respect to the affected Mortgaged Property.

                  Notwithstanding the foregoing, if such environmental audit
reveals, or if the Master Servicer has actual knowledge or notice, that such
Mortgaged Property contains such wastes or substances, the Master Servicer shall
not foreclose or accept a deed in lieu of foreclosure without the prior written
consent of the NIMS Insurer.

                  The cost of the environmental audit report contemplated by
this Section 3.16 shall be advanced by the Master Servicer, subject to the
Master Servicer's right to be reimbursed therefor from the Collection Account as
provided in Section 3.11(a)(vii), such right of reimbursement being


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prior to the rights of Certificateholders to receive any amount in the
Collection Account received in respect of the affected Mortgage Loan or other
Mortgage Loans.

                  If the Master Servicer determines, as described above, that it
is in the best economic interest of the Trust Fund to take such actions as are
necessary to bring any such Mortgaged Property into compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes or petroleum-based materials affecting any such Mortgaged Property, then
the Master Servicer shall take such action as it deems to be in the best
economic interest of the Trust Fund; provided that any amounts disbursed by the
Master Servicer pursuant to this Section 3.16(b) shall constitute Servicing
Advances, subject to Section 4.04(d). The cost of any such compliance,
containment, cleanup or remediation shall be advanced by the Master Servicer,
subject to the Master Servicer's right to be reimbursed therefor from the
Collection Account as provided in Section 3.11(a)(iii) and (a)(vii), such right
of reimbursement being prior to the rights of Certificateholders to receive any
amount in the Collection Account received in respect of the affected Mortgage
Loan or other Mortgage Loans.

                  (c) (i) The NIMS Insurer may, at its option, purchase a
Mortgage Loan which has become 90 or more days delinquent or for which the
Master Servicer has accepted a deed in lieu of foreclosure. Prior to purchase
pursuant to this Section 3.16(c)(i), the Master Servicer shall be required to
continue to make Advances pursuant to Section 4.04. The NIMS Insurer shall not
use any procedure in selecting Mortgage Loans to be repurchased which is
materially adverse to the interests of the Certificateholders. The NIMS Insurer
shall purchase such delinquent Mortgage Loan at a price equal to the Purchase
Price of such Mortgage Loan. Any such purchase of a Mortgage Loan pursuant to
this Section 3.16(c)(i) shall be accomplished by remittance to the Master
Servicer for deposit in the Collection Account of the amount of the Purchase
Price. The Trustee shall immediately effectuate the conveyance of such
delinquent Mortgage Loan to the NIMS Insurer to the extent necessary, including
the prompt delivery of all documentation to the NIMS Insurer.

                           (ii)     If the Master Servicer Optional Purchase
Delinquency Trigger has been met, the Master Servicer may, at its option,
purchase a Mortgage Loan which has become 90 or more days delinquent or for
which the Master Servicer has accepted a deed in lieu of foreclosure. Prior to
purchase pursuant to this Section 3.16(c)(ii), the Master Servicer shall be
required to continue to make Advances pursuant to Section 4.04. The Master
Servicer shall purchase such delinquent Mortgage Loan at a price equal to the
Purchase Price of such Mortgage Loan. Any such purchase of a Mortgage Loan
pursuant to this Section 3.16(c)(ii) shall be accomplished by deposit in the
Collection Account of the amount of the Purchase Price. The Trustee shall
immediately effectuate the conveyance of such delinquent Mortgage Loan to the
Master Servicer to the extent necessary, including the prompt delivery of all
documentation to the Master Servicer.

                  Notwithstanding the foregoing: (A) the Master Servicer shall
have the option to purchase pursuant to this Section 3.16(c)(ii) only such
delinquent Mortgage Loans having an aggregate Principal Balance such that, if
such delinquent Mortgage Loans were not in the Trust, the Master Servicer
Optional Purchase Delinquency Trigger would not be met; (B) if the Master
Servicer purchases any delinquent Mortgage Loans pursuant to this Section
3.16(c)(ii), it must purchase Mortgage Loans that are delinquent the greatest
number of days before it may purchase any that are


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delinquent any fewer number of days; (C) if the Master Servicer purchases some
but not all Mortgage Loans that are delinquent any given number of days, it must
purchase Mortgage Loans having the same delinquency status in the order of
lowest Principal Balance to highest Principal Balance; (D) the Master Servicer
may at any time relinquish its rights to purchase delinquent Mortgage Loans
pursuant to this Section 3.16(C)(ii) in writing delivered to the Trustee, and
from and after the taking of such action by the Master Servicer, the provisions
of this Section 3.16(c)(ii) shall no longer be of any force or effect.

                  (d) Proceeds received in connection with any Final Recovery
Determination, as well as any recovery resulting from a partial collection of
Insurance Proceeds, Liquidation Proceeds or condemnation proceeds, in respect of
any Mortgage Loan, will be applied in the following order of priority: first, to
unpaid Servicing Fees; second, to reimburse the Master Servicer or any Sub-
Servicer for any related unreimbursed Servicing Advances pursuant to Section
3.11(a)(iii) and Advances pursuant to Section 3.11(a)(ii); third, to accrued and
unpaid interest on the Mortgage Loan, to the date of the Final Recovery
Determination, or to the Due Date prior to the Distribution Date on which such
amounts are to be distributed if not in connection with a Final Recovery
Determination; and fourth, as a recovery of principal of the Mortgage Loan. The
portion of the recovery so allocated to unpaid Servicing Fees shall be
reimbursed to the Master Servicer or any Sub-Servicer pursuant to Section
3.11(a)(iii).

                  SECTION 3.17. Trustee to Cooperate; Release of Mortgage Files.

                  (a) Upon the payment in full of any Mortgage Loan, or the
receipt by the Master Servicer of a notification that payment in full shall be
escrowed in a manner customary for such purposes, the Master Servicer shall
deliver to the Trustee, in written (with two executed copies) or electronic
format, a Request for Release in the form of Exhibit E (which certification
shall include a statement to the effect that all amounts received or to be
received in connection with such payment which are required to be deposited in
the Collection Account pursuant to Section 3.10 have been or will be so
deposited) signed by a Servicing Officer (or in a mutually agreeable electronic
format that will, in lieu of a signature on its face, originate from a Servicing
Officer) and shall request delivery to it of the Mortgage File. Upon receipt of
such certification and request, the Trustee shall, within three Business Days,
release and send by overnight mail, at the expense of the Master Servicer, the
related Mortgage File to the Master Servicer. The Trustee agrees to indemnify
the Master Servicer, out of its own funds, for any loss, liability or expense
(other than special, indirect, punitive or consequential damages which will not
be paid by the Trustee) incurred by the Master Servicer as a proximate result of
the Trustee's breach of its obligations pursuant to this Section 3.17. No
expenses incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Collection Account or the Distribution
Account.

                  (b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any insurance policy relating to the Mortgage Loans, the Trustee shall, upon any
request made by or on behalf of the Master Servicer and delivery to the Trustee,
in written (with two executed copies) or electronic format, of a Request for
Release in the form of Exhibit E signed by a Servicing Officer (or in a mutually
agreeable electronic format that will, in lieu of a signature on its face,
originate from a Servicing Officer), release the related Mortgage File to the
Master Servicer within three Business Days, and the Trustee


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shall, at the direction of the Master Servicer, execute such documents as shall
be necessary to the prosecution of any such proceedings. Such Request for
Release shall obligate the Master Servicer to return each and every document
previously requested from the Mortgage File to the Trustee when the need
therefor by the Master 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 Collection Account or the Mortgage File or such document
has 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 Master Servicer has delivered, or caused
to be delivered, to the Trustee an additional Request for Release certifying as
to such liquidation or action or proceedings. Upon the request of the Trustee,
the Master Servicer shall provide notice to the Trustee of the name and address
of the Person to which such Mortgage File or such document was delivered and the
purpose or purposes of such delivery. Upon receipt of a Request for Release, in
written (with two executed copies) or electronic format, from a Servicing
Officer stating that such Mortgage Loan was liquidated and that all amounts
received or to be received in connection with such liquidation that are required
to be deposited into the Collection Account have been so deposited, or that such
Mortgage Loan has become an REO Property, such Mortgage Loan shall be released
by the Trustee to the Master Servicer or its designee.

                  (c) Upon written certification of a Servicing Officer, the
Trustee shall execute and deliver to the Master Servicer or the Sub-Servicer, as
the case may be, copies of, any court pleadings, requests for trustee's sale or
other documents necessary to the foreclosure or trustee's sale in respect of a
Mortgaged Property or to any legal action brought to obtain judgment against any
Mortgagor on the Mortgage Note or Mortgage or to obtain a deficiency judgment,
or to enforce any other remedies or rights provided by the Mortgage Note or
Mortgage or otherwise available at law or in equity. Each such certification
shall include a request that such pleadings or documents be executed by the
Trustee and a statement as to the reason such documents or pleadings are
required and that the execution and delivery thereof by the Trustee will not
invalidate or otherwise affect the lien of the Mortgage, except for the
termination of such a lien upon completion of the foreclosure or trustee's sale.

                  SECTION 3.18. Servicing Compensation.

                  As compensation for the activities of the Master Servicer
hereunder, the Master Servicer shall be entitled to the Servicing Fee with
respect to each Mortgage Loan payable solely from payments of interest in
respect of such Mortgage Loan, subject to Section 3.24. In addition, the Master
Servicer shall be entitled to recover unpaid Servicing Fees out of Insurance
Proceeds, Liquidation Proceeds or condemnation proceeds to the extent permitted
by Section 3.11(a)(iii) and out of amounts derived from the operation and sale
of an REO Property to the extent permitted by Section 3.23. Except as provided
in Section 3.29, the right to receive the Servicing Fee may not be transferred
in whole or in part except in connection with the transfer of all of the Master
Servicer's responsibilities and obligations under this Agreement; provided,
however, that the Master Servicer may pay from the Servicing Fee any amounts due
to a Sub-Servicer pursuant to a Sub-Servicing Agreement entered into under
Section 3.02.



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                  Additional servicing compensation in the form of assumption
fees, late payment charges, insufficient funds charges, ancillary income or
otherwise (other than Prepayment Charges) shall be retained by the Master
Servicer only to the extent such fees or charges are received by the Master
Servicer. The Master Servicer shall also be entitled pursuant to Section
3.11(a)(iv) to withdraw from the Collection Account and pursuant to Section
3.23(b) to withdraw from any REO Account, as additional servicing compensation,
interest or other income earned on deposits therein, subject to Section 3.12 and
Section 3.24. The Master Servicer shall be required to pay all expenses incurred
by it in connection with its servicing activities hereunder (including premiums
for the insurance required by Section 3.14, to the extent such premiums are not
paid by the related Mortgagors or by a Sub-Servicer and servicing compensation
of each Sub-Servicer) and shall not be entitled to reimbursement therefor except
as specifically provided herein.

                  The Master Servicer shall be entitled to any Prepayment
Interest Excess, which it may withdraw from the Collection Account pursuant to
Section 3.11(a)(ix).

                  SECTION 3.19. Reports to the Trustee; Collection Account
                                Statements.

                  Not later than twenty days after each Distribution Date, the
Master Servicer shall forward to the NIMS Insurer and, upon request, to the
Trustee and the Depositor the most current available bank statement for the
Collection Account. Copies of such statement shall be provided by the Trustee to
any Certificateholder and to any Person identified to the Trustee as a
prospective transferee of a Certificate, upon request at the expense of the
requesting party, provided such statement is delivered by the Master Servicer to
the Trustee.

                  SECTION 3.20. Statement as to Compliance.

                  The Master Servicer will deliver to the Trustee, the NIMS
Insurer and the Depositor not later than February 28th, commencing in 2004, an
Officers' Certificate stating, as to each signatory thereof, that (i) a review
of the activities of the Master Servicer during the preceding 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
Master 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 officer and the
nature and status thereof. Copies of any such statement shall be provided by the
Trustee to any Certificateholder and to any Person identified to the Trustee as
a prospective transferee of a Certificate, upon request at the expense of the
requesting party, provided such statement is delivered by the Master Servicer to
the Trustee.

                  SECTION 3.21. Independent Public Accountants' Servicing
                                Report.

                  Not later than February 28th, commencing in 2004, the Master
Servicer, at its expense, shall cause a nationally recognized firm of
independent certified public accountants to furnish to the Master Servicer a
report stating that (i) it has obtained a letter of representation regarding
certain matters from the management of the Master Servicer which includes an
assertion that the Master Servicer has complied with certain minimum residential
mortgage loan servicing standards, identified in the Uniform Single Attestation
Program for Mortgage Bankers established by the


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Mortgage Bankers Association of America, with respect to the servicing of
residential mortgage loans during the most recently completed fiscal year and
(ii) on the basis of an examination conducted by such firm in accordance with
standards established by the American Institute of Certified Public Accountants,
such representation is fairly stated in all material respects, subject to such
exceptions and other qualifications that may be appropriate. In rendering its
report such firm may rely, as to matters relating to the direct servicing of
residential mortgage loans by Sub-Servicers, upon comparable reports of firms of
independent certified public accountants rendered on the basis of examinations
conducted in accordance with the same standards (rendered within one year of
such report) with respect to those Sub-Servicers. Immediately upon receipt of
such report, the Master Servicer shall furnish a copy of such report to the
Trustee, the NIMS Insurer and each Rating Agency. Copies of such statement shall
be provided by the Trustee to any Certificateholder upon request at the Master
Servicer's expense, provided that such statement is delivered by the Master
Servicer to the Trustee.

                  SECTION 3.22. Access to Certain Documentation; Filing of
                                Reports by Trustee.

                  (a) The Master Servicer shall provide to the Office of Thrift
Supervision, the FDIC, and any other federal or state banking or insurance
regulatory authority that may exercise authority over any Certificateholder,
access to the documentation regarding the Mortgage Loans required by applicable
laws and regulations. Such access shall be afforded without charge, but only
upon reasonable request and during normal business hours at the offices of the
Master Servicer designated by it. In addition, access to the documentation
regarding the Mortgage Loans will be provided to any Certificateholder, the
Trustee, the NIMS Insurer and to any Person identified to the Master Servicer as
a prospective transferee of a Certificate, upon reasonable request during normal
business hours at the offices of the Master Servicer designated by it at the
expense of the Person requesting such access.

                  (b) The Trustee shall reasonably cooperate with the Depositor
in connection with satisfying the reporting requirements under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). The Trustee shall prepare
on behalf of the Trust any Forms 8-K and 10-K customary for similar securities
as required by the Exchange Act and the Rules and Regulations of the Securities
and Exchange Commission thereunder, and the Depositor shall sign and the Trustee
shall file (via the Securities and Exchange Commission's Electronic Data
Gathering and Retrieval System) such forms on behalf of the Depositor. The
Depositor hereby grants to the Trustee a limited power of attorney to execute
any Form 8-K and file each such document on behalf of the Depositor. Such power
of attorney shall continue until the earlier of (i) receipt by the Trustee from
the Depositor of written termination of such power of attorney and (ii) the
termination of the Trust. Notwithstanding anything herein to the contrary, the
Depositor, and not the Trustee, shall be responsible for executing each Form
10-K filed on behalf of the Trust.

                  (c) Each Form 8-K shall be filed by the Trustee within 15 days
after each Distribution Date, with a copy of the statement to the
Certificateholders for such Distribution Date as an exhibit thereto. Prior to
March 30th of each year (or such earlier date as may be required by the Exchange
Act and the Rules and Regulations of the Securities and Exchange Commission),
the Trustee shall file a Form 10-K, in substance as required by applicable law
or applicable Securities


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and Exchange Commission staff's interpretations. Such Form 10-K shall include as
exhibits the Master Servicer's annual statement of compliance described under
Section 3.19 and the accountant's report described under Section 3.20, in each
case to the extent they have been timely delivered to the Trustee. If they are
not so timely delivered, the Trustee shall file an amended Form 10-K including
such documents as exhibits reasonably promptly after they are delivered to the
Trustee. The Trustee shall have no liability with respect to any failure to
properly prepare or file such periodic reports resulting from or relating to the
Trustee's inability or failure to obtain any information not resulting from its
own negligence or willful misconduct. The Form 10-K shall also include a
certification in the form attached hereto as Exhibit R-1 (the "Certification"),
which shall be signed by the senior officer of the Depositor in charge of
securitization.

                  (d) In addition, the Trustee shall sign a certification (in
the form attached hereto as Exhibit R-2) for the benefit of the Depositor and
its officers, directors and Affiliates regarding certain aspects of items 1
through 3 of the Certification (provided, however, that the Trustee shall not
undertake an analysis of the accountant's report attached as an exhibit to the
Form 10-K). The Trustee's certification shall be delivered to the Depositor by
no later than March 18th of each year (or if such day is not a Business Day, the
immediately preceding Business Day) and the Depositor shall deliver the
Certification to the Trustee for filing no later than March 20th of each year
(or if such day is not a Business Day, the immediately preceding Business Day).

                  In addition, the Trustee shall indemnify and hold harmless the
Depositor and its officers, directors and Affiliates from and against any
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
fees and related costs, judgments and other costs and expenses arising out of or
based upon a breach of the Trustee's obligations under this Section 3.22(b) or
the Trustee's negligence, bad faith or willful misconduct in connection
therewith. If the indemnification provided for herein is unavailable or
insufficient to hold harmless the Depositor, then the Trustee, in connection
with a breach of the Trustee's obligations under this Section 3.22(b) or the
Trustee's negligence, bad faith or willful misconduct in connection therewith,
agrees that it shall contribute to the amount paid or payable by the Depositor
as a result of the losses, claims, damages or liabilities of the Depositor in
such proportion as is appropriate to reflect the relative fault of the Depositor
on the one hand and the Trustee on the other.

                  (e) Upon any filing with the Securities and Exchange
Commission, the Trustee shall promptly deliver to the Depositor a copy of any
executed report, statement or information.

                  (f) Prior to January 30 of the first year in which the Trustee
is able to do so under applicable law, the Trustee shall file a Form 15
Suspension Notification with respect to the Trust.

                  (g) To the extent that, following the Closing Date, the
Depositor certifies that reports and certifications differing from those
required under this Section 3.22(b) comply with the reporting requirements under
the Exchange Act, the Trustee hereby agrees that it will reasonably cooperate to
amend the provisions of this Section 3.22(b) in order to comply with such
amended reporting requirements and such amendment of this Section 3.22(b). Any
such amendment may result in the reduction of the reports filed by the Depositor
under the Exchange Act. Notwithstanding the foregoing, the Trustee shall not be
obligated to enter into any amendment pursuant to this Section that adversely
affects its obligations and immunities under this Agreement.


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                  SECTION 3.23. Title, Management and Disposition of REO
                                Property.

                  (a) The deed or certificate of sale of any REO Property shall
be taken in the name of the Trustee, or its nominee, in trust for the benefit of
the Certificateholders. The Master Servicer, on behalf of REMIC 1, shall sell
any REO Property as soon as practical and in any event no later than the end of
the third full taxable year after the taxable year in which such REMIC acquires
ownership of such REO Property for purposes of Section 860G(a)(8) of the Code or
request from the Internal Revenue Service, no later than 60 days before the day
on which the three-year grace period would otherwise expire, an extension of
such three-year period, unless the Master Servicer shall have delivered to the
Trustee and the NIMS Insurer an Opinion of Counsel acceptable to the NIMS
Insurer and addressed to the Trustee, the NIMS Insurer and the Depositor, to the
effect that the holding by the REMIC of such REO Property subsequent to three
years after its acquisition will not result in the imposition on the REMIC of
taxes on "prohibited transactions" thereof, as defined in Section 860F of the
Code, or cause any of the REMICs created hereunder to fail to qualify as a REMIC
under Federal law at any time that any Certificates are outstanding. The Master
Servicer shall manage, conserve, protect and operate each REO Property for the
Certificateholders solely for the purpose of its prompt disposition and sale in
a manner which does not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code or
result in the receipt by any of the REMICs created hereunder of any "income from
non-permitted assets" within the meaning of Section 860F(a)(2)(B) of the Code,
or any "net income from foreclosure property" which is subject to taxation under
the REMIC Provisions.

                  (b) The Master Servicer shall separately account for all funds
collected and received in connection with the operation of any REO Property and
shall establish and maintain, or cause to be established and maintained, with
respect to REO Properties an account held in trust for the Trustee for the
benefit of the Certificateholders (the "REO Account"), which shall be an
Eligible Account. The Master Servicer shall be permitted to allow the Collection
Account to serve as the REO Account, subject to separate ledgers for each REO
Property. The Master Servicer shall be entitled to retain or withdraw any
interest income paid on funds deposited in the REO Account.

                  (c) The Master Servicer shall have full power and authority,
subject only to the specific requirements and prohibitions of this Agreement, to
do any and all things in connection with any REO Property as are consistent with
the manner in which the Master Servicer manages and operates similar property
owned by the Master Servicer or any of its Affiliates, all on such terms and for
such period (subject to the requirement of prompt disposition set forth in
Section 3.23(a)) as the Master Servicer deems to be in the best interests of
Certificateholders. In connection therewith, the Master Servicer shall deposit,
or cause to be deposited in the clearing account in which it customarily
deposits payments and collections on mortgage loans in connection with its
mortgage loan servicing activities on a daily basis, and in no event more than
one Business Day after the Master Servicer's receipt thereof, and shall
thereafter deposit in the REO Account, in no event more than two Business Days
after the Master Servicer's receipt thereof, all revenues received by it with
respect to an REO Property and shall withdraw therefrom funds necessary for the
proper operation, management and maintenance of such REO Property including,
without limitation:

                  (i) all insurance premiums due and payable in respect of such
         REO Property;



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                  (ii) all real estate taxes and assessments in respect of such
         REO Property that may result in the imposition of a lien thereon; and

                  (iii) all costs and expenses necessary to maintain such REO
         Property.

                  To the extent that amounts on deposit in the REO Account with
respect to an REO Property are insufficient for the purposes set forth in
clauses (i) through (iii) above with respect to such REO Property, the Master
Servicer shall advance from its own funds such amount as is necessary for such
purposes if, but only if, the Master Servicer would make such advances if the
Master Servicer owned the REO Property and if in the Master Servicer's judgment,
the payment of such amounts will be recoverable from the rental or sale of the
REO Property.

                  Notwithstanding the foregoing, neither the Master Servicer nor
the Trustee shall:

                  (A) authorize the Trust Fund to enter into, renew or extend
         any New Lease with respect to any REO Property, if the New Lease by its
         terms will give rise to any income that does not constitute Rents from
         Real Property;

                  (B) authorize any amount to be received or accrued under any
         New Lease other than amounts that will constitute Rents from Real
         Property;

                  (C) authorize any construction on any REO Property, other than
         the completion of a building or other improvement thereon, and then
         only if more than ten percent of the construction of such building or
         other improvement was completed before default on the related Mortgage
         Loan became imminent, all within the meaning of Section 856(e)(4)(B) of
         the Code; or

                  (D) authorize any Person to Directly Operate any REO Property
         on any date more than 90 days after its date of acquisition by the
         Trust Fund;

unless, in any such case, the Master Servicer has obtained an Opinion of
Counsel, provided to the Trustee and the NIMS Insurer, to the effect that such
action will not cause such REO Property to fail to qualify as "foreclosure
property" within the meaning of Section 860G(a)(8) of the Code at any time that
it is held by the REMIC, in which case the Master Servicer may take such actions
as are specified in such Opinion of Counsel.

                  The Master Servicer may contract with any Independent
Contractor for the operation and management of any REO Property, provided that:

                  (1) the terms and conditions of any such contract shall not be
         inconsistent herewith;

                  (2) any such contract shall require, or shall be administered
         to require, that the Independent Contractor pay all costs and expenses
         incurred in connection with the operation and management of such REO
         Property, including those listed above and remit all related revenues
         (net of such costs and expenses) to the Master Servicer as soon as
         practicable, but


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          in no event later than thirty days following the receipt thereof by
          such Independent Contractor;

                  (3) none of the provisions of this Section 3.23(c) relating to
         any such contract or to actions taken through any such Independent
         Contractor shall be deemed to relieve the Master Servicer of any of its
         duties and obligations to the Trustee on behalf of the
         Certificateholders with respect to the operation and management of any
         such REO Property; and

                  (4) the Master Servicer shall be obligated with respect
         thereto to the same extent as if it alone were performing all duties
         and obligations in connection with the operation and management of such
         REO Property.

                  The Master Servicer shall be entitled to enter into any
agreement with any Independent Contractor performing services for it related to
its duties and obligations hereunder for indemnification of the Master Servicer
by such Independent Contractor, and nothing in this Agreement shall be deemed to
limit or modify such indemnification. The Master Servicer shall be solely liable
for all fees owed by it to any such Independent Contractor, irrespective of
whether the Master Servicer's compensation pursuant to Section 3.18 is
sufficient to pay such fees; provided, however, that to the extent that any
payments made by such Independent Contractor would constitute Servicing Advances
if made by the Master Servicer, such amounts shall be reimbursable as Servicing
Advances made by the Master Servicer.

                  (d) In addition to the withdrawals permitted under Section
3.23(c), the Master Servicer may from time to time make withdrawals from the REO
Account for any REO Property: (i) to pay itself or any Sub-Servicer unpaid
Servicing Fees in respect of the related Mortgage Loan; and (ii) to reimburse
itself or any Sub-Servicer for unreimbursed Servicing Advances and Advances made
in respect of such REO Property or the related Mortgage Loan. On the Master
Servicer Remittance Date, the Master Servicer shall withdraw from each REO
Account maintained by it and deposit into the Distribution Account in accordance
with Section 3.10(d)(ii), for distribution on the related Distribution Date in
accordance with Section 4.01, the income from the related REO Property received
during the prior calendar month, net of any withdrawals made pursuant to Section
3.23(c) or this Section 3.23(d).

                  (e) Subject to the time constraints set forth in Section
3.23(a), each REO Disposition shall be carried out by the Master Servicer in a
manner, at such price and upon such terms and conditions as shall be in
conformity with the requirements of the Loss Mitigation Procedures and as shall
be normal and usual in its Servicing Standard.

                  (f) The proceeds from the REO Disposition, net of any amount
required by law to be remitted to the Mortgagor under the related Mortgage Loan
and net of any payment or reimbursement to the Master Servicer or any
Sub-Servicer as provided above, shall be deposited in the Distribution Account
in accordance with Section 3.10(d)(ii) on the Master Servicer Remittance Date in
the month following the receipt thereof for distribution on the related
Distribution Date in accordance with Section 4.01. Any REO Disposition shall be
for cash only (unless changes in the REMIC Provisions made subsequent to the
Startup Day allow a sale for other consideration).


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                  (g) The Master Servicer shall file information returns with
respect to the receipt of mortgage interest received in a trade or business,
reports of foreclosures and abandonments of any Mortgaged Property and
cancellation of indebtedness income with respect to any Mortgaged Property as
required by Sections 6050H, 6050J and 6050P of the Code, respectively. Such
reports shall be in form and substance sufficient to meet the reporting
requirements imposed by such Sections 6050H, 6050J and 6050P of the Code.

                  SECTION 3.24. Obligations of the Master Servicer in Respect of
                                Prepayment Interest Shortfalls.

                  Not later than 1:00 p.m. New York time on each Master Servicer
Remittance Date, the Master Servicer shall remit to the Distribution Account an
amount ("Compensating Interest") equal to the lesser of (A) the aggregate of the
Prepayment Interest Shortfalls for the related Distribution Date and (B) its
aggregate Servicing Fee for the related Due Period, any interest or investment
income earned on funds deposited in the Collection Account and any Prepayment
Interest Excess earned during the related Prepayment Period. The Master Servicer
shall not have the right to reimbursement for any amounts remitted to the
Trustee in respect of Compensating Interest. Such amounts so remitted shall be
included in the Available Funds and distributed therewith on the next
Distribution Date. The Master Servicer shall not be obligated to pay
Compensating Interest with respect to Relief Act Interest Shortfalls.

                  SECTION 3.25. Convertible Mortgage Loans.

                  With respect to any Convertible Mortgage Loan where the
Mortgagor has chosen to exercise its option to convert the Mortgage Rate
thereunder, the Master Servicer shall determine the fixed rate for such
Convertible Mortgage Loan in accordance with the terms of the applicable
Mortgage Note and to otherwise determine whether the related Mortgagor has
complied with the requirements thereof in order to exercise the conversion
option.

                  SECTION 3.26. Obligations of the Master Servicer in Respect of
                                Mortgage Rates and Monthly Payments.

                  In the event that a shortfall in any collection on or
liability with respect to the Mortgage Loans in the aggregate results from or is
attributable to adjustments to Mortgage Rates, Monthly Payments or Stated
Principal Balances that were made by the Master Servicer in a manner not
consistent with the terms of the related Mortgage Note and this Agreement, the
Master Servicer, upon discovery or receipt of notice thereof, immediately shall
deposit in the Collection Account from its own funds the amount of any such
shortfall and shall indemnify and hold harmless the Trust Fund, the Trustee, the
Depositor and any successor servicer in respect of any such liability. Such
indemnities shall survive the termination or discharge of this Agreement.
Notwithstanding the foregoing, this Section 3.26 shall not limit the ability of
the Master Servicer to seek recovery of any such amounts from the related
Mortgagor under the terms of the related Mortgage Note, as permitted by law.

                  SECTION 3.27. Solicitations.



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                  From and after the Closing Date, the Master Servicer agrees
that it will not take any action or permit or cause any action to be taken by
any of its agents and Affiliates, or by any independent contractors or
independent mortgage brokerage companies on the Master Servicer's behalf, to
personally, by telephone, mail or electronic mail, solicit the Mortgagor under
any Mortgage Loan for the purpose of refinancing such Mortgage Loan; provided,
that the Master Servicer may solicit any Mortgagor for whom the Master Servicer
has received a request for verification of mortgage, a request for demand for
payoff, a mortgagor initiated written or verbal communication indicating a
desire to prepay the related Mortgage Loan, another mortgage company has pulled
a credit report on the mortgagor or the mortgagor initiates a title search;
provided further, it is understood and agreed that promotions undertaken by the
Master Servicer or any of its Affiliates which (i) concern optional insurance
products or other additional products or (ii) 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, nor is the Master Servicer
prohibited from responding to unsolicited requests or inquiries made by a
Mortgagor or an agent of a Mortgagor. Furthermore, the Master Servicer shall be
permitted to include in its monthly statements to borrowers or otherwise,
statements regarding the availability of the Master Servicer's counseling
services with respect to refinancing mortgage loans.

                  SECTION 3.28. Net WAC Rate Carryover Reserve Account.

                  No later than the Closing Date, the Trustee shall establish
and maintain with itself a separate, segregated trust account titled, "Net WAC
Rate Carryover Reserve Account, Wells Fargo Bank Minnesota, National
Association, as Trustee, in trust for registered Holders of Option One Mortgage
Loan Trust 2003-1, Asset-Backed Certificates, Series 2003-1." On the Closing
Date, the Depositor will deposit, or cause to be deposited, into the Net WAC
Rate Carryover Reserve Account $1,000. In addition, the amount deposited in the
Net WAC Rate Carryover Reserve Account will be increased by any payments
received by the Trustee under the Cap Contracts and deposited into the Net WAC
Rate Carryover Reserve Account.

                  On each Distribution Date as to which there is a Net WAC Rate
Carryover Amount payable to the Class A Certificates and/or the Mezzanine
Certificates, the Trustee has been directed by the Class C Certificateholders
to, and therefore will, deposit into the Net WAC Rate Carryover Reserve Account
the amounts described in Section 4.01(d)(viii), rather than distributing such
amounts to the Class C Certificateholders. On each such Distribution Date, the
Trustee shall hold all such amounts for the benefit of the Holders of the Class
A Certificates and the Mezzanine Certificates, and will distribute such amounts
to the Holders of the Class A Certificates and/or the Mezzanine Certificates in
the amounts and priorities set forth in Section 4.01(d). If no Net WAC Rate
Carryover Amounts are payable on a Distribution Date, the Trustee shall deposit
into the Net WAC Rate Carryover Reserve Account on behalf of the Class C
Certificateholders, from amounts otherwise distributable to the Class C
Certificateholders, an amount such that when added to other amounts already on
deposit in the Net WAC Rate Carryover Reserve Account, the aggregate amount on
deposit therein is equal to $1,000.

                  For federal and state income tax purposes, the Class C
Certificateholders will be deemed to be the owners of the Net WAC Rate Carryover
Reserve Account and all amounts


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deposited into the Net WAC Rate Carryover Reserve Account (other than the
initial deposit therein of $1,000) shall be treated as amounts distributed by
REMIC 3 to the Holders of the Class C Certificates. Upon the termination of the
Trust, or the payment in full of the Class A Certificates and the Mezzanine
Certificates, all amounts remaining on deposit in the Net WAC Rate Carryover
Reserve Account will be released by the Trust and distributed to the Class C
Certificateholders or their designees. The Net WAC Rate Carryover Reserve
Account will be part of the Trust but not part of any REMIC and any payments to
the Holders of the Class A Certificates or the Mezzanine Certificates of Net WAC
Rate Carryover Amounts will not be payments with respect to a "regular interest"
in a REMIC within the meaning of Code Section 860(G)(a)(1).

                  By accepting a Class C Certificate, each Class C
Certificateholder hereby agrees to direct the Trustee, and the Trustee hereby is
directed, to deposit into the Net WAC Rate Carryover Reserve Account the amounts
described above on each Distribution Date as to which there is any Net WAC Rate
Carryover Amount rather than distributing such amounts to the Class C
Certificateholders. By accepting a Class C Certificate, each Class C
Certificateholder further agrees that such direction is given for good and
valuable consideration, the receipt and sufficiency of which is acknowledged by
such acceptance.

                  At the direction of the Holders of a majority in Percentage
Interest in the Class C Certificates, the Trustee shall direct any depository
institution maintaining the Net WAC Rate Carryover Reserve Account to invest the
funds in such account in one or more Permitted Investments bearing interest or
sold at a discount, and maturing, unless payable on demand, (i) no later than
the Business Day immediately preceding the date on which such funds are required
to be withdrawn from such account pursuant to this Agreement, if a Person other
than the Trustee or an Affiliate manages or advises such investment, and (ii) no
later than the date on which such funds are required to be withdrawn from such
account pursuant to this Agreement, if the Trustee or an Affiliate manages or
advises such investment. If no investment direction of the Holders of a majority
in Percentage Interest in the Class C Certificates with respect to the Net WAC
Rate Carryover Reserve Account is received by the Trustee, the Trustee shall
invest the funds in such account in Permitted Investments managed by the Trustee
or an Affiliate of the kind described in clause (vi) of the definition of
Permitted Investments.

                  For federal tax return and information reporting, the right of
the Class A Certificateholders and the Mezzanine Certificateholders to receive
payments from the Net WAC Rate Carryover Reserve Account in respect of any Net
Wac Rate Carryover Amount shall be assigned a value of zero.

                  SECTION 3.29.  Advance Facility.

                  (a) The Master Servicer and/or the Trustee on behalf of the
Trust Fund, in either case, with the consent of the NIMS Insurer and the Master
Servicer in the case of the Trustee, is hereby authorized to enter into a
facility with any Person which provides that such Person (an "Advancing Person")
may fund Advances and/or Servicing Advances to the Trust Fund under this
Agreement, although no such facility shall reduce or otherwise affect the Master
Servicer's obligation to fund such Advances and/or Servicing Advances. If the
Master Servicer enters into such an Advance Facility pursuant to this Section
3.29, upon reasonable request of the Advancing Person,


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the Trustee shall execute a letter of acknowledgment, confirming its receipt of
notice of the existence of such Advance Facility. To the extent that an
Advancing Person funds any Advance or any Servicing Advance and provides the
Trustee with notice acknowledged by the Servicer that such Advancing Person is
entitled to reimbursement, such Advancing Person shall be entitled to receive
reimbursement pursuant to this Agreement for such amount to the extent provided
in Section 3.29(b). Such notice from the Advancing Person must specify the
amount of the reimbursement, the Section of this Agreement that permits the
applicable Advance or Servicing Advance to be reimbursed and the section(s) of
the Advance Facility that entitle the Advancing Person to request reimbursement
from the Trustee, rather than the Master Servicer, and include the Master
Servicer's acknowledgment thereto or proof of an Event of Default under the
Advance Facility. The Trustee shall have no duty or liability with respect to
any calculation of any reimbursement to be paid to an Advancing Person and shall
be entitled to rely without independent investigation on the Advancing Person's
notice provided pursuant to this Section 3.29. An Advancing Person whose
obligations hereunder are limited to the funding of Advances and/or Servicing
Advances shall not be required to meet the qualifications of a Master Servicer
or a Sub-Servicer pursuant to Section 6.06 hereof and will not be deemed to be a
Sub-Servicer under this Agreement. If the terms of a facility proposed to be
entered into with an Advancing Person by the Trust Fund would not materially and
adversely affect the interests of any Certificateholder, then the NIMS Insurer
shall not withhold its consent to the Trust Fund's entering such facility.

                  (b) If an advancing facility is entered into, then the Master
Servicer shall not be permitted to reimburse itself therefor under Section
3.11(ii), Section 3.11(iii), Section 3.11(v), Section 3.11(vi) Section 3.11(vii)
and Section 4.04(b) prior to the remittance to the Trust Fund, but instead the
Master Servicer shall include such amounts in the applicable remittance to the
Trustee made pursuant to Section 3.10(a). The Trustee is hereby authorized to
pay to the Advancing Person, reimbursements for Advances and Servicing Advances
from the Distribution Account to the same extent the Master Servicer would have
been permitted to reimburse itself for such Advances and/or Servicing Advances
in accordance with Section 3.11(ii), Section 3.11(iii), Section 3.11(v), Section
3.11(vi), Section 3.11(vii) or Section 4.04(b), as the case may be, had the
Master Servicer itself funded such Advance or Servicing Advance. The Trustee is
hereby authorized to pay directly to the Advancing Person such portion of the
Servicing Fee as the parties to any advancing facility agree.

                  (c) All Advances and Servicing Advances made pursuant to the
terms of this Agreement shall be deemed made and shall be reimbursed on a "first
in-first out" (FIFO) basis.

                  (d) Any amendment to this Section 3.29 or to any other
provision of this Agreement that may be necessary or appropriate to effect the
terms of an Advance Facility as described generally in this Section 3.29,
including amendments to add provisions relating to a successor master servicer,
may be entered into by the Trustee and the Master Servicer without the consent
of any Certificateholder but with the consent of the NIMS Insurer,
notwithstanding anything to the contrary in this Agreement.

                  SECTION 3.30. PMI Policy; Claims Under the PMI Policy.

                  Notwithstanding anything to the contrary elsewhere in this
Article III, the Master Servicer shall not agree to any modification or
assumption of a PMI Mortgage Loan or take any


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other action with respect to a PMI Mortgage Loan that could result in denial of
coverage under the PMI Policy. The Master Servicer shall notify the PMI Insurer
that the Trustee, on behalf of the Certificateholders, is the Insured, as that
term is defined in the PMI Policy, of each PMI Mortgage Loan. The Master
Servicer shall, on behalf of the Trustee, prepare and file on a timely basis
with the PMI Insurer, with a copy to the Trustee, all claims which may be made
under the PMI Policy with respect to the PMI Mortgage Loans. Consistent with all
rights and obligations hereunder, the Master Servicer shall take all actions
required under the PMI Policy as a condition to the payment of any such claim.
Any amount received from the PMI Insurer with respect to any such PMI Mortgage
Loan shall be deposited by the Master Servicer, no later than two Business Days
following receipt thereof, into the Collection Account.

                  SECTION 3.31.  Excess Net WAC Rate Reserve Account.

                  No later than the Closing Date, the Trustee shall establish
and maintain with itself a separate, segregated trust account titled, "Excess
Net WAC Rate Reserve Account, Wells Fargo Bank Minnesota, National Association,
as Trustee, in trust for registered Holders of Option One Mortgage Loan Trust
2003-1, Asset-Backed Certificates, Series 2003-1."

                  On each Distribution Date as to which there is an Excess Group
Net WAC Rate Amount payable on the Class A Certificates or the Class C
Certificates, the Trustee has been directed by the Class A Certificateholders
to, and therefore shall, deposit into the Excess Net WAC Rate Reserve Account,
the Excess Group Net WAC Rate Amount, rather than distributing such amounts to
the applicable Class A Certificateholders. On each such Distribution Date, the
Trustee shall hold all such amounts for the benefit of the Holders of the
applicable Class A Certificates or the Class C Certificates, and shall
distribute such amounts to the Holders of the applicable Class A Certificates
and/or the Class C Certificates to the extent of the Excess Group Net WAC Rate
Amount.

                  For federal and state income tax purposes, the Class C
Certificateholders will be deemed to be the owners of the Excess Net WAC Rate
Reserve Account and all amounts deposited into the Excess Net WAC Rate Reserve
Account shall be treated as amounts distributed by REMIC 3 to the Holders of the
Class C Certificates. Upon the termination of the Trust Fund, or the payment in
full of the Class A Certificates, all amounts remaining on deposit in the Excess
Net WAC Rate Reserve Account shall be released by the Trust Fund and distributed
to the Class C Certificateholders or their designees. The Excess Net WAC Rate
Reserve Account shall be part of the Trust Fund but not part of any Trust REMIC
and any payments to the Holders of the Class A Certificates or the Class C
Certificates of Excess Group Net WAC Rate Amount will not be payments with
respect to a "regular interest" in a REMIC within the meaning of Code Section
860(G)(a)(1).

                  By accepting a Class A Certificate, such Certificateholders
hereby agree to direct the Trustee, and the Trustee hereby is directed, to
deposit into the Excess Net WAC Rate Reserve Account the amounts described above
on each Distribution Date as to which there is any Excess Pool Net WAC Rate
Amount rather than distributing such amounts to the Class A Certificateholders,
as applicable. By accepting a Class A Certificate, each such Certificateholder
further agrees that such direction is given for good and valuable consideration,
the receipt and sufficiency of which is acknowledged by such acceptance.


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                  Amounts on deposit in the Excess Net WAC Rate Reserve Account
will remain uninvested.

                  For federal tax return and information reporting, the right of
the Class A Certificateholders and the Class C Certificates to receive payments
from the Excess Net WAC Rate Reserve Account in respect of any Excess Group Net
WAC Rate Amount shall be assigned a value of zero.

                                   ARTICLE IV

                                  FLOW OF FUNDS

                  SECTION 4.01.     Distributions.

                  On the first Distribution Date, (i) the Initial Deposit
relating to the Group I Mortgage Loans will be transferred from the Group I
Initial Deposit Account to the Distribution Account and (ii) the Initial Deposit
relating to the Group II Mortgage Loans will be transferred from the Group II
Initial Deposit Account to the Distribution Account for inclusion in the
Available Funds for such Distribution Date.

                  (a)(I) On each Distribution Date, the Trustee shall withdraw
from the Distribution Account that portion of Available Funds for such
Distribution Date consisting of the Group I Interest Remittance Amount for such
Distribution Date, and make the following disbursements and transfers in the
order of priority described below, in each case to the extent of the Group I
Interest Remittance Amount remaining for such Distribution Date:

                  (i) to the Holders of the Class A-1 Certificates, the Monthly
         Interest Distributable Amount and the Unpaid Interest Shortfall Amount,
         if any, for the Class A-1 Certificates for such Distribution Date; and

                  (ii) to the Holders of the Class A-2 Certificates, an amount
         equal to the excess, if any, of (x) the amount required to be
         distributed pursuant to Section 4.01(a)(II)(i) below for such
         Distribution Date over (y) the amount actually distributed pursuant to
         such section from the Group II Interest Remittance Amount.

                  (II) On each Distribution Date the Trustee shall withdraw from
the Distribution Account that portion of Available Funds for such Distribution
Date consisting of the Group II Interest Remittance Amount for such Distribution
Date, and make the following disbursements and transfers in the order of
priority described below, in each case to the extent of the Group II Interest
Remittance Amount remaining for such Distribution Date:

                  (i) to the Holders of the Class A-2 Certificates, the Monthly
         Interest Distributable Amount and the Unpaid Interest Shortfall Amount,
         if any, for the Class A-2 Certificates for such Distribution Date; and



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                  (ii) to the Holders of the Class A-1 Certificates, an amount
         equal to the excess, if any, of (x) the amount required to be
         distributed pursuant to Section 4.01(a)(I)(i) above for such
         Distribution Date over (y) the amount actually distributed pursuant to
         such section from the Group I Interest Remittance Amount.

                  (III) On each Distribution Date, following the distributions
made pursuant to Section 4.01(a)(I) and (II) above, the Trustee shall make the
following disbursements and transfers in the order of priority described below,
in each case to the extent of the sum of the Group I Interest Remittance Amount
and the Group II Interest Remittance Amount remaining undistributed for such
Distribution Date:

                  (i) to the Holders of the Class M-1 Certificates, the Monthly
         Interest Distributable Amount allocable to such Certificates;

                  (ii) to the Holders of the Class M-2 Certificates, the Monthly
         Interest Distributable Amount allocable to such Certificates;

                  (iii) to the Holders of the Class M-3 Certificates, the
         Monthly Interest Distributable Amount allocable to such Certificates;
         and

                  (iv) to the Holders of the Class M-4 Certificates, the Monthly
         Interest Distributable Amount allocable to such Certificates.

                  (b)(I) On each Distribution Date (a) prior to the Stepdown
Date or (b) on which a Trigger Event is in effect, distributions in respect of
principal to the extent of the Group I Principal Distribution Amount shall be
made in the following amounts and order of priority:

                  (i) first, to the Holders of the Class A-1 Certificates, until
         the Certificate Principal Balance thereof has been reduced to zero;

                  (ii) second, after taking into account the amount distributed
         to the Holders of the Class A-2 Certificates pursuant to Section
         4.01(b)(II)(i) below on such Distribution Date, to the Holders of the
         Class A-2 Certificates, until the Certificate Principal Balance thereof
         has been reduced to zero.

                  (II) On each Distribution Date (a) prior to the Stepdown Date
or (b) on which a Trigger Event is in effect, distributions in respect of
principal to the extent of the Group II Principal Distribution Amount shall be
made in the following amounts and order of priority:

                  (i) first, to the Holders of the Class A-2 Certificates, until
         the Certificate Principal Balance thereof has been reduced to zero;

                  (ii) second, after taking into account the amount distributed
         to the Holders of the Class A-1 Certificates pursuant to Section
         4.01(b)(I)(i) above on such Distribution Date, to the Holders of the
         Class A-1 Certificates, until the Certificate Principal Balance thereof
         has been reduced to zero.


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                  (III) On each Distribution Date (a) prior to the Stepdown Date
or (b) on which a Trigger Event is in effect, distributions in respect of
principal to the extent of the sum of the Group I Principal Distribution Amount
and the Group II Principal Distribution Amount remaining undistributed for such
Distribution Date shall be made in the following amounts and order of priority:

                  (i) first, to the Holders of the Class M-1 Certificates, until
         the Certificate Principal Balance thereof has been reduced to zero;

                  (ii) second, to the Holders of the Class M-2 Certificates,
         until the Certificate Principal Balance thereof has been reduced to
         zero;

                  (iii) third, to the Holders of the Class M-3 Certificates,
         until the Certificate Principal Balance thereof has been reduced to
         zero; and

                  (iv) fourth, to the Holders of the Class M-4 Certificates,
         until the Certificate Principal Balance thereof has been reduced to
         zero.

                  (c)(I) On each Distribution Date (a) on or after the Stepdown
Date and (b) on which a Trigger Event is not in effect, distributions in respect
of principal to the extent of the Group I Principal Distribution Amount shall be
made in the following amounts and order of priority:

                  (i) first, to the Holders of the Class A-1 Certificates, the
         Class A-1 Principal Distribution Amount until the Certificate Principal
         Balance thereof has been reduced to zero;

                  (ii) second, to the extent of the portion, if any, of the
         Class A-1 Principal Distribution Amount remaining undistributed
         pursuant to Section 4.01(c)(I)(i) above on such Distribution Date, and
         after taking into account the amount distributed to the Holders of the
         Class A-2 Certificates pursuant to Section 4.01(c)(II)(i) below on such
         Distribution Date, to the Holders of the Class A-2 Certificates, until
         the Certificate Principal Balance thereof has been reduced to zero; and

                  (iii) third, to the Holders of the Class A-2 Certificates, an
         amount equal to the excess, if any, of (x) the amount required to be
         distributed pursuant to Section 4.01(c)(II)(i) below for such
         Distribution Date over (y) the sum of (A) the amount actually
         distributed pursuant to Section 4.01(c)(II)(i) below from the Group II
         Principal Distribution Amount on such Distribution Date and (B) the
         amount, if any, distributed to the Holders of the Class A-2
         Certificates pursuant to Section 4.01(c)(I)(ii) above on such
         Distribution Date.

                  (II) On each Distribution Date (a) on or after the Stepdown
Date and (b) on which a Trigger Event is not in effect, distributions in respect
of principal to the extent of the Group II Principal Distribution Amount shall
be made in the following amounts and order of priority:

                  (i) first, to the Holders of the Class A-2 Certificates, the
         Class A-2 Principal Distribution Amount until the Certificate Principal
         Balance thereof has been reduced to zero;



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                  (ii) second, to the extent of the portion, if any, of the
         Class A-2 Principal Distribution Amount remaining undistributed
         pursuant to Section 4.01(c)(II)(i) above on such Distribution Date, and
         after taking into account the amount distributed to the Holders of the
         Class A-1 Certificates pursuant to Section 4.01(c)(I)(i) above on such
         Distribution Date, to the Holders of the Class A-1 Certificates, until
         the Certificate Principal Balance thereof has been reduced to zero; and

                  (iii) third, to the Holders of the Class A-1 Certificates, an
         amount equal to the excess, if any, of (x) the amount required to be
         distributed pursuant to Section 4.01(c)(I)(i) above for such
         Distribution Date over (y) the sum of (A) the amount actually
         distributed pursuant to Section 4.01(c)(I)(i) above from the Group I
         Principal Distribution Amount on such Distribution Date and (B) the
         amount, if any, distributed to the Holders of the Class A-1
         Certificates pursuant to Section 4.01(c)(II)(ii) above on such
         Distribution Date.

                  (III) On each Distribution Date (a) on or after the Stepdown
Date and (b) on which a Trigger Event is not in effect, distributions in respect
of principal to the extent of the sum of the Group I Principal Distribution
Amount and the Group II Principal Distribution Amount remaining undistributed
for such Distribution Date shall be made in the following amounts and order of
priority:

                  (i) first, to the Holders of the Class M-1 Certificates, the
         Class M-1 Principal Distribution Amount until the Certificate Principal
         Balance thereof has been reduced to zero;

                  (ii) second, to the Holders of the Class M-2 Certificates, the
         Class M-2 Principal Distribution Amount until the Certificate Principal
         Balance thereof has been reduced to zero;

                  (iii) third, to the Holders of the Class M-3 Certificates, the
         Class M-3 Principal Distribution Amount until the Certificate Principal
         Balance thereof has been reduced to zero; and

                  (iv) fourth, to the Holders of the Class M-4 Certificates, the
         Class M-4 Principal Distribution Amount until the Certificate Principal
         Balance thereof has been reduced to zero.

                  (d)      On each Distribution Date, the Net Monthly Excess
Cashflow shall be distributed as follows:

                  (i) to the Holders of the Class or Classes of Certificates
         then entitled to receive distributions in respect of principal, in an
         amount equal to any Extra Principal Distribution Amount, distributable
         to such Holders as part of the Group I Principal Distribution Amount
         and/or the Group II Principal Distribution Amount as described under
         Section 4.01(b) and Section 4.01(c) above;

                  (ii) to the Holders of the Class M-1 Certificates, in an
         amount equal to the Unpaid Interest Shortfall Amount allocable to such
         Certificates;



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                  (iii) to the Holders of the Class M-1 Certificates, in an
         amount equal to the Allocated Realized Loss Amount allocable to such
         Certificates;

                  (iv) to the Holders of the Class M-2 Certificates, in an
         amount equal to the Unpaid Interest Shortfall Amount allocable to such
         Certificates;

                  (v) to the Holders of the Class M-2 Certificates, in an amount
         equal to the Allocated Realized Loss Amount allocable to such
         Certificates;

                  (vi) to the Holders of the Class M-3 Certificates, in an
         amount equal to the Unpaid Interest Shortfall Amount allocable to such
         Certificates;

                  (vii) to the Holders of the Class M-3 Certificates, in an
         amount equal to the Allocated Realized Loss Amount allocable to such
         Certificates;

                  (viii) to the Holders of the Class M-4 Certificates, in an
         amount equal to the Unpaid Interest Shortfall Amount allocable to such
         Certificates;

                  (ix) to the Holders of the Class M-4 Certificates, in an
         amount equal to the Allocated Realized Loss Amount allocable to such
         Certificates;

                  (x) to the Net WAC Rate Carryover Reserve Account, the amount
         by which any Net WAC Rate Carryover Amounts for such Distribution Date
         exceed the amounts received by the Trustee under the Cap Contracts;

                  (xi) to the PMI Insurer, reimbursement of any payments made
         under the PMI Policy, to the extent such payments were the result of
         incorrect data supplied to the PMI Insurer by the Originator;

                  (xii) to the Holders of the Class C Certificates, the Monthly
         Interest Distributable Amount for such Class and any remaining
         Overcollateralization Release Amount for such Distribution Date;

                  (xiii) if such Distribution Date follows the Prepayment Period
         during which occurs the latest date on which a Prepayment Charge may be
         required to be paid in respect of any Mortgage Loans, to the Holders of
         the Class P Certificates, in reduction of the Certificate Principal
         Balance thereof, until the Certificate Principal Balance thereof is
         reduced to zero; and

                  (xiv) any remaining amounts to the Holders of the Residual
         Certificates (in respect of the appropriate Class R Interest).

                  On each Distribution Date, after making the distributions of
the Available Funds as set forth above, the Trustee will FIRST, withdraw from
the Net WAC Rate Carryover Reserve Account all income from the investment of
funds in the Net WAC Rate Carryover Reserve Account and distribute such amount
to the Holders of the Class C Certificates, and SECOND, withdraw from the Net


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WAC Rate Carryover Reserve Account, to the extent of amounts remaining on
deposit therein, the amount of any Net WAC Rate Carryover Amount for such
Distribution Date and distribute such amount first, concurrently to the Class
A-1 Certificates and the Class A-2 Certificates on a PRO RATA basis based on the
Net WAC Rate Carryover Amount of each such class, until each such amount has
been paid in full; second, to the Class M-1 Certificates; third, to the Class
M-2 Certificates, fourth, to the Class M-3 Certificates and fifth, to the Class
M-4 Certificates, in each case to the extent the Net WAC Carryover Amount is
allocable to each such Class; provided, however, that distributions in respect
of Net WAC Rate Carryover Amounts shall be made in the order set forth above
until the Class A Certificates and the Mezzanine Certificates receive
distributions such that their Net WAC Rate is equal to a rate (the "Supplemental
Net WAC Rate") as described below. Then, distributions in respect of Net WAC
Rate Carryover Amounts shall be made in the order set forth above until all Net
WAC Rate Carryover Amounts have been paid in full. The Supplemental Net WAC Rate
is a rate equal to the product of (A) the sum of (i) the Net WAC Rate for such
class for such Distribution Date and (ii) the percentage equivalent of a
fraction, the numerator of which is (x) the proceeds, if any, received under the
related cap contract (in the case of the Class A-1 Certificates and the Class
A-2 Certificates) or both cap contracts (in the case of the Mezzanine
Certificates) for such Distribution Date and the denominator of which is (y) the
aggregate amount of Mortgage Loans in Loan Group I (in the case of the Class A-1
Certificates), Loan Group II (in the case of the Class A-2 Certificates) or both
Loan Groups (in the case of the Mezzanine Certificates) and (B) a fraction, the
numerator of which is the actual number of days in the related Interest Accrual
Period and the denominator of which is 360.

                  On each Distribution Date, all amounts representing Prepayment
Charges in respect of the Mortgage Loans received during the related Prepayment
Period and any Master Servicer Prepayment Charge Amounts paid by the Master
Servicer during the related Prepayment Period will be withdrawn from the
Distribution Account and distributed by the Trustee to the Holders of the Class
P Certificates and shall not be available for distribution to the Holders of any
other Class of Certificates. The payment of the foregoing amounts to the Holders
of the Class P Certificates shall not reduce the Certificate Principal Balances
thereof.

                  (e) Method of Distribution. The Trustee shall make
distributions in respect of a Distribution Date to each Certificateholder of
record on the related Record Date (other than as provided in Section 10.01
respecting the final distribution), in the case of Certificateholders of the
Regular Certificates, by check or money order mailed to such Certificateholder
at the address appearing in the Certificate Register, or by wire transfer.
Distributions among Certificateholders shall be made in proportion to the
Percentage Interests evidenced by the Certificates held by such
Certificateholders.

                  (f) Distributions on Book-Entry Certificates. Each
distribution with respect to a Book-Entry Certificate shall be paid to the
Depository, which shall credit the amount of such distribution to the accounts
of its Depository Participants in accordance with its normal procedures. Each
Depository Participant shall be responsible for disbursing such distribution to
the Certificate Owners that it represents and to each indirect participating
brokerage firm (a "brokerage firm" or "indirect participating firm") for which
it acts as agent. Each brokerage firm shall be responsible for disbursing funds
to the Certificate Owners that it represents. All such credits and disbursements
with respect to a Book-Entry Certificate are to be made by the Depository and
the Depository


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Participants in accordance with the provisions of the Certificates. None of the
Trustee, the Depositor, the Master Servicer or the Originator shall have any
responsibility therefor except as otherwise provided by applicable law.

                  SECTION 4.02. [Reserved].

                  SECTION 4.03. Statements.

                  (a) On each Distribution Date, based, as applicable, on
information provided to it by the Master Servicer, the Trustee shall prepare and
make available to each Holder of the Regular Certificates, the NIMS Insurer, the
Master Servicer and the Rating Agencies, a statement as to the distributions
made on such Distribution Date:

                  (i) the amount of the distribution made on such Distribution
         Date to the Holders of each Class of Regular Certificates allocable to
         principal and the amount of the distribution made to the Holders of the
         Class P Certificates allocable to Prepayment Charges and Master
         Servicer Prepayment Charge Payment Amounts;

                  (ii) the amount of the distribution made on such Distribution
         Date to the Holders of each Class of Regular Certificates (other than
         the Class P Certificates) allocable to interest, separately identified;

                  (iii) the Overcollateralized Amount, the Overcollateralization
         Release Amount, the Overcollateralization Deficiency Amount and the
         Overcollateralization Target Amount as of such Distribution Date and
         the Excess Overcollateralized Amount for the Mortgage Pool for such
         Distribution Date;

                  (iv) the aggregate amount of servicing compensation received
         by the Master Servicer with respect to the related Due Period and such
         other customary information as the Trustee deems necessary or
         desirable, or which a Certificateholder reasonably requests, to enable
         Certificateholders to prepare their tax returns;

                  (v) the aggregate amount of Advances for the related Due
         Period;

                  (vi) with respect to each Loan Group, the related group
         balance at the Close of Business at the end of the related Due Period;

                  (vii) the number, aggregate principal balance, weighted
         average remaining term to maturity and weighted average Mortgage Rate
         of the Mortgage Loans as of the related Determination Date and the
         number and aggregate principal balance of all Subsequent Mortgage Loans
         added during the preceding Prepayment Period;

                  (viii) the number and aggregate unpaid principal balance of
         Mortgage Loans that were (A) Delinquent (exclusive of Mortgage Loans in
         bankruptcy or foreclosure and REO Properties) (1) 30 to 59 days, (2) 60
         to 89 days and (3) 90 or more days, (B) as to which foreclosure
         proceedings have been commenced and Delinquent (1) 30 to 59 days, (2)
         60 to


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         89 days and (3) 90 or more days, (C) in bankruptcy and Delinquent (1)
         30 to 59 days, (2) 60 to 89 days and (3) 90 or more days, in each case
         as of the Close of Business on the last day of the calendar month
         preceding such Distribution Date and (D) REO Properties;

                  (ix) [reserved];

                  (x) the total number and cumulative principal balance of all
         REO Properties as of the Close of Business of the last day of the
         preceding Prepayment Period;

                  (xi) the aggregate amount of Principal Prepayments made during
         the related Prepayment Period;

                  (xii) the aggregate amount of Realized Losses incurred during
         the related Prepayment Period and the cumulative amount of Realized
         Losses;

                  (xiii) the aggregate amount of extraordinary Trust Fund
         expenses withdrawn from the Collection Account for such Distribution
         Date;

                  (xiv) the Certificate Principal Balance of each Class of Class
         A Certificates, each class of Mezzanine Certificates and the Class C
         Certificates, after giving effect to the distributions made on such
         Distribution Date;

                  (xv) the Monthly Interest Distributable Amount in respect of
         each class of Class A Certificates, each class of Mezzanine
         Certificates and the Class C Certificates for such Distribution Date
         and the Unpaid Interest Shortfall Amount, if any, with respect to the
         Class A Certificates, the Mezzanine Certificates and the Class C
         Certificates for such Distribution Date;

                  (xvi) the aggregate amount of any Prepayment Interest
         Shortfalls for such Distribution Date, to the extent not covered by
         payments by the Master Servicer pursuant to Section 3.26;

                  (xvii) the Credit Enhancement Percentage for such Distribution
         Date;

                  (xviii) the Net WAC Rate Carryover Amount for each class of
         Class A Certificates and each class of Mezzanine Certificates, if any,
         for such Distribution Date and the amount remaining unpaid after
         reimbursements therefor on such Distribution Date;

                  (xix) any Overcollateralization Target Amount,
         Overcollateralized Amount and Overcollateralization Deficiency Amount
         after giving effect to the distribution of principal on such
         Distribution Date;

                  (xx) when the Stepdown Date or a Trigger Event has occurred;

                  (xxi)    the Available Funds;



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                  (xxii) the respective Pass-Through Rates applicable to each
         Class of Class A Certificates, each Class of Mezzanine Certificates and
         the Class C Certificates for such Distribution Date and the
         Pass-Through Rate applicable to each Class of Class A Certificates and
         each class of Mezzanine Certificates for the immediately succeeding
         Distribution Date;

                  (xxiii) (A) the amount of payments received related to claims
         under the PMI Policy during the related Prepayment Period (and the
         number of Mortgage Loans to which such payments related) and (B) the
         cumulative amount of payments received related to claims under the PMI
         Policy since the Closing Date (and the number of Mortgage Loans to
         which such payments related);

                  (xxiv) (A) the dollar amount of claims made under the PMI
         Policy that were denied during the Prepayment Period (and the number of
         Mortgage Loans to which such denials related) and (B) the dollar amount
         of the cumulative claims made under the PMI Policy that were denied
         since the Closing Date (and the number of Mortgage Loans to which such
         denials related);

                  (xxv) the amount on deposit in the Pre-Funding Accounts, the
         Interest Coverage Accounts, the Excess Net WAC Rate Reserve Account and
         the Net WAC Rate Carryover Reserve Account; and

                  (xxvi) for the distribution occurring on the Distribution Date
         immediately following the end of the Funding Period, the balance on
         deposit in the Group I Pre-Funding Account and/or the Group II
         Pre-Funding Account that has not been used to purchase Subsequent Group
         I Mortgage Loans and/or Subsequent Group II Mortgage Loans, as
         applicable, and that is being distributed to the related Class A
         Certificates as a mandatory distribution of principal, if any, on such
         Distribution Date.

                  The Trustee will make such statement (and, at its option, any
additional files containing the same information in an alternative format)
available each month to Certificateholders, the NIMS Insurer and the Rating
Agencies via the Trustee's internet website. The Trustee's internet website
shall initially be located at "www.ctslink.com". Assistance in using the website
can be obtained by calling the Trustee's customer service desk at (301)
815-6600. Parties that are unable to use the above distribution option are
entitled to have a paper copy mailed to them via first class mail by calling the
customer service desk and indicating such. The Trustee shall have the right to
change the way such statements are distributed in order to make such
distribution more convenient and/or more accessible to the above parties and the
Trustee shall provide timely and adequate notification to all above parties
regarding any such changes. As a condition to access the Trustee's internet
website, the Trustee may require registration and the acceptance of a
disclaimer. The Trustee will not be liable for the dissemination of information
in accordance with this Agreement. The Trustee shall also be entitled to rely on
but shall not be responsible for the content or accuracy of any information
provided by third parties for purposes of preparing the distribution date
statement and may affix thereto any disclaimer it deems appropriate in its
reasonable discretion (without suggesting liability on the part of any other
party thereto).



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                  In the case of information furnished pursuant to subclauses
(i) through (iii) above, the amounts shall be expressed in a separate section of
the report as a dollar amount for each Class for each $1,000 original dollar
amount as of the Cut-off Date.

                  (b) Within a reasonable period of time after the end of each
calendar year, the Trustee shall, upon written request, furnish to the NIMS
Insurer and each Person who at any time during the calendar year was a
Certificateholder of a Regular Certificate, if requested in writing by such
Person, such information as is reasonably necessary to provide to such Person a
statement containing the information set forth in subclauses (i) through (iii)
above, aggregated for such calendar year or applicable portion thereof during
which such Person was a Certificateholder. Such obligation of the Trustee shall
be deemed to have been satisfied to the extent that substantially comparable
information shall be prepared and furnished by the Trustee to Certificateholders
pursuant to any requirements of the Code as are in force from time to time.

                  (c) On each Distribution Date, the Trustee shall forward to
the NIMS Insurer and the Class R Certificateholders a copy of the reports
forwarded to the Regular Certificateholders in respect of such Distribution Date
with such other information as the Trustee deems necessary or appropriate.

                  (d) Within a reasonable period of time after the end of each
calendar year, the Trustee shall deliver to the NIMS Insurer and each Person who
at any time during the calendar year was a Class R Certificateholder, if
requested in writing by such Person, such information as is reasonably necessary
to provide to such Person a statement containing the information provided
pursuant to the previous paragraph aggregated for such calendar year or
applicable portion thereof during which such Person was a Class R
Certificateholder. Such obligation of the Trustee shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
prepared and furnished to Certificateholders by the Trustee pursuant to any
requirements of the Code as from time to time in force.

                  SECTION 4.04. Remittance Reports; Advances.

                  (a) On the second Business Day following each Determination
Date but in no event later than the earlier of (i) such date which would allow
the indenture trustee to submit a claim to the NIMS Insurer under the Indenture
so as to allow a timely payment by the NIMS Insurer under the insurance policy
related to the notes insured by the NIMS Insurer and (ii) the 20th day of each
month (or if such 20th day is not a Business Day, the preceding Business Day),
the Master Servicer shall deliver to the Trustee and the NIMS Insurer by
telecopy or electronic mail (or by such other means as the Master Servicer and
the Trustee may agree from time to time) a Remittance Report with respect to the
related Distribution Date. Not later than the 20th day of each month (or if such
20th day is not a Business Day, the preceding Business Day), the Master Servicer
shall deliver or cause to be delivered to the Trustee in addition to the
information provided on the Remittance Report, such other information reasonably
available to it with respect to the Mortgage Loans as the Trustee may reasonably
require to perform the calculations necessary to make the distributions
contemplated by Section 4.01 and to prepare the statements to Certificateholders
contemplated by Section 4.03. The Trustee shall not be responsible to recompute,
recalculate or verify any information provided to it by the Master Servicer.


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                  (b) The amount of Advances to be made by the Master Servicer
for any Distribution Date shall equal, subject to Section 4.04(d), the sum of
(i) the aggregate amount of Monthly Payments (net of the related Servicing Fee),
due during the related Due Period in respect of the Mortgage Loans, which
Monthly Payments were delinquent on a contractual basis as of the Close of
Business on the related Determination Date and (ii) with respect to each REO
Property, which REO Property was acquired during or prior to the related Due
Period and as to which REO Property an REO Disposition did not occur during the
related Due Period, an amount equal to the excess, if any, of the REO Imputed
Interest on such REO Property for the most recently ended calendar month, over
the net income from such REO Property transferred to the Distribution Account
pursuant to Section 3.23 for distribution on such Distribution Date. For
purposes of the preceding sentence, the Monthly Payment on each Balloon Mortgage
Loan with a delinquent Balloon Payment is equal to the assumed monthly payment
that would have been due on the related Due Date based on the original principal
amortization schedule for the such Balloon Mortgage Loan.

                  On or before 1:00 p.m. New York time on the Master Servicer
Remittance Date, the Master Servicer shall remit in immediately available funds
to the Trustee for deposit in the Distribution Account an amount equal to the
aggregate amount of Advances, if any, to be made in respect of the Mortgage
Loans and REO Properties for the related Distribution Date either (i) from its
own funds or (ii) from the Collection Account, to the extent of funds held
therein for future distribution (in which case it will cause to be made an
appropriate entry in the records of Collection Account that amounts held for
future distribution have been, as permitted by this Section 4.04, used by the
Master Servicer in discharge of any such Advance) or (iii) in the form of any
combination of (i) and (ii) aggregating the total amount of Advances to be made
by the Master Servicer with respect to the Mortgage Loans and REO Properties.
Any amounts held for future distribution used by the Master Servicer to make an
Advance as permitted in the preceding sentence or withdrawn by the Master
Servicer as permitted in Section 3.11(a)(ii) in reimbursement of Advances
previously made shall be appropriately reflected in the Master Servicer's
records and replaced by the Master Servicer by deposit in the Collection Account
on or before any future Master Servicer Remittance Date to the extent that the
Available Funds for the related Distribution Date (determined without regard to
Advances to be made on the Master Servicer Remittance Date) shall be less than
the total amount that would be distributed to the Classes of Certificateholders
pursuant to Section 4.01 on such Distribution Date if such amounts held for
future distributions had not been so used to make Advances or reimburse for
previously made Advances. The Trustee will provide notice to the NIMS Insurer
and the Master Servicer by telecopy by the Close of Business on any Master
Servicer Remittance Date in the event that the amount remitted by the Master
Servicer to the Trustee on such date is less than the Advances required to be
made by the Master Servicer for the related Distribution Date, as set forth in
the related Remittance Report.

                  (c) The obligation of the Master Servicer to make such
Advances is mandatory, notwithstanding any other provision of this Agreement but
subject to (d) below, and, with respect to any Mortgage Loan, shall continue
until the Mortgage Loan is paid in full or until the recovery of all Liquidation
Proceeds thereon.

                  (d) Notwithstanding anything herein to the contrary, no
Advance or Servicing Advance shall be required to be made hereunder by the
Master Servicer if such Advance or Servicing Advance would, if made, constitute
a Nonrecoverable Advance. The determination by the Master


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Servicer that it has made a Nonrecoverable Advance or that any proposed Advance
or Servicing Advance, if made, would constitute a Nonrecoverable Advance, shall
be evidenced by an Officers' Certificate of the Master Servicer delivered to the
NIMS Insurer, the Depositor and the Trustee.

                  SECTION 4.05. Pre-Funding Accounts.

                  (a) No later than the Closing Date, the Trustee shall
establish and maintain two segregated trust accounts that are each Eligible
Accounts, which shall be titled "Group I Pre-Funding Account, Wells Fargo Bank
Minnesota, National Association, as trustee for the registered holders of Option
One Mortgage Loan Trust 2003-1, Asset-Backed Certificates, Series 2003-1" (the
"Group I Pre-Funding Account") and "Group II Pre-Funding Account, Wells Fargo
Bank Minnesota, National Association, as trustee for the registered holders of
Option One Mortgage Loan Trust 2003- 1, Asset-Backed Certificates, Series
2003-1" (the "Group II Pre-Funding Account"). The Trustee shall, promptly upon
receipt, deposit in the applicable Pre-Funding Account and retain therein the
Original Group I Pre-Funded Amount and the Original Group II Pre-Funded Amount,
as applicable, remitted on the Closing Date to the Trustee by the Depositor.
Funds deposited in the Pre-Funding Accounts shall be held in trust by the
Trustee for the Certificateholders for the uses and purposes set forth herein.

                  (b) The Trustee will invest funds deposited in the Pre-Funding
Accounts as directed by the Master Servicer in Permitted Investments with a
maturity date (i) no later than the Business Day immediately preceding the date
on which such funds are required to be withdrawn from such account pursuant to
this Agreement, if a Person other than the Trustee or an Affiliate manages or
advises such investment, (ii) no later than the date on which such funds are
required to be withdrawn from such account pursuant to this Agreement, if the
Trustee or an Affiliate manages or advises such investment or (iii) within one
Business Day of the Trustee's receipt thereof. For federal income tax purposes,
the Master Servicer shall be the owner of the Pre-Funding Accounts and shall
report all items of income, deduction, gain or loss arising therefrom. All
income and gain realized from investment of funds deposited in the Group I
Pre-Funding Account and the Group II Pre-Funding Account shall be transferred to
the Group I Interest Coverage Account and the Group II Interest Coverage
Account, as applicable, at the following times: (i) on the Business Day
immediately preceding each Distribution Date, if a Person other than the Trustee
or an Affiliate of the Trustee manages or advises such investment, or on each
Distribution Date, if the Trustee or an Affiliate of the Trustee manages or
advises such investment, (ii) on the Business Day immediately preceding each
Subsequent Transfer Date, if a Person other than the Trustee or an Affiliate of
the Trustee manages or advises such investment, or on each Subsequent Transfer
Date, if the Trustee or an Affiliate of the Trustee manages or advises such
investment or (iii) within one Business Day of the Trustee's receipt thereof.
The Master Servicer shall deposit in the Pre-Funding Accounts the amount of any
net loss incurred in respect of any such Permitted Investment immediately upon
realization of such loss without any right of reimbursement therefor. At no time
will the Pre- Funding Accounts be assets of any REMIC created hereunder.

                  (c)      Amounts on deposit in the Pre-Funding Accounts shall
be withdrawn by the Trustee as follows:



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                  (i) On any Subsequent Transfer Date, the Trustee shall
         withdraw from the Group I Pre-Funding Account or the Group II
         Pre-Funding Account, as applicable, an amount equal to 100% of the
         Stated Principal Balances of the Subsequent Group I Mortgage Loans or
         the Subsequent Group II Mortgage Loans, as applicable, transferred and
         assigned to the Trustee for deposit in the Mortgage Pool on such
         Subsequent Transfer Date and pay such amount to or upon the order of
         the Depositor upon satisfaction of the conditions set forth in Section
         2.08 with respect to such transfer and assignment;

                  (ii) If the amount on deposit in the Pre-Funding Accounts
         (exclusive of investment income) has not been reduced to zero during
         the Funding Period, on the day immediately following the termination of
         the Funding Period, the Trustee shall deposit into the Distribution
         Account any amounts remaining in the Pre-Funding Accounts (exclusive of
         investment income) for distribution in accordance with the terms
         hereof;

                  (iii) To withdraw any amount not required to be deposited in
         the Pre-Funding Accounts or deposited therein in error; and

                  (iv) To clear and terminate the Pre-Funding Accounts upon the
         earlier to occur of (A) the Distribution Date immediately following the
         end of the Funding Period and (B) the termination of this Agreement,
         with any amounts remaining on deposit therein being paid to the Holders
         of the Certificates then entitled to distributions in respect of
         principal.

                  Withdrawals pursuant to clauses (i), (ii) and (iii) shall be
treated as contributions of cash to REMIC 1 on the date of withdrawal.

                  SECTION 4.06. Interest Coverage Accounts.

                  (a) No later than the Closing Date, the Trustee shall
establish and maintain two segregated trust accounts that are Eligible Accounts,
which shall be titled "Group I Interest Coverage Account, Wells Fargo Bank
Minnesota, National Association, as trustee for the registered holders of Option
One Mortgage Loan Trust 2003-1, Asset-Backed Certificates, Series 2003-1" (the
"Group I Interest Coverage Account") and "Group II Interest Coverage Account,
Wells Fargo Bank Minnesota, National Association, as trustee for the registered
holders of Option One Mortgage Loan Trust 2003-1, Asset-Backed Certificates,
Series 2003-1" (the "Group II Interest Coverage Account"). The Trustee shall,
promptly upon receipt, deposit in the Group I Interest Coverage Account and the
Group II Interest Coverage Account and retain therein the applicable Interest
Coverage Amount remitted on the Closing Date to the Trustee by the Depositor.
Funds deposited in the Interest Coverage Accounts shall be held in trust by the
Trustee for the Certificateholders for the uses and purposes set forth herein.

                  (b) For federal income tax purposes, the Master Servicer shall
be the owner of the Interest Coverage Accounts and shall report all items of
income, deduction, gain or loss arising therefrom. At no time will the Interest
Coverage Accounts be assets of any REMIC created hereunder. All income and gain
realized from investment of funds deposited in the Interest Coverage Accounts
shall be for the sole and exclusive benefit of the Master Servicer and shall be
remitted by the Trustee to the Master Servicer no later than the first Business
Day following receipt


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of such income and gain by the Trustee. The Master Servicer shall deposit in the
Interest Coverage Accounts the amount of any net loss incurred in respect of any
such Permitted Investment immediately upon realization of such loss.

                  (c) On each Distribution Date during the Funding Period and on
the Distribution Date immediately following the end of the Funding Period, the
Trustee shall withdraw from the Group I Interest Coverage Account and the Group
II Interest Coverage Account and deposit in the Distribution Account an amount
equal to 30 days' interest on the excess, if any, of the Original Group I
Pre-Funded Amount or the Original Group II Pre-Funded Amount, as applicable,
over the aggregate Principal Balance of Subsequent Group I Mortgage Loans or
Subsequent Group II Mortgage Loans, as applicable, that both (i) had a Due Date
during the Due Period relating to such Distribution Date and (ii) had a
Subsequent Cut-off Date prior to the first day of the month in which such
Distribution Date occurs, at a per annum rate equal to the Pass-Through Rate of
the Offered Certificates for such Distribution Date, with the Pass-Through Rate
on the Class A Certificates and the Mezzanine Certificates, solely for the
purposes of the foregoing calculation, each being multiplied by a fraction, the
numerator of which is the actual number of days in the Accrual Period for such
Class for such Distribution Date, and the denominator of which is 30. Such
withdrawal and deposit shall be treated as a contribution of cash by the Master
Servicer to REMIC 1, REMIC 2 and REMIC 3 on the date thereof with REMIC 3
receiving that portion of the contribution, if any, to the extent that the rate
of LIBOR used to calculate the Pass-Through Rate on the Class A Certificates and
the Mezzanine Certificates for such Distribution Date exceeds LIBOR for the
first Accrual Period. Immediately following any such withdrawal and deposit, and
immediately following the conveyance of any Subsequent Mortgage Loans to the
Trust on any Subsequent Transfer Date, the Trustee shall withdraw from the Group
I Interest Coverage Account and the Group II Interest Coverage Account and remit
to the Master Servicer or its designee an amount equal to the excess, if any, of
the amount remaining in such Interest Coverage Account over the amount that
would be required to be withdrawn therefrom (assuming sufficient funds therein)
pursuant to the preceding sentence on each subsequent Distribution Date, if any,
that will occur during the Funding Period or that will be the Distribution Date
immediately following the end of the Funding Period, if no Subsequent Group I
Mortgage Loans or Subsequent Group II Mortgage Loans, as applicable, were
acquired by the Trust Fund after the end of the Prepayment Period relating to
the current Distribution Date (assuming that LIBOR remains constant at the level
of LIBOR applicable to the calculation of the Pass-Through Rate for the Class A
Certificates and the Mezzanine Certificates for the current Distribution Date).

                  (d) Upon the earliest of (i) the Distribution Date immediately
following the end of the Funding Period, (ii) the reduction of the Certificate
Principal Balances of the Certificates to zero or (iii) the termination of this
Agreement in accordance with Section 10.01, any amount remaining on deposit in
the Interest Coverage Accounts after distributions pursuant to paragraph (c)
above shall be withdrawn by the Trustee and paid to the Master Servicer or its
designee.

                  SECTION 4.07. Distributions on the REMIC Regular Interests.

                  With respect to the Group I Mortgage Loans:



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                  (1)(i) to the Holders of REMIC 1 Regular Interest LT1A, REMIC
         1 Regular Interest LT1B and REMIC 1 Regular Interest LT1P in an amount
         equal to (A) the Uncertificated Accrued Interest for each REMIC 1
         Regular Interest for such Distribution Date, plus (B) any amounts in
         respect thereof remaining unpaid from previous Distribution Dates; and

                  (ii) to the Holders of REMIC 1 Regular Interest LT1P, on the
         Distribution Date immediately following the expiration of the latest
         Prepayment Charge as identified on the Prepayment Charge Schedule or
         any Distribution Date thereafter until $100 has been distributed
         pursuant to this clause;

                  (2) to the Holders of REMIC 1 Regular Interest LT1A and REMIC
         1 Regular Interest LT1B, in an amount equal to the remainder of the
         Available Funds for such Distribution Date after the distributions made
         pursuant to clause (1) above, allocated as follows:

                           (a) to the Holders of REMIC 1 Regular Interest LT1A,
                  until the Uncertificated Principal Balance of REMIC 1 Regular
                  Interest LT1A is reduced to zero;

                           (b) to the Holders of REMIC 1 Regular Interest LT1B,
                  until the Uncertificated Principal Balance of REMIC 1 Regular
                  Interest LT1B is reduced to zero; and

                           (c)  any remaining amount to the Holders of the
                  Class R Certificates (in respect of the Class R-1 Interest).

                  With respect to the Group II Mortgage Loans:

                  (1) to the Holders of REMIC 1 Regular Interest LT1C and REMIC
         1 Regular Interest LT1D in an amount equal to (A) the Uncertificated
         Accrued Interest for each REMIC 1 Regular Interest for such
         Distribution Date, plus (B) any amounts in respect thereof remaining
         unpaid from previous Distribution Dates;

                  (2) to the Holders of REMIC 1 Regular Interest LT1C and REMIC
         1 Regular Interest LT1D, in an amount equal to the remainder of the
         Available Funds for such Distribution Date after the distributions made
         pursuant to clause (1) above, allocated as follows:

                           (a) to the Holders of REMIC 1 Regular Interest LT1C,
                  until the Uncertificated Principal Balance of REMIC 1 Regular
                  Interest LT1C is reduced to zero;

                           (b) to the Holders of REMIC 1 Regular Interest LT1D,
                  until the Uncertificated Principal Balance of REMIC 1 Regular
                  Interest LT1D is reduced to zero; and



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                           (c) any remaining amount to the Holders of the Class
                  R Certificates (in respect of the Class R-1 Interest).

                  On each Distribution Date, all amounts representing Prepayment
Charges in respect of the Mortgage Loans received during the related Prepayment
Period will be distributed by REMIC 1 to the Holders of REMIC 1 Regular Interest
LT1P. The payment of the foregoing amounts to the Holders of REMIC 1 Regular
Interest LT1P shall not reduce the Uncertificated Principal Balance thereof.

                  (b) On each Distribution Date, the Trustee shall cause in the
following order of priority, the following amounts to be distributed by REMIC 2
to REMIC 3 on account of the REMIC 2 Regular Interests or withdrawn from the
Distribution Account and distributed to the Holders of the Class R Certificates
(in respect of the Class R-2 Interest), as the case may be:

                  (i) to Holders of REMIC 2 Regular Interest LT2AA, REMIC 2
         Regular Interest LT2A1, REMIC 2 Regular Interest LT2A2, REMIC 2 Regular
         Interest LT2M1, REMIC 2 Regular Interest LT2M2, REMIC 2 Regular
         Interest LT2M3, REMIC 2 Regular Interest LT2M4, REMIC 2 Regular
         Interest LT2ZZ and REMIC 2 Regular Interest LT2P, PRO RATA, in an
         amount equal to (A) the Uncertificated Accrued Interest for such
         Distribution Date, plus (B) any amounts in respect thereof remaining
         unpaid from previous Distribution Dates. Amounts payable as
         Uncertificated Accrued Interest in respect of REMIC 2 Regular Interest
         LT2ZZ shall be reduced and deferred when the REMIC 2 Overcollateralized
         Amount is less than the REMIC 2 Overcollateralization Target Amount, by
         the lesser of (x) the amount of such difference and (y) the Maximum
         LT2ZZ Uncertificated Accrued Interest Deferral Amount; and

                  (ii) second, to the Holders of REMIC 2 Regular Interests, in
         an amount equal to the remainder of the Available Funds for such
         Distribution Date after the distributions made pursuant to clause (i)
         above, allocated as follows:

                           (a) to the Holders of REMIC 2 Regular Interest LT2AA
                  and REMIC 2 Regular Interest LT2P, 98.00% of such remainder,
                  until the Uncertificated Principal Balance of such
                  Uncertificated REMIC 2 Regular Interest is reduced to zero;
                  provided, however, that REMIC 2 Regular Interest LT2P shall
                  not be reduced until the Distribution Date immediately
                  following the expiration of the latest Prepayment Charge as
                  identified on the Prepayment Charge Schedule or any
                  Distribution Date thereafter, at which point such amount shall
                  be distributed to REMIC 2 Regular Interest LT2P, until $100
                  has been distributed pursuant to this clause;

                           (b) to the Holders of REMIC 2 Regular Interest LT2A1,
                  REMIC 2 Regular Interest LT2A2, REMIC 2 Regular Interest
                  LT2M1, REMIC 2 Regular Interest LT2M2, REMIC 2 Regular
                  Interest LT2M3 and REMIC 2 Regular Interest LT2M4, 1.00% of
                  such remainder, in the same proportion as principal payments
                  are allocated to the Corresponding Certificates, until the
                  Uncertificated Principal Balances of such REMIC 2 Regular
                  Interests are reduced to zero;



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                           (c) to the Holders of REMIC 2 Regular Interest LT2ZZ,
                  1.00% of such remainder, until the Uncertificated Principal
                  Balance of such REMIC 2 Regular Interest is reduced to zero;
                  then

                           (d) any remaining amount to the Holders of the Class
                  R Certificates (in respect of the Class R-2 Interest);

provided, however, that (i) 98.00% and (ii) 2.00% of any principal payments that
are attributable to an Overcollateralization Release Amount shall be allocated
to Holders of (i) REMIC 2 Regular Interest LT2AA and REMIC 2 Regular Interest
LT2P, in that order and (ii) REMIC 2 Regular Interest LT2ZZ, respectively;
provided that REMIC 2 Regular Interest LT2P shall not be reduced until the
Distribution Date immediately following the expiration of the latest Prepayment
Charge as identified on the Prepayment Charge Schedule or any Distribution Date
thereafter, at which point such amount shall be distributed to REMIC 2 Regular
Interest LT2P, until $100 has been distributed pursuant to this clause.

                  On each Distribution Date, all amounts representing Prepayment
Charges in respect of the Mortgage Loans received during the related Prepayment
Period will be distributed by REMIC 2 to the Holders of REMIC 2 Regular Interest
LT2P. The payment of the foregoing amounts to the Holders of REMIC 2 Regular
Interest LT2P shall not reduce the Uncertificated Principal Balance thereof.

                  SECTION 4.08. Allocation of Realized Losses.

                  (a) All Realized Losses on the Mortgage Loans allocated to any
Regular Certificate shall be allocated by the Trustee on each Distribution Date
as follows: first, to Net Monthly Excess Cashflow; second, to the Class C
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero; third, to the Class M-4 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; fourth, to the Class M-3 Certificates,
until the Certificate Principal Balance thereof has been reduced to zero; fifth,
to the Class M-2 Certificates, until the Certificate Principal Balance thereof
has been reduced to zero; and sixth, to the Class M-1 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero. All Realized
Losses to be allocated to the Certificate Principal Balances of all Classes on
any Distribution Date shall be so allocated after the actual distributions to be
made on such date as provided above. All references above to the Certificate
Principal Balance of any Class of Certificates shall be to the Certificate
Principal Balance of such Class immediately prior to the relevant Distribution
Date, before reduction thereof by any Realized Losses, in each case to be
allocated to such Class of Certificates, on such Distribution Date.

                  Any allocation of Realized Losses to a Mezzanine Certificate
on any Distribution Date shall be made by reducing the Certificate Principal
Balance thereof by the amount so allocated; any allocation of Realized Losses to
a Class C Certificate shall be made by reducing the amount otherwise payable in
respect thereof pursuant to Section 4.01(d)(x). No allocations of any Realized
Losses shall be made to the Certificate Principal Balances of the Class A
Certificates or the Class P Certificates.



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                  (b) All Realized Losses on the Group I Mortgage Loans shall be
allocated by the Trustee on each Distribution Date to the REMIC 1 Regular
Interest LT1A and REMIC 1 Regular Interest LT1B until the Uncertificated
Principal Balance of each such REMIC 1 Regular Interest has been reduced to
zero; provided however, with respect to the first Distribution Date, all
Realized Losses on the Initial Group I Mortgage Loans shall be allocated to
REMIC 1 Regular Interest LT1A until the Uncertificated Principal Balance of each
such REMIC 1 Regular Interest has been reduced to zero, and all Realized Losses
on the Subsequent Group I Mortgage Loans shall be allocated to REMIC 1 Regular
Interest LT1B until the Uncertificated Principal Balance thereof has been
reduced to zero. All Realized Losses on the Group II Mortgage Loans shall be
allocated by the Trustee on each Distribution Date to the REMIC 1 Regular
Interest LT1C and REMIC 1 Regular Interest LT1D until the Uncertificated
Principal Balance of each such REMIC 1 Regular Interest has been reduced to
zero; provided however, with respect to the first Distribution Date, all
Realized Losses on the Initial Group II Mortgage Loans shall be allocated to
REMIC 1 Regular Interest LT1C until the Uncertificated Principal Balance of each
such REMIC 1 Regular Interest has been reduced to zero, and all Realized Losses
on the Subsequent Group II Mortgage Loans shall be allocated to REMIC 1 Regular
Interest LT1D until the Uncertificated Principal Balance thereof has been
reduced to zero.

                  (c) All Realized Losses on the Mortgage Loans shall be deemed
to have been allocated in the specified percentages, as follows: first, to
Uncertificated Accrued Interest payable to the REMIC 2 Regular Interest LT2AA
and REMIC 2 Regular Interest LT2ZZ up to an aggregate amount equal to the REMIC
2 Interest Loss Allocation Amount, 98% and 2%, respectively; second, to the
Uncertificated Principal Balances of REMIC 2 Regular Interest LT2AA and REMIC 2
Regular Interest LT2ZZ up to an aggregate amount equal to the REMIC 2 Principal
Loss Allocation Amount, 98% and 2%, respectively; third, to the Uncertificated
Principal Balances of REMIC 2 Regular Interest LT2AA, REMIC 2 Regular Interest
LT2M4 and REMIC 2 Regular Interest LT2ZZ, 98%, 1% and 1%, respectively, until
the Uncertificated Principal Balance of REMIC 2 Regular Interest LT2M4 has been
reduced to zero; fourth, to the Uncertificated Principal Balances of REMIC 2
Regular Interest LT2AA, REMIC 2 Regular Interest LT2M3 and REMIC 2 Regular
Interest LT2ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC 2 Regular Interest LT2M3 has been reduced to zero; fifth, to
the Uncertificated Principal Balances of REMIC 2 Regular Interest LT2AA, REMIC 2
Regular Interest LT2M2 and REMIC 2 Regular Interest LT2ZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC 2 Regular
Interest LT2M2 has been reduced to zero; and sixth, to the Uncertificated
Principal Balances of REMIC 2 Regular Interest LT2AA, REMIC 2 Regular Interest
LT2M1 and REMIC 2 Regular Interest LT2ZZ, 98%, 1% and 1%, respectively, until
the Uncertificated Principal Balance of REMIC 2 Regular Interest LT2M1 has been
reduced to zero.



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                                    ARTICLE V

                                THE CERTIFICATES

                  SECTION 5.01. The Certificates.

                  Each of the Class A Certificates, the Mezzanine Certificates,
the Class P Certificates, the Class C Certificates and the Class R Certificates
shall be substantially in the forms annexed hereto as exhibits, and shall, on
original issue, be executed, authenticated and delivered by the Trustee to or
upon the order of the Depositor concurrently with the sale and assignment to the
Trustee of the Trust Fund. The Offered Certificates shall be initially evidenced
by one or more Certificates representing a Percentage Interest with a minimum
dollar denomination of $50,000 and integral dollar multiples of $1.00 in excess
thereof, except that one Certificate of each such Class of Certificates may be
in a different denomination so that the sum of the denominations of all
outstanding Certificates of such Class shall equal the Certificate Principal
Balance or Notional Amount of such Class on the Closing Date. The Class P
Certificates, the Class C Certificates and the Class R Certificates are issuable
in any Percentage Interests; provided, however, that the sum of all such
percentages for each such Class totals 100% and no more than ten Certificates of
each Class may be issued and outstanding at any one time.

                  The Certificates shall be executed on behalf of the Trust by
manual or facsimile signature on behalf of the Trustee by a Responsible Officer.
Certificates bearing the manual or facsimile signatures of individuals who were,
at the time when such signatures were affixed, authorized to sign on behalf of
the Trustee shall bind the Trust, notwithstanding that such individuals or any
of them have ceased to be so authorized prior to the authentication and delivery
of such Certificates or did not hold such offices at the date of such
Certificate. No Certificate shall be entitled to any benefit under this
Agreement or be valid for any purpose, unless such Certificate shall have been
manually authenticated by the Trustee substantially in the form provided for
herein, and such authentication upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their authentication. Subject to Section 5.02(c), the Offered Certificates
shall be Book- Entry Certificates. The other Classes of Certificates shall not
be Book-Entry Certificates.

                  SECTION 5.02. Registration of Transfer and Exchange of
                                Certificates.

                  (a) The Certificate Registrar shall cause to be kept at the
Corporate Trust Office a Certificate Register in which, subject to such
reasonable regulations as it may prescribe, the Certificate Registrar shall
provide for the registration of Certificates and of transfers and exchanges of
Certificates as herein provided. The Trustee shall initially serve as
Certificate Registrar for the purpose of registering Certificates and transfers
and exchanges of Certificates as herein provided.

                  Upon surrender for registration of transfer of any Certificate
at any office or agency of the Certificate Registrar maintained for such purpose
pursuant to the foregoing paragraph and, in the case of a Class R Certificate,
upon satisfaction of the conditions set forth below, the Trustee on behalf of
the Trust shall execute, authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Certificates of the same aggregate
Percentage Interest.


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                  At the option of the Certificateholders, Certificates may be
exchanged for other Certificates in authorized denominations and the same
aggregate Percentage Interests, upon surrender of the Certificates to be
exchanged at any such office or agency. Whenever any Certificates are so
surrendered for exchange, the Trustee shall execute on behalf of the Trust and
authenticate and deliver the Certificates which the Certificateholder making the
exchange is entitled to receive. Every Certificate presented or surrendered for
registration of transfer or exchange shall (if so required by the Trustee or the
Certificate Registrar) be duly endorsed by, or be accompanied by a written
instrument of transfer satisfactory to the Trustee and the Certificate Registrar
duly executed by, the Holder thereof or his attorney duly authorized in writing.
In addition, with respect to each Class R Certificate, the holder thereof may
exchange, in the manner described above, such Class R Certificate for three
separate certificates, each representing such holder's respective Percentage
Interest in the Class R-1 Interest, the Class R-2 Interest and the Class R-3
Interest, respectively, in each case that was evidenced by the Class R
Certificate being exchanged.

                  (b) Except as provided in paragraph (c) below, the Book-Entry
Certificates shall at all times remain registered in the name of the Depository
or its nominee and at all times: (i) registration of such Certificates may not
be transferred by the Trustee except to another Depository; (ii) the Depository
shall maintain book-entry records with respect to the Certificate Owners and
with respect to ownership and transfers of such Certificates; (iii) ownership
and transfers of registration of such Certificates on the books of the
Depository shall be governed by applicable rules established by the Depository;
(iv) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants; (v) the Trustee shall for all
purposes deal with the Depository as representative of the Certificate Owners of
the Certificates for purposes of exercising the rights of Holders under this
Agreement, and requests and directions for and votes of such representative
shall not be deemed to be inconsistent if they are made with respect to
different Certificate Owners; (vi) the Trustee may rely and shall be fully
protected in relying upon information furnished by the Depository with respect
to its Depository Participants and furnished by the Depository Participants with
respect to indirect participating firms and Persons shown on the books of such
indirect participating firms as direct or indirect Certificate Owners; and (vii)
the direct participants of the Depository shall have no rights under this
Agreement under or with respect to any of the Certificates held on their behalf
by the Depository, and the Depository may be treated by the Trustee and its
agents, employees, officers and directors as the absolute owner of the
Certificates for all purposes whatsoever.

                  All transfers by Certificate Owners of Book-Entry Certificates
shall be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owners. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners that it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures. The parties hereto
are hereby authorized to execute a Letter of Representations with the Depository
or take such other action as may be necessary or desirable to register a
Book-Entry Certificate to the Depository. In the event of any conflict between
the terms of any such Letter of Representation and this Agreement, the terms of
this Agreement shall control.

                  (c) If (i)(x) the Depository or the Depositor advises the
Trustee in writing that the Depository is no longer willing or able to discharge
properly its responsibilities as Depository and


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(y) the Trustee or the Depositor is unable to locate a qualified successor, (ii)
the Depositor, at its sole option, with the consent of the Trustee, elects to
terminate the book-entry system through the Depository or (iii) after the
occurrence of a Master Servicer Event of Termination, the Certificate Owners of
the Book-Entry Certificates representing Percentage Interests of such Classes
aggregating not less than 51% advise the Trustee and Depository through the
Financial Intermediaries and the Depository Participants in writing that the
continuation of a book-entry system through the Depository to the exclusion of
definitive, fully registered certificates (the "Definitive Certificates") to
Certificate Owners is no longer in the best interests of the Certificate Owners.
Upon surrender to the Certificate Registrar of the Book-Entry Certificates by
the Depository, accompanied by registration instructions from the Depository for
registration, the Trustee shall, at the Depositor's expense, in the case of (ii)
above, or the Master Servicer's expense, in the case of (i) and (iii) above,
execute on behalf of the Trust and authenticate the Definitive Certificates.
Neither the Depositor nor the Trustee shall be liable for any delay in delivery
of such instructions and may conclusively rely on, and shall be protected in
relying on, such instructions. Upon the issuance of Definitive Certificates, the
Trustee, the Certificate Registrar, the Master Servicer, any Paying Agent and
the Depositor shall recognize the Holders of the Definitive Certificates as
Certificateholders hereunder.

                  (d) No transfer, sale, pledge or other disposition of any
Class C Certificate, Class P Certificate or Class R Certificate shall be made
unless such disposition is exempt from the registration requirements of the
Securities Act of 1933, as amended (the "1933 Act"), and any applicable state
securities laws or is made in accordance with the 1933 Act and laws. In the
event of any such transfer, except with respect to the initial transfer of any
Class C Certificate, Class P Certificate or Class R Certificates by the
Depositor (i) unless such transfer is made in reliance upon Rule 144A (as
evidenced by the investment letter delivered to the Trustee, in substantially
the form attached hereto as Exhibit J) under the 1933 Act, the Trustee and the
Depositor shall require a written Opinion of Counsel (which may be in-house
counsel) acceptable to and in form and substance reasonably satisfactory to the
Trustee and the Depositor that such transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from the
1933 Act or is being made pursuant to the 1933 Act, which Opinion of Counsel
shall not be an expense of the Trustee or the Depositor or (ii) the Trustee
shall require the transferor to execute a transferor certificate (in
substantially the form attached hereto as Exhibit L) and the transferee to
execute an investment letter (in substantially the form attached hereto as
Exhibit J) acceptable to and in form and substance reasonably satisfactory to
the Depositor and the Trustee certifying to the Depositor and the Trustee the
facts surrounding such transfer, which investment letter shall not be an expense
of the Trustee or the Depositor. The Holder of a Class C Certificate, Class P
Certificate or Class R Certificate desiring to effect such transfer shall, and
does hereby agree to, indemnify the Trustee and the Depositor against any
liability that may result if the transfer is not so exempt or is not made in
accordance with such federal and state laws.

                  No transfer of a Class C Certificate, Class P Certificate or
Class R Certificate or any interest therein shall be made to any Plan subject to
ERISA or Section 4975 of the Code, any Person acting, directly or indirectly, on
behalf of any such Plan or any Person acquiring such Certificates with "Plan
Assets" of a Plan within the meaning of the Department of Labor regulation
promulgated at 29 C.F.R. ss. 2510.3-101 ("Plan Assets"), as certified by such
transferee in the form of Exhibit M, unless the Depositor, the Trustee and the
Master Servicer are provided with an Opinion of Counsel which establishes to the
satisfaction of the Depositor, the Trustee and the Master Servicer that the


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purchase of such Certificates is permissible under applicable law, will not
constitute or result in any prohibited transaction under ERISA or Section 4975
of the Code and will not subject the Depositor, the Master Servicer, the Trustee
or the Trust Fund to any obligation or liability (including obligations or
liabilities under ERISA or Section 4975 of the Code) in addition to those
undertaken in this Agreement, which Opinion of Counsel shall not be an expense
of the Depositor, the Master Servicer, the Trustee or the Trust Fund. Neither a
certification nor an Opinion of Counsel will be required in connection with the
initial transfer of any such Certificate by the Depositor to an affiliate of the
Depositor (in which case, the Depositor or any affiliate thereof shall have
deemed to have represented that such affiliate is not a Plan or a Person
investing Plan Assets) and the Trustee shall be entitled to conclusively rely
upon a representation (which, upon the request of the Trustee, shall be a
written representation) from the Depositor of the status of such transferee as
an affiliate of the Depositor.

                  Each Transferee of a Mezzanine Certificate will be deemed to
have represented by virtue of its purchase or holding of such Certificate (or
interest therein) that either (a) such Transferee is not a Plan or purchasing
such Certificate with Plan Assets, (b) it has acquired and is holding such
Certificate in reliance on Prohibited Transaction Exemption ("PTE") 90-59, 55
Fed. Reg. 36724 (September 6, 1990), as amended by PTE 2000-58, 65 Fed. Reg.
67765 (November 13, 2000) (the "Exemption"), and that it understands that there
are certain conditions to the availability of the Exemption including that such
Certificate must be rated, at the time of purchase, not lower than "BBB-" (or
its equivalent) by a Rating Agency or (c) the following conditions are
satisfied: (i) such Transferee is an insurance company, (ii) the source of funds
used to purchase or hold such Certificate (or interest therein) is an "insurance
company general account" (as defined in U.S. Department of Labor Prohibited
Transaction Class Exemption ("PTCE") 95-60, and (iii) the conditions set forth
in Sections I and III of PTCE 95-60 have been satisfied.

                  If any Class C Certificate, Class P Certificate or Class R
Certificate or any interest therein is acquired or held in violation of the
provisions of the second preceding paragraph, the next preceding permitted
beneficial owner will be treated as the beneficial owner of that Certificate
retroactive to the date of transfer to the purported beneficial owner. Any
purported beneficial owner whose acquisition or holding of any such Certificate
or interest therein was effected in violation of the provisions of the preceding
paragraph shall indemnify and hold harmless the Depositor, the Master Servicer,
the NIMS Insurer, the Trustee and the Trust from and against any and all
liabilities, claims, costs or expenses incurred by those parties as a result of
that acquisition or holding.

                  Each Person who has or who acquires any Ownership Interest in
a Class R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and to
have irrevocably appointed the Depositor or its designee as its attorney-in-fact
to negotiate the terms of any mandatory sale under clause (v) below and to
execute all instruments of transfer and to do all other things necessary in
connection with any such sale, and the rights of each Person acquiring any
Ownership Interest in a Class R Certificate are expressly subject to the
following provisions:

                  (i) Each Person holding or acquiring any Ownership Interest in
         a Class R Certificate shall be a Permitted Transferee and shall
         promptly notify the Trustee of any change or impending change in its
         status as a Permitted Transferee.


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                  (ii) No Person shall acquire an Ownership Interest in a Class
         R Certificate unless such Ownership Interest is a PRO RATA undivided
         interest.

                  (iii) In connection with any proposed transfer of any
         Ownership Interest in a Class R Certificate, the Trustee shall as a
         condition to registration of the transfer, require delivery to it, in
         form and substance satisfactory to it, of each of the following:

                           (A) an affidavit in the form of Exhibit K hereto from
                  the proposed transferee to the effect that such transferee is
                  a Permitted Transferee and that it is not acquiring its
                  Ownership Interest in the Class R Certificate that is the
                  subject of the proposed transfer as a nominee, trustee or
                  agent for any Person who is not a Permitted Transferee; and

                           (B) a covenant of the proposed transferee to the
                  effect that the proposed transferee agrees to be bound by and
                  to abide by the transfer restrictions applicable to the Class
                  R Certificates.

                  (iv) Any attempted or purported transfer of any Ownership
         Interest in a Class R Certificate in violation of the provisions of
         this Section shall be absolutely null and void and shall vest no rights
         in the purported transferee. If any purported transferee shall, in
         violation of the provisions of this Section, become a Holder of a Class
         R Certificate, then the prior Holder of such Class R Certificate that
         is a Permitted Transferee shall, upon discovery that the registration
         of transfer of such Class R Certificate was not in fact permitted by
         this Section, be restored to all rights as Holder thereof retroactive
         to the date of registration of transfer of such Class R Certificate.
         The Trustee shall be under no liability to any Person for any
         registration of transfer of a Class R Certificate that is in fact not
         permitted by this Section or for making any distributions due on such
         Class R Certificate to the Holder thereof or taking any other action
         with respect to such Holder under the provisions of this Agreement so
         long as the Trustee received the documents specified in clause (iii).
         The Trustee shall be entitled to recover from any Holder of a Class R
         Certificate that was in fact not a Permitted Transferee at the time
         such distributions were made all distributions made on such Class R
         Certificate. Any such distributions so recovered by the Trustee shall
         be distributed and delivered by the Trustee to the prior Holder of such
         Class R Certificate that is a Permitted Transferee.

                  (v) If any Person other than a Permitted Transferee acquires
         any Ownership Interest in a Class R Certificate in violation of the
         restrictions in this Section, then the Trustee shall have the right but
         not the obligation, without notice to the Holder of such Class R
         Certificate or any other Person having an Ownership Interest therein,
         to notify the Depositor to arrange for the sale of such Class R
         Certificate. The proceeds of such sale, net of commissions (which may
         include commissions payable to the Depositor or its affiliates in
         connection with such sale), expenses and taxes due, if any, will be
         remitted by the Trustee to the previous Holder of such Class R
         Certificate that is a Permitted Transferee, except that in the event
         that the Trustee determines that the Holder of such Class R Certificate
         may be liable for any amount due under this Section or any other
         provisions of this Agreement, the Trustee may withhold a corresponding
         amount from such remittance as security for such


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         claim. The terms and conditions of any sale under this clause (v) shall
         be determined in the sole discretion of the Trustee and it shall not be
         liable to any Person having an Ownership Interest in a Class R
         Certificate as a result of its exercise of such discretion.

                  (vi) If any Person other than a Permitted Transferee acquires
         any Ownership Interest in a Class R Certificate in violation of the
         restrictions in this Section, then the Trustee upon receipt of
         reasonable compensation will provide to the Internal Revenue Service,
         and to the persons specified in Sections 860E(e)(3) and (6) of the
         Code, information needed to compute the tax imposed under Section
         860E(e)(5) of the Code on transfers of residual interests to
         disqualified organizations.

                  The foregoing provisions of this Section shall cease to apply
to transfers occurring on or after the date on which there shall have been
delivered to the Trustee and the NIMS Insurer, in form and substance
satisfactory to the Trustee and the NIMS Insurer, (i) written notification from
each Rating Agency that the removal of the restrictions on transfer set forth in
this Section will not cause such Rating Agency to downgrade its rating of the
Certificates and (ii) an Opinion of Counsel to the effect that such removal will
not cause any REMIC created hereunder to fail to qualify as a REMIC.

                  (e) No service charge shall be made for any registration of
transfer or exchange of Certificates of any Class, but the Certificate Registrar
may require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer or exchange of Certificates.

                  All Certificates surrendered for registration of transfer or
exchange shall be canceled by the Certificate Registrar and disposed of pursuant
to its standard procedures.

                  SECTION 5.03. Mutilated, Destroyed, Lost or Stolen
                                Certificates.

                  If (i) any mutilated Certificate is surrendered to the
Certificate Registrar or the Certificate Registrar receives evidence to its
satisfaction of the destruction, loss or theft of any Certificate and (ii) there
is delivered to the Trustee, the Depositor, the NIMS Insurer and the Certificate
Registrar such security or indemnity as may be required by them to save each of
them harmless, then, in the absence of notice to the Trustee or the Certificate
Registrar that such Certificate has been acquired by a bona fide purchaser, the
Trustee shall execute on behalf of the Trust, authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like tenor and Percentage Interest. Upon the
issuance of any new Certificate under this Section, the Trustee or the
Certificate Registrar may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Trustee and the
Certificate Registrar) in connection therewith. Any duplicate Certificate issued
pursuant to this Section, shall constitute complete and indefeasible evidence of
ownership in the Trust, as if originally issued, whether or not the lost, stolen
or destroyed Certificate shall be found at any time.



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                  SECTION 5.04. Persons Deemed Owners.

                  The Master Servicer, the Depositor, the Trustee, the NIMS
Insurer, the Certificate Registrar, any Paying Agent and any agent of the Master
Servicer, the Depositor, the Trustee, the NIMS Insurer, the Certificate
Registrar, any Paying Agent or the Trustee may treat the Person, including a
Depository, in whose name any Certificate is registered as the owner of such
Certificate for the purpose of receiving distributions pursuant to Section 4.01
and for all other purposes whatsoever, and none of the Master Servicer, the
Trust, the Trustee nor any agent of any of them shall be affected by notice to
the contrary.

                  SECTION 5.05. Appointment of Paying Agent.

                  (a) The Paying Agent shall make distributions to
Certificateholders from the Distribution Account pursuant to Section 4.01 and
shall report the amounts of such distributions to the Trustee. The duties of the
Paying Agent may include the obligation (i) to withdraw funds from the
Collection Account pursuant to Section 3.11(a) and for the purpose of making the
distributions referred to above and (ii) to distribute statements and provide
information to Certificateholders as required hereunder. The Paying Agent
hereunder shall at all times be an entity duly incorporated and validly existing
under the laws of the United States of America or any state thereof, authorized
under such laws to exercise corporate trust powers and subject to supervision or
examination by federal or state authorities. The Paying Agent shall initially be
the Trustee. The Trustee may appoint a successor to act as Paying Agent, which
appointment shall be reasonably satisfactory to the Depositor and the NIMS
Insurer.

                  (b) The Trustee shall cause the Paying Agent (if other than
the Trustee) to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee that such Paying Agent shall hold all
sums, if any, held by it for payment to the Certificateholders in trust for the
benefit of the Certificateholders entitled thereto until such sums shall be paid
to such Certificateholders and shall agree that it shall comply with all
requirements of the Code regarding the withholding of payments in respect of
Federal income taxes due from Certificate Owners and otherwise comply with the
provisions of this Agreement applicable to it.




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                                   ARTICLE VI

                      THE MASTER SERVICER AND THE DEPOSITOR

                  SECTION 6.01. Liability of the Master Servicer and the
                                Depositor.

                  The Master Servicer shall be liable in accordance herewith
only to the extent of the obligations specifically imposed upon and undertaken
by Master Servicer herein. The Depositor shall be liable in accordance herewith
only to the extent of the obligations specifically imposed upon and undertaken
by the Depositor.

                  SECTION 6.02. Merger or Consolidation of, or Assumption of the
                                Obligations of, the Master Servicer or the
                                Depositor.

                  Any entity into which the Master Servicer or Depositor may be
merged or consolidated, or any entity resulting from any merger, conversion or
consolidation to which the Master Servicer or the Depositor shall be a party, or
any corporation succeeding to the business of the Master Servicer or the
Depositor, shall be the successor of the Master Servicer or the Depositor, as
the case may be, 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 Master Servicer
shall satisfy all the requirements of Section 7.02 with respect to the
qualifications of a successor Master Servicer.

                  SECTION 6.03. Limitation on Liability of the Master Servicer
                                and Others.

                  Neither the Master Servicer or the Depositor nor any of the
directors or officers or employees or agents of the Master Servicer or the
Depositor shall be under any liability to the Trust or the Certificateholders
for any action taken or for refraining from the taking of any action by the
Master Servicer or the Depositor in good faith pursuant to this Agreement, or
for errors in judgment; provided, however, that this provision shall not protect
the Master Servicer, the Depositor or any such Person against any liability
which would otherwise be imposed by reason of its willful misfeasance, bad faith
or negligence in the performance of duties of the Master Servicer or the
Depositor, as the case may be, or by reason of its reckless disregard of its
obligations and duties of the Master Servicer or the Depositor, as the case may
be, hereunder; provided, further, that this provision shall not be construed to
entitle the Master Servicer to indemnity in the event that amounts advanced by
the Master Servicer to retire any senior lien exceed Liquidation Proceeds (in
excess of related liquidation expenses) realized with respect to the related
Mortgage Loan. The preceding sentence shall not limit the obligations of the
Master Servicer pursuant to Section 8.05. The Master Servicer and any director
or officer or employee or agent of the Master Servicer may rely in good faith on
any document of any kind prima facie properly executed and submitted by any
Person respecting any matters arising hereunder. The Master Servicer and the
Depositor, and any director or officer or employee or agent of the Master
Servicer or the Depositor, shall be indemnified by the Trust and held harmless
against any loss, liability or expense incurred in connection with any legal
action relating to this Agreement or the Certificates, other than any loss,
liability or expense related to any specific Mortgage Loan or Mortgage Loans
(except as any such loss, liability or expense shall be otherwise reimbursable
pursuant to this Agreement) and any loss, liability or expense incurred


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by reason of its willful misfeasance, bad faith or negligence in the performance
of duties hereunder or by reason of its reckless disregard of obligations and
duties hereunder. The Master Servicer or the Depositor may undertake any such
action which it may deem necessary or desirable in respect of this Agreement,
and the rights and duties of the parties hereto and the interests of the
Certificateholders hereunder. In such event, unless the Depositor or the Master
Servicer acts without the consent of Holders of Certificates entitled to at
least 51% of the Voting Rights, the reasonable legal expenses and costs of such
action and any liability resulting therefrom shall be expenses, costs and
liabilities of the Trust and the Master Servicer shall be entitled to be
reimbursed therefor from the Collection Account as and to the extent provided in
Section 3.11, any such right of reimbursement being prior to the rights of the
Certificateholders to receive any amount in the Collection Account. The Master
Servicer's right to indemnity or reimbursement pursuant to this Section shall
survive any resignation or termination of the Master Servicer pursuant to
Section 6.04 or 7.01 with respect to any losses, expenses, costs or liabilities
arising prior to such resignation or termination (or arising from events that
occurred prior to such resignation or termination). This paragraph shall apply
to the Master Servicer solely in its capacity as Master Servicer hereunder and
in no other capacities.

                  The Master Servicer (except the Trustee if it is required to
succeed the Master Servicer hereunder) indemnifies and holds the Trustee, the
Depositor, the NIMS Insurer and each Certificateholder harmless against any and
all claims, losses, penalties, fines, forfeitures, reasonable legal fees and
related costs, judgments, and any other costs, fees and expenses that the
Trustee, the Depositor, the NIMS Insurer and any Certificateholder may sustain
in any way related to the failure of the Master Servicer to perform its duties
and service the Mortgage Loans in compliance with the terms of this Agreement.
The Master Servicer shall immediately notify the Trustee, the Depositor, the
NIMS Insurer and each Certificateholder if a claim is made that may result in
such claims, losses, penalties, fines, forfeitures, legal fees or related costs,
judgments, or any other costs, fees and expenses, and the Master Servicer shall
assume (with the consent of the Trustee) the defense of any such claim and pay
all expenses in connection therewith, including reasonable counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be entered
against the Master Servicer, the Trustee, the Depositor, the NIMS Insurer and/or
Certificateholder in respect of such claim. The provisions of this paragraph
shall survive the termination of this Agreement and the payment of the
outstanding Certificates.

                  SECTION 6.04. Master Servicer Not to Resign.

                  Subject to the provisions of Section 7.01 and Section 6.02,
the Master Servicer shall not resign from the obligations and duties hereby
imposed on it except (i) upon determination that the performance of its
obligations or duties hereunder are no longer permissible under applicable law
or are in material conflict by reason of applicable law with any other
activities carried on by it or its subsidiaries or Affiliates, the other
activities of the Master Servicer so causing such a conflict being of a type and
nature carried on by the Master Servicer or its subsidiaries or Affiliates at
the date of this Agreement or (ii) upon satisfaction of the following
conditions: (a) the Master Servicer has proposed a successor servicer to the
Trustee and the NIMS Insurer in writing and such proposed successor servicer is
reasonably acceptable to the Trustee and the NIMS Insurer and (b) each Rating
Agency shall have delivered a letter to the Trustee and the NIMS Insurer prior
to the appointment of the successor servicer stating that the proposed
appointment of such successor servicer as Master


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Servicer hereunder will not result in the reduction or withdrawal of the then
current rating of the Certificates; provided, however, that no such resignation
by the Master Servicer shall become effective until such successor servicer or,
in the case of (i) above, the Trustee shall have assumed the Master Servicer's
responsibilities and obligations hereunder or the Trustee shall have designated,
with the consent of the NIMS Insurer, a successor servicer in accordance with
Section 7.02. Any such resignation shall not relieve the Master Servicer of
responsibility for any of the obligations specified in Sections 7.01 and 7.02 as
obligations that survive the resignation or termination of the Master Servicer.
Any such determination permitting the resignation of the Master Servicer
pursuant to clause (i) above shall be evidenced by an Opinion of Counsel to such
effect delivered to the Trustee and the NIMS Insurer. Any such determination
permitting the resignation of the Master Servicer shall be evidenced by an
Opinion of Counsel to such effect delivered to the Trustee and the NIMS Insurer.

                  SECTION 6.05. Delegation of Duties.

                  In the ordinary course of business, the Master Servicer at any
time may delegate any of its duties hereunder to any Person, including any of
its Affiliates, who agrees to conduct such duties in accordance with standards
comparable to those set forth in Section 3.01. Such delegation shall not relieve
the Master Servicer of its liabilities and responsibilities with respect to such
duties and shall not constitute a resignation within the meaning of Section
6.04. Except as provided in Section 3.02, no such delegation is permitted that
results in the delegee subservicing any Mortgage Loans. The Master Servicer
shall provide the Trustee and the NIMS Insurer with 60 days prior written notice
prior to the delegation of any of its duties to any Person other than any of the
Master Servicer's Affiliates or their respective successors and assigns.

                  SECTION 6.06. [Reserved].

                  SECTION 6.07. Inspection.

                  The Master Servicer, in its capacity as Originator and Master
Servicer, shall afford the Trustee and the NIMS Insurer, upon reasonable advance
notice, during normal business hours, access to all records maintained by the
Master Servicer in respect of its rights and obligations hereunder and access to
officers of the Master Servicer responsible for such obligations. Upon request,
the Master Servicer shall furnish to the Trustee and the NIMS Insurer its most
recent publicly available financial statements and such other information
relating to its capacity to perform its obligations under this Agreement.




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                                   ARTICLE VII

                                     DEFAULT

                  SECTION 7.01. Master Servicer Events of Termination.

                  (a) If any one of the following events ("Master Servicer
Events of Termination") shall occur and be continuing:

                  (i) (A) The failure by the Master Servicer to make any
         Advance; or (B) any other failure by the Master Servicer to deposit in
         the Collection Account or Distribution Account any deposit required to
         be made under the terms of this Agreement which continues unremedied
         for a period of one Business Day after the date upon which written
         notice of such failure shall have been given to the Master Servicer by
         the Trustee or to the Trustee by the NIMS Insurer or any Holders of a
         Regular Certificate evidencing at least 25% of the Voting Rights; or

                  (ii) The failure by the Master Servicer to make any required
         Servicing Advance which failure continues unremedied for a period of 30
         days, or the failure by the Master Servicer duly to observe or perform,
         in any material respect, any other covenants, obligations or agreements
         of the Master Servicer as set forth in this Agreement, which failure
         continues unremedied for a period of 30 days, after the date (A) on
         which written notice of such failure, requiring the same to be
         remedied, shall have been given to the Master Servicer by the Trustee
         or to the Trustee by the NIMS Insurer or any Holders of a Regular
         Certificate evidencing at least 25% of the Voting Rights or (B) of
         actual knowledge of such failure by a Servicing Officer of the Master
         Servicer; or

                  (iii) The entry against the Master Servicer of a decree or
         order by a court or agency or supervisory authority having jurisdiction
         in the premises for the appointment of a trustee, conservator, receiver
         or liquidator in any insolvency, conservatorship, receivership,
         readjustment of debt, marshalling of assets and liabilities or similar
         proceedings, or for the winding up or liquidation of its affairs, and
         the continuance of any such decree or order unstayed and in effect for
         a period of 60 days; or

                  (iv) The Master Servicer shall voluntarily go into
         liquidation, consent to the appointment of a conservator or receiver or
         liquidator or similar person in any insolvency, readjustment of debt,
         marshalling of assets and liabilities or similar proceedings of or
         relating to the Master Servicer or of or relating to all or
         substantially all of its property; or a decree or order of a court or
         agency or supervisory authority having jurisdiction in the premises for
         the appointment of a conservator, receiver, liquidator or similar
         person in any insolvency, readjustment of debt, marshalling of assets
         and liabilities or similar proceedings, or for the winding-up or
         liquidation of its affairs, shall have been entered against the Master
         Servicer and such decree or order shall have remained in force
         undischarged, unbonded or unstayed for a period of 60 days; or the
         Master 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


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         insolvency or reorganization statute, make an assignment for the
         benefit of its creditors or voluntarily suspend payment of its
         obligations; or

                  (v) A Delinquency Master Servicer Termination Trigger has
         occurred and is continuing;

                  (b) then, and in each and every such case, so long as a Master
Servicer Event of Termination shall not have been remedied within the applicable
grace period, (x) with respect solely to clause (i)(A) above, if such Advance is
not made by 5:00 P.M., New York time, on the Business Day immediately following
the Master Servicer Remittance Date (provided the Trustee shall give the Master
Servicer notice of such failure to advance by 5:00 P.M. New York time on the
Master Servicer Remittance Date), the Trustee shall, at the direction of the
NIMS Insurer, terminate all of the rights and obligations of the Master Servicer
under this Agreement and the Trustee, or a successor servicer appointed in
accordance with Section 7.02, shall immediately make such Advance and assume,
pursuant to Section 7.02, the duties of a successor Master Servicer, (y) in the
case of (i)(B), (ii), (iii) and (iv) above, the Trustee shall, at the written
direction of the NIMS Insurer or the Holders of each Class of Regular
Certificates evidencing Percentage Interests aggregating not less than 51%, by
notice then given in writing to the Master Servicer and to the Trustee and (z)
in the case of (v) above, the Trustee shall, at the direction of the NIMS
Insurer, by notice then given in writing to the Master Servicer and to the
Trustee, terminate all of the rights and obligations of the Master Servicer as
servicer under this Agreement. Any such notice to the Master Servicer shall also
be given to each Rating Agency, the Depositor and the Originator. On or after
the receipt by the Master Servicer (and by the Trustee if such notice is given
by the Holders) of such written notice, all authority and power of the Master
Servicer under this Agreement, whether with respect to the Certificates or the
Mortgage Loans or otherwise, shall pass to and be vested in the Trustee pursuant
to and under this Section; and, without limitation, and the Trustee is hereby
authorized and empowered to execute and deliver, on behalf of the Master
Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to 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 of each Mortgage Loan and related
documents or otherwise. The Master Servicer agrees to cooperate with the Trustee
(or the applicable successor Master Servicer) in effecting the termination of
the responsibilities and rights of the Master Servicer hereunder, including,
without limitation, the delivery to the Trustee of all documents and records
requested by it to enable it to assume the Master Servicer's functions under
this Agreement within ten Business Days subsequent to such notice, the transfer
within one Business Day subsequent to such notice to the Trustee (or the
applicable successor Master Servicer) for the administration by it of all cash
amounts that shall at the time be held by the Master Servicer and to be
deposited by it in the Collection Account, the Distribution Account, any REO
Account or any Servicing Account or that have been deposited by the Master
Servicer in such accounts or thereafter received by the Master Servicer with
respect to the Mortgage Loans or any REO Property received by the Master
Servicer. All reasonable costs and expenses (including attorneys' fees) incurred
in connection with transferring the Mortgage Files to the successor Master
Servicer and amending this Agreement to reflect such succession as Master
Servicer pursuant to this Section shall be paid by the predecessor Master
Servicer (or if the predecessor Master Servicer is the Trustee, the initial
Master Servicer) upon presentation of reasonable documentation of such costs and
expenses and to the extent not paid by the Master Servicer, by the Trust.


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                  (c) In connection with any failure by the Master Servicer to
make any remittance required to be made by the Master Servicer to the
Distribution Account pursuant to this Section 7.01 on the day and by the time
such remittance is required to be made under the terms of this Section 7.01
(without giving effect to any grace or cure period), the Master Servicer shall
pay to the Trustee for the account of the Trustee interest at the Prime Rate on
any amount not timely remitted from and including the day such remittance was
required to be made to, but not including, the day on which such remittance was
actually made.

                  SECTION 7.02. Trustee to Act; Appointment of Successor.

                  (a) Within 90 days of the time the Master Servicer (and the
Trustee, if notice is sent by the Holders) receives a notice of termination
pursuant to Section 7.01 or 6.04, the Trustee (or such other successor Master
Servicer as is approved in accordance with this Agreement) shall be the
successor in all respects to the Master Servicer in its capacity as servicer
under this Agreement and the transactions set forth or provided for herein and
shall be subject to all the responsibilities, duties and liabilities relating
thereto placed on the Master Servicer by the terms and provisions hereof arising
on and after its succession. Notwithstanding the foregoing, the parties hereto
agree that the Trustee, in its capacity as successor Master Servicer,
immediately will assume all of the obligations of the Master Servicer to make
advances. Notwithstanding the foregoing, the Trustee, in its capacity as
successor Master Servicer, shall not be responsible for the lack of information
and/or documents that it cannot obtain through reasonable efforts. As
compensation therefor, the Trustee (or such other successor Master Servicer)
shall be entitled to such compensation as the Master Servicer would have been
entitled to hereunder if no such notice of termination had been given.
Notwithstanding the above, (i) if the Trustee is unwilling to act as successor
Master Servicer or (ii) if the Trustee is legally unable so to act, the Trustee
shall appoint or petition a court of competent jurisdiction to appoint, any
established housing and home finance institution, bank or other mortgage loan or
home equity loan servicer having a net worth of not less than $50,000,000 as the
successor to the Master Servicer hereunder in the assumption of all or any part
of the responsibilities, duties or liabilities of the Master Servicer hereunder;
provided, that the appointment of any such successor Master Servicer shall be
approved by the NIMS Insurer (such approval not to be unreasonably withheld), as
evidenced by the prior written consent of the NIMS Insurer, and will not result
in the qualification, reduction or withdrawal of the ratings assigned to the
Certificates by the Rating Agencies as evidenced by a letter to such effect from
the Rating Agencies. Pending appointment of a successor to the Master Servicer
hereunder, unless the Trustee is prohibited by law from so acting, the Trustee
shall act in such capacity as hereinabove provided. In connection with such
appointment and assumption, the successor shall be entitled to receive
compensation out of payments on Mortgage Loans in an amount equal to the
compensation which the Master Servicer would otherwise have received pursuant to
Section 3.18 (or such other compensation as the Trustee and such successor shall
agree, not to exceed the Servicing Fee). The appointment of a successor Master
Servicer shall not affect any liability of the predecessor Master Servicer which
may have arisen under this Agreement prior to its termination as Master Servicer
to pay any deductible under an insurance policy pursuant to Section 3.14 or to
indemnify the Trustee or the NIMS Insurer pursuant to Section 6.03), nor shall
any successor Master Servicer be liable for any acts or omissions of the
predecessor Master Servicer or for any breach by such Master Servicer of any of
its representations or warranties contained herein or in any related document or
agreement. The Trustee and such successor shall take such action, consistent
with this Agreement, as shall be necessary to


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effectuate any such succession. All Servicing Transfer Costs shall be paid by
the predecessor Master Servicer upon presentation of reasonable documentation of
such costs, and if such predecessor Master Servicer defaults in its obligation
to pay such costs, such costs shall be paid by the successor Master Servicer or
the Trustee (in which case the successor Master Servicer or the Trustee, as
applicable, shall be entitled to reimbursement therefor from the assets of the
Trust).

                  (b) Any successor to the Master Servicer, including the
Trustee, shall during the term of its service as servicer continue to service
and administer the Mortgage Loans for the benefit of Certificateholders, and
maintain in force a policy or policies of insurance covering errors and
omissions in the performance of its obligations as Master Servicer hereunder and
a Fidelity Bond in respect of its officers, employees and agents to the same
extent as the Master Servicer is so required pursuant to Section 3.14.

                  SECTION 7.03. Waiver of Defaults.

                  The Majority Certificateholders may, on behalf of all
Certificateholders and with the consent of the NIMS Insurer, waive any events
permitting removal of the Master Servicer as servicer pursuant to this Article
VII, provided, however, that the Majority Certificateholders may not waive a
default in making a required distribution on a Certificate without the consent
of the Holder of such Certificate and the consent of the NIMS Insurer. Upon any
waiver of a past default, such default shall cease to exist and any Master
Servicer Event of Termination 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 thereto except to the
extent expressly so waived. Notice of any such waiver shall be given by the
Trustee to the Rating Agencies and the NIMS Insurer.

                  SECTION 7.04. Notification to Certificateholders.

                  (a) Upon any termination or appointment of a successor to the
Master Servicer pursuant to this Article VII or Section 6.04, the Trustee shall
give prompt written notice thereof to the Certificateholders at their respective
addresses appearing in the Certificate Register, the NIMS Insurer and each
Rating Agency.

                  (b) No later than 60 days after the occurrence of any event
which constitutes or which, with notice or a lapse of time or both, would
constitute a Master Servicer Event of Termination for five Business Days after a
Responsible Officer of the Trustee becomes aware of the occurrence of such an
event, the Trustee shall transmit by mail to all Certificateholders and to the
NIMS Insurer notice of such occurrence unless such default or Master Servicer
Event of Termination shall have been waived or cured.

                  SECTION 7.05. Survivability of Master Servicer Liabilities.

                  Notwithstanding anything herein to the contrary, upon
termination of the Master Servicer hereunder, any liabilities of the Master
Servicer which accrued prior to such termination shall survive such termination.



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                                  ARTICLE VIII

                                   THE TRUSTEE

                  SECTION 8.01. Duties of Trustee.

                  The Trustee, prior to the occurrence of a Master Servicer
Event of Termination and after the curing of all Master Servicer Events of
Termination which may have occurred, undertakes to perform such duties and only
such duties as are specifically set forth in this Agreement. If a Master
Servicer Event of Termination has occurred (which has not been cured) of which a
Responsible Officer has knowledge, the Trustee shall exercise such of the rights
and powers vested in it by this Agreement, and use the same degree of care and
skill in their exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.

                  The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement; provided, however, that the
Trustee will not be responsible for the accuracy or content of any such
resolutions, certificates, statements, opinions, reports, documents or other
instruments. If any such instrument is found not to conform to the requirements
of this Agreement in a material manner the Trustee shall take such action as it
deems appropriate to have the instrument corrected, and if the instrument is not
corrected to the Trustee's satisfaction, the Trustee will provide notice thereof
to the Certificateholders and the NIMS Insurer.

                  No provision of this Agreement shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act or its own misconduct; provided, however, that:

                  (i) prior to the occurrence of a Master Servicer Event of
         Termination, and after the curing of all such Master Servicer Events of
         Termination which may have occurred, the duties and obligations of the
         Trustee shall be determined solely by the express provisions of this
         Agreement, the Trustee shall not be liable except for the performance
         of such duties and obligations as are specifically set forth in this
         Agreement, no implied covenants or obligations shall be read into this
         Agreement against the Trustee and, in the absence of bad faith on the
         part of the Trustee, the Trustee may conclusively rely, as to the truth
         of the statements and the correctness of the opinions expressed
         therein, upon any certificates or opinions furnished to the Trustee and
         conforming to the requirements of this Agreement;

                  (ii) the Trustee shall not be personally liable for an error
         of judgment made in good faith by a Responsible Officer of the Trustee,
         unless it shall be proved that the Trustee was negligent in
         ascertaining or investigating the facts related thereto;

                  (iii) the Trustee shall not be personally liable with respect
         to any action taken, suffered or omitted to be taken by it in good
         faith in accordance with the direction of the NIMS Insurer or the
         Majority Certificateholders relating to the time, method and place of


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         conducting any proceeding for any remedy available to the Trustee, or
         exercising or omitting to exercise any trust or power conferred upon
         the Trustee, under this Agreement; and

                  (iv) the Trustee shall not be charged with knowledge of any
         failure by the Master Servicer to comply with the obligations of the
         Master Servicer referred to in clauses (i) and (ii) of Section 7.01(a)
         unless a Responsible Officer of the Trustee at the Corporate Trust
         Office obtains actual knowledge of such failure or the Trustee receives
         written notice of such failure from the Master Servicer, the NIMS
         Insurer or the Majority Certificateholders.

                  The Trustee shall not be required to expend or risk its own
funds or otherwise incur financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it, and
none of the provisions contained in this Agreement shall in any event require
the Trustee to perform, or be responsible for the manner of performance of, any
of the obligations of the Master Servicer under this Agreement, except during
such time, if any, as the Trustee shall be the successor to, and be vested with
the rights, duties, powers and privileges of, the Master Servicer in accordance
with the terms of this Agreement.

                  The Trustee is hereby directed to execute and deliver the Cap
Contracts for the benefit of the Trust Fund.

                  SECTION 8.02. Certain Matters Affecting the Trustee.

                  Except as otherwise provided in Section 8.01:

                  (i) the Trustee may request and rely upon, and shall be
         protected in acting or refraining from acting upon, any resolution,
         Officers' Certificate, certificate of auditors or any other
         certificate, statement, instrument, opinion, report, notice, request,
         consent, order, appraisal, bond or other paper or document reasonably
         believed by it to be genuine and to have been signed or presented by
         the proper party or parties, and the manner of obtaining consents and
         of evidencing the authorization of the execution thereof by
         Certificateholders shall be subject to such reasonable regulations as
         the Trustee may prescribe;

                  (ii) the Trustee may consult with counsel and any Opinion of
         Counsel shall be full and complete authorization and protection in
         respect of any action taken or suffered or omitted by it hereunder in
         good faith and in accordance with such Opinion of Counsel;

                  (iii) the Trustee shall be under no obligation to exercise any
         of the rights or powers vested in it by this Agreement, or to
         institute, conduct or defend any litigation hereunder or in relation
         hereto, at the request, order or direction of any of the
         Certificateholders or the NIMS Insurer, pursuant to the provisions of
         this Agreement, unless such Certificateholders or the NIMS Insurer, as
         applicable, shall have offered to the Trustee reasonable security or
         indemnity against the costs, expenses and liabilities which may be
         incurred therein or thereby; the right of the Trustee to perform any
         discretionary act enumerated in this


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         Agreement shall not be construed as a duty, and the Trustee shall not
         be answerable for other than its negligence or willful misconduct in
         the performance of any such act;

                  (iv) the Trustee shall not be personally liable for any action
         taken, suffered or omitted by it in good faith and believed by it to be
         authorized or within the discretion or rights or powers conferred upon
         it by this Agreement;

                  (v) prior to the occurrence of a Master Servicer Event of
         Termination and after the curing of all Master Servicer Events of
         Termination which may have occurred, the Trustee shall not be bound to
         make any investigation into the facts or matters stated in any
         resolution, certificate, statement, instrument, opinion, report,
         notice, request, consent, order, approval, bond or other paper or
         documents, unless requested in writing to do so by the NIMS Insurer or
         the Majority Certificateholder; provided, however, that if the payment
         within a reasonable time to the Trustee of the costs, expenses or
         liabilities likely to be incurred by it in the making of such
         investigation is, in the opinion of the Trustee, not reasonably assured
         to the Trustee by the security afforded to it by the terms of this
         Agreement, the Trustee may require reasonable indemnity against such
         cost, expense or liability as a condition to such proceeding. The
         reasonable expense of every such examination shall be paid by the
         Master Servicer or the NIMS Insurer (if requested by the NIMS Insurer)
         or, if paid by the Trustee, shall be reimbursed by the Master Servicer
         or the NIMS Insurer (if requested by the NIMS Insurer) upon demand and,
         if not reimbursed by the Master Servicer or the NIMS Insurer (if
         requested by the NIMS Insurer), shall be reimbursed by the Trust.
         Nothing in this clause (v) shall derogate from the obligation of the
         Master Servicer to observe any applicable law prohibiting disclosure of
         information regarding the Mortgagors;

                  (vi) the Trustee shall not be accountable, shall have no
         liability and makes no representation as to any acts or omissions
         hereunder of the Master Servicer until such time as the Trustee may be
         required to act as Master Servicer pursuant to Section 7.02 and
         thereupon only for the acts or omissions of the Trustee as successor
         Master Servicer;

                  (vii) the Trustee may execute any of the trusts or powers
         hereunder or perform any duties hereunder either directly or by or
         through agents or attorneys or a custodian; and

                  (viii) the right of the Trustee to perform any discretionary
         act enumerated in this Agreement shall not be construed as a duty, and
         the Trustee shall not be answerable for other than its negligence or
         willful misconduct in the performance of such act.

                  SECTION 8.03. Trustee Not Liable for Certificates or Mortgage
                                Loans.

                  The recitals contained herein and in the Certificates (other
than the authentication of the Trustee on the Certificates) shall be taken as
the statements of the Depositor, and the Trustee assumes no responsibility for
the correctness of the same. The Trustee makes no representations as to the
validity or sufficiency of this Agreement or of the Certificates (other than the
signature and authentication of the Trustee on the Certificates) or of any
Mortgage Loan or related document. The Trustee shall not be accountable for the
use or application by the Master Servicer, or for the use or


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application of any funds paid to the Master Servicer in respect of the Mortgage
Loans or deposited in or withdrawn from the Collection Account by the Master
Servicer. The Trustee shall at no time have any responsibility or liability for
or with respect to the legality, validity and enforceability of any Mortgage or
any Mortgage Loan, or the perfection and priority of any Mortgage or the
maintenance of any such perfection and priority, or for or with respect to the
sufficiency of the Trust or its ability to generate the payments to be
distributed to Certificateholders under this Agreement, including, without
limitation: the existence, condition and ownership of any Mortgaged Property;
the existence and enforceability of any hazard insurance thereon (other than if
the Trustee shall assume the duties of the Master Servicer pursuant to Section
7.02); the validity of the assignment of any Mortgage Loan to the Trustee or of
any intervening assignment; the completeness of any Mortgage Loan; the
performance or enforcement of any Mortgage Loan (other than if the Trustee shall
assume the duties of the Master Servicer pursuant to Section 7.02); the
compliance by the Depositor, the Originator, the Seller or the Master Servicer
with any warranty or representation made under this Agreement or in any related
document or the accuracy of any such warranty or representation prior to the
Trustee's receipt of notice or other discovery of any non-compliance therewith
or any breach thereof; any investment of monies by or at the direction of the
Master Servicer or any loss resulting therefrom, it being understood that the
Trustee shall remain responsible for any Trust property that it may hold in its
individual capacity; the acts or omissions of any of the Master Servicer (other
than if the Trustee shall assume the duties of the Master Servicer pursuant to
Section 7.02), any Sub-Servicer or any Mortgagor; any action of the Master
Servicer (other than if the Trustee shall assume the duties of the Master
Servicer pursuant to Section 7.02), or any Sub- Servicer taken in the name of
the Trustee; the failure of the Master Servicer or any Sub-Servicer to act or
perform any duties required of it as agent of the Trustee hereunder; or any
action by the Trustee taken at the instruction of the Master Servicer (other
than if the Trustee shall assume the duties of the Master Servicer pursuant to
Section 7.02); provided, however, that the foregoing shall not relieve the
Trustee of its obligation to perform its duties under this Agreement, including,
without limitation, the Trustee's duty to review the Mortgage Files pursuant to
Section 2.01. The Trustee shall have no responsibility for filing any financing
or continuation statement in any public office at any time or to otherwise
perfect or maintain the perfection of any security interest or lien granted to
it hereunder (unless the Trustee shall have become the successor Master
Servicer).

                  SECTION 8.04. Trustee May Own Certificates.

                  The Trustee in its individual or any other capacity may become
the owner or pledgee of Certificates with the same rights as it would have if it
were not Trustee and may transact any banking and trust business with the
Originator, the Master Servicer, the Depositor or their Affiliates.

                  SECTION 8.05. Trustee Fee and Expenses.

                  (a) The Trustee shall withdraw from the Distribution Account
on each Distribution Date and pay to itself the Trustee Fee. The Trustee shall
be reimbursed from the Trust Fund for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any of the
provisions of this Agreement (not including expenses, disbursements and advances
incurred or made by the Trustee including the compensation and the expenses and
disbursements of its agents and counsel, in the ordinary course of the Trustee's
performance in accordance with the provisions of this Agreement) up to a limit
of $25,000 per calendar year except


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any such expense, disbursement or advance as may arise from its negligence or
bad faith or which is the responsibility of Certificateholders or the Trustee
hereunder. In addition, the Trustee and its officers, directors, employees and
agents shall be entitled to be indemnified for, and held harmless by the Trust
Fund against, any and all losses, liabilities, damages, claims or expenses
incurred in connection with any legal action relating to this Agreement or the
Certificates up to a limit of $600,000 per calendar year, other than (i) any
loss, liability or expense incurred by reason of willful misfeasance, bad faith
or negligence of the Trustee in the performance of its duties hereunder or by
reason of the Trustee's reckless disregard of obligations and duties hereunder
or (ii) resulting from a breach of the Master Servicer's obligations and duties
under this Agreement and the Mortgage Loans (for which the Master Servicer shall
indemnify pursuant to Section 8.05(b)). Notwithstanding anything herein to the
contrary, the Trustee shall be reimbursed from the Trust Fund for all Servicing
Transfer Costs without regard to any annual limitations. This section shall
survive termination of this Agreement or the resignation or removal of any
Trustee hereunder.

                  (b) The Master Servicer agrees to indemnify the Trustee from,
and hold it harmless against, any loss, liability or expense resulting from a
breach of the Master Servicer's obligations and duties under this Agreement.
Such indemnity shall survive the termination or discharge of this Agreement and
the resignation or removal of the Trustee. Any payment hereunder made by the
Master Servicer to the Trustee shall be from the Master Servicer's own funds,
without reimbursement from the Trust Fund therefor.

                  (c) Any amounts payable to the Trustee, or any director,
officer, employee or agent of the Trustee in respect of the indemnification
provided by this Section 8.05, or pursuant to any other right of reimbursement
from the Trust Fund that the Trustee, or any director, officer, employee or
agent of the Trustee, may have hereunder in its capacity as such, may be
withdrawn by the Trustee from the Distribution Account at any time.

                  (d) The limitations on the indemnification provided to the
Trustee set forth in Section 8.05(a) above shall remain in effect for so long as
any series of notes issued pursuant to one or more Indentures, as set forth in
Section 1.04 remain outstanding.

                  SECTION 8.06. Eligibility Requirements for Trustee.

                  The Trustee hereunder shall at all times be an entity duly
organized and validly existing under the laws of the United States of America or
any state thereof, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000 and a
minimum long-term debt rating of "Baa3" by Moody's, a long-term debt rating of
at least "A-" and a short-term debt rating of at least "A-1" by S&P, if rated by
S&P, and subject to supervision or examination by federal or state authority. If
such entity publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purposes of this Section 8.06, the combined capital and surplus of such
entity shall be deemed to be its combined capital and surplus as set forth in
its most recent report of condition so published. The principal office of the
Trustee (other than the initial Trustee) shall be in a state with respect to
which an Opinion of Counsel has been delivered to such Trustee and the NIMS
Insurer at the time such Trustee is appointed Trustee to the effect that the
Trust will not be a taxable entity under the laws of such state. In case at any
time the Trustee shall cease to be


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eligible in accordance with the provisions of this Section 8.06, the Trustee
shall resign immediately in the manner and with the effect specified in Section
8.07.

                  SECTION 8.07. Resignation or Removal of Trustee.

                  The Trustee may at any time resign and be discharged from the
trusts hereby created by giving written notice thereof to the NIMS Insurer, the
Depositor, the Master Servicer and each Rating Agency. Upon receiving such
notice of resignation, the Depositor shall promptly appoint a successor Trustee
acceptable to the NIMS Insurer by written instrument, in duplicate, one copy of
which instrument shall be delivered to the resigning Trustee and one copy to the
successor Trustee. If no successor Trustee shall have been so appointed and
having accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.

                  If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.06 and shall fail to resign after
written request therefor by the Depositor or the NIMS Insurer or if at any time
the Trustee shall be legally unable to act, or shall be adjudged a bankrupt or
insolvent, or a receiver of the Trustee or of its property shall be appointed,
or any public officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Depositor, the Master Servicer or the NIMS Insurer may
remove the Trustee. If the Depositor, the Master Servicer or the NIMS Insurer
removes the Trustee under the authority of the immediately preceding sentence,
the Depositor, with the consent of the NIMS Insurer, shall promptly appoint a
successor Trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the Trustee so removed and one copy to the
successor trustee.

                  The Majority Certificateholders (or the NIMS Insurer upon the
failure of the Trustee to perform its obligations hereunder) may at any time
remove the Trustee by written instrument or instruments delivered to the Master
Servicer, the Depositor and the Trustee; the Depositor shall thereupon use its
best efforts to appoint a successor trustee acceptable to the NIMS Insurer in
accordance with this Section.

                  Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section 8.07 shall
not become effective until acceptance of appointment by the successor Trustee as
provided in Section 8.08.

                  SECTION 8.08. Successor Trustee.

                  Any successor Trustee appointed as provided in Section 8.07
shall execute, acknowledge and deliver to the NIMS Insurer, the Depositor, the
Master Servicer and to its predecessor Trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor Trustee shall become effective, and such successor Trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with like
effect as if originally named as Trustee. The Depositor, the Master Servicer and
the predecessor Trustee shall execute and deliver


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such instruments and do such other things as may reasonably be required for
fully and certainly vesting and confirming in the successor Trustee all such
rights, powers, duties and obligations.

                  No successor Trustee shall accept appointment as provided in
this Section 8.08 unless at the time of such acceptance such successor Trustee
shall be eligible under the provisions of Section 8.06 and the appointment of
such successor Trustee shall not result in a downgrading of the Regular
Certificates by either Rating Agency, as evidenced by a letter from each Rating
Agency.

                  Upon acceptance of appointment by a successor Trustee as
provided in this Section 8.08, the successor Trustee shall mail notice of the
appointment of a successor Trustee hereunder to all Holders of Certificates at
their addresses as shown in the Certificate Register and to each Rating Agency.

                  SECTION 8.09. Merger or Consolidation of Trustee.

                  Any entity into which the Trustee may be merged or converted
or with which it may be consolidated, or any entity resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any entity
succeeding to the business of the Trustee, shall be the successor of the Trustee
hereunder, provided such entity shall be eligible under the provisions of
Section 8.06 and 8.08, 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.

                  SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.

                  Notwithstanding any other provisions of this Agreement, at any
time, for the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Trust or any Mortgaged Property may at the time be
located, the Depositor and the Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more Persons
approved by the Trustee and the NIMS Insurer to act as co-trustee or
co-trustees, jointly with the Trustee, or separate trustee or separate trustees,
of all or any part of the Trust, and to vest in such Person or Persons, in such
capacity and for the benefit of the Certificateholders, such title to the Trust,
or any part thereof, and, subject to the other provisions of this Section 8.10,
such powers, duties, obligations, rights and trusts as the Master Servicer and
the Trustee may consider necessary or desirable. Any such co-trustee or separate
trustee shall be subject to the written approval of the Master Servicer and the
NIMS Insurer. If the Master Servicer and the NIMS Insurer shall not have joined
in such appointment within 15 days after the receipt by it of a request so to
do, or in the case a Master Servicer Event of Termination shall have occurred
and be continuing, the Trustee alone shall have the power to make such
appointment. No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor trustee under Section 8.06, and no
notice to Certificateholders of the appointment of any co-trustee or separate
trustee shall be required under Section 8.08. The Master Servicer shall be
responsible for the fees of any co-trustee or separate trustee appointed
hereunder.

                  Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:



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                  (i) all rights, powers, duties and obligations conferred or
         imposed upon the Trustee shall be conferred or imposed upon and
         exercised or performed by the Trustee and such separate trustee or
         co-trustee jointly (it being understood that such separate trustee or
         co-trustee is not authorized to act separately without the Trustee
         joining in such act), except to the extent that under any law of any
         jurisdiction in which any particular act or acts are to be performed
         (whether as Trustee hereunder or as successor to the Master Servicer
         hereunder), the Trustee shall be incompetent or unqualified to perform
         such act or acts, in which event such rights, powers, duties and
         obligations (including the holding of title to the Trust or any portion
         thereof in any such jurisdiction) shall be exercised and performed
         singly by such separate trustee or co-trustee, but solely at the
         direction of the Trustee;

                  (ii) no trustee hereunder shall be held personally liable by
         reason of any act or omission of any other trustee hereunder; and

                  (iii) the Master Servicer and the Trustee, acting jointly and
         with the consent of the NIMS Insurer, may at any time accept the
         resignation of or remove any separate trustee or co-trustee except that
         following the occurrence of a Master Servicer Event of Termination, the
         Trustee acting alone may accept the resignation or remove any separate
         trustee or co- trustee.

                  Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VIII. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee and a
copy thereof given to the Depositor, the Master Servicer and the NIMS Insurer.

                  Any separate trustee or co-trustee may, at any time,
constitute the Trustee, its agent or attorney-in-fact, with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor Trustee.

                  SECTION 8.11. Limitation of Liability.

                  The Certificates are executed by the Trustee, not in its
individual capacity but solely as Trustee of the Trust, in the exercise of the
powers and authority conferred and vested in it by this Agreement. Each of the
undertakings and agreements made on the part of the Trustee in the Certificates
is made and intended not as a personal undertaking or agreement by the Trustee
but is made and intended for the purpose of binding only the Trust.



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                  SECTION 8.12. Trustee May Enforce Claims Without Possession of
                                Certificates.

                  (a) All rights of action and claims under this Agreement or
the Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and such proceeding instituted by the Trustee shall
be brought in its own name or in its capacity as Trustee for the benefit of all
Holders of such Certificates, subject to the provisions of this Agreement. Any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursement and advances of the Trustee, its agents and
counsel, be for the ratable benefit of the Certificateholders in respect of
which such judgment has been recovered.

                  (b) The Trustee shall afford the Seller, the Originator, the
Depositor, the Master Servicer, the NIMS Insurer and each Certificateholder upon
reasonable notice during normal business hours, access to all records maintained
by the Trustee in respect of its duties hereunder and access to officers of the
Trustee responsible for performing such duties. Upon request, the Trustee shall
furnish the Depositor, the Master Servicer, the NIMS Insurer and any requesting
Certificateholder with its most recent financial statements. The Trustee shall
cooperate fully with the Seller, the Originator the Master Servicer, the
Depositor and such Certificateholder and shall make available to the Seller, the
Originator, the Master Servicer, the Depositor, the NIMS Insurer and such
Certificateholder for review and copying such books, documents or records as may
be requested with respect to the Trustee's duties hereunder. The Seller, the
Originator, the Depositor, the Master Servicer and the Certificateholders shall
not have any responsibility or liability for any action or failure to act by the
Trustee and are not obligated to supervise the performance of the Trustee under
this Agreement or otherwise.

                  SECTION 8.13. Suits for Enforcement.

                  In case a Master Servicer Event of Termination or other
default by the Master Servicer or the Depositor hereunder shall occur and be
continuing, the Trustee, shall, at the direction of the Majority
Certificateholders or the NIMS Insurer, or may, proceed to protect and enforce
its rights and the rights of the Certificateholders or the NIMS Insurer under
this Agreement by a suit, action or proceeding in equity or at law or otherwise,
whether for the specific performance of any covenant or agreement contained in
this Agreement or in aid of the execution of any power granted in this Agreement
or for the enforcement of any other legal, equitable or other remedy, as the
Trustee, being advised by counsel, and subject to the foregoing, shall deem most
effectual to protect and enforce any of the rights of the Trustee, the NIMS
Insurer and the Certificateholders.

                  SECTION 8.14. Waiver of Bond Requirement.

                  The Trustee shall be relieved of, and each Certificateholder
hereby waives, any requirement of any jurisdiction in which the Trust, or any
part thereof, may be located that the Trustee post a bond or other surety with
any court, agency or body whatsoever.

                  SECTION 8.15. Waiver of Inventory, Accounting and Appraisal
                                Requirement.



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                  The Trustee shall be relieved of, and each Certificateholder
hereby waives, any requirement of any jurisdiction in which the Trust, or any
part thereof, may be located that the Trustee file any inventory, accounting or
appraisal of the Trust with any court, agency or body at any time or in any
manner whatsoever.



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                                   ARTICLE IX

                              REMIC ADMINISTRATION

                  SECTION 9.01. REMIC Administration.

                  (a) REMIC elections as set forth in the Preliminary Statement
shall be made by the Trustee on Form 1066 or other appropriate federal tax or
information return for the taxable year ending on the last day of the calendar
year in which the Certificates are issued. The regular interests and residual
interest in each REMIC shall be as designated in the Preliminary Statement.

                  (b) The Closing Date is hereby designated as the "Startup Day"
of each REMIC within the meaning of section 860G(a)(9) of the Code.

                  (c) The Master Servicer shall pay any and all tax related
expenses (not including taxes) of each REMIC, including but not limited to any
professional fees or expenses related to audits or any administrative or
judicial proceedings with respect to each REMIC that involve the Internal
Revenue Service or state tax authorities, but only to the extent that (i) such
expenses are ordinary or routine expenses, including expenses of a routine audit
but not expenses of litigation (except as described in (ii)); or (ii) such
expenses or liabilities (including taxes and penalties) are attributable to the
negligence or willful misconduct of the Master Servicer in fulfilling its duties
hereunder. The Master Servicer shall be entitled to reimbursement of expenses to
the extent provided in clause (i) above from the Collection Account.

                  (d) The Trustee shall prepare, sign and file, all of the
REMICs' federal and state tax and information returns as the direct
representative each REMIC created hereunder. The expenses of preparing and
filing such returns shall be borne by the Trustee.

                  (e) The Holder of the Class R Certificate at any time holding
the largest Percentage Interest thereof shall be the "tax matters person" as
defined in the REMIC Provisions (the "Tax Matters Person") with respect to each
REMIC and shall act as Tax Matters Person for each REMIC. The Trustee, as agent
for the Tax Matters Person, shall perform on behalf of each REMIC all reporting
and other tax compliance duties that are the responsibility of such REMIC under
the Code, the REMIC Provisions, or other compliance guidance issued by the
Internal Revenue Service or any state or local taxing authority. Among its other
duties, if required by the Code, the REMIC Provisions, or other such guidance,
the Trustee, as agent for the Tax Matters Person, shall provide (i) to the
Treasury or other governmental authority such information as is necessary for
the application of any tax relating to the transfer of a Residual Certificate to
any disqualified person or organization and (ii) to the Certificateholders such
information or reports as are required by the Code or REMIC Provisions. The
Trustee, as agent for the Tax Matters Person, shall represent each REMIC in any
administrative or judicial proceedings relating to an examination or audit by
any governmental taxing authority, request an administrative adjustment as to
any taxable year of any REMIC, enter into settlement agreements with any
government taxing agency, extend any statute of limitations relating to any item
of any REMIC and otherwise act on behalf of any REMIC in relation to any tax
matter involving the Trust.



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                  (f) The Trustee, the Master Servicer and the Holders of
Certificates shall take any action or cause the REMIC to take any action
necessary to create or maintain the status of each REMIC as a REMIC under the
REMIC Provisions and shall assist each other as necessary to create or maintain
such status. Neither the Trustee, the Master Servicer nor the Holder of any
Residual Certificate shall take any action, cause any REMIC created hereunder 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 such REMIC as a REMIC or (ii) result in the imposition of
a tax upon such REMIC (including but not limited to the tax on prohibited
transactions as defined in Code Section 860F(a)(2) and the tax on prohibited
contributions set forth on Section 860G(d) of the Code) (either such event, an
"Adverse REMIC Event") unless the Trustee, the NIMS Insurer and the Master
Servicer have received an Opinion of Counsel (at the expense of the party
seeking to take such action) to the effect that the contemplated action will not
endanger such status or result in the imposition of such a tax. In addition,
prior to taking any action with respect to any REMIC created hereunder or the
assets therein, or causing such REMIC to take any action, which is not expressly
permitted under the terms of this Agreement, any Holder of a Residual
Certificate will consult with the Trustee, the NIMS Insurer and the Master
Servicer, or their respective designees, in writing, with respect to whether
such action could cause an Adverse REMIC Event to occur with respect to any
REMIC, and no such Person shall take any such action or cause any REMIC to take
any such action as to which the Trustee, the NIMS Insurer or the Master Servicer
has advised it in writing that an Adverse REMIC Event could occur.

                  (g) Each Holder of a Residual Certificate shall pay when due
any and all taxes imposed on each REMIC created hereunder by federal or state
governmental authorities. To the extent that such Trust taxes are not paid by a
Residual Certificateholder, the Trustee shall pay any remaining REMIC taxes out
of current or future amounts otherwise distributable to the Holder of the
Residual Certificate in the REMICs or, if no such amounts are available, out of
other amounts held in the Distribution Account, and shall reduce amounts
otherwise payable to Holders of regular interests in the related REMIC. Subject
to the foregoing, in the event that a REMIC incurs a state or local tax,
including franchise taxes, as a result of a determination that such REMIC is
domiciled in the State of California for state tax purposes by virtue of the
location of the Master Servicer, the Master Servicer agrees to pay on behalf of
such REMIC when due, any and all state and local taxes imposed as a result of
such a determination, in the event that the Holder of the related Class R
Certificate fails to pay such taxes, if any, when imposed.

                  (h) The Trustee, as agent for the Tax Matters Person, shall,
for federal income tax purposes, maintain books and records with respect to each
REMIC created hereunder on a calendar year and on an accrual basis.

                  (i) No additional contributions of assets shall be made to any
REMIC created hereunder, except as expressly provided in this Agreement with
respect to eligible substitute mortgage loans.

                  (j) Neither the Trustee nor the Master Servicer shall enter
into any arrangement by which any REMIC created hereunder will receive a fee or
other compensation for services.



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                  (k) On or before April 15 of each calendar year beginning in
2003, the Master Servicer shall deliver to the NIMS Insurer, the Trustee and
each Rating Agency an Officers' Certificate stating the Master Servicer's
compliance with the provisions of this Section 9.01.

                  (j) The Trustee will apply for an Employee Identification
Number from the Internal Revenue Service via a Form SS-4 or other acceptable
method for all tax entities and shall complete the Form 8811.

                  SECTION 9.02. Prohibited Transactions and Activities.

                  Neither the Depositor, the Master Servicer nor the Trustee
shall sell, dispose of, or substitute for any of the Mortgage Loans, except in a
disposition pursuant to (i) the foreclosure of a Mortgage Loan, (ii) the
bankruptcy of the Trust Fund, (iii) the termination of any REMIC created
hereunder pursuant to Article X of this Agreement, (iv) a substitution pursuant
to Article II of this Agreement or (v) a repurchase of Mortgage Loans pursuant
to Article II of this Agreement, nor acquire any assets for any REMIC, nor sell
or dispose of any investments in the Distribution Account for gain, nor accept
any contributions to either REMIC after the Closing Date, unless it and the NIMS
Insurer have received an Opinion of Counsel (at the expense of the party causing
such sale, disposition, or substitution) that such disposition, acquisition,
substitution, or acceptance will not (a) affect adversely the status of any
REMIC created hereunder as a REMIC or of the interests therein other than the
Residual Certificates as the regular interests therein, (b) affect the
distribution of interest or principal on the Certificates, (c) result in the
encumbrance of the assets transferred or assigned to the Trust Fund (except
pursuant to the provisions of this Agreement) or (d) cause any REMIC created
hereunder to be subject to a tax on prohibited transactions or prohibited
contributions pursuant to the REMIC Provisions.

                  SECTION 9.03. Indemnification with Respect to Certain Taxes
                                and Loss of REMIC Status.

                  (a) In the event that any REMIC fails to qualify as a REMIC,
loses its status as a REMIC, or incurs federal, state or local taxes as a result
of a prohibited transaction or prohibited contribution under the REMIC
Provisions due to the negligent performance by the Master Servicer of its duties
and obligations set forth herein, the Master Servicer shall indemnify the NIMS
Insurer, the Trustee and the Trust Fund against any and all losses, claims,
damages, liabilities or expenses ("Losses") resulting from such negligence;
provided, however, that the Master Servicer shall not be liable for any such
Losses attributable to the action or inaction of the Trustee, the Depositor or
the Holder of such Class R Certificate, as applicable, nor for any such Losses
resulting from misinformation provided by the Holder of such Class R Certificate
on which the Master Servicer has relied. The foregoing shall not be deemed to
limit or restrict the rights and remedies of the Holder of such Class R
Certificate now or hereafter existing at law or in equity. Notwithstanding the
foregoing, however, in no event shall the Master Servicer have any liability (1)
for any action or omission that is taken in accordance with and in compliance
with the express terms of, or which is expressly permitted by the terms of, this
Agreement, (2) for any Losses other than arising out of a negligent performance
by the Master Servicer of its duties and obligations set forth herein, and (3)
for any special or consequential damages to Certificateholders (in addition to
payment of principal and interest on the Certificates).


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                  (b) In the event that any REMIC fails to qualify as a REMIC,
loses its status as a REMIC, or incurs federal, state or local taxes as a result
of a prohibited transaction or prohibited contribution under the REMIC
Provisions due to the negligent performance by the Trustee of its duties and
obligations set forth herein, the Trustee shall indemnify the NIMS Insurer and
the Trust Fund against any and all Losses resulting from such negligence;
provided, however, that the Trustee shall not be liable for any such Losses
attributable to the action or inaction of the Master Servicer, the Depositor or
the Holder of such Class R Certificate, as applicable, nor for any such Losses
resulting from misinformation provided by the Holder of such Class R Certificate
on which the Trustee has relied. The foregoing shall not be deemed to limit or
restrict the rights and remedies of the Holder of such Class R Certificate now
or hereafter existing at law or in equity. Notwithstanding the foregoing,
however, in no event shall the Trustee have any liability (1) for any action or
omission that is taken in accordance with and in compliance with the express
terms of, or which is expressly permitted by the terms of, this Agreement, (2)
for any Losses other than arising out of a negligent performance by the Trustee
of its duties and obligations set forth herein, and (3) for any special or
consequential damages to Certificateholders (in addition to payment of principal
and interest on the Certificates).




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                                    ARTICLE X

                                   TERMINATION

                  SECTION 10.01.    Termination.

                  (a) The respective obligations and responsibilities of the
Master Servicer, the Depositor and the Trustee created hereby (other than the
obligation of the Trustee to make certain payments to Certificateholders after
the final Distribution Date and the obligation of the Master Servicer to send
certain notices as hereinafter set forth) shall terminate upon notice to the
Trustee upon the earliest of (i) the Distribution Date on which the Certificate
Principal Balances of the Regular Certificates have been reduced to zero, (ii)
the final payment or other liquidation of the last Mortgage Loan in the Trust
and (iii) the optional purchase by the Master Servicer or the NIMS Insurer of
the Mortgage Loans as described below. Notwithstanding the foregoing, in no
event shall the trust created hereby continue beyond the expiration of 21 years
from the death of the last survivor of the descendants of Joseph P. Kennedy, the
late ambassador of the United States to the Court of St. James's, living on the
date hereof.

                  The Master Servicer (or if the Master Servicer fails to
exercise such option, the NIMS Insurer) may, at its option, terminate this
Agreement on any date on which the aggregate of the Principal Balances of the
Mortgage Loans (after giving effect to scheduled payments of principal due
during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period) on such date is equal to or less than 10% of the sum of the aggregate
Principal Balances of the Initial Mortgage Loans on the Cut-off Date and the
Original Pre-Funded Amounts, by purchasing, on the next succeeding Distribution
Date, all of the outstanding Mortgage Loans and REO Properties at a price equal
to the fair market value of the Mortgage Loans and REO Properties (as determined
by the Master Servicer, if it is the Terminator, the NIMS Insurer, if it is the
Terminator and, to the extent that the Class A Certificates or a Class of
Mezzanine Certificates will not receive all amounts owed to it as a result of
the termination, the Trustee, as of the close of business on the third Business
Day next preceding the date upon which notice of any such termination is
furnished to the related Certificateholders pursuant to Section 10.01(c)), plus
accrued and unpaid interest thereon at the weighted average of the Mortgage
Rates through the end of the Due Period preceding the final Distribution Date
plus unreimbursed Servicing Advances, Advances, any unpaid Servicing Fees
allocable to such Mortgage Loans and REO Properties, any accrued and unpaid Net
WAC Rate Carryover Amount (the "Termination Price"); provided, however, such
option may only be exercised if (i) the Termination Price is sufficient to pay
all interest accrued on, as well as amounts necessary to retire the principal
balance of, each class of notes issued pursuant to the Indenture and any amounts
owed to the NIMS Insurer at the time the option is exercised, and (ii) the fair
market value of the Mortgage Loans and REO Properties described above is at
least equal to the Principal Balance of the Mortgage Loans (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) and the appraised value of the REO
Properties.

                  In connection with any such purchase pursuant to the preceding
paragraph, the Master Servicer or the NIMS Insurer, as applicable, shall deposit
in the Distribution Account all amounts


                                       147

<PAGE>



then on deposit in the Collection Account, which deposit shall be deemed to have
occurred immediately preceding such purchase.

                  Any such purchase shall be accomplished by deposit into the
Distribution Account on the Determination Date before such Distribution Date of
the Termination Price.

                  (b) Notice of any termination, specifying the Distribution
Date (which shall be a date that would otherwise be a Distribution Date) upon
which the Certificateholders may surrender their Certificates to the Trustee for
payment of the final distribution and cancellation, shall be given promptly by
the Trustee upon the Trustee receiving notice of such date from the Master
Servicer or the NIMS Insurer, by letter to the Certificateholders and the NIMS
Insurer mailed not earlier than the 15th day and not later than the 25th day of
the month next preceding the month of such final distribution specifying (1) the
Distribution Date upon which final distribution of the Certificates will be made
upon presentation and surrender of such Certificates at the office or agency of
the Trustee therein designated, (2) the amount of any such final distribution
and (3) that the Record Date otherwise applicable to such Distribution Date is
not applicable, distributions being made only upon presentation and surrender of
the Certificates at the office or agency of the Trustee therein specified.

                  (c) Upon presentation and surrender of the Certificates, the
Trustee shall cause to be distributed to the Holders of the Certificates on the
Distribution Date for such final distribution, in proportion to the Percentage
Interests of their respective Class and to the extent that funds are available
for such purpose, an amount equal to the amount required to be distributed to
such Holders in accordance with the provisions of Section 4.01 for such
Distribution Date. By acceptance of the Class R Certificates, the Holders of the
Class R Certificates agree, in connection with any termination hereunder, to
assign and transfer any amounts in excess of the par value of the Mortgage
Loans, and to the extent received in respect of such termination, to pay any
such amounts to the Holders of the Class C Certificates.

                  (d) In the event that all Certificateholders shall not
surrender their Certificates for final payment and cancellation on or before
such final Distribution Date, the Trustee shall promptly following such date
cause all funds in the Distribution Account not distributed in final
distribution to Certificateholders to be withdrawn therefrom and credited to the
remaining Certificateholders by depositing such funds in a separate Servicing
Account for the benefit of such Certificateholders, and the Master Servicer (if
the Master Servicer has exercised its right to purchase the Mortgage Loans), the
NIMS Insurer (if the NIMS Insurer has exercised its right to purchase the
Mortgage Loans) or the Trustee (in any other case) shall give a second written
notice to the remaining Certificateholders, to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
nine months after the second notice all the Certificates shall not have been
surrendered for cancellation, the Class R Certificateholder shall be entitled to
all unclaimed funds and other assets which remain subject hereto, and the
Trustee upon transfer of such funds shall be discharged of any responsibility
for such funds, and the Certificateholders shall look to the Class R
Certificateholder for payment.



                                       148

<PAGE>



                  SECTION 10.02.  Additional Termination Requirements.

                  (a) In the event that the Master Servicer or the NIMS Insurer
exercises its purchase option as provided in Section 10.01, each REMIC shall be
terminated in accordance with the following additional requirements, unless the
Trustee shall have been furnished with an Opinion of Counsel to the effect that
the failure of the Trust to comply with the requirements of this Section will
not (i) result in the imposition of taxes on "prohibited transactions" of the
Trust as defined in Section 860F of the Code or (ii) cause any REMIC
constituting part of the Trust Fund to fail to qualify as a REMIC at any time
that any Certificates are outstanding:

                  (i) Within 90 days prior to the final Distribution Date, the
         Master Servicer or the NIMS Insurer shall adopt and the Trustee shall
         sign a plan of complete liquidation of each REMIC created hereunder
         meeting the requirements of a "Qualified Liquidation" under Section
         860F of the Code and any regulations thereunder; and

                  (ii) At or after the time of adoption of such a plan of
         complete liquidation and at or prior to the final Distribution Date,
         the Trustee shall sell all of the assets of the Trust Fund to the
         Master Servicer or the NIMS Insurer, as applicable, for cash pursuant
         to the terms of the plan of complete liquidation.

                  (b) By their acceptance of Certificates, the Holders thereof
hereby agree to appoint the Trustee as their attorney in fact to: (i) adopt such
a plan of complete liquidation (and the Certificateholders hereby appoint the
Trustee as their attorney in fact to sign such plan) as appropriate and (ii) to
take such other action in connection therewith as may be reasonably required to
carry out such plan of complete liquidation all in accordance with the terms
hereof.



                                       149

<PAGE>



                                   ARTICLE XI

                            MISCELLANEOUS PROVISIONS

                  SECTION 11.01.   Amendment.

                  This Agreement may be amended from time to time by the
Depositor, the Master Servicer and the Trustee with the consent of the NIMS
Insurer and without the consent of the Certificateholders (i) to cure any
ambiguity, (ii) to correct or supplement any provisions herein which may be
defective or inconsistent with any other provisions herein, (iii) to amend the
provisions of Section 3.22(b) or (iv) to make any other provisions with respect
to matters or questions arising under this Agreement which shall not be
inconsistent with the provisions of this Agreement; provided that such action
shall not, as evidenced by either (a) an Opinion of Counsel delivered to the
Trustee or (b) written notice to the Depositor, the Master Servicer and the
Trustee from the Rating Agencies that such action will not result in the
reduction or withdrawal of the rating of any outstanding Class of Certificates
with respect to which it is a Rating Agency, adversely affect in any material
respect the interests of any Certificateholder. Neither an Opinion of Counsel
nor confirmation from the Rating Agencies will be required in connection with an
amendment to the provisions of Section 3.22(b).

                  This Agreement may also be amended from time to time by the
Depositor, the Master Servicer and the Trustee with the consent of the NIMS
Insurer and the Holders of Certificates entitled to at least 66% of the Voting
Rights for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Holders of Certificates; provided, however, that no
such amendment shall (i) reduce in any manner the amount of, or delay the timing
of, payments received on Mortgage Loans which are required to be distributed on
any Certificate without the consent of the Holder of such Certificate, (ii)
adversely affect in any material respect the interests of the Holders of any
Class of Certificates (as evidenced by either (a) an Opinion of Counsel
delivered to the Trustee or (b) written notice to the Depositor, the Master
Servicer and the Trustee from the Rating Agencies that such action will not
result in the reduction or withdrawal of the rating of any outstanding Class of
Certificates with respect to which it is a Rating Agency) in a manner, other
than as described in (i), or (iii) modify the consents required by the
immediately preceding clauses (i) and (ii) without the consent of the Holders of
all Certificates then outstanding. Notwithstanding any other provision of this
Agreement, for purposes of the giving or withholding of consents pursuant to
this Section 11.01, Certificates registered in the name of the Depositor or the
Master Servicer or any Affiliate thereof shall be entitled to Voting Rights with
respect to matters affecting such Certificates.

                  Notwithstanding any provision of this Agreement to the
contrary, the Trustee shall not consent to any amendment to this Agreement
unless it shall have first received an Opinion of Counsel, delivered by (and at
the expense of) the Person seeking such Amendment and satisfactory to the NIMS
Insurer, to the effect that such amendment will not result in the imposition of
a tax on any REMIC created hereunder constituting part of the Trust Fund
pursuant to the REMIC Provisions or cause any REMIC created hereunder
constituting part of the Trust to fail to qualify as a REMIC at any time that
any Certificates are outstanding and that the amendment is being made in
accordance with the terms hereof.


                                       150

<PAGE>



                  Promptly after the execution of any such amendment the Trustee
shall furnish, at the expense of the Person that requested the amendment if such
Person is the Master Servicer (but in no event at the expense of the Trustee),
otherwise at the expense of the Trust, a copy of such amendment and the Opinion
of Counsel referred to in the immediately preceding paragraph to the Master
Servicer, the NIMS Insurer and each Rating Agency.

                  It shall not be necessary for the consent of
Certificateholders under this Section 11.01 to approve the particular form of
any proposed amendment; instead it shall be sufficient if such consent shall
approve the substance thereof. The manner of obtaining such consents and of
evidencing the authorization of the execution thereof by Certificateholders
shall be subject to such reasonable regulations as the Trustee may prescribe.

                  The Trustee may, but shall not be obligated to, enter into any
amendment pursuant to this Section 11.01 that affects its rights, duties and
immunities under this Agreement or otherwise.

                  SECTION 11.02.    Recordation of Agreement; Counterparts.

                  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 or
all of 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 Master Servicer at the expense of the Trust, but only upon
direction of Certificateholders accompanied by an Opinion of Counsel to the
effect that such recordation materially and beneficially affects the interests
of the Certificateholders.

                  For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
together constitute but one and the same instrument.

                  SECTION 11.03.  Limitation on Rights of Certificateholders.

                  The death or incapacity of any Certificateholder shall not (i)
operate to terminate this Agreement or the Trust, (ii) entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of the
Trust, or (iii) otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.

                  Except as expressly provided for herein, no Certificateholder
shall have any right to vote or in any manner otherwise control the operation
and management of the Trust, or the obligations of the parties hereto, nor shall
anything herein set forth or contained in the terms of the Certificates be
construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third person by reason of any action taken by the parties
to this Agreement pursuant to any provision hereof.



                                       151

<PAGE>



                  No Certificateholder shall have any right by virtue of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of default
and of the continuance thereof, as hereinbefore provided, and unless also the
Holders of Certificates entitled to at least 25% of the Voting Rights shall have
made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee for 15 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding. It is
understood and intended, and expressly covenanted by each Certificateholder with
every other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, which priority or
preference is not otherwise provided for herein, or to enforce any right under
this Agreement, except in the manner herein provided and for the equal, ratable
and common benefit of all Certificateholders. For the protection and enforcement
of the provisions of this Section 11.03 each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.

                  SECTION 11.04.  Governing Law; Jurisdiction.

                  This Agreement shall be construed in accordance with the laws
of the State of New York, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws. With respect
to any claim arising out of this Agreement, each party irrevocably submits to
the exclusive jurisdiction of the courts of the State of New York and the United
States District Court located in the Borough of Manhattan in The City of New
York, and each party irrevocably waives any objection which it may have at any
time to the laying of venue of any suit, action or proceeding arising out of or
relating hereto brought in any such courts, irrevocably waives any claim that
any such suit, action or proceeding brought in any such court has been brought
in any inconvenient forum and further irrevocably waives the right to object,
with respect to such claim, suit, action or proceeding brought in any such
court, that such court does not have jurisdiction over such party, provided that
service of process has been made by any lawful means.

                  SECTION 11.05.   Notices.

                  All directions, demands and notices hereunder shall be in
writing and shall be deemed to have been duly given if personally delivered at
or mailed by first class mail, postage prepaid, by facsimile or by express
delivery service, to (a) in the case of the Originator and/or Master Servicer,
Option One Mortgage Corporation, 3 Ada, Irvine, California 92618, Attention:
William O'Neill, or such other address or telecopy number as may hereafter be
furnished to the Depositor, the NIMS Insurer and the Trustee in writing by the
Master Servicer, (b) in the case of the Trustee, Wells Fargo Bank Minnesota,
National Association, P.O. Box 98, Columbia, Maryland 21046, Attention: Client
Manager--Option One 2003-1, with a copy to Wells Fargo Bank Minnesota, National
Association, 9062 Old Annapolis Road, Columbia, Maryland 21045-1951, Attention:
Option One Mortgage Loan Trust Series 2003-1, or such other address or telecopy
number as may hereafter be furnished to the Depositor, the NIMS Insurer and the
Master Servicer in writing by the Trustee, (c) in the case of the


                                       152

<PAGE>



Depositor, Option One Mortgage Acceptance Corporation, 3 Ada, Irvine, California
92618, Attention: William O'Neill, or such other address or telecopy number as
may be furnished to the Master Servicer, the NIMS Insurer and the Trustee in
writing by the Depositor and (d) in the case of the NIMS Insurer, such address
furnished to the Depositor, the Master Servicer, the Trustee and the Guarantor
in writing by the NIMS Insurer, or such other address or telecopy number as may
hereafter be furnished to the Depositor, the Master Servicer and the Trustee in
writing by the NIMS Insurer. Any notice required or permitted to be mailed to a
Certificateholder shall be given by first class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Notice of any
Master Servicer Default shall be given by telecopy and by certified mail. Any
notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have duly been given when mailed, whether or not the
Certificateholder receives such notice. A copy of any notice required to be
telecopied hereunder shall also be mailed to the appropriate party in the manner
set forth above.

                  SECTION 11.06. Severability of Provisions.

                  If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall for any reason whatsoever be held invalid, then
such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions of
this Agreement or of the Certificates or the rights of the Holders thereof.

                  SECTION 11.07.  Article and Section References.

                  All article and section references used in this Agreement,
unless otherwise provided, are to articles and sections in this Agreement.

                  SECTION 11.08.   Notice to the Rating Agencies and the NIMS
                                   Insurer.

                  (a) Each of the Trustee and the Master Servicer shall be
obligated to use its best reasonable efforts promptly to provide notice to the
Rating Agencies and the NIMS Insurer with respect to each of the following of
which a Responsible Officer of the Trustee or Master Servicer, as the case may
be, has actual knowledge:

                  (i) any material change or amendment to this Agreement;

                  (ii) the occurrence of any Master Servicer Event of
         Termination that has not been cured or waived;

                  (iii) the resignation or termination of the Master Servicer or
         the Trustee;

                  (iv) the final payment to Holders of the Certificates of any
         Class;

                  (v) any change in the location of any Account; and



                                      153

<PAGE>



                  (vi) if the Trustee is acting as successor Master Servicer
         pursuant to Section 7.02 hereof, any event that would result in the
         inability of the Trustee to make Advances.

                  (b) In addition, the Trustee shall promptly make available to
each Rating Agency copies of each Statement to Certificateholders described in
Section 4.03 hereof and the Master Servicer shall promptly furnish to each
Rating Agency copies of the following:

                  (i) each annual statement as to compliance described in
         Section 3.20 hereof;

                  (ii) each annual independent public accountants' servicing
         report described in Section 3.21 hereof; and

                  (iii) each notice delivered pursuant to Section 7.01(a) hereof
         which relates to the fact that the Master Servicer has not made an
         Advance.

                  Any such notice pursuant to this Section 11.08 shall be in
writing and shall be deemed to have been duly given if personally delivered or
mailed by first class mail, postage prepaid, or by express delivery service to
Moody's Investors Service, Inc., 99 Church Street, New York, NY 10007,
Attention: MBS Monitoring/Option One Mortgage Loan Trust 2003-1, Fitch Ratings,
One State Street Plaza, New York, New York 10007 and Standard & Poor's Ratings
Services, Inc., 55 Water Street, New York, New York 10004.

                  SECTION 11.09.            Further Assurances.

                  Notwithstanding any other provision of this Agreement, neither
the Regular Certificateholders nor the Trustee shall have any obligation to
consent to any amendment or modification of this Agreement unless they have been
provided reasonable security or indemnity against their out-of-pocket expenses
(including reasonable attorneys' fees) to be incurred in connection therewith.

                  SECTION 11.10.            Third Party Rights.

                  The NIMS Insurer shall be deemed a third-party beneficiary of
this Agreement to the same extent as if it were a party hereto, and shall have
the right to enforce the provisions of this Agreement.

                  SECTION 11.11.            Benefits of Agreement.

                  Nothing in this Agreement or in the Certificates, expressed or
implied, shall give to any Person, other than the Certificateholders, the NIMS
Insurer and the parties hereto and their successors hereunder, any benefit or
any legal or equitable right, remedy or claim under this Agreement.



                                      154

<PAGE>



                  SECTION 11.12.            Acts of Certificateholders.

                  (a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Agreement to be given or taken
by the Certificateholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Certificateholders in
person or by agent duly appointed in writing, and such action shall become
effective when such instrument or instruments are delivered to the Trustee and
the Master Servicer. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the "act" of
the Certificateholders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Agreement and conclusive in favor of the
Trustee and the Trust, if made in the manner provided in this Section 11.11.

                  (b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of a notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Whenever
such execution is by a signer acting in a capacity other than his or her
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority.

                  (c) Any request, demand, authorization, direction, notice,
consent, waiver or other action by any Certificateholder shall bind every future
Holder of such Certificate and the Holder of every Certificate issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof, in
respect of anything done, omitted or suffered to be done by the Trustee or the
Trust in reliance thereon, whether or not notation of such action is made upon
such Certificate.

                  SECTION 11.13             No Petition.

                  The Depositor, Master Servicer and the Trustee, by entering
into this Agreement and each Certificateholder, by accepting a Certificate,
hereby covenant and agree that they will not at any time institute against the
Trust Fund, or join in any institution against the Trust Fund of, any bankruptcy
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations with respect to the Certificates or this
Agreement.


                                       155

<PAGE>



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

                                   OPTION ONE MORTGAGE ACCEPTANCE
                                   CORPORATION,
                                     as Depositor

                                   By:
                                       -----------------------------------
                                   Name:         David S. Wells
                                   Title:        Assistant Secretary


                                   OPTION ONE MORTGAGE CORPORATION,
                                     as Master Servicer

                                   By:
                                       -----------------------------------
                                   Name:        David S. Wells
                                   Title:       Assistant Secretary


                                   WELLS FARGO BANK MINNESOTA,
                                   NATIONAL ASSOCIATION,
                                     as Trustee

                                   By:
                                       -----------------------------------
                                   Name:
                                   Title:




                                       156

<PAGE>



STATE OF               )
                       ) ss.:
COUNTY OF              )


         On the ___th day of January, 2003 before me, a notary public in and for
said State, personally appeared _______________ known to me to be a
______________ of Option One Mortgage Acceptance Corporation, a Delaware
corporation that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.




                                       -----------------------------------
                                             Notary Public




                                       157

<PAGE>



STATE OF               )
                       ) ss.:
COUNTY OF              )

         On the ___th day of January, 2003 before me, a notary public in and for
said State, personally appeared _______________ known to me to be a
_______________ of Option One Mortgage Corporation, a corporation that executed
the within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.




                                       -----------------------------------
                                              Notary Public










                                       158

<PAGE>


STATE OF              )
                      ) ss.:
COUNTY OF             )

         On the ___th day of January, 2003 before me, a notary public in and for
said State, personally appeared________________, known to me to be
a________________ of Wells Fargo Bank Minnesota, National Association, a
national banking association that executed the within instrument, and also known
to me to be the person who executed it on behalf of said association, and
acknowledged to me that such corporation executed the within instrument.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.


                                       -----------------------------------
                                               Notary Public


                                       159

<PAGE>
                                   EXHIBIT A-1

                         FORM OF CLASS A-1 CERTIFICATES

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").


Certificate No.                 :   1

Cut-off Date                    :   With respect to any Mortgage Loan, the later
                                    of (i) the date of origination of such
                                    Mortgage Loan or (ii) January 1, 2003

First Distribution Date         :   [2/25/03]

Initial Certificate Principal
Balance of this Certificate
("Denomination")                :   $[500,000,000]

Original Class Certificate
Principal Balance of this
Class                           :   $_______________

Percentage Interest             :   100.00%

Pass-Through Rate               :   Variable

CUSIP                           :   68389FCZ5

Class                           :   A-1

Assumed Maturity Date           :   [2/25/33]




                                      A-1-1

<PAGE>



                      Option One Mortgage Loan Trust 2003-1
                           Asset-Backed Certificates,
                                  Series 2003-1
                                    Class A-1

     evidencing the Percentage Interest in the distributions allocable
     to the Certificates of the above-referenced Class with respect to
     the Trust consisting of first and second lien, adjustable and fixed
     rate mortgage loans (the "Mortgage Loans")

            OPTION ONE MORTGAGE ACCEPTANCE CORPORATION, as Depositor

     Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Principal Balance of this Class A-1
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class A-1
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer, or the Trustee referred to
below or any of their respective affiliates.

     This certifies that______________ is the registered owner of the Percentage
Interest evidenced by this Class A Certificate (obtained by dividing the
Denomination of this Class A Certificate by the Original Class Certificate
Principal Balance) in certain monthly distributions with respect to a Trust
consisting primarily of the Mortgage Loans deposited by Option One Mortgage
Acceptance Corporation (the "Depositor"). The Trust was created pursuant to a
Pooling and Servicing Agreement dated as of January 1, 2002 (the "Agreement")
among the Depositor, Option One Mortgage Corporation, as master servicer (the
"Master Servicer"), and Wells Fargo Bank Minnesota, National Association, a
national banking association, as Trustee (the "Trustee"). To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Class A-1 Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder
of this Class A-1 Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.

     Reference is hereby made to the further provisions of this Class A-1
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

     This Class A-1 Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.


                                      A-1-2

<PAGE>



     IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.

Dated: January __, 2003

                                    OPTION ONE MORTGAGE LOAN TRUST 2003-1

                                    By:  WELLS FARGO BANK MINNESOTA,
                                         NATIONAL ASSOCIATION
                                         not in its individual capacity, but
                                         solely as Trustee

                                    By:_______________________________________


This is one of the Class A-1 Certificates
referenced in the within-mentioned Agreement


By _______________________________________
         Authorized Signatory of
         Wells Fargo Bank Minnesota,
         National Association,
         as Trustee




<PAGE>



                       [Reverse of Class A-1 Certificate]

                      OPTION ONE MORTGAGE LOAN TRUST 2003-1
                           Asset-Backed Certificates,
                                  Series 2003-1

     This Certificate is one of a duly authorized issue of Certificates
designated as Option One Mortgage Loan Trust 2003-1, Asset-Backed Certificates,
Series 2003-1 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.

     The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

     This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced thereby, and the rights, duties and
immunities of the Trustee.

     Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day then the first
Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.

     Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trustee specified in the notice to Certificateholders of
such final distribution.

     The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer and the Trustee with the consent of the
NIMs Insurer, if any and of Holders of the requisite percentage of the
Percentage Interests of each Class of Certificates affected by such amendment,
as specified in the Agreement. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange therefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates, but with the consent of the NIMS Insurer, if any.


                                      A-1-4

<PAGE>



     As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.

     The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

     No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

     The Master Servicer, the Depositor, the Trustee, the NIMs Insurer, if any,
the Certificate Registrar, any Paying Agent and any agent of the Master
Servicer, the Depositor, the Trustee, the NIMs Insurer, if any, the Certificate
Registrar, any Paying Agent or the Trustee may treat the Person, including a
Depository, in whose name any Certificate is registered as the owner hereof for
all purposes, and none of the Master Servicer, the Trust, the Trustee nor any
agent of any of them shall be affected by notice to the contrary.

     On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Initial Mortgage Loans as of the Cut-off
Date plus the Original Pre-Funded Amounts, the Master Servicer may purchase, in
whole, from the Trust the Mortgage Loans at a purchase price determined as
provided in the Agreement. In the event that no such optional termination
occurs, the obligations and responsibilities created by the Agreement will
terminate upon notice to the Trustee upon the earliest of (i) the Distribution
Date on which the Certificate Principal Balances of the Regular Certificates
have been reduced to zero, (ii) the final payment or other liquidation of the
last Mortgage Loan in the Trust, (iii) the Distribution Date in [month/year].

     Capitalized terms used herein that are defined in the Agreement shall have
the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.


                                      A-1-5

<PAGE>



                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
             (Please print or typewrite name and address including
                          postal zip code of assignee)

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

     I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:

Dated: _________________

                                         _______________________________________
                                         Signature by or on behalf of assignor




                                      A-1-6

<PAGE>



                            DISTRIBUTION INSTRUCTIONS

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
________________________________________________________________________________
for the account of ____________________________________________________________,
account number ________________, or, if mailed by check, to ____________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.

     This information is provided by __________________________________________,
the assignee named above, or __________________________________________________,
as its agent.


                                      A-1-7

<PAGE>



                                   EXHIBIT A-2

                         FORM OF CLASS A-2 CERTIFICATES

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").


Certificate No.                  :  1

Cut-off Date                     :  With respect to any Mortgage Loan, the later
                                    of (i) the date of origination of such
                                    Mortgage Loan or (ii) January 1, 2003

First Distribution Date          :  2/25/03

Initial Certificate Principal
Balance of this Certificate
("Denomination")                 :  $[908,000,000]

Original Class Certificate
Principal Balance of this
Class                            :  $_______________

Percentage Interest              :  100.00%

Pass-Through Rate                :  Variable

CUSIP                            :  68389FDA9

Class                            :  A-2

Assumed Maturity Date            :  [2/25/33]






                                      A-2-1

<PAGE>



                      Option One Mortgage Loan Trust 2003-1
                           Asset-Backed Certificates,
                                  Series 2003-1
                                    Class A-2

     evidencing the Percentage Interest in the distributions allocable
     to the Certificates of the above-referenced Class with respect to
     the Trust consisting of first and second lien, adjustable and fixed
     rate mortgage loans (the "Mortgage Loans")

            OPTION ONE MORTGAGE ACCEPTANCE CORPORATION, as Depositor

     Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Principal Balance of this Class A-2
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class A-2
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer, or the Trustee referred to
below or any of their respective affiliates.

     This certifies that_____________ is the registered owner of the Percentage
Interest evidenced by this Class A-2 Certificate (obtained by dividing the
Denomination of this Class A-2 Certificate by the Original Class Certificate
Principal Balance) in certain monthly distributions with respect to a Trust
consisting primarily of the Mortgage Loans deposited by Option One Mortgage
Acceptance Corporation (the "Depositor"). The Trust was created pursuant to a
Pooling and Servicing Agreement dated as of January 1, 2003 (the "Agreement")
among the Depositor, Option One Mortgage Corporation, as master servicer (the
"Master Servicer"), and Wells Fargo Bank Minnesota, National Association, a
national banking association, as Trustee (the "Trustee"). To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Class A-2 Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder
of this Class A-2 Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.

     Reference is hereby made to the further provisions of this Class A-2
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

     This Class A-2 Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.


                                      A-2-2

<PAGE>



     IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.

Dated: January __, 2003

                                    OPTION ONE MORTGAGE LOAN TRUST 2003-1

                                    By:  WELLS FARGO BANK MINNESOTA,
                                         NATIONAL ASSOCIATION
                                         not in its individual capacity, but
                                         solely as Trustee

                                    By: _______________________________________


This is one of the Class A-2 Certificates
referenced in the within-mentioned Agreement


By _____________________________________
     Authorized Signatory of
     Wells Fargo Bank Minnesota,
     National Association,
     as Trustee


                                      A-2-3

<PAGE>



                       [Reverse of Class A-2 Certificate]

                      OPTION ONE MORTGAGE LOAN TRUST 2003-1
                           Asset-Backed Certificates,
                                  Series 2003-1

     This Certificate is one of a duly authorized issue of Certificates
designated as Option One Mortgage Loan Trust 2003-1, Asset-Backed Certificates,
Series 2003-1 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.

     The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

     This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced thereby, and the rights, duties and
immunities of the Trustee.

     Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day then the first
Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.

     Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trustee specified in the notice to Certificateholders of
such final distribution.

     The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer and the Trustee with the consent of the
NIMs Insurer, if any and of Holders of the requisite percentage of the
Percentage Interests of each Class of Certificates affected by such amendment,
as specified in the Agreement. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange therefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates, but with the consent of the NIMS Insurer, if any.


                                      A-2-4

<PAGE>



     As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.

     The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

     No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

     The Master Servicer, the Depositor, the Trustee, the NIMs Insurer, if any,
the Certificate Registrar, any Paying Agent and any agent of the Master
Servicer, the Depositor, the Trustee, the NIMs Insurer, if any, the Certificate
Registrar, any Paying Agent or the Trustee may treat the Person, including a
Depository, in whose name any Certificate is registered as the owner hereof for
all purposes, and none of the Master Servicer, the Trust, the Trustee nor any
agent of any of them shall be affected by notice to the contrary.

     On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Initial Mortgage Loans as of the Cut-off
Date plus the Original Pre-Funded Amounts, the Master Servicer may purchase, in
whole, from the Trust the Mortgage Loans at a purchase price determined as
provided in the Agreement. In the event that no such optional termination
occurs, the obligations and responsibilities created by the Agreement will
terminate upon notice to the Trustee upon the earliest of (i) the Distribution
Date on which the Certificate Principal Balances of the Regular Certificates
have been reduced to zero, (ii) the final payment or other liquidation of the
last Mortgage Loan in the Trust, (iii) the Distribution Date in [month/year].

     Capitalized terms used herein that are defined in the Agreement shall have
the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.


                                      A-2-5

<PAGE>



                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto_______________________________________________________________
________________________________________________________________________________
              (Please print or typewrite name and address including
                          postal zip code of assignee)

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

     I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:

Dated: ________________

                                       _______________________________________
                                       Signature by or on behalf of assignor




                                      A-2-6

<PAGE>



                            DISTRIBUTION INSTRUCTIONS

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
________________________________________________________________________________
for the account of ____________________________________________________________,
account number ________________, or, if mailed by check, to ____________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.

     This information is provided by __________________________________________,
the assignee named above, or __________________________________________________,
as its agent.




                                      A-2-7

<PAGE>



                                   EXHIBIT A-3

                         FORM OF CLASS M-1 CERTIFICATES

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES AND THE CLASS A-2
CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.

NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").


                                      A-3-1

<PAGE>




Certificate No.                :    1

Cut-off Date                   :    With respect to any Mortgage Loan, the later
                                    of (i) the date of origination of such
                                    Mortgage Loan or (ii) January 1, 2003

First Distribution Date        :    _______________

Initial Certificate Principal
Balance of this Certificate
("Denomination")               :    $______________

Original Class Certificate
Principal Balance of this
Class                          :    $______________

Percentage Interest            :    100.00%

Pass-Through Rate              :    Variable

CUSIP                          :    _______________

Class                          :    M-1

Assumed Maturity Date          :    _______________



                                      A-3-2

<PAGE>



                      Option One Mortgage Loan Trust 2003-1
                           Asset-Backed Certificates,
                                  Series 2003-1
                                    Class M-1

     evidencing the Percentage Interest in the distributions allocable
     to the Certificates of the above-referenced Class with respect to
     the Trust consisting of first and second lien, adjustable and fixed
     rate mortgage loans (the "Mortgage Loans")

            OPTION ONE MORTGAGE ACCEPTANCE CORPORATION, as Depositor

     Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Principal Balance of this Class M-1
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-1
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer, or the Trustee referred to
below or any of their respective affiliates.

     This certifies that _______________________ is the registered owner of the
Percentage Interest evidenced by this Class M-1 Certificate (obtained by
dividing the Denomination of this Class M-1 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Option One
Mortgage Acceptance Corporation (the "Depositor"). The Trust was created
pursuant to a Pooling and Servicing Agreement dated as of January 1, 2003 (the
"Agreement") among the Depositor, Option One Mortgage Corporation, as master
servicer (the "Master Servicer"), and Wells Fargo Bank Minnesota, National
Association, a national banking association, as Trustee (the "Trustee"). To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Class M-1 Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Class M-1 Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

     Each Transferee of this Certificate will be deemed to have represented by
virtue of its purchase or holding of such Certificate (or interest therein) that
either (a) such Transferee is not a Plan or purchasing such Certificate with
Plan Assets, (b) it has acquired and is holding such Certificate in reliance on
the Prohibited Transaction Exemption (the "Exemption") set forth in the
Agreement and that it understands that there are certain conditions to the
availability of the Exemption including that such Certificate must be rated, at
the time of purchase, not lower than "BBB-" (or its equivalent) by a Rating
Agency or (c) the following conditions are satisfied: (i) such Transferee is an
insurance company, (ii) the source of funds used to purchase or hold such
Certificate (or interest therein) is an "insurance company general account" (as
defined in U.S. Department of Labor Prohibited Transaction Class Exemption
("PTCE") 95-60), and (iii) the conditions set forth in Sections I and III of
PTCE 95-60 have been satisfied.

     Reference is hereby made to the further provisions of this Class M-1
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.


                                      A-3-3

<PAGE>



     This Class M-1 Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.




                                      A-3-4

<PAGE>



     IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.

Dated: January __, 2003

                                    OPTION ONE MORTGAGE LOAN TRUST 2003-1

                                    By:  WELLS FARGO BANK MINNESOTA,
                                         NATIONAL ASSOCIATION
                                         not in its individual capacity, but
                                         solely as Trustee


                                    By _______________________________________


This is one of the Class M-1 Certificates
referenced in the within-mentioned Agreement


By ________________________________________
     Authorized Signatory of
     Wells Fargo Bank Minnesota,
     National Association,
     as Trustee



                                      A-3-5

<PAGE>



                       [Reverse of Class M-1 Certificate]

                      OPTION ONE MORTGAGE LOAN TRUST 2003-1
                           Asset-Backed Certificates,
                                  Series 2003-1

     This Certificate is one of a duly authorized issue of Certificates
designated as Option One Mortgage Loan Trust 2003-1, Asset-Backed Certificates,
Series 2003-1 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.

     The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

     This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced thereby, and the rights, duties and
immunities of the Trustee.

     Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day then the first
Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.

     Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trustee specified in the notice to Certificateholders of
such final distribution.

     The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer and the Trustee with the consent of the
NIMs Insurer, if any, and of Holders of the requisite percentage of the
Percentage Interests of each Class of Certificates affected by such amendment,
as specified in the Agreement. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange therefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates, but with the consent of the NIMS Insurer, if any.


                                      A-3-6

<PAGE>



     As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.

     The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

     No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

     The Master Servicer, the Depositor, the Trustee, the NIMs Insurer, if any,
the Certificate Registrar, any Paying Agent and any agent of the Master
Servicer, the Depositor, the Trustee, the NIMs Insurer, if any, the Certificate
Registrar, any Paying Agent or the Trustee may treat the Person, including a
Depository, in whose name any Certificate is registered as the owner hereof for
all purposes, and none of the Master Servicer, the Trust, the Trustee nor any
agent of any of them shall be affected by notice to the contrary.

     On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Initial Mortgage Loans as of the Cut-off
Date plus the Original Pre-Funded Amounts, the Master Servicer may purchase, in
whole, from the Trust the Mortgage Loans at a purchase price determined as
provided in the Agreement. In the event that no such optional termination
occurs, the obligations and responsibilities created by the Agreement will
terminate upon notice to the Trustee upon the earliest of (i) the Distribution
Date on which the Certificate Principal Balances of the Regular Certificates
have been reduced to zero, (ii) the final payment or other liquidation of the
last Mortgage Loan in the Trust, (iii) the Distribution Date in [month/year].

     Capitalized terms used herein that are defined in the Agreement shall have
the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.


                                      A-3-7

<PAGE>



                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

     I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:

Dated: __________________

                                    _______________________________________
                                    Signature by or on behalf of assignor




                                      A-3-8

<PAGE>



                            DISTRIBUTION INSTRUCTIONS

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
________________________________________________________________________________
for the account of ____________________________________________________________,
account number ________________, or, if mailed by check, to ____________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.

     This information is provided by __________________________________________,
the assignee named above, or __________________________________________________,
as its agent.




                                      A-3-9

<PAGE>



                                   EXHIBIT A-4

                         FORM OF CLASS M-2 CERTIFICATES

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES, THE CLASS A-2
CERTIFICATES AND THE CLASS M-1 CERTIFICATES TO THE EXTENT DESCRIBED IN THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").


                                      A-5-1

<PAGE>




Certificate No.                 :   1

Cut-off Date                    :   With respect to any Mortgage Loan, the later
                                    of (i) the date of origination of such
                                    Mortgage Loan or (ii) January 1, 2003

First Distribution Date         :   [2/25/03]

Initial Certificate Principal
Balance of this Certificate
("Denomination")                :   $[60,000,000]

Original Class Certificate
Principal Balance of this
Class                           :   $____________________

Percentage Interest             :   100.00%

Pass-Through Rate               :   Variable

CUSIP                           :   68389FDC5

Class                           :   M-2

Assumed Maturity Date           :   [2/25/33]



                                      A-5-2

<PAGE>



                      Option One Mortgage Loan Trust 2003-1
                           Asset-Backed Certificates,
                                  Series 2003-1
                                    Class M-2

     evidencing the Percentage Interest in the distributions allocable
     to the Certificates of the above-referenced Class with respect to
     the Trust consisting of first and second lien, adjustable and fixed
     rate mortgage loans (the "Mortgage Loans")

            OPTION ONE MORTGAGE ACCEPTANCE CORPORATION, as Depositor

     Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Principal Balance of this Class M-2
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-2
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer, or the Trustee referred to
below or any of their respective affiliates.

     This certifies that ______________________. is the registered owner of the
Percentage Interest evidenced by this Class M-2 Certificate (obtained by
dividing the Denomination of this Class M-2 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Option One
Mortgage Acceptance Corporation (the "Depositor"). The Trust was created
pursuant to a Pooling and Servicing Agreement dated as of January 1, 2003 (the
"Agreement") among the Depositor, Option One Mortgage Corporation, as master
servicer (the "Master Servicer"), and Wells Fargo Bank Minnesota, National
Association, a national banking association, as Trustee (the "Trustee"). To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Class M-2 Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Class M-2 Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

     Each Transferee of this Certificate will be deemed to have represented by
virtue of its purchase or holding of such Certificate (or interest therein) that
either (a) such Transferee is not a Plan or purchasing such Certificate with
Plan Assets, (b) it has acquired and is holding such Certificate in reliance on
the Prohibited Transaction Exemption (the "Exemption") set forth in the
Agreement and that it understands that there are certain conditions to the
availability of the Exemption including that such Certificate must be rated, at
the time of purchase, not lower than "BBB-" (or its equivalent) by a Rating
Agency or (c) the following conditions are satisfied: (i) such Transferee is an
insurance company, (ii) the source of funds used to purchase or hold such
Certificate (or interest therein) is an "insurance company general account" (as
defined in U.S. Department of Labor Prohibited Transaction Class Exemption
("PTCE") 95-60), and (iii) the conditions set forth in Sections I and III of
PTCE 95-60 have been satisfied.

     Reference is hereby made to the further provisions of this Class M-2
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.


                                      A-5-3

<PAGE>



     This Class M-2 Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.


                                      A-5-4

<PAGE>



         IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.

Dated: January __, 2003

                                    OPTION ONE MORTGAGE LOAN TRUST 2003-1

                                    By:  WELLS FARGO BANK MINNESOTA,
                                         NATIONAL ASSOCIATION
                                         not in its individual capacity, but
                                         solely as Trustee


                                    By ______________________________________


This is one of the Class M-2 Certificates
referenced in the within-mentioned Agreement


By ______________________________________
     Authorized Signatory of
     Wells Fargo Bank Minnesota,
     National Association,
     as Trustee



                                      A-5-5

<PAGE>



                       [Reverse of Class M-2 Certificate]

                      OPTION ONE MORTGAGE LOAN TRUST 2003-1
                           Asset-Backed Certificates,
                                  Series 2003-1

     This Certificate is one of a duly authorized issue of Certificates
designated as Option One Mortgage Loan Trust 2003-1, Asset-Backed Certificates,
Series 2003-1 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.

     The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

     This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced thereby, and the rights, duties and
immunities of the Trustee.

     Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day then the first
Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.

     Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trustee specified in the notice to Certificateholders of
such final distribution.

     The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer and the Trustee with the consent of the
NIMs Insurer, if any and of Holders of the requisite percentage of the
Percentage Interests of each Class of Certificates affected by such amendment,
as specified in the Agreement. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange therefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates, but with the consent of the NIMS Insurer, if any.


                                      A-5-6

<PAGE>



     As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.

     The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

     No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

     The Master Servicer, the Depositor, the Trustee, the NIMs Insurer, if any,
the Certificate Registrar, any Paying Agent and any agent of the Master
Servicer, the Depositor, the Trustee, the NIMs Insurer, if any, the Certificate
Registrar, any Paying Agent or the Trustee may treat the Person, including a
Depository, in whose name any Certificate is registered as the owner hereof for
all purposes, and none of the Master Servicer, the Trust, the Trustee nor any
agent of any of them shall be affected by notice to the contrary.

     On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Initial Mortgage Loans as of the Cut-off
Date plus the Original Pre-Funded Amounts, the Master Servicer may purchase, in
whole, from the Trust the Mortgage Loans at a purchase price determined as
provided in the Agreement. In the event that no such optional termination
occurs, the obligations and responsibilities created by the Agreement will
terminate upon notice to the Trustee upon the earliest of (i) the Distribution
Date on which the Certificate Principal Balances of the Regular Certificates
have been reduced to zero, (ii) the final payment or other liquidation of the
last Mortgage Loan in the Trust, (iii) the Distribution Date in [month/year].

     Capitalized terms used herein that are defined in the Agreement shall have
the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.


                                      A-5-7

<PAGE>



                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
              (Please print or typewrite name and address including
                          postal zip code of assignee)

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

     I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:

Dated:____________________


                                    _____________________________________
                                    Signature by or on behalf of assignor




                                      A-5-8

<PAGE>



                            DISTRIBUTION INSTRUCTIONS

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
________________________________________________________________________________
for the account of ____________________________________________________________,
account number ________________, or, if mailed by check, to ____________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.

     This information is provided by __________________________________________,
the assignee named above, or __________________________________________________,
as its agent.




                                      A-5-9

<PAGE>



                                   EXHIBIT A-5

                         FORM OF CLASS M-3 CERTIFICATES

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES , THE CLASS A-2
CERTIFICATES, THE CLASS M-1 CERTIFICATES AND THE CLASS M-2 CERTIFICATES TO THE
EXTENT DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").


                                      A-6-1

<PAGE>




Certificate No.                  :  1

Cut-off Date                     :  With respect to any Mortgage Loan, the later
                                    of (i) the date of origination of such
                                    Mortgage Loan or (ii) January 1, 2003

First Distribution Date          :  [2/25/03]

Initial Certificate Principal
Balance of this Certificate
("Denomination")                 :  $36,000,000

Original Class Certificate
Principal Balance of this
Class                            :  $_____________

Percentage Interest              :  100.00%

Pass-Through Rate                :  Variable

CUSIP                            :  68389FDD3

Class                            :  M-3

Assumed Maturity Date            :  2/25/33



                                      A-6-2

<PAGE>



                      Option One Mortgage Loan Trust 2003-1
                           Asset-Backed Certificates,
                                  Series 2003-1
                                    Class M-3

     evidencing the Percentage Interest in the distributions allocable
     to the Certificates of the above-referenced Class with respect to
     the Trust consisting of first and second lien, adjustable and fixed
     rate mortgage loans (the "Mortgage Loans")

            OPTION ONE MORTGAGE ACCEPTANCE CORPORATION, as Depositor

     Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Principal Balance of this Class M-3
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-3
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer, or the Trustee referred to
below or any of their respective affiliates.

     This certifies that ______________ is the registered owner of the
Percentage Interest evidenced by this Class M-3 Certificate (obtained by
dividing the Denomination of this Class M-3 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Option One
Mortgage Acceptance Corporation (the "Depositor"). The Trust was created
pursuant to a Pooling and Servicing Agreement dated as of January 1, 2003 (the
"Agreement") among the Depositor, Option One Mortgage Corporation, as master
servicer (the "Master Servicer"), and Wells Fargo Bank Minnesota, National
Association, a national banking association, as Trustee (the "Trustee"). To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Class M-3 Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Class M-3 Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

     Each Transferee of this Certificate will be deemed to have represented by
virtue of its purchase or holding of such Certificate (or interest therein) that
either (a) such Transferee is not a Plan or purchasing such Certificate with
Plan Assets, (b) it has acquired and is holding such Certificate in reliance on
the Prohibited Transaction Exemption (the "Exemption") set forth in the
Agreement and that it understands that there are certain conditions to the
availability of the Exemption including that such Certificate must be rated, at
the time of purchase, not lower than "BBB-" (or its equivalent) by a Rating
Agency or (c) the following conditions are satisfied: (i) such Transferee is an
insurance company, (ii) the source of funds used to purchase or hold such
Certificate (or interest therein) is an "insurance company general account" (as
defined in U.S. Department of Labor Prohibited Transaction Class Exemption
("PTCE") 95-60), and (iii) the conditions set forth in Sections I and III of
PTCE 95-60 have been satisfied.

     Reference is hereby made to the further provisions of this Class M-3
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.


                                      A-6-3

<PAGE>



     This Class M-3 Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.





                                      A-6-4

<PAGE>



     IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.

Dated: January __, 2003

                                    OPTION ONE MORTGAGE LOAN TRUST 2003-1

                                    By:  WELLS FARGO BANK MINNESOTA,
                                         NATIONAL ASSOCIATION
                                         not in its individual capacity, but
                                         solely as Trustee


                                    By _______________________________________


This is one of the Class M-3 Certificates
referenced in the within-mentioned Agreement


By _______________________________________
         Authorized Signatory of
         Wells Fargo Bank Minnesota,
         National Association,
         as Trustee



                                      A-6-5

<PAGE>



                       [Reverse of Class M-3 Certificate]

                      OPTION ONE MORTGAGE LOAN TRUST 2003-1
                           Asset-Backed Certificates,
                                  Series 2003-1

     This Certificate is one of a duly authorized issue of Certificates
designated as Option One Mortgage Loan Trust 2003-1, Asset-Backed Certificates,
Series 2003-1 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.

     The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

     This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced thereby, and the rights, duties and
immunities of the Trustee.

     Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day then the first
Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.

     Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trustee specified in the notice to Certificateholders of
such final distribution.

     The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer and the Trustee with the consent of the
NIMs Insurer, if any and of Holders of the requisite percentage of the
Percentage Interests of each Class of Certificates affected by such amendment,
as specified in the Agreement. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange therefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates, but with the consent of the NIMS Insurer, if any.


                                      A-6-6

<PAGE>



     As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.

     The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

     No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

     The Master Servicer, the Depositor, the Trustee, the NIMs Insurer, if any,
the Certificate Registrar, any Paying Agent and any agent of the Master
Servicer, the Depositor, the Trustee, the NIMs Insurer, if any, the Certificate
Registrar, any Paying Agent or the Trustee may treat the Person, including a
Depository, in whose name any Certificate is registered as the owner hereof for
all purposes, and none of the Master Servicer, the Trust, the Trustee nor any
agent of any of them shall be affected by notice to the contrary.

     On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Initial Mortgage Loans as of the Cut-off
Date plus the Original Pre-Funded Amounts, the Master Servicer may purchase, in
whole, from the Trust the Mortgage Loans at a purchase price determined as
provided in the Agreement. In the event that no such optional termination
occurs, the obligations and responsibilities created by the Agreement will
terminate upon notice to the Trustee upon the earliest of (i) the Distribution
Date on which the Certificate Principal Balances of the Regular Certificates
have been reduced to zero, (ii) the final payment or other liquidation of the
last Mortgage Loan in the Trust, (iii) the Distribution Date in [month/year].

     Capitalized terms used herein that are defined in the Agreement shall have
the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.


                                      A-6-7

<PAGE>



                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
              (Please print or typewrite name and address including
                          postal zip code of assignee)

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

         I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:

Dated: ___________________

                                    _________________________________________
                                    Signature by or on behalf of assignor




                                      A-6-8

<PAGE>



                            DISTRIBUTION INSTRUCTIONS

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
________________________________________________________________________________
for the account of ____________________________________________________________,
account number ________________, or, if mailed by check, to ____________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.

     This information is provided by __________________________________________,
the assignee named above, or __________________________________________________,
as its agent.




                                      A-6-9

<PAGE>



                                   EXHIBIT A-6

                         FORM OF CLASS M-4 CERTIFICATES

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES , THE CLASS A-2
CERTIFICATES, THE CLASS M-1 CERTIFICATES, THE CLASS M-2 CERTIFICATES AND THE
CLASS M-3 CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.

NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").


                                     A-6-10

<PAGE>




Certificate No.                 :   1

Cut-off Date                    :   With respect to any Mortgage Loan, the later
                                    of (i) the date of origination of such
                                    Mortgage Loan or (ii) January 1, 2003

First Distribution Date         :   [2/25/03]

Initial Certificate Principal
Balance of this Certificate
("Denomination")                :   [$16,000,000]

Original Class Certificate
Principal Balance of this
Class                           :   $_____________

Percentage Interest             :   100.00%

Pass-Through Rate               :   Variable

CUSIP                           :   68389FDE1

Class                           :   M-4

Assumed Maturity Date           :   [2/25/33]



                                     A-6-11

<PAGE>



                      Option One Mortgage Loan Trust 2003-1
                           Asset-Backed Certificates,
                                  Series 2003-1
                                    Class M-4

     evidencing the Percentage Interest in the distributions allocable
     to the Certificates of the above-referenced Class with respect to
     the Trust consisting of first and second lien, adjustable and fixed
     rate mortgage loans (the "Mortgage Loans")

            OPTION ONE MORTGAGE ACCEPTANCE CORPORATION, as Depositor

     Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Principal Balance of this Class M-4
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class M-4
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer, or the Trustee referred to
below or any of their respective affiliates.

     This certifies that ______________ is the registered owner of the
Percentage Interest evidenced by this Class M-4 Certificate (obtained by
dividing the Denomination of this Class M-4 Certificate by the Original Class
Certificate Principal Balance) in certain monthly distributions with respect to
a Trust consisting primarily of the Mortgage Loans deposited by Option One
Mortgage Acceptance Corporation (the "Depositor"). The Trust was created
pursuant to a Pooling and Servicing Agreement dated as of January 1, 2003 (the
"Agreement") among the Depositor, Option One Mortgage Corporation, as master
servicer (the "Master Servicer"), and Wells Fargo Bank Minnesota, National
Association, a national banking association, as Trustee (the "Trustee"). To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Class M-4 Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Class M-4 Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

     Each Transferee of this Certificate will be deemed to have represented by
virtue of its purchase or holding of such Certificate (or interest therein) that
either (a) such Transferee is not a Plan or purchasing such Certificate with
Plan Assets, (b) it has acquired and is holding such Certificate in reliance on
the Prohibited Transaction Exemption (the "Exemption") set forth in the
Agreement and that it understands that there are certain conditions to the
availability of the Exemption including that such Certificate must be rated, at
the time of purchase, not lower than "BBB-" (or its equivalent) by a Rating
Agency or (c) the following conditions are satisfied: (i) such Transferee is an
insurance company, (ii) the source of funds used to purchase or hold such
Certificate (or interest therein) is an "insurance company general account" (as
defined in U.S. Department of Labor Prohibited Transaction Class Exemption
("PTCE") 95-60), and (iii) the conditions set forth in Sections I and III of
PTCE 95-60 have been satisfied.

     Reference is hereby made to the further provisions of this Class M-4
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.


                                     A-6-12

<PAGE>



     This Class M-4 Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.




                                     A-6-13

<PAGE>



     IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.

Dated: January __, 2003

                                    OPTION ONE MORTGAGE LOAN TRUST 2003-1

                                    By:  WELLS FARGO BANK MINNESOTA,
                                         NATIONAL ASSOCIATION
                                         not in its individual capacity, but
                                         solely as Trustee


                                    By ______________________________________


This is one of the Class M-4 Certificates
referenced in the within-mentioned Agreement


By _______________________________________
     Authorized Signatory of
     Wells Fargo Bank Minnesota,
     National Association,
     as Trustee



                                     A-6-14

<PAGE>



                       [Reverse of Class M-4 Certificate]

                      OPTION ONE MORTGAGE LOAN TRUST 2003-1
                           Asset-Backed Certificates,
                                  Series 2003-1

     This Certificate is one of a duly authorized issue of Certificates
designated as Option One Mortgage Loan Trust 2003-1, Asset-Backed Certificates,
Series 2003-1 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.

     The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

     This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced thereby, and the rights, duties and
immunities of the Trustee.

     Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day then the first
Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.

     Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trustee specified in the notice to Certificateholders of
such final distribution.

     The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer and the Trustee with the consent of the
NIMs Insurer, if any and of Holders of the requisite percentage of the
Percentage Interests of each Class of Certificates affected by such amendment,
as specified in the Agreement. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange therefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates, but with the consent of the NIMS Insurer, if any.


                                     A-6-15

<PAGE>



     As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.

     The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

     No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

     The Master Servicer, the Depositor, the Trustee, the NIMs Insurer, if any,
the Certificate Registrar, any Paying Agent and any agent of the Master
Servicer, the Depositor, the Trustee, the NIMs Insurer, if any, the Certificate
Registrar, any Paying Agent or the Trustee may treat the Person, including a
Depository, in whose name any Certificate is registered as the owner hereof for
all purposes, and none of the Master Servicer, the Trust, the Trustee nor any
agent of any of them shall be affected by notice to the contrary.

     On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Initial Mortgage Loans as of the Cut-off
Date plus the Original Pre-Funded Amounts, the Master Servicer may purchase, in
whole, from the Trust the Mortgage Loans at a purchase price determined as
provided in the Agreement. In the event that no such optional termination
occurs, the obligations and responsibilities created by the Agreement will
terminate upon notice to the Trustee upon the earliest of (i) the Distribution
Date on which the Certificate Principal Balances of the Regular Certificates
have been reduced to zero, (ii) the final payment or other liquidation of the
last Mortgage Loan in the Trust, (iii) the Distribution Date in [month/year].

     Capitalized terms used herein that are defined in the Agreement shall have
the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.


                                     A-6-16

<PAGE>



                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
              (Please print or typewrite name and address including
                          postal zip code of assignee)

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

     I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:

Dated: ____________________

                                      ______________________________________
                                      Signature by or on behalf of assignor




                                     A-6-17

<PAGE>



                            DISTRIBUTION INSTRUCTIONS

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
________________________________________________________________________________
for the account of ____________________________________________________________,
account number ________________, or, if mailed by check, to ____________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.

     This information is provided by __________________________________________,
the assignee named above, or __________________________________________________,
as its agent.



                                     A-6-18

<PAGE>



                                   EXHIBIT A-7

                          FORM OF CLASS C CERTIFICATES

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").

THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.

THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES, THE CLASS A-2
CERTIFICATES, THE CLASS S CERTIFICATES, THE CLASS M-1 CERTIFICATES, THE CLASS
M-2 CERTIFICATES AND THE CLASS M-3 CERTIFICATES TO THE EXTENT DESCRIBED IN THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.


                                      A-7-1

<PAGE>




Certificate No.                  :  1

Cut-off Date                     :  With respect to any Mortgage Loan, the later
                                    of (i) the date of origination of such
                                    Mortgage Loan or (ii) January 1, 2003

First Distribution Date          :  ______________________

Initial Certificate Principal
Balance of this Certificate
("Denomination")                 :  $____________________

Original Class Certificate
Principal Balance of this
Class                            :  $____________________

Initial Notional Amount of
this Certificate                 :  $____________________

Percentage Interest              :  100.00%

Class                            :  C




                                      A-7-2

<PAGE>



                      Option One Mortgage Loan Trust 2003-1
                           Asset-Backed Certificates,
                                  Series 2003-1
                                     Class C

     evidencing the Percentage Interest in the distributions allocable
     to the Certificates of the above-referenced Class with respect to
     the Trust consisting of first and second lien, adjustable and fixed
     rate mortgage loans (the "Mortgage Loans")

            OPTION ONE MORTGAGE ACCEPTANCE CORPORATION, as Depositor

     Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Principal Balance of this Class C
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class C
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer, or the Trustee referred to
below or any of their respective affiliates.

     This certifies that Option One Mortgage Securities Corp. is the registered
owner of the Percentage Interest evidenced by this Class C Certificate (obtained
by dividing the Denomination of this Class C Certificate by the Original Class
Certificate Principal Balance) in certain distributions with respect to a Trust
consisting primarily of the Mortgage Loans deposited by Option One Mortgage
Acceptance Corporation (the "Depositor"). The Trust was created pursuant to a
Pooling and Servicing Agreement dated as of January 1, 2003 (the "Agreement")
among the Depositor, Option One Mortgage Corporation, as master servicer (the
"Master Servicer"), and Wells Fargo Bank Minnesota, National Association, a
national banking association, as Trustee (the "Trustee"). To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Class C Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder
of this Class C Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.

     No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Act, which Opinion of Counsel shall not be obtained at the expense of
the Trustee or the Depositor; or there shall be delivered to the Trustee and the
Depositor a transferor certificate by the transferor and an investment letter
shall be executed by the transferee. The Holder hereof desiring to effect such
transfer shall, and does hereby agree to, indemnify the Trustee and the
Depositor against any liability that may result if the transfer is not so exempt
or is not made in accordance with such federal and state laws.


                                      A-7-3

<PAGE>



     No transfer of this Certificate to a Plan subject to ERISA or Section 4975
of the Code, any Person acting, directly or indirectly, on behalf of any such
Plan or any person using Plan Assets to acquire this Certificate shall be made
except in accordance with Section 5.02(d) of the Agreement.

     Reference is hereby made to the further provisions of this Class C
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

     This Class C Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.




                                      A-7-4

<PAGE>



     IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.

Dated: January __, 2003

                                    OPTION ONE MORTGAGE LOAN TRUST 2003-1

                                    By:  WELLS FARGO BANK MINNESOTA,
                                         NATIONAL ASSOCIATION
                                         not in its individual capacity, but
                                         solely as Trustee


                                    By _____________________________________


This is one of the Class C Certificates
referenced in the within-mentioned Agreement


By _______________________________________
         Authorized Signatory of
         Wells Fargo Bank Minnesota,
         National Association,
         as Trustee



                                      A-7-5

<PAGE>



                        [Reverse of Class C Certificate]

                      OPTION ONE MORTGAGE LOAN TRUST 2003-1
                           Asset-Backed Certificates,
                                  Series 2003-1

     This Certificate is one of a duly authorized issue of Certificates
designated as Option One Mortgage Loan Trust 2003-1, Asset-Backed Certificates,
Series 2003-1 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.

     The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

     This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced thereby, and the rights, duties and
immunities of the Trustee.

     Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day then the first
Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.

     Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trustee specified in the notice to Certificateholders of
such final distribution.

     The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer and the Trustee with the consent of the
NIMs Insurer, if any and of Holders of the requisite percentage of the
Percentage Interests of each Class of Certificates affected by such amendment,
as specified in the Agreement. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange therefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates, but with the consent of the NIMS Insurer, if any.



                                      A-7-6

<PAGE>



     As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.

     The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

     No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

     The Master Servicer, the Depositor, the Trustee, the NIMs Insurer, if any,
the Certificate Registrar, any Paying Agent and any agent of the Master
Servicer, the Depositor, the Trustee, the NIMs Insurer, if any, the Certificate
Registrar, any Paying Agent or the Trustee may treat the Person, including a
Depository, in whose name any Certificate is registered as the owner hereof for
all purposes, and none of the Master Servicer, the Trust, the Trustee nor any
agent of any of them shall be affected by notice to the contrary.

     On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Initial Mortgage Loans as of the Cut-off
Date plus the Original Pre-Funded Amounts, the Master Servicer may purchase, in
whole, from the Trust the Mortgage Loans at a purchase price determined as
provided in the Agreement. In the event that no such optional termination
occurs, the obligations and responsibilities created by the Agreement will
terminate upon notice to the Trustee upon the earliest of (i) the Distribution
Date on which the Certificate Principal Balances of the Regular Certificates
have been reduced to zero, (ii) the final payment or other liquidation of the
last Mortgage Loan in the Trust, (iii) the Distribution Date in [month/year].

     Capitalized terms used herein that are defined in the Agreement shall have
the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.


                                      A-7-7

<PAGE>



                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
              (Please print or typewrite name and address including
                          postal zip code of assignee)

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

         I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:

Dated: __________________

                                    ______________________________________
                                    Signature by or on behalf of assignor




                                      A-7-8

<PAGE>



                            DISTRIBUTION INSTRUCTIONS

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
________________________________________________________________________________
for the account of ____________________________________________________________,
account number ________________, or, if mailed by check, to ____________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.

     This information is provided by __________________________________________,
the assignee named above, or __________________________________________________,
as its agent.



                                      A-7-9

<PAGE>



                                   EXHIBIT A-8

                           FORM OF CLASS P CERTIFICATE

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").

THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.

NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.


                                      A-8-1

<PAGE>




Certificate No.                 :  1

Cut-off Date                    :  With respect to any Mortgage Loan, the later
                                   of (i) the date of origination of such
                                   Mortgage Loan or (ii) January 1, 2003

First Distribution Date         :  ____________________

Initial Certificate Principal
Balance of this Certificate
("Denomination")                :  $100.00

Original Class Certificate
Principal Balance of this
Class                           :  $100.00

Percentage Interest             :  100.00%

Class                           :  P





                                      A-8-2

<PAGE>



                      Option One Mortgage Loan Trust 2003-1
                           Asset-Backed Certificates,
                                  Series 2003-1
                                     Class P

     evidencing the Percentage Interest in the distributions allocable
     to the Certificates of the above-referenced Class with respect to
     the Trust consisting of first and second lien, adjustable and fixed
     rate mortgage loans (the "Mortgage Loans")

            OPTION ONE MORTGAGE ACCEPTANCE CORPORATION, as Depositor

     Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Principal Balance of this Class P
Certificate at any time may be less than the Initial Certificate Principal
Balance set forth on the face hereof, as described herein. This Class P
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Master Servicer, or the Trustee referred to
below or any of their respective affiliates.

     This certifies that Option One Mortgage Securities Corp. is the registered
owner of the Percentage Interest evidenced by this Class P Certificate (obtained
by dividing the Denomination of this Class P Certificate by the Original Class
Certificate Principal Balance) in certain distributions with respect to a Trust
consisting primarily of the Mortgage Loans deposited by Option One Mortgage
Acceptance Corporation (the "Depositor"). The Trust was created pursuant to a
Pooling and Servicing Agreement dated as of January 1, 2003 (the "Agreement")
among the Depositor, Option One Mortgage Corporation, as master servicer (the
"Master Servicer"), and Wells Fargo Bank Minnesota, National Association, a
national banking association, as Trustee (the "Trustee"). To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Class P Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder
of this Class P Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.

     This Certificate does not have a pass-through rate and will be entitled to
distributions only to the extent set forth in the Agreement.

     No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Act, which Opinion of Counsel shall not be obtained at the expense of
the Trustee or the Depositor; or there shall be delivered to the Trustee and the
Depositor a transferor certificate by the transferor and an investment letter
shall be executed by the transferee. The Holder hereof desiring to effect such
transfer shall, and


                                      A-8-3

<PAGE>



does hereby agree to, indemnify the Trustee and the Depositor against any
liability that may result if the transfer is not so exempt or is not made in
accordance with such federal and state laws.

     No transfer of this Certificate to a Plan subject to ERISA or Section 4975
of the Code, any Person acting, directly or indirectly, on behalf of any such
Plan or any person using Plan Assets to acquire this Certificate shall be made
except in accordance with Section 5.02(d) of the Agreement.

     Reference is hereby made to the further provisions of this Class P
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

     This Class P Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.


                                      A-8-4

<PAGE>



     IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.

Dated: January __, 2003

                                    OPTION ONE MORTGAGE LOAN TRUST 2003-1

                                    By:  WELLS FARGO BANK MINNESOTA,
                                         NATIONAL ASSOCIATION
                                         not in its individual capacity, but
                                         solely as Trustee


                                    By ______________________________________


This is one of the Class P Certificates
referenced in the within-mentioned Agreement


By _____________________________________
     Authorized Signatory of
     Wells Fargo Bank Minnesota,
     National Association,
     as Trustee



                                      A-8-5

<PAGE>



                        [Reverse of Class P Certificate]

                      OPTION ONE MORTGAGE LOAN TRUST 2003-1
                           Asset-Backed Certificates,
                                  Series 2003-1

     This Certificate is one of a duly authorized issue of Certificates
designated as Option One Mortgage Loan Trust 2003-1, Asset-Backed Certificates,
Series 2003-1 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.

     The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

     This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced thereby, and the rights, duties and
immunities of the Trustee.

     Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day then the first
Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.

     Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trustee specified in the notice to Certificateholders of
such final distribution.

     The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer and the Trustee with the consent of the
NIMs Insurer, if any and of Holders of the requisite percentage of the
Percentage Interests of each Class of Certificates affected by such amendment,
as specified in the Agreement. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange therefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates, but with the consent of the NIMS Insurer, if any.



                                      A-8-6

<PAGE>



     As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.

     The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

     No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

     The Master Servicer, the Depositor, the Trustee, the NIMs Insurer, if any,
the Certificate Registrar, any Paying Agent and any agent of the Master
Servicer, the Depositor, the Trustee, the NIMs Insurer, if any, the Certificate
Registrar, any Paying Agent or the Trustee may treat the Person, including a
Depository, in whose name any Certificate is registered as the owner hereof for
all purposes, and none of the Master Servicer, the Trust, the Trustee nor any
agent of any of them shall be affected by notice to the contrary.

     On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Initial Mortgage Loans as of the Cut-off
Date plus the Original Pre-Funded Amounts, the Master Servicer may purchase, in
whole, from the Trust the Mortgage Loans at a purchase price determined as
provided in the Agreement. In the event that no such optional termination
occurs, the obligations and responsibilities created by the Agreement will
terminate upon notice to the Trustee upon the earliest of (i) the Distribution
Date on which the Certificate Principal Balances of the Regular Certificates
have been reduced to zero, (ii) the final payment or other liquidation of the
last Mortgage Loan in the Trust, (iii) the Distribution Date in [month/year].

     Capitalized terms used herein that are defined in the Agreement shall have
the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.


                                      A-8-7

<PAGE>



                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
              (Please print or typewrite name and address including
                          postal zip code of assignee)

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

     I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:

Dated: ____________________


                                    _________________________________________
                                    Signature by or on behalf of assignor




                                      A-8-8

<PAGE>



                            DISTRIBUTION INSTRUCTIONS

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
________________________________________________________________________________
for the account of ____________________________________________________________,
account number ________________, or, if mailed by check, to ____________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.

     This information is provided by __________________________________________,
the assignee named above, or __________________________________________________,
as its agent.




                                      A-8-9

<PAGE>



                                   EXHIBIT A-9

                           FORM OF CLASS R CERTIFICATE

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN ONE OR MORE "REAL ESTATE MORTGAGE INVESTMENT CONDUITS," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE").

THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.

THIS CLASS R CERTIFICATE HAS NO PRINCIPAL BALANCE, DOES NOT BEAR INTEREST AND
WILL NOT RECEIVE ANY DISTRIBUTIONS EXCEPT AS PROVIDED HEREIN.

NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.

NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE WITH THE
PROCEDURES DESCRIBED HEREIN.


Certificate No.              :   1

Cut-off Date                 :   With respect to any Mortgage Loan, the later
                                 of (i) the date of origination of such Mortgage
                                 Loan or (ii) January 1, 2003

First Distribution Date      :   ____________________

Percentage Interest          :   100.00%

Class                        :   R



                                                       A-9-1

<PAGE>



                      Option One Mortgage Loan Trust 2003-1
                           Asset-Backed Certificates,
                                  Series 2003-1
                                     Class R

     evidencing the Percentage Interest in the distributions allocable
     to the Certificates of the above-referenced Class with respect to
     the Trust consisting of first and second lien, adjustable and fixed
     rate mortgage loans (the "Mortgage Loans")

            OPTION ONE MORTGAGE ACCEPTANCE CORPORATION, as Depositor

     This Certificate does not evidence an obligation of, or an interest in, and
is not guaranteed by the Depositor, the Master Servicer or the Trustee referred
to below or any of their respective affiliates.

     This certifies that Option One Mortgage Securities Corp. is the registered
owner of the Percentage Interest evidenced by this Certificate specified above
in the interest represented by all Certificates of the Class to which this
Certificate belongs in a Trust consisting primarily of the Mortgage Loans
deposited by Option One Mortgage Acceptance Corporation (the "Depositor"). The
Trust was created pursuant to a Pooling and Servicing Agreement dated as of
January 1, 2003 (the "Agreement") among the Depositor, Option One Mortgage
Corporation, as master servicer (the 'Master Servicer") and Wells Fargo Bank
Minnesota, National Association, a national banking association, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

     This Certificate does not have a principal balance or pass-through rate and
will be entitled to distributions only to the extent set forth in the Agreement.
In addition, any distribution of the proceeds of any remaining assets of the
Trust will be made only upon presentment and surrender of this Certificate at
the Corporate Trust Office or the office or agency maintained by the Trustee in
Minneapolis, Minnesota.

     No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Depositor in writing the facts surrounding
the transfer. In the event that such a transfer is not to be made pursuant to
Rule 144A of the Act, there shall be delivered to the Trustee and the Depositor
an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Act, which Opinion of Counsel shall not be obtained at the expense of
the Trustee or the Depositor; or there shall be delivered to the Trustee and the
Depositor a transferor certificate by the transferor and an investment letter
shall be executed by the transferee. The Holder hereof desiring to effect such
transfer shall, and


                                      A-9-2

<PAGE>



does hereby agree to, indemnify the Trustee and the Depositor against any
liability that may result if the transfer is not so exempt or is not made in
accordance with such federal and state laws.

     No transfer of this Certificate to a Plan subject to ERISA or Section 4975
of the Code, any Person acting, directly or indirectly, on behalf of any such
Plan or any person using Plan Assets to acquire this Certificate shall be made
except in accordance with Section 5.02(d) of the Agreement.

     Each Holder of this Certificate will be deemed to have agreed to be bound
by the restrictions of the Agreement, including but not limited to the
restrictions that (i) each person holding or acquiring any Ownership Interest in
this Certificate must be a Permitted Transferee, (ii) no Ownership Interest in
this Certificate may be transferred without delivery to the Trustee of (a) a
transfer affidavit of the proposed transferee and (b) a transfer certificate of
the transferor, each of such documents to be in the form described in the
Agreement, (iii) each person holding or acquiring any Ownership Interest in this
Certificate must agree to require a transfer affidavit and to deliver a transfer
certificate to the Trustee as required pursuant to the Agreement, (iv) each
person holding or acquiring an Ownership Interest in this Certificate must agree
not to transfer an Ownership Interest in this Certificate if it has actual
knowledge that the proposed transferee is not a Permitted Transferee and (v) any
attempted or purported transfer of any Ownership Interest in this Certificate in
violation of such restrictions will be absolutely null and void and will vest no
rights in the purported transferee. Pursuant to the Agreement, the Trustee will
provide the Internal Revenue Service and any pertinent persons with the
information needed to compute the tax imposed under the applicable tax laws on
transfers of residual interests to disqualified organizations, if any person
other than a Permitted Transferee acquires an Ownership Interest on a Class R
Certificate in violation of the restrictions mentioned above.

     Reference is hereby made to the further provisions of this Class R
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

     This Certificate shall not be entitled to any benefit under the Agreement
or be valid for any purpose unless manually countersigned by an authorized
signatory of the Trustee.


                                      A-9-3

<PAGE>



     IN WITNESS WHEREOF, the Trustee on behalf of the Trust has caused this
Certificate to be duly executed.

Dated: January __, 2003

                                 OPTION ONE MORTGAGE LOAN TRUST 2003-1

                                 By:      WELLS FARGO BANK MINNESOTA,
                                          NATIONAL ASSOCIATION
                                          not in its individual capacity, but
                                          solely as Trustee


                                 By ______________________________________


This is one of the Class R Certificates
referenced in the within-mentioned Agreement


By ____________________________________
     Authorized Signatory of
     Wells Fargo Bank Minnesota,
     National Association,
     as Trustee



                                      A-9-4

<PAGE>



                        [Reverse of Class R Certificate]

                      OPTION ONE MORTGAGE LOAN TRUST 2003-1
                           Asset-Backed Certificates,
                                  Series 2003-1

     This Certificate is one of a duly authorized issue of Certificates
designated as Option One Mortgage Loan Trust 2003-1, Asset-Backed Certificates,
Series 2003-1 (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust created by the Agreement.

     The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

     This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced thereby, and the rights, duties and
immunities of the Trustee.

     Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day then the first
Business Day following such Distribution Date (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business on
the applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to Holders of Certificates of the Class to which this Certificate belongs on
such Distribution Date pursuant to the Agreement.

     Distributions on this Certificate shall be made by check or money order
mailed to the address of the person entitled thereto as it appears on the
Certificate Register or by wire transfer or otherwise, as set forth in the
Agreement. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office or agency of the Trustee specified in the notice to Certificateholders of
such final distribution.

     The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer and the Trustee with the consent of the
NIMs Insurer, if any and of Holders of the requisite percentage of the
Percentage Interests of each Class of Certificates affected by such amendment,
as specified in the Agreement. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange therefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates, but with the consent of the NIMS Insurer, if any.



                                      A-9-5

<PAGE>



     As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Trustee accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust will be issued to the designated transferee or
transferees.

     The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

     No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

     The Master Servicer, the Depositor, the Trustee, the NIMs Insurer, if any,
the Certificate Registrar, any Paying Agent and any agent of the Master
Servicer, the Depositor, the Trustee, the NIMs Insurer, if any, the Certificate
Registrar, any Paying Agent or the Trustee may treat the Person, including a
Depository, in whose name any Certificate is registered as the owner hereof for
all purposes, and none of the Master Servicer, the Trust, the Trustee nor any
agent of any of them shall be affected by notice to the contrary.

     On any Distribution Date following the date at which the remaining
aggregate Principal Balance of the Mortgage Loans is less than 10% of the sum of
the aggregate Principal Balance of the Initial Mortgage Loans as of the Cut-off
Date plus the Original Pre-Funded Amounts, the Master Servicer may purchase, in
whole, from the Trust the Mortgage Loans at a purchase price determined as
provided in the Agreement. In the event that no such optional termination
occurs, the obligations and responsibilities created by the Agreement will
terminate upon notice to the Trustee upon the earliest of (i) the Distribution
Date on which the Certificate Principal Balances of the Regular Certificates
have been reduced to zero, (ii) the final payment or other liquidation of the
last Mortgage Loan in the Trust, (iii) the Distribution Date in [month/year].

     Capitalized terms used herein that are defined in the Agreement shall have
the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.


                                      A-9-6

<PAGE>



                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
              (Please print or typewrite name and address including
                          postal zip code of assignee)

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust.

         I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:

Dated:________________

                                    _____________________________________
                                    Signature by or on behalf of assignor




                                      A-9-7

<PAGE>



                            DISTRIBUTION INSTRUCTIONS

     The assignee should include the following for purposes of distribution:

     Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
________________________________________________________________________________
for the account of ____________________________________________________________,
account number ________________, or, if mailed by check, to ____________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
_______________________________________________________________________________.

     This information is provided by __________________________________________,
the assignee named above, or __________________________________________________,
as its agent.




                                      A-9-8

<PAGE>



                                    EXHIBIT B

                                   [RESERVED]





                                       B-1

<PAGE>



                                    EXHIBIT C

                    FORM OF MORTGAGE LOAN PURCHASE AGREEMENT





                                       C-1

<PAGE>


================================================================================







                        OPTION ONE MORTGAGE CORPORATION,

                                  as Originator


                         OPTION ONE OWNER TRUST 2001-1B,

                                    as Seller

                                       and


                   OPTION ONE MORTGAGE ACCEPTANCE CORPORATION,

                                  as Purchaser




                        MORTGAGE LOAN PURCHASE AGREEMENT

                          Dated as of January 13, 2003



                  Fixed Rate and Adjustable Rate Mortgage Loans

                      Option One Mortgage Loan Trust 2003-1
                    Asset-Backed Certificates, Series 2003-1





================================================================================







<PAGE>



                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

                                   ARTICLE I.

                                   DEFINITIONS
Section 1.01  Definitions......................................................1

                                   ARTICLE II.

                SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.01  Sale of Mortgage Loans...........................................2
Section 2.02  Obligations of Originator upon Sale..............................2
Section 2.03  Payment of Purchase Price For The Mortgage Loans.................5

                                  ARTICLE III.

               REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01  Originator Representations And Warranties Relating to
              The Mortgage Loans...............................................6
Section 3.02  Originator Representations And Warranties Relating to
              The Originator..................................................12
Section 3.03  Originator Representations And Warranties Relating to
              The Seller......................................................14
Section 3.04  Remedies For Breach of Representations And Warranties...........15

                                   ARTICLE IV.

                             ORIGINATOR'S COVENANTS
Section 4.01  Covenants of The Originator.....................................17

                                   ARTICLE V.

               INDEMNIFICATION WITH RESPECT TO THE MORTGAGE LOANS
Section 5.01  Indemnification.................................................18

                                   ARTICLE VI.

                                   TERMINATION
Section 6.01  Termination.....................................................21

                                  ARTICLE VII.

                            MISCELLANEOUS PROVISIONS
Section 7.01  Amendment.......................................................21
Section 7.02  Governing Law...................................................21


                                       ii

<PAGE>



Section 7.03  Notices.........................................................21
Section 7.04  Severability of Provisions......................................22
Section 7.05  Counterparts....................................................22
Section 7.06  Further Agreements..............................................22
Section 7.07  Intention of The Parties........................................22
Section 7.08  Successors And Assigns, Assignment of Purchase Agreement........23
Section 7.09  Survival........................................................23
Section 7.10  Owner Trustee...................................................23




                                       iii

<PAGE>




          MORTGAGE LOAN PURCHASE AGREEMENT, dated as of January 13, 2002 (the
"Agreement"), among Option One Mortgage Corporation (the "Originator"), Option
One Owner Trust 2001-1B (the "Seller") and Option One Mortgage Acceptance
Corporation (the "Purchaser").

                              W I T N E S S E T H
                              -------------------

          WHEREAS, the Seller is the owner of (a) the notes or other evidence of
indebtedness (the "Mortgage Notes") so indicated on Schedule I hereto referred
to below and (b) the other documents or instruments constituting the Mortgage
File (collectively, the "Mortgage Loans"); and

          WHEREAS, the Seller, as of the date hereof, owns the mortgages (the
"Mortgages") on the properties (the "Mortgaged Properties") securing such
Mortgage Loans, including rights to (a) any property acquired by foreclosure or
deed in lieu of foreclosure or otherwise and (b) the proceeds of any insurance
policies covering the Mortgage Loans or the Mortgaged Properties or the obligors
on the Mortgage Loans; and

          WHEREAS, the parties hereto desire that the Seller sell the Mortgage
Loans to the Purchaser pursuant to the terms of this Agreement; and

          WHEREAS, the Seller is an indirect subsidiary of the Originator and
the Originator is the administrator of the Seller; and

          WHEREAS, the Originator originated the Mortgage Loans and previously
sold the Mortgage Loans; and

          WHEREAS, pursuant to the terms of a Pooling and Servicing Agreement
dated as of January 1, 2002 (the "Pooling and Servicing Agreement") among the
Purchaser as depositor, the Originator as master servicer and Wells Fargo Bank
Minnesota, National Association as trustee (the "Trustee"), the Purchaser will
convey the Mortgage Loans to Option One Mortgage Loan Trust 2003-1 (the
"Trust");

          WHEREAS, the Originator is obligated, in connection with the
transactions contemplated by this Agreement, to make certain representations,
warranties and covenants with respect to itself, the Seller and the Mortgage
Loans.

          NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:

                                   ARTICLE I.

                                   DEFINITIONS


          Section 1.01 DEFINITIONS. All capitalized terms used but not defined
herein and below shall have the meanings assigned thereto in the Pooling and
Servicing Agreement.


                                        1

<PAGE>



     "ORIGINATOR INFORMATION": The information in the Prospectus
     Supplement as follows: under "SUMMARY OF TERMS--Mortgage Loans,"
     "SUMMARY OF TERMS--Primary Mortgage Insurance," the first sentence
     under the fourth bullet point under "RISK FACTORS--Unpredictability
     of Prepayments and Effect on Yields," "RISK FACTORS--Delinquent
     Mortgage Loan Risk," the third sentence under "RISK FACTORS--
     Balloon Loan Risks," the first sentence under "RISK FACTORS--Second
     Lien Loan Risk," "RISK FACTORS--Convertible Mortgage Loan Risk,"
     the first sentence of the third paragraph under "RISK FACTORS--
     Potential Inadequacy of Credit Enhancement for the Offered
     Certificates," the second sentence under the fourth bullet point
     under "RISK FACTORS--Interest Generated by the Mortgage Loans May
     Be Insufficient to Maintain Overcollateralization," the second
     sentence under "RISK FACTORS--High Loan-to-Value Ratios Increase
     Risk of Loss," "THE MORTGAGE POOL," "OPTION ONE MORTGAGE
     CORPORATION," the first sentence under "DESCRIPTION OF THE
     CERTIFICATES--The PMI Policy," and the first sentence of the sixth
     paragraph under "YIELD, PREPAYMENT AND MATURITY CONSIDERATIONS."

                                   ARTICLE II.

                SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE


     Section 2.01 SALE OF MORTGAGE LOANS.

          (a) The Seller, concurrently with the execution and delivery of this
Agreement, does hereby sell, and in connection therewith hereby assigns to the
Purchaser, effective as of the Closing Date, without recourse, (i) all of its
right, title and interest in and to each Mortgage Loan, including the related
Cut-off Date Principal Balance, all interest accruing thereon on and after the
Cut-off Date and all collections in respect of interest and principal due on or
after the Cut-off Date; (ii) property which secured such Mortgage Loan and which
has been acquired by foreclosure or deed in lieu of foreclosure; (iii) its
interest in any insurance policies (including the PMI Policy) in respect of the
Mortgage Loans and (iv) all proceeds of any of the foregoing.

          (b) [Reserved].

     Section 2.02 OBLIGATIONS OF ORIGINATOR UPON SALE. In connection with any
transfer pursuant to Section 2.01 hereof, the Originator further agrees, at its
own expense on or prior to the Closing Date, (a) to cause the books and records
of the Seller to indicate that the Mortgage Loans have been sold to the
Purchaser pursuant to this Agreement, (b) to deliver to the Purchaser and the
Trustee a computer file containing a true and complete list of all such Mortgage
Loans specifying for each such Mortgage Loan, as of the Cut-off Date, (i) its
account number and (ii) the Cut-off Date Principal Balance. Such file, which
forms a part of Exhibit D to the Pooling and Servicing Agreement, shall also be
marked as Schedule I to this Agreement and is hereby incorporated into and made
a part of this Agreement and (c) to deliver to the Purchaser and the Trustee the
ETT (as defined in the PMI Policy) with respect to the Mortgage Loans.


                                        2

<PAGE>



     In connection with any conveyance by the Seller, the Seller shall on behalf
of the Purchaser deliver to, and deposit with the Trustee, as assignee of the
Purchaser, on or before the Closing Date, the following documents or instruments
with respect to each Mortgage Loan:

          (i) the original Mortgage Note, endorsed either (A) in blank, in which
case the Trustee shall cause the endorsement to be completed or (B) in the
following form: "Pay to the order of Wells Fargo Bank Minnesota, National
Association, as Trustee, without recourse", or with respect to any lost Mortgage
Note, an original Lost Note Affidavit stating that the original mortgage note
was lost, misplaced or destroyed, together with a copy of the related mortgage
note; PROVIDED, HOWEVER, that such substitutions of Lost Note Affidavits for
original Mortgage Notes may occur only with respect to Mortgage Loans, the
aggregate Cut-off Date Principal Balance of which is less than or equal to 1.00%
of the Pool Balance as of the Cut-off Date;

          (ii) the original Mortgage with evidence of recording thereon, and the
original recorded power of attorney, if the Mortgage was executed pursuant to a
power of attorney, with evidence of recording thereon or, if such Mortgage or
power of attorney has been submitted for recording but has not been returned
from the applicable public recording office, has been lost or is not otherwise
available, a copy of such Mortgage or power of attorney, as the case may be,
certified to be a true and complete copy of the original submitted for
recording;

          (iii) an original Assignment of Mortgage, in form and substance
acceptable for recording. The Mortgage shall be assigned either (A) in blank,
without recourse or (B) to "Wells Fargo Bank Minnesota, National Association, as
Trustee, without recourse";

          (iv) an original copy of any intervening assignment of Mortgage
showing a complete chain of assignments;

          (v) the original or a certified copy of lender's title insurance
policy; and

          (vi) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any.

     The Originator hereby confirms to the Purchaser and the Trustee that it has
caused the appropriate entries to be made in the general accounting records of
the Seller, to indicate that such Mortgage Loans have been transferred to the
Trustee and constitute part of the Trust in accordance with the terms of the
Pooling and Servicing Agreement.

     If any of the documents referred to in Section 2.02(ii), (iii) or (iv)
above has as of the Closing Date been submitted for recording but either (x) has
not been returned from the applicable public recording office or (y) has been
lost or such public recording office has retained the original of such document,
the obligations of the Seller to deliver such documents shall be deemed to be
satisfied upon (1) delivery to the Trustee or the Custodian no later than the
Closing Date, of a copy of each such document certified by the Originator in the
case of (x) above or the applicable public recording office in the case of (y)
above to be a true and complete copy of the original that was submitted for
recording and (2) if such copy is certified by the Originator, delivery to the
Trustee or the Custodian, promptly upon receipt thereof of either the original
or a copy of such document certified by the


                                        3

<PAGE>



applicable public recording office to be a true and complete copy of the
original. If the original lender's title insurance policy, or a certified copy
thereof, was not delivered pursuant to Section 2.02(v) above, the Seller shall
deliver or cause to be delivered to the Trustee or the Custodian, the original
or a copy of a written commitment or interim binder or preliminary report of
title issued by the title insurance or escrow company, with the original or a
certified copy thereof to be delivered to the Trustee or the Custodian, promptly
upon receipt thereof. The Originator and the Seller shall deliver or cause to be
delivered to the Trustee or the Custodian promptly upon receipt thereof any
other documents constituting a part of a Mortgage File received with respect to
any Mortgage Loan, including, but not limited to, any original documents
evidencing an assumption or modification of any Mortgage Loan.

     Upon discovery or receipt of notice of any materially defective document
in, or that a document is missing from, a Mortgage File, the Seller shall have
120 days to cure such defect or deliver such missing document to the Purchaser.
If the Seller does not cure such defect or deliver such missing document within
such time period, the Originator shall either repurchase or substitute for such
Mortgage Loan pursuant to Section 2.03 of the Pooling and Servicing Agreement.

     The Purchaser hereby acknowledges its acceptance of all right, title and
interest to the Mortgage Loans and other property, now existing and hereafter
created, conveyed to it pursuant to Section 2.01.

     The parties hereto intend that the transaction set forth herein be a sale
by the Seller to the Purchaser of all the Seller's right, title and interest in
and to the Mortgage Loans and other property described above. In the event the
transaction set forth herein is deemed not to be a sale, the Seller hereby
grants to the Purchaser a security interest in all of the Seller's right, title
and interest in, to and under the Mortgage Loans and other property described
above, whether now existing or hereafter created, to secure all of the Seller's
obligations hereunder; and this Agreement shall constitute a security agreement
under applicable law.

     The Originator shall cause the Assignments which were delivered in blank to
be completed and shall cause all Assignments referred to in Section 2.02(iii)
hereof and, to the extent necessary, in Section 2.02(iv) hereof to be recorded.
The Originator shall be required to deliver such Assignments for recording
within 90 days of the Closing Date. Notwithstanding the foregoing, however, for
administrative convenience and facilitation of servicing and to reduce closing
costs, the Assignments of Mortgage shall not be required to be submitted for
recording with respect to any Mortgage Loan in any jurisdiction where the Rating
Agencies do not require recordation in order to receive the ratings on the
Certificates at the time of their initial issuance; PROVIDED, HOWEVER, each
Assignment shall be submitted for recording by the Originator in the manner
described above, at no expense to the Trust Fund or Trustee, upon the earliest
to occur of: (i) reasonable direction by Holders of Certificates entitled to at
least 25% of the Voting Rights, (ii) the occurrence of a Master Servicer Event
of Termination, (iii) the occurrence of a bankruptcy, insolvency or foreclosure
relating to the Master Servicer, (iv) the occurrence of a servicing transfer as
described in Section 7.02 hereof, (v) if the Originator is not the Master
Servicer and with respect to any one Assignment the occurrence of a bankruptcy,
insolvency or foreclosure relating to the Mortgagor under the related Mortgage
and (vi) any Mortgage Loan that is 90 days or more Delinquent. Upon (a) receipt
of written notice from the Trustee that recording of the Assignments is required
pursuant to one or more


                                        4

<PAGE>



of the conditions (excluding (v) and (vi) above) set forth in the preceding
sentence or (b) upon the occurrence of condition (v) or (vi) in the preceding
sentence, the Originator shall be required to deliver such Assignments for
recording as provided above, promptly and in any event within 30 days following
receipt of such notice. Notwithstanding the foregoing, if the Originator fails
to pay the cost of recording the Assignments, such expense will be paid by the
Trustee and the Trustee shall be reimbursed for such expenses by the Trust. The
Originator shall furnish the Trustee, or its designated agent, with a copy of
each Assignment submitted for recording. In the event that any such Assignment
is lost or returned unrecorded because of a defect therein, the Originator shall
promptly have a substitute Assignment prepared or have such defect cured, as the
case may be, and thereafter cause each such Assignment to be duly recorded. In
the event that any Mortgage Note is endorsed in blank as of the Closing Date,
within ninety (90) days of the Closing Date the Originator shall cause to be
completed such endorsements "Pay to the order of Wells Fargo Bank Minnesota,
National Association, as Trustee, without recourse."

     The Originator shall forward to the Purchaser original documents evidencing
an assumption, modification, consolidation or extension of any Mortgage Loan
entered into in accordance with the Pooling and Servicing Agreement within two
weeks of their execution; PROVIDED, HOWEVER, that the Originator shall provide
the Purchaser with a certified true copy of any such document submitted for
recordation within two weeks of 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 365 days of its submission for recordation. In the event that
the Originator cannot provide a copy of such document certified by the public
recording office within such 365 day period, the Originator shall deliver to the
Purchaser, within such 365 day period, an Officer's Certificate of the Master
Servicer which shall (A) identify the recorded document, (B) state that the
recorded document has not been delivered to the Purchaser due solely to a delay
caused by the public recording office, (C) state the amount of time generally
required by the applicable recording office to record and return a document
submitted for recordation, if known, and (D) specify the date the applicable
recorded document is expected to be delivered to the Purchaser, and, upon
receipt of a copy of such document certified by the public recording office, the
Originator shall immediately deliver such document to the Purchaser. In the
event the appropriate public recording office will not certify as to the
accuracy of such document, the Originator shall deliver a copy of such document
certified by an officer of the Originator to be a true and complete copy of the
original to the Purchaser.

     Section 2.03 PAYMENT OF PURCHASE PRICE FOR THE MORTGAGE LOANS.

     In consideration of the sale of the Mortgage Loans from the Seller to the
Purchaser on the Closing Date, the Purchaser agrees to pay to the Seller on the
Closing Date (the "Purchase Price") by transfer of (i) immediately available
funds in an amount equal to $526,358,968.06 and (ii) a 43.86% percentage
interest in the Class C Certificates, the Class P Certificates and the Class R
Certificates (collectively the "Option One Certificates") which Option One
Certificates shall be registered in the name of Option One Mortgage Corporation.
The Originator shall pay, and be billed directly for, all expenses incurred by
the Purchaser in connection with the issuance of the Certificates, including,
without limitation, printing fees incurred in connection with the prospectus
relating to the Certificates, blue sky registration fees and expenses, fees and
expenses of Purchaser's


                                        5

<PAGE>



counsel, fees of the Rating Agencies requested to rate the Certificates,
accountant's fees and expenses and the fees and expenses of the Trustee and
other out-of-pocket costs, if any.

                                  ARTICLE III.

               REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH


     Section 3.01 ORIGINATOR REPRESENTATIONS AND WARRANTIES RELATING TO THE
MORTGAGE LOANS. The Originator hereby represents and warrants with respect to
the Mortgage Loans to the Purchaser that as of the Closing Date or as of such
date specifically provided herein:

          (a) The Seller has good title to and is the sole owner and holder of
the Mortgage Loan;

          (b) Immediately prior to the transfer and assignment to the Purchaser,
the Mortgage Note and the Mortgage Loan were not subject to an assignment or
pledge, and the Seller has full right and authority to sell and assign the
Mortgage Loan;

          (c) The Seller is transferring such Mortgage Loan to the Purchaser
free and clear of any and all liens, pledges, charges or security interests of
any nature encumbering the Mortgage Loans;

          (d) The information set forth on Schedule I is true and correct in all
material respects as of the Cut-off Date or such other date as may be indicated
in such schedule;

          (e) The Mortgage Loan has been acquired, serviced, collected and
otherwise dealt with by the Originator and any affiliate of the Originator in
compliance with all applicable federal, state and local laws and regulations and
the terms of the related Mortgage Note and Mortgage;

          (f) The related Mortgage Note and Mortgage are genuine and each is the
legal, valid and binding obligation of the maker thereof, enforceable in
accordance with its terms except as such enforcement may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by general equity principles
(regardless of whether such enforcement is considered in a proceeding in equity
or at law);

          (g) The related Mortgage is a valid and enforceable first or second
lien on the related Mortgaged Property, which Mortgaged Property is free and
clear of all encumbrances and liens (including mechanics liens) having priority
over the first or second lien of the Mortgage except for: (i) liens for real
estate taxes and assessments not yet due and payable; (ii) covenants, conditions
and restrictions, rights of way, easements and other matters of public record as
of the date of recording of such Mortgage, such exceptions appearing of record
being acceptable to mortgage lending institutions generally or specifically
reflected or considered in the lender's title insurance policy delivered to the
originator of the Mortgage Loan and referred to in the appraisal made in
connection with the origination of the related Mortgage Loan, (iii) other
matters to which like properties are commonly subject which do not materially
interfere with the benefits of the security


                                        6

<PAGE>



intended to be provided by such Mortgage and (iv) the first lien on the
Mortgaged Property, in the case of the Mortgages that are second liens;

          (h) Any security agreement, chattel mortgage or equivalent document
related to such Mortgage Loan establishes and creates a valid and enforceable
first or second lien on the Mortgaged Property;

          (i) As of the last calendar day of December 2002 and with respect to
any Mortgage Loan that had a payment due on or before December 1, 2002, except
with respect to .32% of the Mortgage Loans by the aggregate Cut-off Date
Principal Balance of the Mortgage Loans, the related Monthly Payment due on
December 1, 2002 has been received. In addition, .36% of the Mortgage Loans have
been 30 or more days delinquent in the last 12 months and .03% of the Mortgage
Loans have been 30 or more days delinquent for two payment periods in the last
12 months;

          (j) Neither the Originator nor the Seller has advanced funds, or
induced, solicited or knowingly received any advance of funds by a party other
than the Mortgagor, directly or indirectly, for the payment of any amount
required under the Mortgage Loan;

          (k) Neither the Originator nor the Seller has impaired, waived,
altered or modified the related Mortgage or Mortgage Note in any material
respect, or satisfied, canceled, rescinded or subordinated such Mortgage or
Mortgage Note in whole or in part or released all or any material portion of the
Mortgaged Property from the lien of the Mortgage, or executed any instrument of
release, cancellation, rescission or satisfaction of the Mortgage Note or
Mortgage;

          (l) As of the Cut-off Date, the Mortgage has not been satisfied,
canceled or subordinated, in whole or in part, or rescinded, and the Mortgaged
Property has not been released from the lien of the Mortgage, in whole or in
part (except for a release that does not materially impair the security of the
Mortgage Loan or a release the effect of which is reflected in the Loan-to-Value
Ratio for the Mortgage Loan as set forth in the Schedule of Mortgage Loans), nor
has any instrument been executed that would effect any such release,
cancellation, subordination or rescission;

          (m) No Mortgage Loan is subject to any right of recission, set-off,
counterclaim or defense, including the defense of usury, nor will the operation
of any of the terms of any Mortgage Note or Mortgage, or the exercise of any
right thereunder, render either the Mortgage Note or Mortgage unenforceable in
whole or in part, or subject to any right of recission, set-off, counterclaim or
defense, including the defense of usury, and no such right of recission,
set-off, counterclaim or defense has been asserted with respect thereto;

          (n) To the Originator's knowledge, there is no proceeding pending for
the total or partial condemnation and no eminent domain proceedings pending
affecting any Mortgaged Property;

          (o) Each Mortgage Loan is covered by either (i) a mortgage title
insurance policy or other generally acceptable form of insurance policy
customary in the jurisdiction where the Mortgaged Property is located or (ii) if
generally acceptable in the jurisdiction where the Mortgaged


                                        7

<PAGE>



Property is located, an attorney's opinion of title given by an attorney
licensed to practice law in the jurisdiction where the Mortgaged Property is
located. All of the Originator's rights under such policies, opinions or other
instruments shall be transferred and assigned to Purchaser upon sale and
assignment of the Mortgage Loans hereunder. The title insurance policy has been
issued by a title insurer licensed to do business in the jurisdiction where the
Mortgaged Property is located, insuring the original lender, its successor and
assigns, as to the first or second priority lien of the Mortgage in the original
principal amount of the Mortgage Loan, subject to the exceptions contained in
such policy. The Originator is the sole insured of such mortgagee title
insurance policy, and such mortgagee title insurance policy is in full force and
effect and will be in force and effect upon the consummation of the transactions
contemplated by this Agreement. Neither the Originator nor any affiliate of the
Originator has made, and the Originator has no knowledge of, any claims under
such mortgagee title insurance policy. The Originator is not aware of any action
by a prior holder and neither the Originator nor any affiliate of the Originator
has done, by act or omission, anything which could impair the coverage or
enforceability of such mortgagee title insurance policy or the accuracy of such
attorney's opinion of title;

          (p) There is no material default, breach, violation or event of
acceleration existing under the related Mortgage or the related Mortgage Note
and no event which, with the passage of time or with notice and the expiration
of any grace or cure period, would constitute a material default, breach,
violation or event of acceleration, other than a payment delinquency that is for
a payment due after the date specified in (i) above. Neither the Originator, the
Seller nor any affiliate of the Originator or the Seller has waived any default,
breach, violation or event of acceleration;

          (q) With respect to any Mortgage Loan which provides for an adjustable
interest rate, all rate adjustments have been performed in accordance with the
terms of the related Mortgage Note or subsequent modifications, if any;

          (r) To the Originator's knowledge, there are no delinquent taxes,
ground rents, water charges, sewer rents, assessments, insurance premiums,
leasehold payments, including assessments payable in future installments or
other outstanding charges, affecting the related Mortgaged Property;

          (s) No foreclosure proceedings are pending against the Mortgaged
Property and the Mortgage Loan is not subject to any pending bankruptcy or
insolvency proceeding, and to the Originator's best knowledge, no material
litigation or lawsuit relating to the Mortgage Loan is pending;

          (t) The Mortgage Loan obligates the mortgagor thereunder to maintain a
hazard insurance policy ("Hazard Insurance") in an amount at least equal to the
lesser of (i) the maximum insurable value of such improvements or (ii) the
principal balance of the Mortgage Loan with a standard mortgagee clause, in
either case in an amount sufficient to avoid the application of any
"co-insurance provisions," and, if it was in place at origination of the
Mortgage Loan, flood insurance, at the mortgagor's cost and expense. If the
Mortgaged Property is in an area identified in the Federal Register by the
Federal Emergency Management Agency ("FEMA") as having special flood hazards, a
flood insurance policy is in effect which met the requirements of FEMA at the
time such policy was issued. The Mortgage obligates the Mortgagor to maintain
the Hazard Insurance,


                                        8

<PAGE>



and, if applicable, flood insurance policy at the Mortgagor's cost and expense,
and on the Mortgagor's failure to do so, authorizes the holder of the Mortgage
to obtain and maintain such insurance at the Mortgagor's cost and expense, and
to seek reimbursement therefor from the Mortgagor. The Mortgaged Property is
covered by Hazard Insurance;

          (u) The Mortgage Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage and the security
interest of any applicable security agreement or chattel mortgage;

          (v) The Mortgage contains an enforceable provision for the
acceleration of the payment of the unpaid principal balance of the Mortgage Loan
in the event that the Mortgaged Property is sold or transferred without the
prior written consent of the Mortgagee thereunder. The Mortgage contains
customary and enforceable provisions such as to render the rights and remedies
of the holder thereof adequate for the realization against the Mortgaged
Property of the benefits of the security provided thereby, including (i) in the
case of a Mortgage designated as a deed of trust, by trustee's sale or judicial
foreclosure and (ii) otherwise by judicial foreclosure. Since the date of
origination of the Mortgage Loan, the Mortgaged Property has not been subject to
any bankruptcy proceeding or foreclosure proceeding and the Mortgagor has not
filed for protection under applicable bankruptcy laws. There is no homestead or
other exemption available to the Mortgagor that would interfere with the right
to sell the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage. In the event the Mortgage constitutes a deed of trust, a trustee, duly
qualified under applicable law to serve as such, as been properly designated and
currently so serves and is named in the Mortgage, and no fees or expenses are or
will become payable by Purchaser to the trustee under the deed of trust, except
in connection with a trustee's sale after default by the related Mortgagor. The
Mortgagor has not notified the Originator or any affiliate of the Originator and
the Originator has no knowledge of any relief requested or allowed to the
Mortgagor under the Soldiers and Sailors Civil Relief Act of 1940;

          (w) Except as set forth in the appraisal which forms part of the
related Mortgage File, the Mortgaged Property, normal wear and tear excepted, is
undamaged by waste, fire, earthquake or earth movement, windstorm, flood,
tornado or other casualty so as to affect materially and adversely the value of
the Mortgaged Property as security for the Mortgage Loan or the use for which
the premises were intended;

          (x) To the Originator's knowledge, there was no fraud involved in the
origination of the Mortgage Loan by the mortgagee or by the Mortgagor, any
appraiser or any other party involved in the origination of the Mortgage Loan;

          (y) Each Mortgage File contains an appraisal of the Mortgaged Property
indicating an appraised value equal to the appraised value identified for such
Mortgaged Property on the Mortgage Loan Schedule. Each appraisal has been
performed in accordance with the provisions of the Financial Institutions
Reform, Recovery and Enforcement Act of 1989;

          (z) To the best of the Originator's knowledge, all parties which have
had any interest in the Mortgage Loan, whether as mortgagee, assignee, pledgee
or otherwise, are (or, during the period in which they held and disposed of such
interest, were) in compliance with any and all


                                        9

<PAGE>



applicable "doing business" and licensing requirements of the laws of the state
wherein the Mortgaged Property is located;

          (aa) No improvements on the related Mortgaged Property (upon which
value was given) encroach on adjoining properties (and in the case of a
condominium unit, such improvements are within the project with respect to that
unit), and no improvements on adjoining properties encroach upon the Mortgaged
Property unless there exists in the Mortgage File a title Policy with
endorsements which insure against losses sustained by the insured as a result of
such encroachments;

          (bb) Each Mortgage Loan was originated or acquired by a savings and
loan association, a savings bank, a commercial bank or similar banking
institution which is supervised and examined by a federal or state authority, or
by a mortgagee approved by the Secretary of HUD. Each Mortgage Loan was
originated substantially in accordance with the Originator's underwriting
criteria, which are at least as stringent as the underwriting criteria set forth
in the Prospectus Supplement. Each Mortgage Loan is currently being serviced by
the Originator and has been serviced by the Originator since the date of
origination of such Mortgage Loan;

          (cc) (i) Principal payments on the Mortgage Loan commenced no more
than two months after the proceeds of the Mortgage Loan were disbursed and (ii)
each Mortgage Note is payable on the first day of each month;

          (dd) Other than with respect to not more than 0% of the Mortgage Loans
(by aggregate principal balance of the Mortgage Loans as of the Cut-off Date),
which are "balloon payment" mortgage loans, each Mortgage Loan is fully
amortizing;

          (ee) The Mortgage Loan bears interest at the Mortgage Rate and the
Mortgage Note does not permit negative amortization. No Mortgage Loan bearing
interest at an adjustable rate permits the Mortgagor to convert the Mortgage
Loan to a fixed rate Mortgage Loan;

          (ff) With respect to escrow deposits, if any, all such payments are in
the possession of, or under the control of, the Master Servicer and there exist
no deficiencies in connection therewith for which customary arrangements for
repayment thereof have not been made. No escrow deposits or escrow advances or
other charges or payments due the Master Servicer have been capitalized under
any Mortgage or the related Mortgage Note;

          (gg) No Mortgage Loan contains provisions pursuant to which scheduled
payments are: (i) paid or partially paid with funds deposited in any separate
account established by the Originator, the Seller, the Mortgagor, or anyone on
behalf of the Mortgagor; or (ii) paid by any source other than the Mortgagor or
contains any other similar provisions which may constitute a "buydown"
provision. The Mortgage Loan is not a graduated payment mortgage loan and the
Mortgage Loan does not have a shared appreciation or other contingent interest
feature;

          (hh) As of the origination date of each Mortgage Loan, the related
Mortgaged Property is lawfully permitted to be occupied under applicable law;



                                       10

<PAGE>



          (ii) No law relating to servicing, collection or notification
practices and no law relating to origination practices, has been violated in
connection with any Mortgage Loan transferred to the Purchaser pursuant to this
Agreement, including, without limitation, usury, truth in lending, real estate
settlement procedures, consumer credit protection, equal credit opportunity or
disclosure laws. The Mortgage Loan has been serviced in accordance with the
terms of the Mortgage Note.

          (jj) No Mortgage Loan was made in connection with (a) the construction
or rehabilitation of a Mortgaged Property or (b) facilitating the trade-in or
exchange of a Mortgaged Property;

          (kk) The proceeds of the Mortgage Loan have been fully disbursed to or
for the account of the Mortgagor and there is no obligation for the Mortgagee to
advance additional funds thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage have been paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due to the, Mortgagee pursuant to the Mortgage Note or Mortgage;

          (ll) There are no mechanics' or similar liens or claims that have been
filed for work, labor or material (and no rights are outstanding that under law
could give rise to such lien) affecting the related Mortgaged Property that are
or may be liens prior to, or equal or coordinate with, the lien of the related
Mortgage;

          (mm) As to each Mortgage Loan, interest is calculated on the Mortgage
Note on the basis of twelve 30-day months and a 360 day year;

          (nn) The Mortgaged Property consists of one of the following: detached
or semi-detached one- to four-family dwelling units, townhouses, individual
condominium units and individual units in planned unit developments, or
manufactured homes;

          (oo) Each Mortgage Loan constitutes a "qualified mortgage" within the
meaning of Section 860G(a)(3) of the Code;

          (pp) The Mortgage Loans were not intentionally selected by the Seller
in a manner intended to adversely affect the Purchaser or the Trust;

          (qq) The representations, warranties and covenants, set forth in this
Section shall survive the Closing Date;

          (rr) The Mortgage Loans have original terms to maturity ranging from
10 to 30 years;

          (ss) With respect to the Mortgage Loans, no more than 23.02%; 13.45%;
8.87% and 7.08% of the Mortgage Loans, by Cut-off Date Principal Balance will be
secured by Mortgaged Properties located in California, New York, Massachusetts
and Florida, respectively; and 73.34% of the Mortgage Loans, by Cut-off Date
Principal Balance will be secured by real property with a


                                       11

<PAGE>



single family residence erected thereon and 4.53% of the Mortgage Loans, by the
Cut-off Date Principal Balance are secured by condominiums;

          (tt) As of the Cut-off Date, each Mortgage Loan, had a
Loan-to-Value-Ratio that was less than or equal to 100%;

          (uu) With respect to each Mortgage Loan, the Mortgage Note related
thereto bears a fixed Mortgage Rate or an adjustable Mortgage Rate which will be
adjusted on each Adjustment Date to equal the Index plus the Gross Margin,
rounded to the nearest or next highest 0.125%, subject to the Periodic Rate Cap,
the Maximum Mortgage Rate and the Minimum Mortgage Rate;

          (vv) The average Cut-off Date Principal Balance of the Mortgage Loans
is $169,902.83;

          (ww) No Mortgage Loan is subject to the requirements of the Home
Ownership and Equity Protection Act of 1994 ("HOEPA") and no Mortgage Loan is in
violation of any state law or ordinance similar to HOEPA;

          (xx) No proceeds from any Mortgage Loan were used to purchase single
premium credit insurance policies as part of the origination of, or as a
condition to closing, such Mortgage Loan;

          (yy) No Mortgage Loan has a Prepayment Charge term longer than five
years after its origination;

          (zz) Each Group I Mortgage Loan had a Principal Balance at origination
which conformed with Fannie Mae/Freddie Mac guidelines and none of the Group I
Mortgage Loans (by aggregate principal balance of the Group I Mortgage Loans as
of the Cut-Off Date) were originated with points/fees in excess of 5.00%.

          (aaa) Each Mortgage Loan conforms, and all Mortgage Loans in the
aggregate conform, in all material respects, to the description thereof set
forth in the Prospectus Supplement;

          (bbb) With respect to second lien Mortgage Loans, either (a) no
consent for the Mortgage Loan is required by the holder of the related first
lien or (b) such consent has been obtained and is contained in the Mortgage
File;

          (ccc) Each Mortgage Note is comprised of one original promissory note
and each such promissory note constitutes an "instrument" for purposes of
section 9-102(a)(65) of the UCC;

          (ddd) Each Mortgage Loan satisfies the eligibility for purchase
requirements and was originated in compliance with Lender Letter # LL03-00 dated
April 11, 2000 for Fannie Mae Sellers (the "Lender Letter");

          (eee) No borrower was encouraged or required to select a Mortgage Loan
product offered by the Originator which is a higher cost product designed for
less creditworthy borrowers,


                                       12

<PAGE>



unless at the time of the Mortgage Loan's origination, such borrower did not
qualify taking into account credit history and debt-to-income ratios for a
lower-cost credit product then offered by the Originator or any affiliate of the
Originator. If, at the time of loan application, the borrower may have qualified
for a for a lower-cost credit product then offered by any mortgage lending
affiliate of the Originator, the Originator referred the borrower's application
to such affiliate for underwriting consideration;

          (fff) The methodology used in underwriting the extension of credit for
each Mortgage Loan employs objective mathematical principles which relate the
borrower's income, assets and liabilities to the proposed payment and such
underwriting methodology does not rely on the extent of the borrower's equity in
the collateral as the principal determining factor in approving such credit
extension. Such underwriting methodology confirmed that at the time of
origination (application/approval) the borrower had a reasonable ability to make
timely payments on the Mortgage Loan;

          (ggg) With respect to any Mortgage Loan that contains a provision
permitting imposition of a premium upon a prepayment prior to maturity: (i)
prior to the loan's origination, the borrower agreed to such premium in exchange
for a monetary benefit, including but not limited to a rate or fee reduction,
(ii) prior to the loan's origination, the borrower was offered the choice of
another mortgage product that did not require payment of such a premium, (iii)
the prepayment premium is disclosed to the borrower in the loan documents
pursuant to applicable state and federal law, and (iv) notwithstanding any state
or federal law to the contrary, the Master Servicer shall not impose such
prepayment premium in any instance when the mortgage debt is accelerated as the
result of the borrower's default in making the loan payments;

          (hhh) No borrower was required to purchase any credit life,
disability, accident or health insurance product as a condition of obtaining the
extension of credit. No borrower obtained a prepaid single-premium credit life,
disability, accident or health insurance policy in connection with the
origination of the Mortgage Loan;

          (iii) All points and fees related to each Group I Mortgage Loan were
disclosed in writing to the borrower in accordance with applicable state and
federal law. Except in the case of a Group I Mortgage Loan in an original
principal amount of less than $60,000 which would have resulted in an
unprofitable origination, no borrower was charged "points and fees" (whether or
not financed) in an amount greater than 5% of the principal amount of such loan,
such 5% limitation calculated in accordance with the Lender Letter. All fees and
charges (including finance charges) and whether or not financed, assessed,
collected or to be collected in connection with the origination and servicing of
each Group I Mortgage Loan has been disclosed in writing to the borrower in
accordance with applicable state and federal law and regulation; and

          (jjj) The Group II Mortgage Loans that are "Covered Loans" within the
meaning of the Georgia Fair Lending Act (the "Georgia Act") comply with all
material provisions of the Georgia Act, and as of the Closing Date, any Group II
Mortgage Loans that are Covered Loan that has refinanced an existing "Home
Loan," within the meaning of the Georgia Act, within the previous five years,
the Covered Loan has provided a reasonable, tangible net benefit to the borrower


                                       13

<PAGE>



considering all of the circumstances. None of the Group II Mortgage Loans
constitute a "high cost mortgage" under the Georgia Act.

     Section 3.02 ORIGINATOR REPRESENTATIONS AND WARRANTIES RELATING TO THE
ORIGINATOR. The Originator represents, warrants and covenants to the Purchaser
as of the Closing Date or as of such other date specifically provided herein or
in the applicable Assignment and Conveyance:

               (i) The Originator is duly organized, validly existing and in
good standing as a corporation under the laws of the State of California and is
and will remain in compliance with the laws of each state in which any Mortgaged
Property is located to the extent necessary to ensure the enforceability of each
Mortgage Loan in accordance with the terms of this Agreement;

               (ii) The Originator has the full power and authority to execute,
deliver and perform, and to enter into and consummate, all transactions
contemplated by this Agreement. The Originator has duly authorized the
execution, delivery and performance of this Agreement, has duly executed and
delivered this Agreement and this Agreement, assuming due authorization,
execution and delivery by the Purchaser and the Seller, constitutes a legal,
valid and binding obligation of the Originator, enforceable against it in
accordance with its terms except as the enforceability thereof may be limited by
bankruptcy, insolvency or reorganization. At the time of the sale of each
Mortgage Loan by the Originator, the Originator had the full power and authority
to hold each Mortgage Loan and to sell each Mortgage Loan;

               (iii) The execution and delivery of this Agreement by the
Originator and the performance of and compliance with the terms of this
Agreement will not violate the Originator's articles of incorporation or by-laws
or constitute a default under or result in a breach or acceleration of, any
material contract, agreement or other instrument to which the Originator is a
party or which may be applicable to the Originator or its assets;

               (iv) The Originator is not in violation of, and the execution and
delivery of this Agreement by the Originator and its performance and compliance
with the terms of this Agreement will not constitute a violation with respect
to, any order or decree of any court or any order or regulation of any federal,
state, municipal or governmental agency having jurisdiction over the Originator
or its assets, which violation might have consequences that would materially and
adversely affect the condition (financial or otherwise) or the operation of the
Originator or its assets or might have consequences that would materially and
adversely affect the performance of its obligations and duties hereunder;

               (v) The Originator is a HUD approved mortgagee pursuant to
Section 203 and Section 211 of the National Housing Act. No event has occurred,
including but not limited to a change in insurance coverage, which would make
the Originator unable to comply with HUD eligibility requirements or which would
require notification to HUD;

               (vi) The Originator does not believe, nor does it have any reason
or cause to believe, that it cannot perform each and every covenant contained in
this Agreement;



                                       14

<PAGE>



               (vii) There are no actions or proceedings against, or
investigations known to it of, the Originator before any court, administrative
or other tribunal (A) that might prohibit its entering into this Agreement, (B)
seeking to prevent the sale of the Mortgage Loans or the consummation of the
transactions contemplated by this Agreement or (C) that might prohibit or
materially and adversely affect the performance by the Originator of its
obligations under, or validity of enforceability of, this Agreement;

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

               (ix) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Originator. The sale of
the Mortgage Loans was in the ordinary course of business of the Originator and
the assignment and conveyance of the Mortgage Notes and the Mortgages by the
Originator are not subject to the bulk transfer or any similar statutory
provisions;

               (x) The information delivered by the Originator to the Purchaser
with respect to the Originator's loan loss, foreclosure and delinquency
experience on mortgage loans underwritten to similar standards as the Mortgage
Loans and covering mortgaged properties similar to the Mortgaged Properties, is
true and correct in all material respects as of the date of such report;

               (xi) Except with respect to any statement regarding the
intentions of the Purchaser, or any other statement contained herein the truth
or falsity of which is dependant solely upon the actions of the Purchaser, this
Agreement does not contain any untrue statement of material fact or omit to
state a material fact necessary to make the statements contained herein not
misleading. The written statements, reports and other documents prepared and
furnished or to be prepared and furnished by the Originator pursuant to this
Agreement or in connection with the transactions contemplated hereby taken in
the aggregate do not contain any untrue statement of material fact or omit to
state a material fact necessary to make the statements contained therein not
misleading; and

               (xii) The Originator has not transferred the Mortgage Loans with
any intent to hinder, delay or defraud any of its creditors.

     Section 3.03 ORIGINATOR REPRESENTATIONS AND WARRANTIES RELATING TO THE
SELLER. The Originator represents, warrants and covenants to the Purchaser as of
the Closing Date or as of such other date specifically provided herein:

          (a) The Seller is duly organized, validly existing and in good
standing as a business trust under the laws of the State of Delaware and is and
will remain in compliance with the laws of each state in which any Mortgaged
Property is located to the extent necessary to ensure the enforceability of each
Mortgage Loan in accordance with the terms of this Agreement;



                                       15

<PAGE>



          (b) The Seller has the full power and authority to hold each Mortgage
Loan, to sell each Mortgage Loan, to execute, deliver and perform, and to enter
into and consummate, all transactions contemplated by this Agreement. The Seller
has duly authorized the execution, delivery and performance of this Agreement,
has duly executed and delivered this Agreement and this Agreement, assuming due
authorization, execution and delivery by the Purchaser and the Originator,
constitutes a legal, valid and binding obligation of the Seller, enforceable
against it in accordance with its terms except as the enforceability thereof may
be limited by bankruptcy, insolvency or reorganization;

          (c) The execution and delivery of this Agreement by the Seller and the
performance of and compliance with the terms of this Agreement will not violate
the Seller's certificate of trust or constitute a default under or result in a
breach or acceleration of, any material contract, agreement or other instrument
to which the Seller is a party or which may be applicable to the Seller or its
assets;

          (d) The Seller is not in violation of, and the execution and delivery
of this Agreement by the Seller and its performance and compliance with the
terms of this Agreement will not constitute a violation with respect to, any
order or decree of any court or any order or regulation of any federal, state,
municipal or governmental agency having jurisdiction over the Seller or its
assets, which violation might have consequences that would materially and
adversely affect the condition (financial or otherwise) or the operation of the
Seller or its assets or might have consequences that would materially and
adversely affect the performance of its obligations and duties hereunder; and

          (e) Immediately prior to the payment of the Purchase Price for each
Mortgage Loan, the Seller was the owner of the related Mortgage and the
indebtedness evidenced by the related Mortgage Note and upon the payment of the
Purchase Price by the Purchaser, in the event that the Seller retains record
title, the Seller shall retain such record title to each Mortgage, each related
Mortgage Note and the related Mortgage Files with respect thereto in trust for
the Purchaser as the owner thereof;

          (f) The Seller has not transferred the Mortgage Loans to the Purchaser
with any intent to hinder, delay or defraud any of its creditors;

          (g) There are no actions or proceedings against, or investigations
known to it of, the Seller before any court, administrative or other tribunal
(A) that might prohibit its entering into this Agreement, (B) seeking to prevent
the sale of the Mortgage Loans or the consummation of the transactions
contemplated by this Agreement or (C) that might prohibit or materially and
adversely affect the performance by the Seller of its obligations under, or
validity or enforceability of, this Agreement;

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


                                       16

<PAGE>



          (i) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Seller, and the transfer
assignment and conveyance of the Mortgage Notes and the Mortgages by the Seller
pursuant to this Agreement are not subject to the bulk transfer or any similar
statutory provisions; and

          (j) Except with respect to liens released immediately prior to the
transfer herein contemplated, each Mortgage Note and related Mortgage have not
been assigned or pledged and immediately prior to the transfer and assignment
herein contemplated, the Seller held good, marketable and indefeasible title to,
and was the sole owner and holder of, each Mortgage Loan subject to no liens,
charges, mortgages, claims, participation interests, equities, pledges or
security interests of any nature, encumbrances or rights of others
(collectively, a "Lien"); the Seller has full right and authority under all
governmental and regulatory bodies having jurisdiction over the Seller, subject
to no interest or participation of, or agreement with, any party, to sell and
assign the same pursuant to this Agreement; and immediately upon the transfers
and assignments herein contemplated, the Seller shall have transferred all of
its right, title and interest in and to each Mortgage Loan and the Trustee will
hold good, marketable and indefeasible title to, and be the sole owner of, each
Mortgage Loan subject to no Liens.

     Section 3.04 REMEDIES FOR BREACH OF REPRESENTATIONS AND WARRANTIES. It is
understood and agreed that the representations and warranties set forth in
Sections 3.01, 3.02 and 3.03 shall survive the sale of the Mortgage Loans to the
Purchaser and shall inure to the benefit of the Purchaser, notwithstanding any
restrictive or qualified endorsement on any Mortgage Note or Assignment or the
examination or lack of examination of any Mortgage File. With respect to the
representations and warranties contained herein that are made to the knowledge
or the best knowledge of the Originator or as to which the Originator has no
knowledge, if it is discovered that the substance of any such representation and
warranty is inaccurate and the inaccuracy materially and adversely affects the
value of the related Mortgage Loan, or the interest therein of the Purchaser or
the Purchaser's assignee, designee or transferee, then notwithstanding the
Originator's lack of knowledge with respect to the substance of such
representation and warranty being inaccurate at the time the representation and
warranty was made, such inaccuracy shall be deemed a breach of the applicable
representation and warranty and the Originator shall take such action described
in the following paragraphs of this Section 3.04 in respect of such Mortgage
Loan. Upon discovery by either the Originator, the Master Servicer or the
Purchaser of a breach of any of the foregoing representations and warranties
that materially and adversely affects the value of the Mortgage Loans or the
interest of the Purchaser (or which materially and adversely affects the
interests of the Purchaser in the related Mortgage Loan in the case of a
representation and warranty relating to a particular Mortgage Loan), the party
discovering such breach shall give prompt written notice to the others.

     Within 120 days of the earlier of either discovery by or notice to the
Originator of any breach of a representation or warranty made by the Originator
that materially and adversely affects the value of a Mortgage Loan or the
Mortgage Loans or the interest therein of the Purchaser, the Originator shall
use its best efforts promptly to cure such breach in all material respects and,
if such breach cannot be cured, the Originator shall, at the Purchaser's option,
repurchase such Mortgage Loan at the Purchase Price. In the event that a breach
shall involve any representation or warranty set forth in Section 3.02 or 3.03
and such breach cannot be cured within 120 days of the earlier of either
discovery by or notice to the Originator of such breach, all of the Mortgage
Loans shall, at the


                                       17

<PAGE>



Purchaser's option, be repurchased by the Originator at the Purchase Price. The
Originator may, at the request of the Purchaser and assuming the Originator has
a Qualified Substitute Mortgage Loan, rather than repurchase a deficient
Mortgage Loan as provided above, remove such Mortgage Loan and substitute in its
place a Qualified Substitute Mortgage Loan or Loans. If the Originator does not
provide a Qualified Substitute Mortgage Loan or Loans, it shall repurchase the
deficient Mortgage Loan. Any repurchase of a Mortgage Loan(s) pursuant to the
foregoing provisions of this Section 3.04 shall occur on a date designated by
the Purchaser and shall be accomplished by deposit in accordance with Section
2.03 of the Pooling and Servicing Agreement. Any repurchase or substitution
required by this Section shall be made in a manner consistent with Section 2.03
of the Pooling and Servicing Agreement.

     At the time of substitution or repurchase of any deficient Mortgage Loan,
the Purchaser and the Originator shall arrange for the reassignment of the
repurchased or substituted Mortgage Loan to the Originator and the delivery to
the Originator of any documents held by the Trustee relating to the deficient or
repurchased Mortgage Loan. In the event the Purchase Price is deposited in the
Collection Account, the Originator shall, simultaneously with such deposit, give
written notice to the Purchaser that such deposit has taken place. Upon such
repurchase, the Mortgage Loan Schedule shall be amended to reflect the
withdrawal of the repurchased Mortgage Loan from this Agreement.

     As to any Deleted Mortgage Loan for which the Originator substitutes a
Qualified Substitute Mortgage Loan or Loans, the Originator shall effect such
substitution by delivering to the Purchaser or its designee for such Qualified
Substitute Mortgage Loan or Loans the Mortgage Note, the Mortgage, the
Assignment and such other documents and agreements as are required by the
Pooling and Servicing Agreement, with the Mortgage Note endorsed as required
therein. The Originator shall deposit in the Collection Account the Monthly
Payment less the Servicing Fee due on such Qualified Substitute Mortgage Loan or
Loans in the month following the date of such substitution. Monthly Payments due
with respect to Qualified Substitute Mortgage Loans in the month of substitution
will be retained by the Originator. For the month of substitution, distributions
to the Purchaser will include the Monthly Payment due on such Deleted Mortgage
Loan in the month of substitution, and the Originator shall thereafter be
entitled to retain all amounts subsequently received by the Originator in
respect of such Deleted Mortgage Loan. Upon such substitution, the Qualified
Substitute Mortgage Loans shall be subject to the terms of this Agreement in all
respects, and the Originator shall be deemed to have made with respect to such
Qualified Substitute Mortgage Loan or Loans as of the date of substitution, the
covenants, representations and warranties set forth in Sections 3.01, 3.02 and
3.03.

     It is understood and agreed that the representations and warranties set
forth in Section 3.01 shall survive delivery of the respective Mortgage Files to
the Trustee on behalf of the Purchaser.

     It is understood and agreed that the obligations of the Originator set
forth in Section 3.04 to cure, repurchase and substitute for a defective
Mortgage Loan and to indemnify the Purchaser as provided in Section 5.01
constitute the sole remedies of the Purchaser respecting a missing or defective
document or a breach of the representations and warranties contained in Section
3.01, 3.02 or 3.03.


                                       18

<PAGE>




                                   ARTICLE IV.

                             ORIGINATOR'S COVENANTS


     Section 4.01 COVENANTS OF THE ORIGINATOR. The Originator hereby covenants
that except for the transfer hereunder, neither the Originator nor the Seller
will sell, pledge, assign or transfer to any other Person, or grant, create,
incur, assume or suffer to exist any Lien on any Mortgage Loan, or any interest
therein; the Originator will notify the Trustee, as assignee of the Purchaser,
of the existence of any Lien on any Mortgage Loan immediately upon discovery
thereof, and the Originator will defend the right, title and interest of the
Trust, as assignee of the Purchaser, in, to and under the Mortgage Loans,
against all claims of third parties claiming through or under the Originator or
the Seller; provided, however, that nothing in this Section 4.01 shall prevent
or be deemed to prohibit the Originator or the Seller from suffering to exist
upon any of the Mortgage Loans any Liens for municipal or other local taxes and
other governmental charges if such taxes or governmental charges shall not at
the time be due and payable or if the Originator or the Seller shall currently
be contesting the validity thereof in good faith by appropriate proceedings and
shall have set aside on its books adequate reserves with respect thereto.

                                   ARTICLE V.

               INDEMNIFICATION WITH RESPECT TO THE MORTGAGE LOANS


     Section 5.01 INDEMNIFICATION.

          (a) The Originator agrees to indemnify and hold harmless the
Purchaser, each of its directors, each of its officers and each person or entity
who controls the Purchaser or any such person, within the meaning of Section 15
of the Securities Act, against any and all losses, claims, damages or
liabilities, joint and several, as incurred, to which the Purchaser, or any such
person or entity may become subject, under the Securities Act or otherwise, and
will reimburse the Purchaser, each such director and officer and each such
controlling person for any legal or other expenses incurred by the Purchaser or
such controlling person in connection with investigating or defending any such
losses, claims, damages or liabilities, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of any material fact
contained in the Prospectus Supplement or any amendment or supplement to the
Prospectus Supplement approved in writing by the Originator or the omission or
the alleged omission to state therein a material fact necessary in order to make
the statements in the Prospectus Supplement or any amendment or supplement to
the Prospectus Supplement approved in writing by the Originator, in the light of
the circumstances under which they were made, not misleading, but only to the
extent that such untrue statement or alleged untrue statement or omission or
alleged omission relates to the Originator Information contained in the
Prospectus Supplement, (ii) any untrue statement or alleged untrue statement of
any material fact contained in the information on any computer tape furnished to
the Purchaser or an affiliate thereof by or on behalf of the Originator
containing information regarding the assets of the Trust or (iii) any untrue
statement or


                                       19

<PAGE>



alleged untrue statement of any material fact contained in any information
provided by the Originator to the Purchaser or any affiliate thereof, or any
material omission from the information purported to be provided hereby, and
disseminated to PriceWaterhouseCoopers L.L.P. or prospective investors (directly
or indirectly through available information systems) in connection with the
issuance, marketing or offering of the Certificates. This indemnity agreement
will be in addition to any liability which the Originator may otherwise have.

          (b) The Purchaser agrees to indemnify and hold harmless the Seller and
the Originator, each of their respective officers, directors and each person or
entity who controls the Seller, the Originator or any such person, against any
and all losses, claims, damages or liabilities, joint and several, to which the
Seller, the Originator or any such person or entity may become subject, under
the Securities Act or otherwise, and will reimburse the Seller and/or the
Originator for any legal or other expenses incurred by the Seller, the
Originator, each such officer and director and such controlling person in
connection with investigating or defending any such losses, claims, damages or
liabilities insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Prospectus
Supplement or any amendment or supplement to the Prospectus Supplement or the
omission or the alleged omission to state therein a material fact necessary in
order to make the statements in the Prospectus Supplement or any amendment or
supplement to the Prospectus Supplement, in the light of the circumstances under
which they were made, not misleading, but only to the extent that such untrue
statement or alleged untrue statement or omission or alleged omission is not
contained in the Originator Information in the Prospectus Supplement. This
indemnity agreement will be in addition to any liability which the Purchaser may
otherwise have.

          (c) Promptly after receipt by any indemnified party under this Article
V of notice of any claim or the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against any
indemnifying party under this Article V, notify the indemnifying party in
writing of the claim or the commencement of that action; PROVIDED, HOWEVER, that
the failure to notify an indemnifying party shall not relieve it from any
liability which it may have under this Article V except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify any indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under this Article V.

     If any such claim or action shall be brought against an indemnified party,
and it shall notify the indemnifying party thereof, the indemnifying party shall
be entitled to participate therein and, to the extent that it wishes, jointly
with any other similarly notified indemnifying party, to assume the defense
thereof with counsel reasonably satisfactory to the indemnified party. After
notice from the indemnifying party to the indemnified party of its election to
assume the defense of such claim or action, the indemnifying party shall not be
liable to the indemnified party under this Article V for any legal or other
expenses subsequently incurred by the indemnified party in connection with the
defense thereof other than reasonable costs of investigation.

     Any indemnified party shall have the right to employ separate counsel in
any such action and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless: (i) the employment thereof has been specifically authorized by the


                                       20

<PAGE>



indemnifying party in writing; (ii) such indemnified party shall have been
advised in writing by such counsel that there may be one or more legal defenses
available to it which are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it is
advisable for such indemnified party to employ separate counsel; or (iii) the
indemnifying party has failed to assume the defense of such action and employ
counsel reasonably satisfactory to the indemnified party, in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party, it being understood, however, the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to local counsel) at any time for all such indemnified parties, which
firm shall be designated in writing by the Purchaser, if the indemnified parties
under this Article V consist of the Purchaser, by the Originator, if the
indemnified parties in this Article V consist of the Originator, or by the
Seller, if the indemnified parties under this Article V consist of the Seller.

     Each indemnified party, as a condition of the indemnity agreements
contained in Section 5.01 (a) and (b) hereof, shall use its best efforts to
cooperate with the indemnifying party in the defense of any such action or
claim. No indemnifying party shall be liable for any settlement of any such
action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to consent to a settlement of any action, the indemnifying
party agrees that it shall be liable for any settlement of any proceeding
effected without its written consent if such settlement is entered into more
than 30 days after receipt by such indemnifying party of the aforesaid request
and the indemnifying party has not previously provided the indemnified party
with written notice of its objection to such settlement. No indemnifying party
shall effect any settlement of any pending or threatened proceeding in respect
of which an indemnified party is or could have been a party and indemnity is or
could have been sought hereunder, without the written consent of such
indemnified party, unless settlement includes an unconditional release of such
indemnified party from all liability and claims that are the subject matter of
such proceeding.

          (d) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in this Article is
for any reason held to be unenforceable although applicable in accordance with
its terms, the Seller and the Originator, on the one hand, and the Purchaser, on
the other, shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said indemnity agreement
incurred by the Seller, the Originator and the Purchaser in such proportions as
shall be appropriate to reflect the relative benefits received by the Seller and
the Originator on the one hand and the Purchaser on the other from the sale of
the Mortgage Loans such that the Purchaser is responsible for the lesser of (i)
0.25% thereof and (ii) 0.25% of the aggregate proceeds to the Seller from the
sale of the Mortgage Loans and the Originator shall be responsible for the
balance; PROVIDED, HOWEVER, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be


                                       21

<PAGE>



entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section, each officer and director of
the Purchaser and each person, if any, who controls the Purchaser within the
meaning of Section 15 of the Securities Act shall have the same rights to
contribution as the Purchaser, each director of the Originator, each officer of
the Originator, and each person, if any, who controls the Originator within the
meaning of Section 15 of the Securities Act shall have the same rights to
contribution as the Originator and each director of the Seller, each officer of
the Seller, and each person, if any, who controls the Seller within the meaning
of Section 15 of the Securities Act shall have the same rights to contribution
as the Seller.

          (e) The Originator agrees to indemnify and to hold each of the
Purchaser, the Trustee, each of the officers and directors of each such entity
and each person or entity who controls each such entity or person and each
Certificateholder harmless against any and all claims, losses, penalties, fines,
forfeitures, legal fees and related costs, judgments, and any other costs, fees
and expenses that the Purchaser, the Trustee, or any such person or entity and
any Certificateholder may sustain in any way (i) related to the failure of the
Originator to perform its duties in compliance with the terms of this Agreement,
(ii) arising from a breach by the Originator of its representations and
warranties in Section 3.01, 3.02 or 3.03 of this Agreement or (iii) related to
the origination or prior servicing of the Mortgage Loans by reason of any acts,
omissions, or alleged acts or omissions of the Originator, the Seller or any
servicer. The Originator shall immediately notify the Purchaser, the Trustee and
each Certificateholder if a claim is made by a third party with respect to this
Agreement. The Originator shall assume the defense of any such claim and pay all
expenses in connection therewith, including reasonable counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be entered
against the Purchaser, the Trustee or any such person or entity and/or any
Certificateholder in respect of such claim.

                                   ARTICLE VI.

                                   TERMINATION


          Section 6.01 TERMINATION. The respective obligations and
responsibilities of the Originator, the Seller and the Purchaser created hereby
shall terminate, except for the Originator's indemnity obligations as provided
herein upon the termination of the Trust as provided in Article X of the Pooling
and Servicing Agreement.

                                  ARTICLE VII.

                            MISCELLANEOUS PROVISIONS


          Section 7.01 AMENDMENT. This Agreement may be amended from time to
time by the Originator, the Seller and the Purchaser, by written agreement
signed by the Originator, the Seller and the Purchaser.



                                       22

<PAGE>



          Section 7.02 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.

          Section 7.03 NOTICES. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at or mailed by registered mail, postage prepaid, addressed
as follows:

          if to the Originator:

                  Option One Mortgage Corporation
                  3 Ada
                  Irvine, CA 92618
                  Attention: William L. O'Neill

or such other address as may hereafter be furnished to the Purchaser and the
Seller in writing by the Originator.

          if to the Purchaser:

                  Option One Mortgage Acceptance Corporation
                  3 Ada
                  Irvine, CA 92618
                  Attention: William L. O'Neill

or such other address as may hereafter be furnished to the Seller and the
Originator in writing by the Purchaser.

         if to the Seller:

                  Option One Owner Trust 2001-1B
                  c/o Wilmington Trust Company
                  One Rodney Square North
                  1100 North Market Street
                  Wilmington, Delaware 19890
                  Attention: Corporate Trust Administration

or such other address as may hereafter be furnished to the Originator and the
Purchaser in writing by the Seller.

     Section 7.04 SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions of terms of this Agreement shall be held
invalid for any reason whatsoever, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity of
enforceability of the other provisions of this Agreement.



                                       23

<PAGE>



     Section 7.05 COUNTERPARTS. 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 and such
counterparts, together, shall constitute one and the same agreement.

     Section 7.06 FURTHER AGREEMENTS. The Purchaser, the Seller and the
Originator each agree to execute and deliver to the other such additional
documents, instruments or agreements as may be necessary or reasonable and
appropriate to effectuate the purposes of this Agreement or in connection with
the issuance of any series of Certificates representing interests in the
Mortgage Loans.

     Without limiting the generality of the foregoing, as a further inducement
for the Purchaser to purchase the Mortgage Loans from the Seller, the Originator
will cooperate with the Purchaser in connection with the sale of any of the
securities representing interests in the Mortgage Loans. In that connection, the
Originator will provide to the Purchaser any and all information and appropriate
verification of information, whether through letters of its auditors and counsel
or otherwise, as the Purchaser shall reasonably request and will provide to the
Purchaser such additional representations and warranties, covenants, opinions of
counsel, letters from auditors, and certificates of public officials or officers
of the Originator as are reasonably required in connection with such
transactions and the offering of investment grade securities rated by the Rating
Agencies.

     Section 7.07 INTENTION OF THE PARTIES. It is the intention of the parties
that the Purchaser is purchasing, and the Seller is selling, the Mortgage Loans
rather than pledging the Mortgage Loans to secure a loan by the Purchaser to the
Seller. Accordingly, the parties hereto each intend to treat the transaction for
federal income tax purposes and all other purposes as a sale by the Seller, and
a purchase by the Purchaser, of the Mortgage Loans. The Purchaser will have the
right to review the Mortgage Loans and the related Mortgage Files to determine
the characteristics of the Mortgage Loans which will affect the federal income
tax consequences of owning the Mortgage Loans and the Seller will cooperate with
all reasonable requests made by the Purchaser in the course of such review.

     Section 7.08 SUCCESSORS AND ASSIGNS, ASSIGNMENT OF PURCHASE AGREEMENT. This
Agreement shall bind and inure to the benefit of and be enforceable by the
Seller, the Originator, the Purchaser, the Trustee and the NIMs Insurer, if any.
The NIMs Insurer, if any, shall be a third party beneficiary hereof and may
enforce the terms hereof as if a party hereto. The obligations of the Seller and
the Originator under this Agreement cannot be assigned or delegated to a third
party without the consent of the Purchaser which consent shall be at the
Purchaser's sole discretion, except that the Purchaser acknowledges and agrees
that the Seller or the Originator may assign its obligations hereunder to any
Person into which the Seller or the Originator is merged or any corporation
resulting from any merger, conversion or consolidation to which the Seller or
the Originator is a party or any Person succeeding to the business of the Seller
or the Originator. The parties hereto acknowledge that the Purchaser is
acquiring the Mortgage Loans for the purpose of contributing them to a trust
that will issue a series of Certificates representing undivided interests in
such Mortgage Loans. As an inducement to the Purchaser to purchase the Mortgage
Loans, the Seller and the Originator each acknowledge and consent to the
assignment by the Purchaser to the Trustee of all of the Purchaser's rights
against the Seller and the Originator pursuant to this Agreement insofar


                                       24

<PAGE>



as such rights relate to Mortgage Loans transferred to the Trustee and to the
enforcement or exercise of any right or remedy against the Seller or the
Originator pursuant to this Agreement by the Trustee. Such enforcement of a
right or remedy by the Trustee shall have the same force and effect as if the
right or remedy had been enforced or exercised by the Purchaser directly.

     Section 7.09 SURVIVAL. The representations and warranties set forth in
Sections 3.01, 3.02 and 3.03 and the provisions of Article V hereof shall
survive the purchase of the Mortgage Loans hereunder.

     Section 7.10 OWNER TRUSTEE. It is expressly understood and agreed by the
parties to this Agreement that (a) this Agreement is executed and delivered by
Wilmington Trust Company, not individually or personally but solely as Owner
Trustee of the Seller, in the exercise of the powers and authority conferred and
vested in it as trustee, (b) each of the representations, undertakings and
agreements herein made on the part of the Seller is made and intended not as
personal representations, undertakings and agreements by Wilmington Trust
Company but is made and intended for the purpose of binding only the Seller, (c)
nothing herein contained shall be construed as creating any liability on
Wilmington Trust Company, individually or personally, to perform any covenant
either expressed or implied contained herein, all such liability, if any, being
expressly waived by the parties to this Agreement and by any person claiming by,
through or under the parties to this Agreement and (d) under no circumstances
shall Wilmington Trust Company be personally liable for the payment of any
indebtedness or expenses of the Seller or be liable for the breach or failure of
any obligation, representation, warranty or covenant made or undertaken by the
Seller under this Agreement or any other document.






                                       25

<PAGE>



     IN WITNESS WHEREOF, the Seller, the Originator and the Purchaser have
caused their names to be signed to this Mortgage Loan Purchase Agreement by
their respective officers thereunto duly authorized as of the day and year fist
above written.

                                            OPTION ONE MORTGAGE ACCEPTANCE
                                            CORPORATION,
                                            as Purchaser


                                            By: ________________________________
                                                Name:
                                                Title:


                                            OPTION ONE MORTGAGE CORPORATION,
                                            as Originator


                                            By: ________________________________
                                                Name:
                                                Title:

                                            OPTION ONE OWNER TRUST 2001-1B,
                                                     as Seller


                                            By: Wilmington Trust Company, not in
                                                its individual capacity but
                                                solely as Owner Trustee.


                                            By: ________________________________
                                                Name:
                                                Title:






                                       26

<PAGE>


                                   SCHEDULE I

                                 MORTGAGE LOANS


                                 FILED BY PAPER








                                       I-1


<PAGE>


================================================================================







                        OPTION ONE MORTGAGE CORPORATION,

                                  as Originator


                         OPTION ONE OWNER TRUST 2001-2,

                                    as Seller

                                       and


                   OPTION ONE MORTGAGE ACCEPTANCE CORPORATION,

                                  as Purchaser




                        MORTGAGE LOAN PURCHASE AGREEMENT

                          Dated as of January 13, 2003



                  Fixed Rate and Adjustable Rate Mortgage Loans

                      Option One Mortgage Loan Trust 2003-1
                    Asset-Backed Certificates, Series 2003-1





================================================================================







<PAGE>



                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

                                   ARTICLE I.

                                   DEFINITIONS
Section 1.01   Definitions.....................................................1

                                   ARTICLE II.

                SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.01   Sale of Mortgage Loans..........................................2
Section 2.02   Obligations of Originator upon Sale.............................2
Section 2.03   Payment of Purchase Price For The Mortgage Loans................5

                                  ARTICLE III.

               REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01   Originator Representations And Warranties Relating to
               The Mortgage Loans..............................................6
Section 3.02   Originator Representations And Warranties Relating to
               The Originator.................................................12
Section 3.03   Originator Representations And Warranties Relating to
               The Seller.....................................................14
Section 3.04   Remedies For Breach of Representations And Warranties..........15

                                   ARTICLE IV.

                             ORIGINATOR'S COVENANTS
Section 4.01   Covenants of The Originator....................................17

                                   ARTICLE V.

               INDEMNIFICATION WITH RESPECT TO THE MORTGAGE LOANS
Section 5.01   Indemnification................................................18

                                   ARTICLE VI.

                                   TERMINATION
Section 6.01   Termination....................................................21

                                  ARTICLE VII.

                            MISCELLANEOUS PROVISIONS
Section 7.01   Amendment......................................................21
Section 7.02   Governing Law..................................................21


                                       ii

<PAGE>



Section 7.03   Notices........................................................21
Section 7.04   Severability of Provisions.....................................22
Section 7.05   Counterparts...................................................22
Section 7.06   Further Agreements.............................................22
Section 7.07   Intention of The Parties.......................................22
Section 7.08   Successors And Assigns, Assignment of Purchase Agreement.......23
Section 7.09   Survival.......................................................23
Section 7.10   Owner Trustee..................................................23




                                      iii

<PAGE>




          MORTGAGE LOAN PURCHASE AGREEMENT, dated as of January 13, 2003 (the
"Agreement"), among Option One Mortgage Corporation (the "Originator"), Option
One Owner Trust 2001-2 (the "Seller") and Option One Mortgage Acceptance
Corporation (the "Purchaser").

                             W I T N E S S E T H
                             -------------------

          WHEREAS, the Seller is the owner of (a) the notes or other evidence of
indebtedness (the "Mortgage Notes") so indicated on Schedule I hereto referred
to below and (b) the other documents or instruments constituting the Mortgage
File (collectively, the "Mortgage Loans"); and

          WHEREAS, the Seller, as of the date hereof, owns the mortgages (the
"Mortgages") on the properties (the "Mortgaged Properties") securing such
Mortgage Loans, including rights to (a) any property acquired by foreclosure or
deed in lieu of foreclosure or otherwise and (b) the proceeds of any insurance
policies covering the Mortgage Loans or the Mortgaged Properties or the obligors
on the Mortgage Loans; and

          WHEREAS, the parties hereto desire that the Seller sell the Mortgage
Loans to the Purchaser pursuant to the terms of this Agreement; and

          WHEREAS, the Seller is an indirect subsidiary of the Originator and
the Originator is the administrator of the Seller; and

          WHEREAS, the Originator originated the Mortgage Loans and previously
sold the Mortgage Loans; and

          WHEREAS, pursuant to the terms of a Pooling and Servicing Agreement
dated as of January 1, 2003 (the "Pooling and Servicing Agreement") among the
Purchaser as depositor, the Originator as master servicer and Wells Fargo Bank
Minnesota, National Association as trustee (the "Trustee"), the Purchaser will
convey the Mortgage Loans to Option One Mortgage Loan Trust 2003-1 (the
"Trust");

          WHEREAS, the Originator is obligated, in connection with the
transactions contemplated by this Agreement, to make certain representations,
warranties and covenants with respect to itself, the Seller and the Mortgage
Loans.

          NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:

                                   ARTICLE I.

                                   DEFINITIONS


     Section 1.01 DEFINITIONS. All capitalized terms used but not defined herein
and below shall have the meanings assigned thereto in the Pooling and Servicing
Agreement.


                                        1

<PAGE>



     "ORIGINATOR INFORMATION": The information in the Prospectus
     Supplement as follows: under "SUMMARY OF TERMS--Mortgage Loans,"
     "SUMMARY OF TERMS--Primary Mortgage Insurance," the first sentence
     under the fourth bullet point under "RISK FACTORS--Unpredictability
     of Prepayments and Effect on Yields," "RISK FACTORS--Delinquent
     Mortgage Loan Risk," the third sentence under "RISK FACTORS--
     Balloon Loan Risks," the first sentence under "RISK FACTORS--Second
     Lien Loan Risk," "RISK FACTORS--Convertible Mortgage Loan Risk,"
     the first sentence of the third paragraph under "RISK FACTORS--
     Potential Inadequacy of Credit Enhancement for the Offered
     Certificates," the second sentence under the fourth bullet point
     under "RISK FACTORS--Interest Generated by the Mortgage Loans May
     Be Insufficient to Maintain Overcollateralization," the second
     sentence under "RISK FACTORS--High Loan-to-Value Ratios Increase
     Risk of Loss," "THE MORTGAGE POOL," "OPTION ONE MORTGAGE
     CORPORATION," the first sentence under "DESCRIPTION OF THE
     CERTIFICATES--The PMI Policy," and the first sentence of the sixth
     paragraph under "YIELD, PREPAYMENT AND MATURITY CONSIDERATIONS."

                               ARTICLE II.

            SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE


     Section 2.01 SALE OF MORTGAGE LOANS.

          (a) The Seller, concurrently with the execution and delivery of this
Agreement, does hereby sell, and in connection therewith hereby assigns to the
Purchaser, effective as of the Closing Date, without recourse, (i) all of its
right, title and interest in and to each Mortgage Loan, including the related
Cut-off Date Principal Balance, all interest accruing thereon on and after the
Cut-off Date and all collections in respect of interest and principal due on or
after the Cut-off Date; (ii) property which secured such Mortgage Loan and which
has been acquired by foreclosure or deed in lieu of foreclosure; (iii) its
interest in any insurance policies (including the PMI Policy) in respect of the
Mortgage Loans and (iv) all proceeds of any of the foregoing.

          (b) [Reserved].

     Section 2.02 OBLIGATIONS OF ORIGINATOR UPON SALE. In connection with any
transfer pursuant to Section 2.01 hereof, the Originator further agrees, at its
own expense on or prior to the Closing Date, (a) to cause the books and records
of the Seller to indicate that the Mortgage Loans have been sold to the
Purchaser pursuant to this Agreement, (b) to deliver to the Purchaser and the
Trustee a computer file containing a true and complete list of all such Mortgage
Loans specifying for each such Mortgage Loan, as of the Cut-off Date, (i) its
account number and (ii) the Cut-off Date Principal Balance. Such file, which
forms a part of Exhibit D to the Pooling and Servicing Agreement, shall also be
marked as Schedule I to this Agreement and is hereby incorporated into and made
a part of this Agreement and (c) to deliver to the Purchaser and the Trustee the
ETT (as defined in the PMI Policy) with respect to the Mortgage Loans.


                                        2

<PAGE>



     In connection with any conveyance by the Seller, the Seller shall on behalf
of the Purchaser deliver to, and deposit with the Trustee, as assignee of the
Purchaser, on or before the Closing Date, the following documents or instruments
with respect to each Mortgage Loan:

          (i) the original Mortgage Note, endorsed either (A) in blank, in which
case the Trustee shall cause the endorsement to be completed or (B) in the
following form: "Pay to the order of Wells Fargo Bank Minnesota, National
Association, as Trustee, without recourse", or with respect to any lost Mortgage
Note, an original Lost Note Affidavit stating that the original mortgage note
was lost, misplaced or destroyed, together with a copy of the related mortgage
note; PROVIDED, HOWEVER, that such substitutions of Lost Note Affidavits for
original Mortgage Notes may occur only with respect to Mortgage Loans, the
aggregate Cut-off Date Principal Balance of which is less than or equal to 1.00%
of the Pool Balance as of the Cut-off Date;

          (ii) the original Mortgage with evidence of recording thereon, and the
original recorded power of attorney, if the Mortgage was executed pursuant to a
power of attorney, with evidence of recording thereon or, if such Mortgage or
power of attorney has been submitted for recording but has not been returned
from the applicable public recording office, has been lost or is not otherwise
available, a copy of such Mortgage or power of attorney, as the case may be,
certified to be a true and complete copy of the original submitted for
recording;

          (iii) an original Assignment of Mortgage, in form and substance
acceptable for recording. The Mortgage shall be assigned either (A) in blank,
without recourse or (B) to "Wells Fargo Bank Minnesota, National Association, as
Trustee, without recourse";

          (iv) an original copy of any intervening assignment of Mortgage
showing a complete chain of assignments;

          (v) the original or a certified copy of lender's title insurance
policy; and

          (vi) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any.

     The Originator hereby confirms to the Purchaser and the Trustee that it has
caused the appropriate entries to be made in the general accounting records of
the Seller, to indicate that such Mortgage Loans have been transferred to the
Trustee and constitute part of the Trust in accordance with the terms of the
Pooling and Servicing Agreement.

     If any of the documents referred to in Section 2.02(ii), (iii) or (iv)
above has as of the Closing Date been submitted for recording but either (x) has
not been returned from the applicable public recording office or (y) has been
lost or such public recording office has retained the original of such document,
the obligations of the Seller to deliver such documents shall be deemed to be
satisfied upon (1) delivery to the Trustee or the Custodian no later than the
Closing Date, of a copy of each such document certified by the Originator in the
case of (x) above or the applicable public recording office in the case of (y)
above to be a true and complete copy of the original that was submitted for
recording and (2) if such copy is certified by the Originator, delivery to the
Trustee or the Custodian, promptly upon receipt thereof of either the original
or a copy of such document certified by the


                                        3

<PAGE>



applicable public recording office to be a true and complete copy of the
original. If the original lender's title insurance policy, or a certified copy
thereof, was not delivered pursuant to Section 2.02(v) above, the Seller shall
deliver or cause to be delivered to the Trustee or the Custodian, the original
or a copy of a written commitment or interim binder or preliminary report of
title issued by the title insurance or escrow company, with the original or a
certified copy thereof to be delivered to the Trustee or the Custodian, promptly
upon receipt thereof. The Originator and the Seller shall deliver or cause to be
delivered to the Trustee or the Custodian promptly upon receipt thereof any
other documents constituting a part of a Mortgage File received with respect to
any Mortgage Loan, including, but not limited to, any original documents
evidencing an assumption or modification of any Mortgage Loan.

     Upon discovery or receipt of notice of any materially defective document
in, or that a document is missing from, a Mortgage File, the Seller shall have
120 days to cure such defect or deliver such missing document to the Purchaser.
If the Seller does not cure such defect or deliver such missing document within
such time period, the Originator shall either repurchase or substitute for such
Mortgage Loan pursuant to Section 2.03 of the Pooling and Servicing Agreement.

     The Purchaser hereby acknowledges its acceptance of all right, title and
interest to the Mortgage Loans and other property, now existing and hereafter
created, conveyed to it pursuant to Section 2.01.

     The parties hereto intend that the transaction set forth herein be a sale
by the Seller to the Purchaser of all the Seller's right, title and interest in
and to the Mortgage Loans and other property described above. In the event the
transaction set forth herein is deemed not to be a sale, the Seller hereby
grants to the Purchaser a security interest in all of the Seller's right, title
and interest in, to and under the Mortgage Loans and other property described
above, whether now existing or hereafter created, to secure all of the Seller's
obligations hereunder; and this Agreement shall constitute a security agreement
under applicable law.

     The Originator shall cause the Assignments which were delivered in blank to
be completed and shall cause all Assignments referred to in Section 2.02(iii)
hereof and, to the extent necessary, in Section 2.02(iv) hereof to be recorded.
The Originator shall be required to deliver such Assignments for recording
within 90 days of the Closing Date. Notwithstanding the foregoing, however, for
administrative convenience and facilitation of servicing and to reduce closing
costs, the Assignments of Mortgage shall not be required to be submitted for
recording with respect to any Mortgage Loan in any jurisdiction where the Rating
Agencies do not require recordation in order to receive the ratings on the
Certificates at the time of their initial issuance; PROVIDED, HOWEVER, each
Assignment shall be submitted for recording by the Originator in the manner
described above, at no expense to the Trust Fund or Trustee, upon the earliest
to occur of: (i) reasonable direction by Holders of Certificates entitled to at
least 25% of the Voting Rights, (ii) the occurrence of a Master Servicer Event
of Termination, (iii) the occurrence of a bankruptcy, insolvency or foreclosure
relating to the Master Servicer, (iv) the occurrence of a servicing transfer as
described in Section 7.02 hereof, (v) if the Originator is not the Master
Servicer and with respect to any one Assignment the occurrence of a bankruptcy,
insolvency or foreclosure relating to the Mortgagor under the related Mortgage
and (vi) any Mortgage Loan that is 90 days or more Delinquent. Upon (a) receipt
of written notice from the Trustee that recording of the Assignments is required
pursuant to one or more


                                        4

<PAGE>



of the conditions (excluding (v) and (vi) above) set forth in the preceding
sentence or (b) upon the occurrence of condition (v) or (vi) in the preceding
sentence, the Originator shall be required to deliver such Assignments for
recording as provided above, promptly and in any event within 30 days following
receipt of such notice. Notwithstanding the foregoing, if the Originator fails
to pay the cost of recording the Assignments, such expense will be paid by the
Trustee and the Trustee shall be reimbursed for such expenses by the Trust. The
Originator shall furnish the Trustee, or its designated agent, with a copy of
each Assignment submitted for recording. In the event that any such Assignment
is lost or returned unrecorded because of a defect therein, the Originator shall
promptly have a substitute Assignment prepared or have such defect cured, as the
case may be, and thereafter cause each such Assignment to be duly recorded. In
the event that any Mortgage Note is endorsed in blank as of the Closing Date,
within ninety (90) days of the Closing Date the Originator shall cause to be
completed such endorsements "Pay to the order of Wells Fargo Bank Minnesota,
National Association, as Trustee, without recourse."

     The Originator shall forward to the Purchaser original documents evidencing
an assumption, modification, consolidation or extension of any Mortgage Loan
entered into in accordance with the Pooling and Servicing Agreement within two
weeks of their execution; PROVIDED, HOWEVER, that the Originator shall provide
the Purchaser with a certified true copy of any such document submitted for
recordation within two weeks of 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 365 days of its submission for recordation. In the event that
the Originator cannot provide a copy of such document certified by the public
recording office within such 365 day period, the Originator shall deliver to the
Purchaser, within such 365 day period, an Officer's Certificate of the Master
Servicer which shall (A) identify the recorded document, (B) state that the
recorded document has not been delivered to the Purchaser due solely to a delay
caused by the public recording office, (C) state the amount of time generally
required by the applicable recording office to record and return a document
submitted for recordation, if known, and (D) specify the date the applicable
recorded document is expected to be delivered to the Purchaser, and, upon
receipt of a copy of such document certified by the public recording office, the
Originator shall immediately deliver such document to the Purchaser. In the
event the appropriate public recording office will not certify as to the
accuracy of such document, the Originator shall deliver a copy of such document
certified by an officer of the Originator to be a true and complete copy of the
original to the Purchaser.

     Section 2.03 PAYMENT OF PURCHASE PRICE FOR THE MORTGAGE LOANS.

     In consideration of the sale of the Mortgage Loans from the Seller to the
Purchaser on the Closing Date, the Purchaser agrees to pay to the Seller on the
Closing Date (the "Purchase Price") by transfer of (i) immediately available
funds in an amount equal to $179,382,011.29 and (ii) a 14.95% percentage
interest in the Class C Certificates, the Class P Certificates and the Class R
Certificates (collectively the "Option One Certificates") which Option One
Certificates shall be registered in the name of Option One Mortgage Corporation.
The Originator shall pay, and be billed directly for, all expenses incurred by
the Purchaser in connection with the issuance of the Certificates, including,
without limitation, printing fees incurred in connection with the prospectus
relating to the Certificates, blue sky registration fees and expenses, fees and
expenses of Purchaser's


                                        5

<PAGE>



counsel, fees of the Rating Agencies requested to rate the Certificates,
accountant's fees and expenses and the fees and expenses of the Trustee and
other out-of-pocket costs, if any.

                                  ARTICLE III.

               REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH


     Section 3.01 ORIGINATOR REPRESENTATIONS AND WARRANTIES RELATING TO THE
MORTGAGE LOANS. The Originator hereby represents and warrants with respect to
the Mortgage Loans to the Purchaser that as of the Closing Date or as of such
date specifically provided herein:

          (a) The Seller has good title to and is the sole owner and holder of
the Mortgage Loan;

          (b) Immediately prior to the transfer and assignment to the Purchaser,
the Mortgage Note and the Mortgage Loan were not subject to an assignment or
pledge, and the Seller has full right and authority to sell and assign the
Mortgage Loan;

          (c) The Seller is transferring such Mortgage Loan to the Purchaser
free and clear of any and all liens, pledges, charges or security interests of
any nature encumbering the Mortgage Loans;

          (d) The information set forth on Schedule I is true and correct in all
material respects as of the Cut-off Date or such other date as may be indicated
in such schedule;

          (e) The Mortgage Loan has been acquired, serviced, collected and
otherwise dealt with by the Originator and any affiliate of the Originator in
compliance with all applicable federal, state and local laws and regulations and
the terms of the related Mortgage Note and Mortgage;

          (f) The related Mortgage Note and Mortgage are genuine and each is the
legal, valid and binding obligation of the maker thereof, enforceable in
accordance with its terms except as such enforcement may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by general equity principles
(regardless of whether such enforcement is considered in a proceeding in equity
or at law);

          (g) The related Mortgage is a valid and enforceable first or second
lien on the related Mortgaged Property, which Mortgaged Property is free and
clear of all encumbrances and liens (including mechanics liens) having priority
over the first or second lien of the Mortgage except for: (i) liens for real
estate taxes and assessments not yet due and payable; (ii) covenants, conditions
and restrictions, rights of way, easements and other matters of public record as
of the date of recording of such Mortgage, such exceptions appearing of record
being acceptable to mortgage lending institutions generally or specifically
reflected or considered in the lender's title insurance policy delivered to the
originator of the Mortgage Loan and referred to in the appraisal made in
connection with the origination of the related Mortgage Loan, (iii) other
matters to which like properties are commonly subject which do not materially
interfere with the benefits of the security


                                        6

<PAGE>



intended to be provided by such Mortgage and (iv) the first lien on the
Mortgaged Property, in the case of the Mortgages that are second liens;

          (h) Any security agreement, chattel mortgage or equivalent document
related to such Mortgage Loan establishes and creates a valid and enforceable
first or second lien on the Mortgaged Property;

          (i) As of the last calendar day of December 2002 and with respect to
any Mortgage Loan that had a payment due on or before December 1, 2002, except
with respect to 0% of the Mortgage Loans by the aggregate Cut-off Date Principal
Balance of the Mortgage Loans, the related Monthly Payment due on December 1,
2002 has been received. In addition, 0% of the Mortgage Loans have been 30 or
more days delinquent in the last 12 months and 0% of the Mortgage Loans have
been 30 or more days delinquent for two payment periods in the last 12 months;

          (j) Neither the Originator nor the Seller has advanced funds, or
induced, solicited or knowingly received any advance of funds by a party other
than the Mortgagor, directly or indirectly, for the payment of any amount
required under the Mortgage Loan;

          (k) Neither the Originator nor the Seller has impaired, waived,
altered or modified the related Mortgage or Mortgage Note in any material
respect, or satisfied, canceled, rescinded or subordinated such Mortgage or
Mortgage Note in whole or in part or released all or any material portion of the
Mortgaged Property from the lien of the Mortgage, or executed any instrument of
release, cancellation, rescission or satisfaction of the Mortgage Note or
Mortgage;

          (l) As of the Cut-off Date, the Mortgage has not been satisfied,
canceled or subordinated, in whole or in part, or rescinded, and the Mortgaged
Property has not been released from the lien of the Mortgage, in whole or in
part (except for a release that does not materially impair the security of the
Mortgage Loan or a release the effect of which is reflected in the Loan-to-Value
Ratio for the Mortgage Loan as set forth in the Schedule of Mortgage Loans), nor
has any instrument been executed that would effect any such release,
cancellation, subordination or rescission;

          (m) No Mortgage Loan is subject to any right of recission, set-off,
counterclaim or defense, including the defense of usury, nor will the operation
of any of the terms of any Mortgage Note or Mortgage, or the exercise of any
right thereunder, render either the Mortgage Note or Mortgage unenforceable in
whole or in part, or subject to any right of recission, set-off, counterclaim or
defense, including the defense of usury, and no such right of recission,
set-off, counterclaim or defense has been asserted with respect thereto;

          (n) To the Originator's knowledge, there is no proceeding pending for
the total or partial condemnation and no eminent domain proceedings pending
affecting any Mortgaged Property;

          (o) Each Mortgage Loan is covered by either (i) a mortgage title
insurance policy or other generally acceptable form of insurance policy
customary in the jurisdiction where the Mortgaged Property is located or (ii) if
generally acceptable in the jurisdiction where the Mortgaged Property is
located, an attorney's opinion of title given by an attorney licensed to
practice law in the


                                        7

<PAGE>



jurisdiction where the Mortgaged Property is located. All of the Originator's
rights under such policies, opinions or other instruments shall be transferred
and assigned to Purchaser upon sale and assignment of the Mortgage Loans
hereunder. The title insurance policy has been issued by a title insurer
licensed to do business in the jurisdiction where the Mortgaged Property is
located, insuring the original lender, its successor and assigns, as to the
first or second priority lien of the Mortgage in the original principal amount
of the Mortgage Loan, subject to the exceptions contained in such policy. The
Originator is the sole insured of such mortgagee title insurance policy, and
such mortgagee title insurance policy is in full force and effect and will be in
force and effect upon the consummation of the transactions contemplated by this
Agreement. Neither the Originator nor any affiliate of the Originator has made,
and the Originator has no knowledge of, any claims under such mortgagee title
insurance policy. The Originator is not aware of any action by a prior holder
and neither the Originator nor any affiliate of the Originator has done, by act
or omission, anything which could impair the coverage or enforceability of such
mortgagee title insurance policy or the accuracy of such attorney's opinion of
title;

          (p) There is no material default, breach, violation or event of
acceleration existing under the related Mortgage or the related Mortgage Note
and no event which, with the passage of time or with notice and the expiration
of any grace or cure period, would constitute a material default, breach,
violation or event of acceleration, other than a payment delinquency that is for
a payment due after the date specified in (i) above. Neither the Originator, the
Seller nor any affiliate of the Originator or the Seller has waived any default,
breach, violation or event of acceleration;

          (q) With respect to any Mortgage Loan which provides for an adjustable
interest rate, all rate adjustments have been performed in accordance with the
terms of the related Mortgage Note or subsequent modifications, if any;

          (r) To the Originator's knowledge, there are no delinquent taxes,
ground rents, water charges, sewer rents, assessments, insurance premiums,
leasehold payments, including assessments payable in future installments or
other outstanding charges, affecting the related Mortgaged Property;

          (s) No foreclosure proceedings are pending against the Mortgaged
Property and the Mortgage Loan is not subject to any pending bankruptcy or
insolvency proceeding, and to the Originator's best knowledge, no material
litigation or lawsuit relating to the Mortgage Loan is pending;

          (t) The Mortgage Loan obligates the mortgagor thereunder to maintain a
hazard insurance policy ("Hazard Insurance") in an amount at least equal to the
lesser of (i) the maximum insurable value of such improvements or (ii) the
principal balance of the Mortgage Loan with a standard mortgagee clause, in
either case in an amount sufficient to avoid the application of any
"co-insurance provisions," and, if it was in place at origination of the
Mortgage Loan, flood insurance, at the mortgagor's cost and expense. If the
Mortgaged Property is in an area identified in the Federal Register by the
Federal Emergency Management Agency ("FEMA") as having special flood hazards, a
flood insurance policy is in effect which met the requirements of FEMA at the
time such policy was issued. The Mortgage obligates the Mortgagor to maintain
the Hazard Insurance, and, if applicable, flood insurance policy at the
Mortgagor's cost and expense, and on the


                                        8

<PAGE>



Mortgagor's failure to do so, authorizes the holder of the Mortgage to obtain
and maintain such insurance at the Mortgagor's cost and expense, and to seek
reimbursement therefor from the Mortgagor. The Mortgaged Property is covered by
Hazard Insurance;

          (u) The Mortgage Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage and the security
interest of any applicable security agreement or chattel mortgage;

          (v) The Mortgage contains an enforceable provision for the
acceleration of the payment of the unpaid principal balance of the Mortgage Loan
in the event that the Mortgaged Property is sold or transferred without the
prior written consent of the Mortgagee thereunder. The Mortgage contains
customary and enforceable provisions such as to render the rights and remedies
of the holder thereof adequate for the realization against the Mortgaged
Property of the benefits of the security provided thereby, including (i) in the
case of a Mortgage designated as a deed of trust, by trustee's sale or judicial
foreclosure and (ii) otherwise by judicial foreclosure. Since the date of
origination of the Mortgage Loan, the Mortgaged Property has not been subject to
any bankruptcy proceeding or foreclosure proceeding and the Mortgagor has not
filed for protection under applicable bankruptcy laws. There is no homestead or
other exemption available to the Mortgagor that would interfere with the right
to sell the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage. In the event the Mortgage constitutes a deed of trust, a trustee, duly
qualified under applicable law to serve as such, as been properly designated and
currently so serves and is named in the Mortgage, and no fees or expenses are or
will become payable by Purchaser to the trustee under the deed of trust, except
in connection with a trustee's sale after default by the related Mortgagor. The
Mortgagor has not notified the Originator or any affiliate of the Originator and
the Originator has no knowledge of any relief requested or allowed to the
Mortgagor under the Soldiers and Sailors Civil Relief Act of 1940;

          (w) Except as set forth in the appraisal which forms part of the
related Mortgage File, the Mortgaged Property, normal wear and tear excepted, is
undamaged by waste, fire, earthquake or earth movement, windstorm, flood,
tornado or other casualty so as to affect materially and adversely the value of
the Mortgaged Property as security for the Mortgage Loan or the use for which
the premises were intended;

          (x) To the Originator's knowledge, there was no fraud involved in the
origination of the Mortgage Loan by the mortgagee or by the Mortgagor, any
appraiser or any other party involved in the origination of the Mortgage Loan;

          (y) Each Mortgage File contains an appraisal of the Mortgaged Property
indicating an appraised value equal to the appraised value identified for such
Mortgaged Property on the Mortgage Loan Schedule. Each appraisal has been
performed in accordance with the provisions of the Financial Institutions
Reform, Recovery and Enforcement Act of 1989;

          (z) To the best of the Originator's knowledge, all parties which have
had any interest in the Mortgage Loan, whether as mortgagee, assignee, pledgee
or otherwise, are (or, during the period in which they held and disposed of such
interest, were) in compliance with any and all


                                        9

<PAGE>



applicable "doing business" and licensing requirements of the laws of the state
wherein the Mortgaged Property is located;

          (aa) No improvements on the related Mortgaged Property (upon which
value was given) encroach on adjoining properties (and in the case of a
condominium unit, such improvements are within the project with respect to that
unit), and no improvements on adjoining properties encroach upon the Mortgaged
Property unless there exists in the Mortgage File a title Policy with
endorsements which insure against losses sustained by the insured as a result of
such encroachments;

          (bb) Each Mortgage Loan was originated or acquired by a savings and
loan association, a savings bank, a commercial bank or similar banking
institution which is supervised and examined by a federal or state authority, or
by a mortgagee approved by the Secretary of HUD. Each Mortgage Loan was
originated substantially in accordance with the Originator's underwriting
criteria, which are at least as stringent as the underwriting criteria set forth
in the Prospectus Supplement. Each Mortgage Loan is currently being serviced by
the Originator and has been serviced by the Originator since the date of
origination of such Mortgage Loan;

          (cc) (i) Principal payments on the Mortgage Loan commenced no more
than two months after the proceeds of the Mortgage Loan were disbursed and (ii)
each Mortgage Note is payable on the first day of each month;

          (dd) Other than with respect to not more than 0% of the Mortgage Loans
(by aggregate principal balance of the Mortgage Loans as of the Cut-off Date),
which are "balloon payment" mortgage loans, each Mortgage Loan is fully
amortizing;

          (ee) The Mortgage Loan bears interest at the Mortgage Rate and the
Mortgage Note does not permit negative amortization. No Mortgage Loan bearing
interest at an adjustable rate permits the Mortgagor to convert the Mortgage
Loan to a fixed rate Mortgage Loan;

          (ff) With respect to escrow deposits, if any, all such payments are in
the possession of, or under the control of, the Master Servicer and there exist
no deficiencies in connection therewith for which customary arrangements for
repayment thereof have not been made. No escrow deposits or escrow advances or
other charges or payments due the Master Servicer have been capitalized under
any Mortgage or the related Mortgage Note;

          (gg) No Mortgage Loan contains provisions pursuant to which scheduled
payments are: (i) paid or partially paid with funds deposited in any separate
account established by the Originator, the Seller, the Mortgagor, or anyone on
behalf of the Mortgagor; or (ii) paid by any source other than the Mortgagor or
contains any other similar provisions which may constitute a "buydown"
provision. The Mortgage Loan is not a graduated payment mortgage loan and the
Mortgage Loan does not have a shared appreciation or other contingent interest
feature;

          (hh) As of the origination date of each Mortgage Loan, the related
Mortgaged Property is lawfully permitted to be occupied under applicable law;



                                       10

<PAGE>



          (ii) No law relating to servicing, collection or notification
practices and no law relating to origination practices, has been violated in
connection with any Mortgage Loan transferred to the Purchaser pursuant to this
Agreement, including, without limitation, usury, truth in lending, real estate
settlement procedures, consumer credit protection, equal credit opportunity or
disclosure laws. The Mortgage Loan has been serviced in accordance with the
terms of the Mortgage Note.

          (jj) No Mortgage Loan was made in connection with (a) the construction
or rehabilitation of a Mortgaged Property or (b) facilitating the trade-in or
exchange of a Mortgaged Property;

          (kk) The proceeds of the Mortgage Loan have been fully disbursed to or
for the account of the Mortgagor and there is no obligation for the Mortgagee to
advance additional funds thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage have been paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due to the, Mortgagee pursuant to the Mortgage Note or Mortgage;

          (ll) There are no mechanics' or similar liens or claims that have been
filed for work, labor or material (and no rights are outstanding that under law
could give rise to such lien) affecting the related Mortgaged Property that are
or may be liens prior to, or equal or coordinate with, the lien of the related
Mortgage;

          (mm) As to each Mortgage Loan, interest is calculated on the Mortgage
Note on the basis of twelve 30-day months and a 360 day year;

          (nn) The Mortgaged Property consists of one of the following: detached
or semi-detached one- to four-family dwelling units, townhouses, individual
condominium units and individual units in planned unit developments, or
manufactured homes;

          (oo) Each Mortgage Loan constitutes a "qualified mortgage" within the
meaning of Section 860G(a)(3) of the Code;

          (pp) The Mortgage Loans were not intentionally selected by the Seller
in a manner intended to adversely affect the Purchaser or the Trust;

          (qq) The representations, warranties and covenants, set forth in this
Section shall survive the Closing Date;

          (rr) The Mortgage Loans have original terms to maturity ranging from
10 to 30 years;

          (ss) With respect to the Mortgage Loans, no more than 19.49%; 14.12%;
10.28% and 9.25% of the Mortgage Loans, by Cut-off Date Principal Balance will
be secured by Mortgaged Properties located in California, New York, Georgia and
Massachusetts, respectively; and 69.16% of the Mortgage Loans, by Cut-off Date
Principal Balance will be secured by real property with a


                                       11

<PAGE>



single family residence erected thereon and 5.21% of the Mortgage Loans, by the
Cut-off Date Principal Balance are secured by condominiums;

          (tt) As of the Cut-off Date, each Mortgage Loan, had a
Loan-to-Value-Ratio that was less than or equal to 100%;

          (uu) With respect to each Mortgage Loan, the Mortgage Note related
thereto bears a fixed Mortgage Rate or an adjustable Mortgage Rate which will be
adjusted on each Adjustment Date to equal the Index plus the Gross Margin,
rounded to the nearest or next highest 0.125%, subject to the Periodic Rate Cap,
the Maximum Mortgage Rate and the Minimum Mortgage Rate;

          (vv) The average Cut-off Date Principal Balance of the Mortgage Loans
is $157,629.18;

          (ww) No Mortgage Loan is subject to the requirements of the Home
Ownership and Equity Protection Act of 1994 ("HOEPA") and no Mortgage Loan is in
violation of any state law or ordinance similar to HOEPA;

          (xx) No proceeds from any Mortgage Loan were used to purchase single
premium credit insurance policies as part of the origination of, or as a
condition to closing, such Mortgage Loan;

          (yy) No Mortgage Loan has a Prepayment Charge term longer than five
years after its origination;

          (zz) Each Group I Mortgage Loan had a Principal Balance at origination
which conformed with Fannie Mae/Freddie Mac guidelines and none of the Group I
Mortgage Loans (by aggregate principal balance of the Group I Mortgage Loans as
of the Cut-Off Date) were originated with points/fees in excess of 5.00%.

          (aaa) Each Mortgage Loan conforms, and all Mortgage Loans in the
aggregate conform, in all material respects, to the description thereof set
forth in the Prospectus Supplement;

          (bbb) With respect to second lien Mortgage Loans, either (a) no
consent for the Mortgage Loan is required by the holder of the related first
lien or (b) such consent has been obtained and is contained in the Mortgage
File;

          (ccc) Each Mortgage Note is comprised of one original promissory note
and each such promissory note constitutes an "instrument" for purposes of
section 9-102(a)(65) of the UCC;

          (ddd) Each Mortgage Loan satisfies the eligibility for purchase
requirements and was originated in compliance with Lender Letter # LL03-00 dated
April 11, 2000 for Fannie Mae Sellers (the "Lender Letter");

          (eee) No borrower was encouraged or required to select a Mortgage Loan
product offered by the Originator which is a higher cost product designed for
less creditworthy borrowers,


                                       12

<PAGE>



unless at the time of the Mortgage Loan's origination, such borrower did not
qualify taking into account credit history and debt-to-income ratios for a
lower-cost credit product then offered by the Originator or any affiliate of the
Originator. If, at the time of loan application, the borrower may have qualified
for a for a lower-cost credit product then offered by any mortgage lending
affiliate of the Originator, the Originator referred the borrower's application
to such affiliate for underwriting consideration;

          (fff) The methodology used in underwriting the extension of credit for
each Mortgage Loan employs objective mathematical principles which relate the
borrower's income, assets and liabilities to the proposed payment and such
underwriting methodology does not rely on the extent of the borrower's equity in
the collateral as the principal determining factor in approving such credit
extension. Such underwriting methodology confirmed that at the time of
origination (application/approval) the borrower had a reasonable ability to make
timely payments on the Mortgage Loan;

          (ggg) With respect to any Mortgage Loan that contains a provision
permitting imposition of a premium upon a prepayment prior to maturity: (i)
prior to the loan's origination, the borrower agreed to such premium in exchange
for a monetary benefit, including but not limited to a rate or fee reduction,
(ii) prior to the loan's origination, the borrower was offered the choice of
another mortgage product that did not require payment of such a premium, (iii)
the prepayment premium is disclosed to the borrower in the loan documents
pursuant to applicable state and federal law, and (iv) notwithstanding any state
or federal law to the contrary, the Master Servicer shall not impose such
prepayment premium in any instance when the mortgage debt is accelerated as the
result of the borrower's default in making the loan payments;

          (hhh) No borrower was required to purchase any credit life,
disability, accident or health insurance product as a condition of obtaining the
extension of credit. No borrower obtained a prepaid single-premium credit life,
disability, accident or health insurance policy in connection with the
origination of the Mortgage Loan;

          (iii) All points and fees related to each Group I Mortgage Loan were
disclosed in writing to the borrower in accordance with applicable state and
federal law. Except in the case of a Group I Mortgage Loan in an original
principal amount of less than $60,000 which would have resulted in an
unprofitable origination, no borrower was charged "points and fees" (whether or
not financed) in an amount greater than 5% of the principal amount of such loan,
such 5% limitation calculated in accordance with the Lender Letter. All fees and
charges (including finance charges) and whether or not financed, assessed,
collected or to be collected in connection with the origination and servicing of
each Group I Mortgage Loan has been disclosed in writing to the borrower in
accordance with applicable state and federal law and regulation; and

          (jjj) The Group II Mortgage Loans that are "Covered Loans" within the
meaning of the Georgia Fair Lending Act (the "Georgia Act") comply with all
material provisions of the Georgia Act, and as of the Closing Date, any Group II
Mortgage Loans that are Covered Loan that has refinanced an existing "Home
Loan," within the meaning of the Georgia Act, within the previous five years,
the Covered Loan has provided a reasonable, tangible net benefit to the borrower


                                       13

<PAGE>



considering all of the circumstances. None of the Group II Mortgage Loans
constitute a "high cost mortgage" under the Georgia Act.

     Section 3.02 ORIGINATOR REPRESENTATIONS AND WARRANTIES RELATING TO THE
ORIGINATOR. The Originator represents, warrants and covenants to the Purchaser
as of the Closing Date or as of such other date specifically provided herein or
in the applicable Assignment and Conveyance:

               (i) The Originator is duly organized, validly existing and in
good standing as a corporation under the laws of the State of California and is
and will remain in compliance with the laws of each state in which any Mortgaged
Property is located to the extent necessary to ensure the enforceability of each
Mortgage Loan in accordance with the terms of this Agreement;

               (ii) The Originator has the full power and authority to execute,
deliver and perform, and to enter into and consummate, all transactions
contemplated by this Agreement. The Originator has duly authorized the
execution, delivery and performance of this Agreement, has duly executed and
delivered this Agreement and this Agreement, assuming due authorization,
execution and delivery by the Purchaser and the Seller, constitutes a legal,
valid and binding obligation of the Originator, enforceable against it in
accordance with its terms except as the enforceability thereof may be limited by
bankruptcy, insolvency or reorganization. At the time of the sale of each
Mortgage Loan by the Originator, the Originator had the full power and authority
to hold each Mortgage Loan and to sell each Mortgage Loan;

               (iii) The execution and delivery of this Agreement by the
Originator and the performance of and compliance with the terms of this
Agreement will not violate the Originator's articles of incorporation or by-laws
or constitute a default under or result in a breach or acceleration of, any
material contract, agreement or other instrument to which the Originator is a
party or which may be applicable to the Originator or its assets;

               (iv) The Originator is not in violation of, and the execution and
delivery of this Agreement by the Originator and its performance and compliance
with the terms of this Agreement will not constitute a violation with respect
to, any order or decree of any court or any order or regulation of any federal,
state, municipal or governmental agency having jurisdiction over the Originator
or its assets, which violation might have consequences that would materially and
adversely affect the condition (financial or otherwise) or the operation of the
Originator or its assets or might have consequences that would materially and
adversely affect the performance of its obligations and duties hereunder;

               (v) The Originator is a HUD approved mortgagee pursuant to
Section 203 and Section 211 of the National Housing Act. No event has occurred,
including but not limited to a change in insurance coverage, which would make
the Originator unable to comply with HUD eligibility requirements or which would
require notification to HUD;

               (vi) The Originator does not believe, nor does it have any reason
or cause to believe, that it cannot perform each and every covenant contained in
this Agreement;



                                       14

<PAGE>



               (vii) There are no actions or proceedings against, or
investigations known to it of, the Originator before any court, administrative
or other tribunal (A) that might prohibit its entering into this Agreement, (B)
seeking to prevent the sale of the Mortgage Loans or the consummation of the
transactions contemplated by this Agreement or (C) that might prohibit or
materially and adversely affect the performance by the Originator of its
obligations under, or validity of enforceability of, this Agreement;

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

               (ix) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Originator. The sale of
the Mortgage Loans was in the ordinary course of business of the Originator and
the assignment and conveyance of the Mortgage Notes and the Mortgages by the
Originator are not subject to the bulk transfer or any similar statutory
provisions;

               (x) The information delivered by the Originator to the Purchaser
with respect to the Originator's loan loss, foreclosure and delinquency
experience on mortgage loans underwritten to similar standards as the Mortgage
Loans and covering mortgaged properties similar to the Mortgaged Properties, is
true and correct in all material respects as of the date of such report;

               (xi) Except with respect to any statement regarding the
intentions of the Purchaser, or any other statement contained herein the truth
or falsity of which is dependant solely upon the actions of the Purchaser, this
Agreement does not contain any untrue statement of material fact or omit to
state a material fact necessary to make the statements contained herein not
misleading. The written statements, reports and other documents prepared and
furnished or to be prepared and furnished by the Originator pursuant to this
Agreement or in connection with the transactions contemplated hereby taken in
the aggregate do not contain any untrue statement of material fact or omit to
state a material fact necessary to make the statements contained therein not
misleading; and

               (xii) The Originator has not transferred the Mortgage Loans with
any intent to hinder, delay or defraud any of its creditors.

     Section 3.02 ORIGINATOR REPRESENTATIONS AND WARRANTIES RELATING TO THE
ORIGINATOR. The Originator represents, warrants and covenants to the Purchaser
as of the Closing Date or as of such other date specifically provided herein or
in the applicable Assignment and Conveyance:

               (i) The Originator is duly organized, validly existing and in
good standing as a corporation under the laws of the State of California and is
and will remain in compliance with the laws of each state in which any Mortgaged
Property is located to the extent necessary to ensure the enforceability of each
Mortgage Loan in accordance with the terms of this Agreement;



                                       15

<PAGE>



               (ii) The Originator has the full power and authority to execute,
deliver and perform, and to enter into and consummate, all transactions
contemplated by this Agreement. The Originator has duly authorized the
execution, delivery and performance of this Agreement, has duly executed and
delivered this Agreement and this Agreement, assuming due authorization,
execution and delivery by the Purchaser and the Seller, constitutes a legal,
valid and binding obligation of the Originator, enforceable against it in
accordance with its terms except as the enforceability thereof may be limited by
bankruptcy, insolvency or reorganization. At the time of the sale of each
Mortgage Loan by the Originator, the Originator had the full power and authority
to hold each Mortgage Loan and to sell each Mortgage Loan;

               (iii) The execution and delivery of this Agreement by the
Originator and the performance of and compliance with the terms of this
Agreement will not violate the Originator's articles of incorporation or by-laws
or constitute a default under or result in a breach or acceleration of, any
material contract, agreement or other instrument to which the Originator is a
party or which may be applicable to the Originator or its assets;

               (iv) The Originator is not in violation of, and the execution and
delivery of this Agreement by the Originator and its performance and compliance
with the terms of this Agreement will not constitute a violation with respect
to, any order or decree of any court or any order or regulation of any federal,
state, municipal or governmental agency having jurisdiction over the Originator
or its assets, which violation might have consequences that would materially and
adversely affect the condition (financial or otherwise) or the operation of the
Originator or its assets or might have consequences that would materially and
adversely affect the performance of its obligations and duties hereunder;

               (v) The Originator is a HUD approved mortgagee pursuant to
Section 203 and Section 211 of the National Housing Act. No event has occurred,
including but not limited to a change in insurance coverage, which would make
the Originator unable to comply with HUD eligibility requirements or which would
require notification to HUD;

               (vi) The Originator does not believe, nor does it have any reason
or cause to believe, that it cannot perform each and every covenant contained in
this Agreement;

               (vii) There are no actions or proceedings against, or
investigations known to it of, the Originator before any court, administrative
or other tribunal (A) that might prohibit its entering into this Agreement, (B)
seeking to prevent the sale of the Mortgage Loans or the consummation of the
transactions contemplated by this Agreement or (C) that might prohibit or
materially and adversely affect the performance by the Originator of its
obligations under, or validity of enforceability of, this Agreement;

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



                                       16

<PAGE>



               (ix) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Originator. The sale of
the Mortgage Loans was in the ordinary course of business of the Originator and
the assignment and conveyance of the Mortgage Notes and the Mortgages by the
Originator are not subject to the bulk transfer or any similar statutory
provisions;

               (x) The information delivered by the Originator to the Purchaser
with respect to the Originator's loan loss, foreclosure and delinquency
experience on mortgage loans underwritten to similar standards as the Mortgage
Loans and covering mortgaged properties similar to the Mortgaged Properties, is
true and correct in all material respects as of the date of such report;

               (xi) Except with respect to any statement regarding the
intentions of the Purchaser, or any other statement contained herein the truth
or falsity of which is dependant solely upon the actions of the Purchaser, this
Agreement does not contain any untrue statement of material fact or omit to
state a material fact necessary to make the statements contained herein not
misleading. The written statements, reports and other documents prepared and
furnished or to be prepared and furnished by the Originator pursuant to this
Agreement or in connection with the transactions contemplated hereby taken in
the aggregate do not contain any untrue statement of material fact or omit to
state a material fact necessary to make the statements contained therein not
misleading; and

               (xii) The Originator has not transferred the Mortgage Loans with
any intent to hinder, delay or defraud any of its creditors.

     Section 3.03 ORIGINATOR REPRESENTATIONS AND WARRANTIES RELATING TO THE
SELLER. The Originator represents, warrants and covenants to the Purchaser as of
the Closing Date or as of such other date specifically provided herein:

          (a) The Seller is duly organized, validly existing and in good
standing as a business trust under the laws of the State of Delaware and is and
will remain in compliance with the laws of each state in which any Mortgaged
Property is located to the extent necessary to ensure the enforceability of each
Mortgage Loan in accordance with the terms of this Agreement;

          (b) The Seller has the full power and authority to hold each Mortgage
Loan, to sell each Mortgage Loan, to execute, deliver and perform, and to enter
into and consummate, all transactions contemplated by this Agreement. The Seller
has duly authorized the execution, delivery and performance of this Agreement,
has duly executed and delivered this Agreement and this Agreement, assuming due
authorization, execution and delivery by the Purchaser and the Originator,
constitutes a legal, valid and binding obligation of the Seller, enforceable
against it in accordance with its terms except as the enforceability thereof may
be limited by bankruptcy, insolvency or reorganization;

          (c) The execution and delivery of this Agreement by the Seller and the
performance of and compliance with the terms of this Agreement will not violate
the Seller's certificate of trust or constitute a default under or result in a
breach or acceleration of, any material contract, agreement or other instrument
to which the Seller is a party or which may be applicable to the Seller or its
assets;


                                       17

<PAGE>



          (d) The Seller is not in violation of, and the execution and delivery
of this Agreement by the Seller and its performance and compliance with the
terms of this Agreement will not constitute a violation with respect to, any
order or decree of any court or any order or regulation of any federal, state,
municipal or governmental agency having jurisdiction over the Seller or its
assets, which violation might have consequences that would materially and
adversely affect the condition (financial or otherwise) or the operation of the
Seller or its assets or might have consequences that would materially and
adversely affect the performance of its obligations and duties hereunder; and

          (e) Immediately prior to the payment of the Purchase Price for each
Mortgage Loan, the Seller was the owner of the related Mortgage and the
indebtedness evidenced by the related Mortgage Note and upon the payment of the
Purchase Price by the Purchaser, in the event that the Seller retains record
title, the Seller shall retain such record title to each Mortgage, each related
Mortgage Note and the related Mortgage Files with respect thereto in trust for
the Purchaser as the owner thereof;

          (f) The Seller has not transferred the Mortgage Loans to the Purchaser
with any intent to hinder, delay or defraud any of its creditors;

          (g) There are no actions or proceedings against, or investigations
known to it of, the Seller before any court, administrative or other tribunal
(A) that might prohibit its entering into this Agreement, (B) seeking to prevent
the sale of the Mortgage Loans or the consummation of the transactions
contemplated by this Agreement or (C) that might prohibit or materially and
adversely affect the performance by the Seller of its obligations under, or
validity or enforceability of, this Agreement;

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

          (i) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Seller, and the transfer
assignment and conveyance of the Mortgage Notes and the Mortgages by the Seller
pursuant to this Agreement are not subject to the bulk transfer or any similar
statutory provisions; and

          (j) Except with respect to liens released immediately prior to the
transfer herein contemplated, each Mortgage Note and related Mortgage have not
been assigned or pledged and immediately prior to the transfer and assignment
herein contemplated, the Seller held good, marketable and indefeasible title to,
and was the sole owner and holder of, each Mortgage Loan subject to no liens,
charges, mortgages, claims, participation interests, equities, pledges or
security interests of any nature, encumbrances or rights of others
(collectively, a "Lien"); the Seller has full right and authority under all
governmental and regulatory bodies having jurisdiction over the Seller, subject
to no interest or participation of, or agreement with, any party, to sell and
assign the same pursuant to this Agreement; and immediately upon the transfers
and assignments herein


                                       18

<PAGE>



contemplated, the Seller shall have transferred all of its right, title and
interest in and to each Mortgage Loan and the Trustee will hold good, marketable
and indefeasible title to, and be the sole owner of, each Mortgage Loan subject
to no Liens.

     Section 3.04 REMEDIES FOR BREACH OF REPRESENTATIONS AND WARRANTIES. It is
understood and agreed that the representations and warranties set forth in
Sections 3.01, 3.02 and 3.03 shall survive the sale of the Mortgage Loans to the
Purchaser and shall inure to the benefit of the Purchaser, notwithstanding any
restrictive or qualified endorsement on any Mortgage Note or Assignment or the
examination or lack of examination of any Mortgage File. With respect to the
representations and warranties contained herein that are made to the knowledge
or the best knowledge of the Originator or as to which the Originator has no
knowledge, if it is discovered that the substance of any such representation and
warranty is inaccurate and the inaccuracy materially and adversely affects the
value of the related Mortgage Loan, or the interest therein of the Purchaser or
the Purchaser's assignee, designee or transferee, then notwithstanding the
Originator's lack of knowledge with respect to the substance of such
representation and warranty being inaccurate at the time the representation and
warranty was made, such inaccuracy shall be deemed a breach of the applicable
representation and warranty and the Originator shall take such action described
in the following paragraphs of this Section 3.04 in respect of such Mortgage
Loan. Upon discovery by either the Originator, the Master Servicer or the
Purchaser of a breach of any of the foregoing representations and warranties
that materially and adversely affects the value of the Mortgage Loans or the
interest of the Purchaser (or which materially and adversely affects the
interests of the Purchaser in the related Mortgage Loan in the case of a
representation and warranty relating to a particular Mortgage Loan), the party
discovering such breach shall give prompt written notice to the others.

     Within 120 days of the earlier of either discovery by or notice to the
Originator of any breach of a representation or warranty made by the Originator
that materially and adversely affects the value of a Mortgage Loan or the
Mortgage Loans or the interest therein of the Purchaser, the Originator shall
use its best efforts promptly to cure such breach in all material respects and,
if such breach cannot be cured, the Originator shall, at the Purchaser's option,
repurchase such Mortgage Loan at the Purchase Price. In the event that a breach
shall involve any representation or warranty set forth in Section 3.02 or 3.03
and such breach cannot be cured within 120 days of the earlier of either
discovery by or notice to the Originator of such breach, all of the Mortgage
Loans shall, at the Purchaser's option, be repurchased by the Originator at the
Purchase Price. The Originator may, at the request of the Purchaser and assuming
the Originator has a Qualified Substitute Mortgage Loan, rather than repurchase
a deficient Mortgage Loan as provided above, remove such Mortgage Loan and
substitute in its place a Qualified Substitute Mortgage Loan or Loans. If the
Originator does not provide a Qualified Substitute Mortgage Loan or Loans, it
shall repurchase the deficient Mortgage Loan. Any repurchase of a Mortgage
Loan(s) pursuant to the foregoing provisions of this Section 3.04 shall occur on
a date designated by the Purchaser and shall be accomplished by deposit in
accordance with Section 2.03 of the Pooling and Servicing Agreement. Any
repurchase or substitution required by this Section shall be made in a manner
consistent with Section 2.03 of the Pooling and Servicing Agreement.

     At the time of substitution or repurchase of any deficient Mortgage Loan,
the Purchaser and the Originator shall arrange for the reassignment of the
repurchased or substituted Mortgage Loan to the Originator and the delivery to
the Originator of any documents held by the Trustee relating to


                                       19

<PAGE>



the deficient or repurchased Mortgage Loan. In the event the Purchase Price is
deposited in the Collection Account, the Originator shall, simultaneously with
such deposit, give written notice to the Purchaser that such deposit has taken
place. Upon such repurchase, the Mortgage Loan Schedule shall be amended to
reflect the withdrawal of the repurchased Mortgage Loan from this Agreement.

     As to any Deleted Mortgage Loan for which the Originator substitutes a
Qualified Substitute Mortgage Loan or Loans, the Originator shall effect such
substitution by delivering to the Purchaser or its designee for such Qualified
Substitute Mortgage Loan or Loans the Mortgage Note, the Mortgage, the
Assignment and such other documents and agreements as are required by the
Pooling and Servicing Agreement, with the Mortgage Note endorsed as required
therein. The Originator shall deposit in the Collection Account the Monthly
Payment less the Servicing Fee due on such Qualified Substitute Mortgage Loan or
Loans in the month following the date of such substitution. Monthly Payments due
with respect to Qualified Substitute Mortgage Loans in the month of substitution
will be retained by the Originator. For the month of substitution, distributions
to the Purchaser will include the Monthly Payment due on such Deleted Mortgage
Loan in the month of substitution, and the Originator shall thereafter be
entitled to retain all amounts subsequently received by the Originator in
respect of such Deleted Mortgage Loan. Upon such substitution, the Qualified
Substitute Mortgage Loans shall be subject to the terms of this Agreement in all
respects, and the Originator shall be deemed to have made with respect to such
Qualified Substitute Mortgage Loan or Loans as of the date of substitution, the
covenants, representations and warranties set forth in Sections 3.01, 3.02 and
3.03.

     It is understood and agreed that the representations and warranties set
forth in Section 3.01 shall survive delivery of the respective Mortgage Files to
the Trustee on behalf of the Purchaser.

     It is understood and agreed that the obligations of the Originator set
forth in Section 3.04 to cure, repurchase and substitute for a defective
Mortgage Loan and to indemnify the Purchaser as provided in Section 5.01
constitute the sole remedies of the Purchaser respecting a missing or defective
document or a breach of the representations and warranties contained in Section
3.01, 3.02 or 3.03.

                                   ARTICLE IV.

                             ORIGINATOR'S COVENANTS


     Section 4.01 COVENANTS OF THE ORIGINATOR. The Originator hereby covenants
that except for the transfer hereunder, neither the Originator nor the Seller
will sell, pledge, assign or transfer to any other Person, or grant, create,
incur, assume or suffer to exist any Lien on any Mortgage Loan, or any interest
therein; the Originator will notify the Trustee, as assignee of the Purchaser,
of the existence of any Lien on any Mortgage Loan immediately upon discovery
thereof, and the Originator will defend the right, title and interest of the
Trust, as assignee of the Purchaser, in, to and under the Mortgage Loans,
against all claims of third parties claiming through or under the Originator or
the Seller; provided, however, that nothing in this Section 4.01 shall prevent
or be deemed to prohibit the Originator or the Seller from suffering to exist
upon any of the Mortgage Loans any Liens for municipal or other local taxes and
other governmental charges if such taxes or governmental charges


                                       20

<PAGE>



shall not at the time be due and payable or if the Originator or the Seller
shall currently be contesting the validity thereof in good faith by appropriate
proceedings and shall have set aside on its books adequate reserves with respect
thereto.


                                   ARTICLE V.

               INDEMNIFICATION WITH RESPECT TO THE MORTGAGE LOANS


     Section 5.01 INDEMNIFICATION.

          (a) The Originator agrees to indemnify and hold harmless the
Purchaser, each of its directors, each of its officers and each person or entity
who controls the Purchaser or any such person, within the meaning of Section 15
of the Securities Act, against any and all losses, claims, damages or
liabilities, joint and several, as incurred, to which the Purchaser, or any such
person or entity may become subject, under the Securities Act or otherwise, and
will reimburse the Purchaser, each such director and officer and each such
controlling person for any legal or other expenses incurred by the Purchaser or
such controlling person in connection with investigating or defending any such
losses, claims, damages or liabilities, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of any material fact
contained in the Prospectus Supplement or any amendment or supplement to the
Prospectus Supplement approved in writing by the Originator or the omission or
the alleged omission to state therein a material fact necessary in order to make
the statements in the Prospectus Supplement or any amendment or supplement to
the Prospectus Supplement approved in writing by the Originator, in the light of
the circumstances under which they were made, not misleading, but only to the
extent that such untrue statement or alleged untrue statement or omission or
alleged omission relates to the Originator Information contained in the
Prospectus Supplement, (ii) any untrue statement or alleged untrue statement of
any material fact contained in the information on any computer tape furnished to
the Purchaser or an affiliate thereof by or on behalf of the Originator
containing information regarding the assets of the Trust or (iii) any untrue
statement or alleged untrue statement of any material fact contained in any
information provided by the Originator to the Purchaser or any affiliate
thereof, or any material omission from the information purported to be provided
hereby, and disseminated to Price Waterhouse Coopers L.L.P. or prospective
investors (directly or indirectly through available information systems) in
connection with the issuance, marketing or offering of the Certificates. This
indemnity agreement will be in addition to any liability which the Originator
may otherwise have.

          (b) The Purchaser agrees to indemnify and hold harmless the Seller and
the Originator, each of their respective officers, directors and each person or
entity who controls the Seller, the Originator or any such person, against any
and all losses, claims, damages or liabilities, joint and several, to which the
Seller, the Originator or any such person or entity may become subject, under
the Securities Act or otherwise, and will reimburse the Seller and/or the
Originator for any legal or other expenses incurred by the Seller, the
Originator, each such officer and director and such controlling person in
connection with investigating or defending any such losses, claims, damages or
liabilities insofar as such losses, claims, damages or liabilities (or actions
in respect


                                       21

<PAGE>



thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Prospectus Supplement or any
amendment or supplement to the Prospectus Supplement or the omission or the
alleged omission to state therein a material fact necessary in order to make the
statements in the Prospectus Supplement or any amendment or supplement to the
Prospectus Supplement, in the light of the circumstances under which they were
made, not misleading, but only to the extent that such untrue statement or
alleged untrue statement or omission or alleged omission is not contained in the
Originator Information in the Prospectus Supplement. This indemnity agreement
will be in addition to any liability which the Purchaser may otherwise have.

          (c) Promptly after receipt by any indemnified party under this Article
V of notice of any claim or the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against any
indemnifying party under this Article V, notify the indemnifying party in
writing of the claim or the commencement of that action; PROVIDED, HOWEVER, that
the failure to notify an indemnifying party shall not relieve it from any
liability which it may have under this Article V except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify any indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under this Article V.

     If any such claim or action shall be brought against an indemnified party,
and it shall notify the indemnifying party thereof, the indemnifying party shall
be entitled to participate therein and, to the extent that it wishes, jointly
with any other similarly notified indemnifying party, to assume the defense
thereof with counsel reasonably satisfactory to the indemnified party. After
notice from the indemnifying party to the indemnified party of its election to
assume the defense of such claim or action, the indemnifying party shall not be
liable to the indemnified party under this Article V for any legal or other
expenses subsequently incurred by the indemnified party in connection with the
defense thereof other than reasonable costs of investigation.

     Any indemnified party shall have the right to employ separate counsel in
any such action and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless: (i) the employment thereof has been specifically authorized by the
indemnifying party in writing; (ii) such indemnified party shall have been
advised in writing by such counsel that there may be one or more legal defenses
available to it which are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it is
advisable for such indemnified party to employ separate counsel; or (iii) the
indemnifying party has failed to assume the defense of such action and employ
counsel reasonably satisfactory to the indemnified party, in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party, it being understood, however, the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to local counsel) at any time for all such indemnified parties, which
firm shall be designated in writing by the Purchaser, if the indemnified parties
under this Article V consist of the Purchaser, by the


                                       22

<PAGE>



Originator, if the indemnified parties in this Article V consist of the
Originator, or by the Seller, if the indemnified parties under this Article V
consist of the Seller.

     Each indemnified party, as a condition of the indemnity agreements
contained in Section 5.01 (a) and (b) hereof, shall use its best efforts to
cooperate with the indemnifying party in the defense of any such action or
claim. No indemnifying party shall be liable for any settlement of any such
action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to consent to a settlement of any action, the indemnifying
party agrees that it shall be liable for any settlement of any proceeding
effected without its written consent if such settlement is entered into more
than 30 days after receipt by such indemnifying party of the aforesaid request
and the indemnifying party has not previously provided the indemnified party
with written notice of its objection to such settlement. No indemnifying party
shall effect any settlement of any pending or threatened proceeding in respect
of which an indemnified party is or could have been a party and indemnity is or
could have been sought hereunder, without the written consent of such
indemnified party, unless settlement includes an unconditional release of such
indemnified party from all liability and claims that are the subject matter of
such proceeding.

          (d) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in this Article is
for any reason held to be unenforceable although applicable in accordance with
its terms, the Seller and the Originator, on the one hand, and the Purchaser, on
the other, shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said indemnity agreement
incurred by the Seller, the Originator and the Purchaser in such proportions as
shall be appropriate to reflect the relative benefits received by the Seller and
the Originator on the one hand and the Purchaser on the other from the sale of
the Mortgage Loans such that the Purchaser is responsible for the lesser of (i)
0.25% thereof and (ii) 0.25% of the aggregate proceeds to the Seller from the
sale of the Mortgage Loans and the Originator shall be responsible for the
balance; PROVIDED, HOWEVER, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section, each officer and
director of the Purchaser and each person, if any, who controls the Purchaser
within the meaning of Section 15 of the Securities Act shall have the same
rights to contribution as the Purchaser, each director of the Originator, each
officer of the Originator, and each person, if any, who controls the Originator
within the meaning of Section 15 of the Securities Act shall have the same
rights to contribution as the Originator and each director of the Seller, each
officer of the Seller, and each person, if any, who controls the Seller within
the meaning of Section 15 of the Securities Act shall have the same rights to
contribution as the Seller.

          (e) The Originator agrees to indemnify and to hold each of the
Purchaser, the Trustee, each of the officers and directors of each such entity
and each person or entity who controls each such entity or person and each
Certificateholder harmless against any and all claims, losses, penalties, fines,
forfeitures, legal fees and related costs, judgments, and any other costs, fees
and expenses that the Purchaser, the Trustee, or any such person or entity and
any Certificateholder may


                                       23

<PAGE>



sustain in any way (i) related to the failure of the Originator to perform its
duties in compliance with the terms of this Agreement, (ii) arising from a
breach by the Originator of its representations and warranties in Section 3.01,
3.02 or 3.03 of this Agreement or (iii) related to the origination or prior
servicing of the Mortgage Loans by reason of any acts, omissions, or alleged
acts or omissions of the Originator, the Seller or any servicer. The Originator
shall immediately notify the Purchaser, the Trustee and each Certificateholder
if a claim is made by a third party with respect to this Agreement. The
Originator shall assume the defense of any such claim and pay all expenses in
connection therewith, including reasonable counsel fees, and promptly pay,
discharge and satisfy any judgment or decree which may be entered against the
Purchaser, the Trustee or any such person or entity and/or any Certificateholder
in respect of such claim.

                                   ARTICLE VI.

                                   TERMINATION


     Section 6.01 TERMINATION. The respective obligations and responsibilities
of the Originator, the Seller and the Purchaser created hereby shall terminate,
except for the Originator's indemnity obligations as provided herein upon the
termination of the Trust as provided in Article X of the Pooling and Servicing
Agreement.

                                  ARTICLE VII.

                            MISCELLANEOUS PROVISIONS


     Section 7.01 AMENDMENT. This Agreement may be amended from time to time by
the Originator, the Seller and the Purchaser, by written agreement signed by the
Originator, the Seller and the Purchaser.

     Section 7.02 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.

     Section 7.03 NOTICES. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered at or mailed by registered mail, postage prepaid, addressed as
follows:

     if to the Originator:

                  Option One Mortgage Corporation
                  3 Ada
                  Irvine, CA 92618
                  Attention: William L. O'Neill



                                       24

<PAGE>



or such other address as may hereafter be furnished to the Purchaser and the
Seller in writing by the Originator.

     if to the Purchaser:

                  Option One Mortgage Acceptance Corporation
                  3 Ada
                  Irvine, CA 92618
                  Attention: William L. O'Neill

or such other address as may hereafter be furnished to the Seller and the
Originator in writing by the Purchaser.

     if to the Seller:

                  Option One Owner Trust 2001-2
                  c/o Wilmington Trust Company
                  One Rodney Square North
                  1100 North Market Street
                  Wilmington, Delaware 19890
                  Attention: Corporate Trust Administration

or such other address as may hereafter be furnished to the Originator and the
Purchaser in writing by the Seller.

     Section 7.04 SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions of terms of this Agreement shall be held
invalid for any reason whatsoever, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity of
enforceability of the other provisions of this Agreement.

     Section 7.05 COUNTERPARTS. 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 and such
counterparts, together, shall constitute one and the same agreement.

     Section 7.06 FURTHER AGREEMENTS. The Purchaser, the Seller and the
Originator each agree to execute and deliver to the other such additional
documents, instruments or agreements as may be necessary or reasonable and
appropriate to effectuate the purposes of this Agreement or in connection with
the issuance of any series of Certificates representing interests in the
Mortgage Loans.

     Without limiting the generality of the foregoing, as a further inducement
for the Purchaser to purchase the Mortgage Loans from the Seller, the Originator
will cooperate with the Purchaser in connection with the sale of any of the
securities representing interests in the Mortgage Loans. In that connection, the
Originator will provide to the Purchaser any and all information and appropriate


                                       25

<PAGE>



verification of information, whether through letters of its auditors and counsel
or otherwise, as the Purchaser shall reasonably request and will provide to the
Purchaser such additional representations and warranties, covenants, opinions of
counsel, letters from auditors, and certificates of public officials or officers
of the Originator as are reasonably required in connection with such
transactions and the offering of investment grade securities rated by the Rating
Agencies.

     Section 7.07 INTENTION OF THE PARTIES. It is the intention of the parties
that the Purchaser is purchasing, and the Seller is selling, the Mortgage Loans
rather than pledging the Mortgage Loans to secure a loan by the Purchaser to the
Seller. Accordingly, the parties hereto each intend to treat the transaction for
federal income tax purposes and all other purposes as a sale by the Seller, and
a purchase by the Purchaser, of the Mortgage Loans. The Purchaser will have the
right to review the Mortgage Loans and the related Mortgage Files to determine
the characteristics of the Mortgage Loans which will affect the federal income
tax consequences of owning the Mortgage Loans and the Seller will cooperate with
all reasonable requests made by the Purchaser in the course of such review.

     Section 7.08 SUCCESSORS AND ASSIGNS, ASSIGNMENT OF PURCHASE AGREEMENT. This
Agreement shall bind and inure to the benefit of and be enforceable by the
Seller, the Originator, the Purchaser, the Trustee and the NIMs Insurer, if any.
The NIMs Insurer, if any, shall be a third party beneficiary hereof and may
enforce the terms hereof as if a party hereto. The obligations of the Seller and
the Originator under this Agreement cannot be assigned or delegated to a third
party without the consent of the Purchaser which consent shall be at the
Purchaser's sole discretion, except that the Purchaser acknowledges and agrees
that the Seller or the Originator may assign its obligations hereunder to any
Person into which the Seller or the Originator is merged or any corporation
resulting from any merger, conversion or consolidation to which the Seller or
the Originator is a party or any Person succeeding to the business of the Seller
or the Originator. The parties hereto acknowledge that the Purchaser is
acquiring the Mortgage Loans for the purpose of contributing them to a trust
that will issue a series of Certificates representing undivided interests in
such Mortgage Loans. As an inducement to the Purchaser to purchase the Mortgage
Loans, the Seller and the Originator each acknowledge and consent to the
assignment by the Purchaser to the Trustee of all of the Purchaser's rights
against the Seller and the Originator pursuant to this Agreement insofar as such
rights relate to Mortgage Loans transferred to the Trustee and to the
enforcement or exercise of any right or remedy against the Seller or the
Originator pursuant to this Agreement by the Trustee. Such enforcement of a
right or remedy by the Trustee shall have the same force and effect as if the
right or remedy had been enforced or exercised by the Purchaser directly.

     Section 7.09 SURVIVAL. The representations and warranties set forth in
Sections 3.01, 3.02 and 3.03 and the provisions of Article V hereof shall
survive the purchase of the Mortgage Loans hereunder.

     Section 7.10 OWNER TRUSTEE. It is expressly understood and agreed by the
parties to this Agreement that (a) this Agreement is executed and delivered by
Wilmington Trust Company, not individually or personally but solely as Owner
Trustee of the Seller, in the exercise of the powers and authority conferred and
vested in it as trustee, (b) each of the representations, undertakings and
agreements herein made on the part of the Seller is made and intended not as
personal representations, undertakings and agreements by Wilmington Trust
Company but is made and


                                       26

<PAGE>



intended for the purpose of binding only the Seller, (c) nothing herein
contained shall be construed as creating any liability on Wilmington Trust
Company, individually or personally, to perform any covenant either expressed or
implied contained herein, all such liability, if any, being expressly waived by
the parties to this Agreement and by any person claiming by, through or under
the parties to this Agreement and (d) under no circumstances shall Wilmington
Trust Company be personally liable for the payment of any indebtedness or
expenses of the Seller or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the Seller under this
Agreement or any other document.
     IN WITNESS WHEREOF, the Seller, the Originator and the Purchaser have
caused their names to be signed to this Mortgage Loan Purchase Agreement by
their respective officers thereunto duly authorized as of the day and year fist
above written.

                                           OPTION ONE MORTGAGE ACCEPTANCE
                                           CORPORATION,
                                           as Purchaser


                                           By:  ________________________________
                                                Name:
                                                Title:

                                           OPTION ONE MORTGAGE CORPORATION,
                                                    as Originator


                                           By:  ________________________________
                                                Name:
                                                Title:

                                           OPTION ONE OWNER TRUST 2001-2,
                                                    as Seller


                                           By:  Wilmington Trust Company, not in
                                                its individual capacity but
                                                solely as Owner Trustee.


                                           By:  ________________________________
                                                Name:
                                                Title:






<PAGE>






                                       28

<PAGE>


                                   SCHEDULE I

                                 MORTGAGE LOANS


                                 FILED BY PAPER








                                       I-1




<PAGE>


===============================================================================







                        OPTION ONE MORTGAGE CORPORATION,

                                  as Originator


                         OPTION ONE OWNER TRUST 2002-3,

                                    as Seller

                                       and


                   OPTION ONE MORTGAGE ACCEPTANCE CORPORATION,

                                  as Purchaser




                        MORTGAGE LOAN PURCHASE AGREEMENT

                          Dated as of January 13, 2003



                  Fixed Rate and Adjustable Rate Mortgage Loans

                      Option One Mortgage Loan Trust 2003-1
                    Asset-Backed Certificates, Series 2003-1





================================================================================







<PAGE>



                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

                                   ARTICLE I.

                                   DEFINITIONS
Section 1.01   Definitions.....................................................1

                                   ARTICLE II.

                SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.01   Sale of Mortgage Loans..........................................2
Section 2.02   Obligations of Originator upon Sale.............................2
Section 2.03   Payment of Purchase Price For The Mortgage Loans................5

                                  ARTICLE III.

               REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01   Originator Representations And Warranties Relating to
               The Mortgage Loans..............................................6
Section 3.02   Originator Representations And Warranties Relating to
               The Originator.................................................12
Section 3.03   Originator Representations And Warranties Relating to
               The Seller.....................................................14
Section 3.04   Remedies For Breach of Representations And Warranties..........15

                                   ARTICLE IV.

                             ORIGINATOR'S COVENANTS
Section 4.01   Covenants of The Originator....................................17

                                   ARTICLE V.

               INDEMNIFICATION WITH RESPECT TO THE MORTGAGE LOANS
Section 5.01   Indemnification................................................18

                                   ARTICLE VI.

                                   TERMINATION
Section 6.01   Termination....................................................21

                                  ARTICLE VII.

                            MISCELLANEOUS PROVISIONS
Section 7.01   Amendment......................................................21
Section 7.02   Governing Law..................................................21


                                       ii

<PAGE>



Section 7.03   Notices........................................................21
Section 7.04   Severability of Provisions.....................................22
Section 7.05   Counterparts...................................................22
Section 7.06   Further Agreements.............................................22
Section 7.07   Intention of The Parties.......................................22
Section 7.08   Successors And Assigns, Assignment of Purchase Agreement.......23
Section 7.09   Survival.......................................................23
Section 7.10   Owner Trustee..................................................23




                                       iii

<PAGE>




          MORTGAGE LOAN PURCHASE AGREEMENT, dated as of January 13, 2003 (the
"Agreement"), among Option One Mortgage Corporation (the "Originator"), Option
One Owner Trust 2002-3 (the "Seller") and Option One Mortgage Acceptance
Corporation (the "Purchaser").

                             W I T N E S S E T H
                             -------------------

          WHEREAS, the Seller is the owner of (a) the notes or other evidence of
indebtedness (the "Mortgage Notes") so indicated on Schedule I hereto referred
to below and (b) the other documents or instruments constituting the Mortgage
File (collectively, the "Mortgage Loans"); and

          WHEREAS, the Seller, as of the date hereof, owns the mortgages (the
"Mortgages") on the properties (the "Mortgaged Properties") securing such
Mortgage Loans, including rights to (a) any property acquired by foreclosure or
deed in lieu of foreclosure or otherwise and (b) the proceeds of any insurance
policies covering the Mortgage Loans or the Mortgaged Properties or the obligors
on the Mortgage Loans; and

          WHEREAS, the parties hereto desire that the Seller sell the Mortgage
Loans to the Purchaser pursuant to the terms of this Agreement; and

          WHEREAS, the Seller is an indirect subsidiary of the Originator and
the Originator is the administrator of the Seller; and

          WHEREAS, the Originator originated the Mortgage Loans and previously
sold the Mortgage Loans; and

          WHEREAS, pursuant to the terms of a Pooling and Servicing Agreement
dated as of January 1, 2003 (the "Pooling and Servicing Agreement") among the
Purchaser as depositor, the Originator as master servicer and Wells Fargo Bank
Minnesota, National Association as trustee (the "Trustee"), the Purchaser will
convey the Mortgage Loans to Option One Mortgage Loan Trust 2003-1 (the
"Trust");

          WHEREAS, the Originator is obligated, in connection with the
transactions contemplated by this Agreement, to make certain representations,
warranties and covenants with respect to itself, the Seller and the Mortgage
Loans.

          NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:

                                   ARTICLE I.

                                   DEFINITIONS


          Section 1.01 DEFINITIONS. All capitalized terms used but not defined
herein and below shall have the meanings assigned thereto in the Pooling and
Servicing Agreement.


                                        1

<PAGE>



     "ORIGINATOR INFORMATION": The information in the Prospectus
     Supplement as follows: under "SUMMARY OF TERMS--Mortgage Loans,"
     "SUMMARY OF TERMS--Primary Mortgage Insurance," the first sentence
     under the fourth bullet point under "RISK FACTORS--Unpredictability
     of Prepayments and Effect on Yields," "RISK FACTORS--Delinquent
     Mortgage Loan Risk," the third sentence under "RISK FACTORS--
     Balloon Loan Risks," the first sentence under "RISK FACTORS--Second
     Lien Loan Risk," "RISK FACTORS--Convertible Mortgage Loan Risk,"
     the first sentence of the third paragraph under "RISK FACTORS--
     Potential Inadequacy of Credit Enhancement for the Offered
     Certificates," the second sentence under the fourth bullet point
     under "RISK FACTORS--Interest Generated by the Mortgage Loans May
     Be Insufficient to Maintain Overcollateralization," the second
     sentence under "RISK FACTORS--High Loan-to-Value Ratios Increase
     Risk of Loss," "THE MORTGAGE POOL," "OPTION ONE MORTGAGE
     CORPORATION," the first sentence under "DESCRIPTION OF THE
     CERTIFICATES--The PMI Policy," and the first sentence of the sixth
     paragraph under "YIELD, PREPAYMENT AND MATURITY CONSIDERATIONS."

                                   ARTICLE II.

                SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE


     Section 2.01 SALE OF MORTGAGE LOANS.

          (a) The Seller, concurrently with the execution and delivery of this
Agreement, does hereby sell, and in connection therewith hereby assigns to the
Purchaser, effective as of the Closing Date, without recourse, (i) all of its
right, title and interest in and to each Mortgage Loan, including the related
Cut-off Date Principal Balance, all interest accruing thereon on and after the
Cut-off Date and all collections in respect of interest and principal due on or
after the Cut-off Date; (ii) property which secured such Mortgage Loan and which
has been acquired by foreclosure or deed in lieu of foreclosure; (iii) its
interest in any insurance policies (including the PMI Policy) in respect of the
Mortgage Loans and (iv) all proceeds of any of the foregoing.

          (b) [Reserved].

     Section 2.02 OBLIGATIONS OF ORIGINATOR UPON SALE. In connection with any
transfer pursuant to Section 2.01 hereof, the Originator further agrees, at its
own expense on or prior to the Closing Date, (a) to cause the books and records
of the Seller to indicate that the Mortgage Loans have been sold to the
Purchaser pursuant to this Agreement, (b) to deliver to the Purchaser and the
Trustee a computer file containing a true and complete list of all such Mortgage
Loans specifying for each such Mortgage Loan, as of the Cut-off Date, (i) its
account number and (ii) the Cut-off Date Principal Balance. Such file, which
forms a part of Exhibit D to the Pooling and Servicing Agreement, shall also be
marked as Schedule I to this Agreement and is hereby incorporated into and made
a part of this Agreement and (c) to deliver to the Purchaser and the Trustee the
ETT (as defined in the PMI Policy) with respect to the Mortgage Loans.


                                        2

<PAGE>



     In connection with any conveyance by the Seller, the Seller shall on behalf
of the Purchaser deliver to, and deposit with the Trustee, as assignee of the
Purchaser, on or before the Closing Date, the following documents or instruments
with respect to each Mortgage Loan:

               (i) the original Mortgage Note, endorsed either (A) in blank, in
which case the Trustee shall cause the endorsement to be completed or (B) in the
following form: "Pay to the order of Wells Fargo Bank Minnesota, National
Association, as Trustee, without recourse", or with respect to any lost Mortgage
Note, an original Lost Note Affidavit stating that the original mortgage note
was lost, misplaced or destroyed, together with a copy of the related mortgage
note; PROVIDED, HOWEVER, that such substitutions of Lost Note Affidavits for
original Mortgage Notes may occur only with respect to Mortgage Loans, the
aggregate Cut-off Date Principal Balance of which is less than or equal to 1.00%
of the Pool Balance as of the Cut-off Date;

               (ii) the original Mortgage with evidence of recording thereon,
and the original recorded power of attorney, if the Mortgage was executed
pursuant to a power of attorney, with evidence of recording thereon or, if such
Mortgage or power of attorney has been submitted for recording but has not been
returned from the applicable public recording office, has been lost or is not
otherwise available, a copy of such Mortgage or power of attorney, as the case
may be, certified to be a true and complete copy of the original submitted for
recording;

               (iii) an original Assignment of Mortgage, in form and substance
acceptable for recording. The Mortgage shall be assigned either (A) in blank,
without recourse or (B) to "Wells Fargo Bank Minnesota, National Association, as
Trustee, without recourse";

               (iv) an original copy of any intervening assignment of Mortgage
showing a complete chain of assignments;

               (v) the original or a certified copy of lender's title insurance
policy; and

               (vi) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any.

     The Originator hereby confirms to the Purchaser and the Trustee that it has
caused the appropriate entries to be made in the general accounting records of
the Seller, to indicate that such Mortgage Loans have been transferred to the
Trustee and constitute part of the Trust in accordance with the terms of the
Pooling and Servicing Agreement.

     If any of the documents referred to in Section 2.02(ii), (iii) or (iv)
above has as of the Closing Date been submitted for recording but either (x) has
not been returned from the applicable public recording office or (y) has been
lost or such public recording office has retained the original of such document,
the obligations of the Seller to deliver such documents shall be deemed to be
satisfied upon (1) delivery to the Trustee or the Custodian no later than the
Closing Date, of a copy of each such document certified by the Originator in the
case of (x) above or the applicable public recording office in the case of (y)
above to be a true and complete copy of the original that was submitted for
recording and (2) if such copy is certified by the Originator, delivery to the
Trustee or the Custodian, promptly upon receipt thereof of either the original
or a copy of such document certified by the


                                        3

<PAGE>



applicable public recording office to be a true and complete copy of the
original. If the original lender's title insurance policy, or a certified copy
thereof, was not delivered pursuant to Section 2.02(v) above, the Seller shall
deliver or cause to be delivered to the Trustee or the Custodian, the original
or a copy of a written commitment or interim binder or preliminary report of
title issued by the title insurance or escrow company, with the original or a
certified copy thereof to be delivered to the Trustee or the Custodian, promptly
upon receipt thereof. The Originator and the Seller shall deliver or cause to be
delivered to the Trustee or the Custodian promptly upon receipt thereof any
other documents constituting a part of a Mortgage File received with respect to
any Mortgage Loan, including, but not limited to, any original documents
evidencing an assumption or modification of any Mortgage Loan.

     Upon discovery or receipt of notice of any materially defective document
in, or that a document is missing from, a Mortgage File, the Seller shall have
120 days to cure such defect or deliver such missing document to the Purchaser.
If the Seller does not cure such defect or deliver such missing document within
such time period, the Originator shall either repurchase or substitute for such
Mortgage Loan pursuant to Section 2.03 of the Pooling and Servicing Agreement.

     The Purchaser hereby acknowledges its acceptance of all right, title and
interest to the Mortgage Loans and other property, now existing and hereafter
created, conveyed to it pursuant to Section 2.01.

     The parties hereto intend that the transaction set forth herein be a sale
by the Seller to the Purchaser of all the Seller's right, title and interest in
and to the Mortgage Loans and other property described above. In the event the
transaction set forth herein is deemed not to be a sale, the Seller hereby
grants to the Purchaser a security interest in all of the Seller's right, title
and interest in, to and under the Mortgage Loans and other property described
above, whether now existing or hereafter created, to secure all of the Seller's
obligations hereunder; and this Agreement shall constitute a security agreement
under applicable law.

     The Originator shall cause the Assignments which were delivered in blank to
be completed and shall cause all Assignments referred to in Section 2.02(iii)
hereof and, to the extent necessary, in Section 2.02(iv) hereof to be recorded.
The Originator shall be required to deliver such Assignments for recording
within 90 days of the Closing Date. Notwithstanding the foregoing, however, for
administrative convenience and facilitation of servicing and to reduce closing
costs, the Assignments of Mortgage shall not be required to be submitted for
recording with respect to any Mortgage Loan in any jurisdiction where the Rating
Agencies do not require recordation in order to receive the ratings on the
Certificates at the time of their initial issuance; PROVIDED, HOWEVER, each
Assignment shall be submitted for recording by the Originator in the manner
described above, at no expense to the Trust Fund or Trustee, upon the earliest
to occur of: (i) reasonable direction by Holders of Certificates entitled to at
least 25% of the Voting Rights, (ii) the occurrence of a Master Servicer Event
of Termination, (iii) the occurrence of a bankruptcy, insolvency or foreclosure
relating to the Master Servicer, (iv) the occurrence of a servicing transfer as
described in Section 7.02 hereof, (v) if the Originator is not the Master
Servicer and with respect to any one Assignment the occurrence of a bankruptcy,
insolvency or foreclosure relating to the Mortgagor under the related Mortgage
and (vi) any Mortgage Loan that is 90 days or more Delinquent. Upon (a) receipt
of written notice from the Trustee that recording of the Assignments is required
pursuant to one or more


                                        4

<PAGE>



of the conditions (excluding (v) and (vi) above) set forth in the preceding
sentence or (b) upon the occurrence of condition (v) or (vi) in the preceding
sentence, the Originator shall be required to deliver such Assignments for
recording as provided above, promptly and in any event within 30 days following
receipt of such notice. Notwithstanding the foregoing, if the Originator fails
to pay the cost of recording the Assignments, such expense will be paid by the
Trustee and the Trustee shall be reimbursed for such expenses by the Trust. The
Originator shall furnish the Trustee, or its designated agent, with a copy of
each Assignment submitted for recording. In the event that any such Assignment
is lost or returned unrecorded because of a defect therein, the Originator shall
promptly have a substitute Assignment prepared or have such defect cured, as the
case may be, and thereafter cause each such Assignment to be duly recorded. In
the event that any Mortgage Note is endorsed in blank as of the Closing Date,
within ninety (90) days of the Closing Date the Originator shall cause to be
completed such endorsements "Pay to the order of Wells Fargo Bank Minnesota,
National Association, as Trustee, without recourse."

     The Originator shall forward to the Purchaser original documents evidencing
an assumption, modification, consolidation or extension of any Mortgage Loan
entered into in accordance with the Pooling and Servicing Agreement within two
weeks of their execution; PROVIDED, HOWEVER, that the Originator shall provide
the Purchaser with a certified true copy of any such document submitted for
recordation within two weeks of 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 365 days of its submission for recordation. In the event that
the Originator cannot provide a copy of such document certified by the public
recording office within such 365 day period, the Originator shall deliver to the
Purchaser, within such 365 day period, an Officer's Certificate of the Master
Servicer which shall (A) identify the recorded document, (B) state that the
recorded document has not been delivered to the Purchaser due solely to a delay
caused by the public recording office, (C) state the amount of time generally
required by the applicable recording office to record and return a document
submitted for recordation, if known, and (D) specify the date the applicable
recorded document is expected to be delivered to the Purchaser, and, upon
receipt of a copy of such document certified by the public recording office, the
Originator shall immediately deliver such document to the Purchaser. In the
event the appropriate public recording office will not certify as to the
accuracy of such document, the Originator shall deliver a copy of such document
certified by an officer of the Originator to be a true and complete copy of the
original to the Purchaser.

     Section 2.03 PAYMENT OF PURCHASE PRICE FOR THE MORTGAGE LOANS.

     In consideration of the sale of the Mortgage Loans from the Seller to the
Purchaser on the Closing Date, the Purchaser agrees to pay to the Seller on the
Closing Date (the "Purchase Price") by transfer of (i) immediately available
funds in an amount equal to $478,669,738.15 and (ii) a 39.89% percentage
interest in the Class C Certificates, the Class P Certificates and the Class R
Certificates (collectively the "Option One Certificates") which Option One
Certificates shall be registered in the name of Option One Mortgage Corporation.
The Originator shall pay, and be billed directly for, all expenses incurred by
the Purchaser in connection with the issuance of the Certificates, including,
without limitation, printing fees incurred in connection with the prospectus
relating to the Certificates, blue sky registration fees and expenses, fees and
expenses of Purchaser's


                                        5

<PAGE>



counsel, fees of the Rating Agencies requested to rate the Certificates,
accountant's fees and expenses and the fees and expenses of the Trustee and
other out-of-pocket costs, if any.

                                  ARTICLE III.

               REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH


     Section 3.01 ORIGINATOR REPRESENTATIONS AND WARRANTIES RELATING TO THE
MORTGAGE LOANS. The Originator hereby represents and warrants with respect to
the Mortgage Loans to the Purchaser that as of the Closing Date or as of such
date specifically provided herein:

          (a) The Seller has good title to and is the sole owner and holder of
the Mortgage Loan;

          (b) Immediately prior to the transfer and assignment to the Purchaser,
the Mortgage Note and the Mortgage Loan were not subject to an assignment or
pledge, and the Seller has full right and authority to sell and assign the
Mortgage Loan;

          (c) The Seller is transferring such Mortgage Loan to the Purchaser
free and clear of any and all liens, pledges, charges or security interests of
any nature encumbering the Mortgage Loans;

          (d) The information set forth on Schedule I is true and correct in all
material respects as of the Cut-off Date or such other date as may be indicated
in such schedule;

          (e) The Mortgage Loan has been acquired, serviced, collected and
otherwise dealt with by the Originator and any affiliate of the Originator in
compliance with all applicable federal, state and local laws and regulations and
the terms of the related Mortgage Note and Mortgage;

          (f) The related Mortgage Note and Mortgage are genuine and each is the
legal, valid and binding obligation of the maker thereof, enforceable in
accordance with its terms except as such enforcement may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by general equity principles
(regardless of whether such enforcement is considered in a proceeding in equity
or at law);

          (g) The related Mortgage is a valid and enforceable first or second
lien on the related Mortgaged Property, which Mortgaged Property is free and
clear of all encumbrances and liens (including mechanics liens) having priority
over the first or second lien of the Mortgage except for: (i) liens for real
estate taxes and assessments not yet due and payable; (ii) covenants, conditions
and restrictions, rights of way, easements and other matters of public record as
of the date of recording of such Mortgage, such exceptions appearing of record
being acceptable to mortgage lending institutions generally or specifically
reflected or considered in the lender's title insurance policy delivered to the
originator of the Mortgage Loan and referred to in the appraisal made in
connection with the origination of the related Mortgage Loan, (iii) other
matters to which like properties are commonly subject which do not materially
interfere with the benefits of the security


                                        6

<PAGE>



intended to be provided by such Mortgage and (iv) the first lien on the
Mortgaged Property, in the case of the Mortgages that are second liens;

          (h) Any security agreement, chattel mortgage or equivalent document
related to such Mortgage Loan establishes and creates a valid and enforceable
first or second lien on the Mortgaged Property;

          (i) As of the last calendar day of December 2002 and with respect to
any Mortgage Loan that had a payment due on or before December 1, 2002, except
with respect to .45% of the Mortgage Loans by the aggregate Cut-off Date
Principal Balance of the Mortgage Loans, the related Monthly Payment due on
December 1, 2002 has been received. In addition, .49% of the Mortgage Loans have
been 30 or more days delinquent in the last 12 months and .02% of the Mortgage
Loans have been 30 or more days delinquent for two payment periods in the last
12 months;

          (j) Neither the Originator nor the Seller has advanced funds, or
induced, solicited or knowingly received any advance of funds by a party other
than the Mortgagor, directly or indirectly, for the payment of any amount
required under the Mortgage Loan;

          (k) Neither the Originator nor the Seller has impaired, waived,
altered or modified the related Mortgage or Mortgage Note in any material
respect, or satisfied, canceled, rescinded or subordinated such Mortgage or
Mortgage Note in whole or in part or released all or any material portion of the
Mortgaged Property from the lien of the Mortgage, or executed any instrument of
release, cancellation, rescission or satisfaction of the Mortgage Note or
Mortgage;

          (l) As of the Cut-off Date, the Mortgage has not been satisfied,
canceled or subordinated, in whole or in part, or rescinded, and the Mortgaged
Property has not been released from the lien of the Mortgage, in whole or in
part (except for a release that does not materially impair the security of the
Mortgage Loan or a release the effect of which is reflected in the Loan-to-Value
Ratio for the Mortgage Loan as set forth in the Schedule of Mortgage Loans), nor
has any instrument been executed that would effect any such release,
cancellation, subordination or rescission;

          (m) No Mortgage Loan is subject to any right of recission, set-off,
counterclaim or defense, including the defense of usury, nor will the operation
of any of the terms of any Mortgage Note or Mortgage, or the exercise of any
right thereunder, render either the Mortgage Note or Mortgage unenforceable in
whole or in part, or subject to any right of recission, set-off, counterclaim or
defense, including the defense of usury, and no such right of recission,
set-off, counterclaim or defense has been asserted with respect thereto;

          (n) To the Originator's knowledge, there is no proceeding pending for
the total or partial condemnation and no eminent domain proceedings pending
affecting any Mortgaged Property;

          (o) Each Mortgage Loan is covered by either (i) a mortgage title
insurance policy or other generally acceptable form of insurance policy
customary in the jurisdiction where the Mortgaged Property is located or (ii) if
generally acceptable in the jurisdiction where the Mortgaged


                                        7

<PAGE>



Property is located, an attorney's opinion of title given by an attorney
licensed to practice law in the jurisdiction where the Mortgaged Property is
located. All of the Originator's rights under such policies, opinions or other
instruments shall be transferred and assigned to Purchaser upon sale and
assignment of the Mortgage Loans hereunder. The title insurance policy has been
issued by a title insurer licensed to do business in the jurisdiction where the
Mortgaged Property is located, insuring the original lender, its successor and
assigns, as to the first or second priority lien of the Mortgage in the original
principal amount of the Mortgage Loan, subject to the exceptions contained in
such policy. The Originator is the sole insured of such mortgagee title
insurance policy, and such mortgagee title insurance policy is in full force and
effect and will be in force and effect upon the consummation of the transactions
contemplated by this Agreement. Neither the Originator nor any affiliate of the
Originator has made, and the Originator has no knowledge of, any claims under
such mortgagee title insurance policy. The Originator is not aware of any action
by a prior holder and neither the Originator nor any affiliate of the Originator
has done, by act or omission, anything which could impair the coverage or
enforceability of such mortgagee title insurance policy or the accuracy of such
attorney's opinion of title;

          (p) There is no material default, breach, violation or event of
acceleration existing under the related Mortgage or the related Mortgage Note
and no event which, with the passage of time or with notice and the expiration
of any grace or cure period, would constitute a material default, breach,
violation or event of acceleration, other than a payment delinquency that is for
a payment due after the date specified in (i) above. Neither the Originator, the
Seller nor any affiliate of the Originator or the Seller has waived any default,
breach, violation or event of acceleration;

          (q) With respect to any Mortgage Loan which provides for an adjustable
interest rate, all rate adjustments have been performed in accordance with the
terms of the related Mortgage Note or subsequent modifications, if any;

          (r) To the Originator's knowledge, there are no delinquent taxes,
ground rents, water charges, sewer rents, assessments, insurance premiums,
leasehold payments, including assessments payable in future installments or
other outstanding charges, affecting the related Mortgaged Property;

          (s) No foreclosure proceedings are pending against the Mortgaged
Property and the Mortgage Loan is not subject to any pending bankruptcy or
insolvency proceeding, and to the Originator's best knowledge, no material
litigation or lawsuit relating to the Mortgage Loan is pending;

          (t) The Mortgage Loan obligates the mortgagor thereunder to maintain a
hazard insurance policy ("Hazard Insurance") in an amount at least equal to the
lesser of (i) the maximum insurable value of such improvements or (ii) the
principal balance of the Mortgage Loan with a standard mortgagee clause, in
either case in an amount sufficient to avoid the application of any
"co-insurance provisions," and, if it was in place at origination of the
Mortgage Loan, flood insurance, at the mortgagor's cost and expense. If the
Mortgaged Property is in an area identified in the Federal Register by the
Federal Emergency Management Agency ("FEMA") as having special flood hazards, a
flood insurance policy is in effect which met the requirements of FEMA at the
time such policy was issued. The Mortgage obligates the Mortgagor to maintain
the Hazard Insurance,


                                        8

<PAGE>



and, if applicable, flood insurance policy at the Mortgagor's cost and expense,
and on the Mortgagor's failure to do so, authorizes the holder of the Mortgage
to obtain and maintain such insurance at the Mortgagor's cost and expense, and
to seek reimbursement therefor from the Mortgagor. The Mortgaged Property is
covered by Hazard Insurance;

          (u) The Mortgage Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage and the security
interest of any applicable security agreement or chattel mortgage;

          (v) The Mortgage contains an enforceable provision for the
acceleration of the payment of the unpaid principal balance of the Mortgage Loan
in the event that the Mortgaged Property is sold or transferred without the
prior written consent of the Mortgagee thereunder. The Mortgage contains
customary and enforceable provisions such as to render the rights and remedies
of the holder thereof adequate for the realization against the Mortgaged
Property of the benefits of the security provided thereby, including (i) in the
case of a Mortgage designated as a deed of trust, by trustee's sale or judicial
foreclosure and (ii) otherwise by judicial foreclosure. Since the date of
origination of the Mortgage Loan, the Mortgaged Property has not been subject to
any bankruptcy proceeding or foreclosure proceeding and the Mortgagor has not
filed for protection under applicable bankruptcy laws. There is no homestead or
other exemption available to the Mortgagor that would interfere with the right
to sell the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage. In the event the Mortgage constitutes a deed of trust, a trustee, duly
qualified under applicable law to serve as such, as been properly designated and
currently so serves and is named in the Mortgage, and no fees or expenses are or
will become payable by Purchaser to the trustee under the deed of trust, except
in connection with a trustee's sale after default by the related Mortgagor. The
Mortgagor has not notified the Originator or any affiliate of the Originator and
the Originator has no knowledge of any relief requested or allowed to the
Mortgagor under the Soldiers and Sailors Civil Relief Act of 1940;

          (w) Except as set forth in the appraisal which forms part of the
related Mortgage File, the Mortgaged Property, normal wear and tear excepted, is
undamaged by waste, fire, earthquake or earth movement, windstorm, flood,
tornado or other casualty so as to affect materially and adversely the value of
the Mortgaged Property as security for the Mortgage Loan or the use for which
the premises were intended;

          (x) To the Originator's knowledge, there was no fraud involved in the
origination of the Mortgage Loan by the mortgagee or by the Mortgagor, any
appraiser or any other party involved in the origination of the Mortgage Loan;

          (y) Each Mortgage File contains an appraisal of the Mortgaged Property
indicating an appraised value equal to the appraised value identified for such
Mortgaged Property on the Mortgage Loan Schedule. Each appraisal has been
performed in accordance with the provisions of the Financial Institutions
Reform, Recovery and Enforcement Act of 1989;

          (z) To the best of the Originator's knowledge, all parties which have
had any interest in the Mortgage Loan, whether as mortgagee, assignee, pledgee
or otherwise, are (or, during the period in which they held and disposed of such
interest, were) in compliance with any and all


                                        9

<PAGE>



applicable "doing business" and licensing requirements of the laws of the state
wherein the Mortgaged Property is located;

          (aa) No improvements on the related Mortgaged Property (upon which
value was given) encroach on adjoining properties (and in the case of a
condominium unit, such improvements are within the project with respect to that
unit), and no improvements on adjoining properties encroach upon the Mortgaged
Property unless there exists in the Mortgage File a title Policy with
endorsements which insure against losses sustained by the insured as a result of
such encroachments;

          (bb) Each Mortgage Loan was originated or acquired by a savings and
loan association, a savings bank, a commercial bank or similar banking
institution which is supervised and examined by a federal or state authority, or
by a mortgagee approved by the Secretary of HUD. Each Mortgage Loan was
originated substantially in accordance with the Originator's underwriting
criteria, which are at least as stringent as the underwriting criteria set forth
in the Prospectus Supplement. Each Mortgage Loan is currently being serviced by
the Originator and has been serviced by the Originator since the date of
origination of such Mortgage Loan;

          (cc) (i) Principal payments on the Mortgage Loan commenced no more
than two months after the proceeds of the Mortgage Loan were disbursed and (ii)
each Mortgage Note is payable on the first day of each month;

          (dd) Other than with respect to not more than 0% of the Mortgage Loans
(by aggregate principal balance of the Mortgage Loans as of the Cut-off Date),
which are "balloon payment" mortgage loans, each Mortgage Loan is fully
amortizing;

          (ee) The Mortgage Loan bears interest at the Mortgage Rate and the
Mortgage Note does not permit negative amortization. No Mortgage Loan bearing
interest at an adjustable rate permits the Mortgagor to convert the Mortgage
Loan to a fixed rate Mortgage Loan;

          (ff) With respect to escrow deposits, if any, all such payments are in
the possession of, or under the control of, the Master Servicer and there exist
no deficiencies in connection therewith for which customary arrangements for
repayment thereof have not been made. No escrow deposits or escrow advances or
other charges or payments due the Master Servicer have been capitalized under
any Mortgage or the related Mortgage Note;

          (gg) No Mortgage Loan contains provisions pursuant to which scheduled
payments are: (i) paid or partially paid with funds deposited in any separate
account established by the Originator, the Seller, the Mortgagor, or anyone on
behalf of the Mortgagor; or (ii) paid by any source other than the Mortgagor or
contains any other similar provisions which may constitute a "buydown"
provision. The Mortgage Loan is not a graduated payment mortgage loan and the
Mortgage Loan does not have a shared appreciation or other contingent interest
feature;

          (hh) As of the origination date of each Mortgage Loan, the related
Mortgaged Property is lawfully permitted to be occupied under applicable law;



                                       10

<PAGE>



          (ii) No law relating to servicing, collection or notification
practices and no law relating to origination practices, has been violated in
connection with any Mortgage Loan transferred to the Purchaser pursuant to this
Agreement, including, without limitation, usury, truth in lending, real estate
settlement procedures, consumer credit protection, equal credit opportunity or
disclosure laws. The Mortgage Loan has been serviced in accordance with the
terms of the Mortgage Note.

          (jj) No Mortgage Loan was made in connection with (a) the construction
or rehabilitation of a Mortgaged Property or (b) facilitating the trade-in or
exchange of a Mortgaged Property;

          (kk) The proceeds of the Mortgage Loan have been fully disbursed to or
for the account of the Mortgagor and there is no obligation for the Mortgagee to
advance additional funds thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage have been paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due to the, Mortgagee pursuant to the Mortgage Note or Mortgage;

          (ll) There are no mechanics' or similar liens or claims that have been
filed for work, labor or material (and no rights are outstanding that under law
could give rise to such lien) affecting the related Mortgaged Property that are
or may be liens prior to, or equal or coordinate with, the lien of the related
Mortgage;

          (mm) As to each Mortgage Loan, interest is calculated on the Mortgage
Note on the basis of twelve 30-day months and a 360 day year;

          (nn) The Mortgaged Property consists of one of the following: detached
or semi-detached one- to four-family dwelling units, townhouses, individual
condominium units and individual units in planned unit developments, or
manufactured homes;

          (oo) Each Mortgage Loan constitutes a "qualified mortgage" within the
meaning of Section 860G(a)(3) of the Code;

          (pp) The Mortgage Loans were not intentionally selected by the Seller
in a manner intended to adversely affect the Purchaser or the Trust;

          (qq) The representations, warranties and covenants, set forth in this
Section shall survive the Closing Date;

          (rr) The Mortgage Loans have original terms to maturity ranging from
10 to 30 years;

          (ss) With respect to the Mortgage Loans, no more than 19.84%; 13.95%;
9.89% and 7.98% of the Mortgage Loans, by Cut-off Date Principal Balance will be
secured by Mortgaged Properties located in California, New York, Massachusetts
and New Jersey, respectively; and 74.70% of the Mortgage Loans, by Cut-off Date
Principal Balance will be secured by real property


                                       11

<PAGE>



with a single family residence erected thereon and 4.04% of the Mortgage Loans,
by the Cut-off Date Principal Balance are secured by condominiums;

          (tt) As of the Cut-off Date, each Mortgage Loan, had a
Loan-to-Value-Ratio that was less than or equal to 100%;

          (uu) With respect to each Mortgage Loan, the Mortgage Note related
thereto bears a fixed Mortgage Rate or an adjustable Mortgage Rate which will be
adjusted on each Adjustment Date to equal the Index plus the Gross Margin,
rounded to the nearest or next highest 0.125%, subject to the Periodic Rate Cap,
the Maximum Mortgage Rate and the Minimum Mortgage Rate;

          (vv) The average Cut-off Date Principal Balance of the Mortgage Loans
is $166,320.27;

          (ww) No Mortgage Loan is subject to the requirements of the Home
Ownership and Equity Protection Act of 1994 ("HOEPA") and no Mortgage Loan is in
violation of any state law or ordinance similar to HOEPA;

          (xx) No proceeds from any Mortgage Loan were used to purchase single
premium credit insurance policies as part of the origination of, or as a
condition to closing, such Mortgage Loan;

          (yy) No Mortgage Loan has a Prepayment Charge term longer than five
years after its origination;

          (zz) Each Group I Mortgage Loan had a Principal Balance at origination
which conformed with Fannie Mae/Freddie Mac guidelines and none of the Group I
Mortgage Loans (by aggregate principal balance of the Group I Mortgage Loans as
of the Cut-Off Date) were originated with points/fees in excess of 5.00%.

          (aaa) Each Mortgage Loan conforms, and all Mortgage Loans in the
aggregate conform, in all material respects, to the description thereof set
forth in the Prospectus Supplement;

          (bbb) With respect to second lien Mortgage Loans, either (a) no
consent for the Mortgage Loan is required by the holder of the related first
lien or (b) such consent has been obtained and is contained in the Mortgage
File;

          (ccc) Each Mortgage Note is comprised of one original promissory note
and each such promissory note constitutes an "instrument" for purposes of
section 9-102(a)(65) of the UCC;

          (ddd) Each Mortgage Loan satisfies the eligibility for purchase
requirements and was originated in compliance with Lender Letter # LL03-00 dated
April 11, 2000 for Fannie Mae Sellers (the "Lender Letter");

          (eee) No borrower was encouraged or required to select a Mortgage Loan
product offered by the Originator which is a higher cost product designed for
less creditworthy borrowers,


                                       12

<PAGE>



unless at the time of the Mortgage Loan's origination, such borrower did not
qualify taking into account credit history and debt-to-income ratios for a
lower-cost credit product then offered by the Originator or any affiliate of the
Originator. If, at the time of loan application, the borrower may have qualified
for a for a lower-cost credit product then offered by any mortgage lending
affiliate of the Originator, the Originator referred the borrower's application
to such affiliate for underwriting consideration;

          (fff) The methodology used in underwriting the extension of credit for
each Mortgage Loan employs objective mathematical principles which relate the
borrower's income, assets and liabilities to the proposed payment and such
underwriting methodology does not rely on the extent of the borrower's equity in
the collateral as the principal determining factor in approving such credit
extension. Such underwriting methodology confirmed that at the time of
origination (application/approval) the borrower had a reasonable ability to make
timely payments on the Mortgage Loan;

          (ggg) With respect to any Mortgage Loan that contains a provision
permitting imposition of a premium upon a prepayment prior to maturity: (i)
prior to the loan's origination, the borrower agreed to such premium in exchange
for a monetary benefit, including but not limited to a rate or fee reduction,
(ii) prior to the loan's origination, the borrower was offered the choice of
another mortgage product that did not require payment of such a premium, (iii)
the prepayment premium is disclosed to the borrower in the loan documents
pursuant to applicable state and federal law, and (iv) notwithstanding any state
or federal law to the contrary, the Master Servicer shall not impose such
prepayment premium in any instance when the mortgage debt is accelerated as the
result of the borrower's default in making the loan payments;

          (hhh) No borrower was required to purchase any credit life,
disability, accident or health insurance product as a condition of obtaining the
extension of credit. No borrower obtained a prepaid single-premium credit life,
disability, accident or health insurance policy in connection with the
origination of the Mortgage Loan;

          (iii) All points and fees related to each Group I Mortgage Loan were
disclosed in writing to the borrower in accordance with applicable state and
federal law. Except in the case of a Group I Mortgage Loan in an original
principal amount of less than $[60,000] which would have resulted in an
unprofitable origination, no borrower was charged "points and fees" (whether or
not financed) in an amount greater than 5% of the principal amount of such loan,
such 5% limitation calculated in accordance with the Lender Letter. All fees and
charges (including finance charges) and whether or not financed, assessed,
collected or to be collected in connection with the origination and servicing of
each Group I Mortgage Loan has been disclosed in writing to the borrower in
accordance with applicable state and federal law and regulation; and

          (jjj) The Group II Mortgage Loans that are "Covered Loans" within the
meaning of the Georgia Fair Lending Act (the "Georgia Act") comply with all
material provisions of the Georgia Act, and as of the Closing Date, any Group II
Mortgage Loans that are Covered Loan that has refinanced an existing "Home
Loan," within the meaning of the Georgia Act, within the previous five years,
the Covered Loan has provided a reasonable, tangible net benefit to the borrower


                                       13

<PAGE>



considering all of the circumstances. None of the Group II Mortgage Loans
constitute a "high cost mortgage" under the Georgia Act.

     Section 3.02 ORIGINATOR REPRESENTATIONS AND WARRANTIES RELATING TO THE
ORIGINATOR. The Originator represents, warrants and covenants to the Purchaser
as of the Closing Date or as of such other date specifically provided herein or
in the applicable Assignment and Conveyance:

               (i) The Originator is duly organized, validly existing and in
good standing as a corporation under the laws of the State of California and is
and will remain in compliance with the laws of each state in which any Mortgaged
Property is located to the extent necessary to ensure the enforceability of each
Mortgage Loan in accordance with the terms of this Agreement;

               (ii) The Originator has the full power and authority to execute,
deliver and perform, and to enter into and consummate, all transactions
contemplated by this Agreement. The Originator has duly authorized the
execution, delivery and performance of this Agreement, has duly executed and
delivered this Agreement and this Agreement, assuming due authorization,
execution and delivery by the Purchaser and the Seller, constitutes a legal,
valid and binding obligation of the Originator, enforceable against it in
accordance with its terms except as the enforceability thereof may be limited by
bankruptcy, insolvency or reorganization. At the time of the sale of each
Mortgage Loan by the Originator, the Originator had the full power and authority
to hold each Mortgage Loan and to sell each Mortgage Loan;

               (iii) The execution and delivery of this Agreement by the
Originator and the performance of and compliance with the terms of this
Agreement will not violate the Originator's articles of incorporation or by-laws
or constitute a default under or result in a breach or acceleration of, any
material contract, agreement or other instrument to which the Originator is a
party or which may be applicable to the Originator or its assets;

               (iv) The Originator is not in violation of, and the execution and
delivery of this Agreement by the Originator and its performance and compliance
with the terms of this Agreement will not constitute a violation with respect
to, any order or decree of any court or any order or regulation of any federal,
state, municipal or governmental agency having jurisdiction over the Originator
or its assets, which violation might have consequences that would materially and
adversely affect the condition (financial or otherwise) or the operation of the
Originator or its assets or might have consequences that would materially and
adversely affect the performance of its obligations and duties hereunder;

               (v) The Originator is a HUD approved mortgagee pursuant to
Section 203 and Section 211 of the National Housing Act. No event has occurred,
including but not limited to a change in insurance coverage, which would make
the Originator unable to comply with HUD eligibility requirements or which would
require notification to HUD;

               (vi) The Originator does not believe, nor does it have any reason
or cause to believe, that it cannot perform each and every covenant contained in
this Agreement;



                                       14

<PAGE>



               (vii) There are no actions or proceedings against, or
investigations known to it of, the Originator before any court, administrative
or other tribunal (A) that might prohibit its entering into this Agreement, (B)
seeking to prevent the sale of the Mortgage Loans or the consummation of the
transactions contemplated by this Agreement or (C) that might prohibit or
materially and adversely affect the performance by the Originator of its
obligations under, or validity of enforceability of, this Agreement;

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

               (ix) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Originator. The sale of
the Mortgage Loans was in the ordinary course of business of the Originator and
the assignment and conveyance of the Mortgage Notes and the Mortgages by the
Originator are not subject to the bulk transfer or any similar statutory
provisions;

               (x) The information delivered by the Originator to the Purchaser
with respect to the Originator's loan loss, foreclosure and delinquency
experience on mortgage loans underwritten to similar standards as the Mortgage
Loans and covering mortgaged properties similar to the Mortgaged Properties, is
true and correct in all material respects as of the date of such report;

               (xi) Except with respect to any statement regarding the
intentions of the Purchaser, or any other statement contained herein the truth
or falsity of which is dependant solely upon the actions of the Purchaser, this
Agreement does not contain any untrue statement of material fact or omit to
state a material fact necessary to make the statements contained herein not
misleading. The written statements, reports and other documents prepared and
furnished or to be prepared and furnished by the Originator pursuant to this
Agreement or in connection with the transactions contemplated hereby taken in
the aggregate do not contain any untrue statement of material fact or omit to
state a material fact necessary to make the statements contained therein not
misleading; and

               (xii) The Originator has not transferred the Mortgage Loans with
any intent to hinder, delay or defraud any of its creditors.

     Section 3.03 ORIGINATOR REPRESENTATIONS AND WARRANTIES RELATING TO THE
SELLER. The Originator represents, warrants and covenants to the Purchaser as of
the Closing Date or as of such other date specifically provided herein:

          (a) The Seller is duly organized, validly existing and in good
standing as a business trust under the laws of the State of Delaware and is and
will remain in compliance with the laws of each state in which any Mortgaged
Property is located to the extent necessary to ensure the enforceability of each
Mortgage Loan in accordance with the terms of this Agreement;



                                       15

<PAGE>



          (b) The Seller has the full power and authority to hold each Mortgage
Loan, to sell each Mortgage Loan, to execute, deliver and perform, and to enter
into and consummate, all transactions contemplated by this Agreement. The Seller
has duly authorized the execution, delivery and performance of this Agreement,
has duly executed and delivered this Agreement and this Agreement, assuming due
authorization, execution and delivery by the Purchaser and the Originator,
constitutes a legal, valid and binding obligation of the Seller, enforceable
against it in accordance with its terms except as the enforceability thereof may
be limited by bankruptcy, insolvency or reorganization;

          (c) The execution and delivery of this Agreement by the Seller and the
performance of and compliance with the terms of this Agreement will not violate
the Seller's certificate of trust or constitute a default under or result in a
breach or acceleration of, any material contract, agreement or other instrument
to which the Seller is a party or which may be applicable to the Seller or its
assets;

          (d) The Seller is not in violation of, and the execution and delivery
of this Agreement by the Seller and its performance and compliance with the
terms of this Agreement will not constitute a violation with respect to, any
order or decree of any court or any order or regulation of any federal, state,
municipal or governmental agency having jurisdiction over the Seller or its
assets, which violation might have consequences that would materially and
adversely affect the condition (financial or otherwise) or the operation of the
Seller or its assets or might have consequences that would materially and
adversely affect the performance of its obligations and duties hereunder; and

          (e) Immediately prior to the payment of the Purchase Price for each
Mortgage Loan, the Seller was the owner of the related Mortgage and the
indebtedness evidenced by the related Mortgage Note and upon the payment of the
Purchase Price by the Purchaser, in the event that the Seller retains record
title, the Seller shall retain such record title to each Mortgage, each related
Mortgage Note and the related Mortgage Files with respect thereto in trust for
the Purchaser as the owner thereof;

          (f) The Seller has not transferred the Mortgage Loans to the Purchaser
with any intent to hinder, delay or defraud any of its creditors;

          (g) There are no actions or proceedings against, or investigations
known to it of, the Seller before any court, administrative or other tribunal
(A) that might prohibit its entering into this Agreement, (B) seeking to prevent
the sale of the Mortgage Loans or the consummation of the transactions
contemplated by this Agreement or (C) that might prohibit or materially and
adversely affect the performance by the Seller of its obligations under, or
validity or enforceability of, this Agreement;

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


                                       16

<PAGE>



          (i) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Seller, and the transfer
assignment and conveyance of the Mortgage Notes and the Mortgages by the Seller
pursuant to this Agreement are not subject to the bulk transfer or any similar
statutory provisions; and

          (j) Except with respect to liens released immediately prior to the
transfer herein contemplated, each Mortgage Note and related Mortgage have not
been assigned or pledged and immediately prior to the transfer and assignment
herein contemplated, the Seller held good, marketable and indefeasible title to,
and was the sole owner and holder of, each Mortgage Loan subject to no liens,
charges, mortgages, claims, participation interests, equities, pledges or
security interests of any nature, encumbrances or rights of others
(collectively, a "Lien"); the Seller has full right and authority under all
governmental and regulatory bodies having jurisdiction over the Seller, subject
to no interest or participation of, or agreement with, any party, to sell and
assign the same pursuant to this Agreement; and immediately upon the transfers
and assignments herein contemplated, the Seller shall have transferred all of
its right, title and interest in and to each Mortgage Loan and the Trustee will
hold good, marketable and indefeasible title to, and be the sole owner of, each
Mortgage Loan subject to no Liens.

     Section 3.04 REMEDIES FOR BREACH OF REPRESENTATIONS AND WARRANTIES. It is
understood and agreed that the representations and warranties set forth in
Sections 3.01, 3.02 and 3.03 shall survive the sale of the Mortgage Loans to the
Purchaser and shall inure to the benefit of the Purchaser, notwithstanding any
restrictive or qualified endorsement on any Mortgage Note or Assignment or the
examination or lack of examination of any Mortgage File. With respect to the
representations and warranties contained herein that are made to the knowledge
or the best knowledge of the Originator or as to which the Originator has no
knowledge, if it is discovered that the substance of any such representation and
warranty is inaccurate and the inaccuracy materially and adversely affects the
value of the related Mortgage Loan, or the interest therein of the Purchaser or
the Purchaser's assignee, designee or transferee, then notwithstanding the
Originator's lack of knowledge with respect to the substance of such
representation and warranty being inaccurate at the time the representation and
warranty was made, such inaccuracy shall be deemed a breach of the applicable
representation and warranty and the Originator shall take such action described
in the following paragraphs of this Section 3.04 in respect of such Mortgage
Loan. Upon discovery by either the Originator, the Master Servicer or the
Purchaser of a breach of any of the foregoing representations and warranties
that materially and adversely affects the value of the Mortgage Loans or the
interest of the Purchaser (or which materially and adversely affects the
interests of the Purchaser in the related Mortgage Loan in the case of a
representation and warranty relating to a particular Mortgage Loan), the party
discovering such breach shall give prompt written notice to the others.

     Within 120 days of the earlier of either discovery by or notice to the
Originator of any breach of a representation or warranty made by the Originator
that materially and adversely affects the value of a Mortgage Loan or the
Mortgage Loans or the interest therein of the Purchaser, the Originator shall
use its best efforts promptly to cure such breach in all material respects and,
if such breach cannot be cured, the Originator shall, at the Purchaser's option,
repurchase such Mortgage Loan at the Purchase Price. In the event that a breach
shall involve any representation or warranty set forth in Section 3.02 or 3.03
and such breach cannot be cured within 120 days of the earlier of either
discovery by or notice to the Originator of such breach, all of the Mortgage
Loans shall, at the


                                       17

<PAGE>



Purchaser's option, be repurchased by the Originator at the Purchase Price. The
Originator may, at the request of the Purchaser and assuming the Originator has
a Qualified Substitute Mortgage Loan, rather than repurchase a deficient
Mortgage Loan as provided above, remove such Mortgage Loan and substitute in its
place a Qualified Substitute Mortgage Loan or Loans. If the Originator does not
provide a Qualified Substitute Mortgage Loan or Loans, it shall repurchase the
deficient Mortgage Loan. Any repurchase of a Mortgage Loan(s) pursuant to the
foregoing provisions of this Section 3.04 shall occur on a date designated by
the Purchaser and shall be accomplished by deposit in accordance with Section
2.03 of the Pooling and Servicing Agreement. Any repurchase or substitution
required by this Section shall be made in a manner consistent with Section 2.03
of the Pooling and Servicing Agreement.

     At the time of substitution or repurchase of any deficient Mortgage Loan,
the Purchaser and the Originator shall arrange for the reassignment of the
repurchased or substituted Mortgage Loan to the Originator and the delivery to
the Originator of any documents held by the Trustee relating to the deficient or
repurchased Mortgage Loan. In the event the Purchase Price is deposited in the
Collection Account, the Originator shall, simultaneously with such deposit, give
written notice to the Purchaser that such deposit has taken place. Upon such
repurchase, the Mortgage Loan Schedule shall be amended to reflect the
withdrawal of the repurchased Mortgage Loan from this Agreement.

     As to any Deleted Mortgage Loan for which the Originator substitutes a
Qualified Substitute Mortgage Loan or Loans, the Originator shall effect such
substitution by delivering to the Purchaser or its designee for such Qualified
Substitute Mortgage Loan or Loans the Mortgage Note, the Mortgage, the
Assignment and such other documents and agreements as are required by the
Pooling and Servicing Agreement, with the Mortgage Note endorsed as required
therein. The Originator shall deposit in the Collection Account the Monthly
Payment less the Servicing Fee due on such Qualified Substitute Mortgage Loan or
Loans in the month following the date of such substitution. Monthly Payments due
with respect to Qualified Substitute Mortgage Loans in the month of substitution
will be retained by the Originator. For the month of substitution, distributions
to the Purchaser will include the Monthly Payment due on such Deleted Mortgage
Loan in the month of substitution, and the Originator shall thereafter be
entitled to retain all amounts subsequently received by the Originator in
respect of such Deleted Mortgage Loan. Upon such substitution, the Qualified
Substitute Mortgage Loans shall be subject to the terms of this Agreement in all
respects, and the Originator shall be deemed to have made with respect to such
Qualified Substitute Mortgage Loan or Loans as of the date of substitution, the
covenants, representations and warranties set forth in Sections 3.01, 3.02 and
3.03.

     It is understood and agreed that the representations and warranties set
forth in Section 3.01 shall survive delivery of the respective Mortgage Files to
the Trustee on behalf of the Purchaser.

     It is understood and agreed that the obligations of the Originator set
forth in Section 3.04 to cure, repurchase and substitute for a defective
Mortgage Loan and to indemnify the Purchaser as provided in Section 5.01
constitute the sole remedies of the Purchaser respecting a missing or defective
document or a breach of the representations and warranties contained in Section
3.01, 3.02 or 3.03.


                                       18

<PAGE>




                                   ARTICLE IV.

                             ORIGINATOR'S COVENANTS


     Section 4.01 COVENANTS OF THE ORIGINATOR. The Originator hereby covenants
that except for the transfer hereunder, neither the Originator nor the Seller
will sell, pledge, assign or transfer to any other Person, or grant, create,
incur, assume or suffer to exist any Lien on any Mortgage Loan, or any interest
therein; the Originator will notify the Trustee, as assignee of the Purchaser,
of the existence of any Lien on any Mortgage Loan immediately upon discovery
thereof, and the Originator will defend the right, title and interest of the
Trust, as assignee of the Purchaser, in, to and under the Mortgage Loans,
against all claims of third parties claiming through or under the Originator or
the Seller; provided, however, that nothing in this Section 4.01 shall prevent
or be deemed to prohibit the Originator or the Seller from suffering to exist
upon any of the Mortgage Loans any Liens for municipal or other local taxes and
other governmental charges if such taxes or governmental charges shall not at
the time be due and payable or if the Originator or the Seller shall currently
be contesting the validity thereof in good faith by appropriate proceedings and
shall have set aside on its books adequate reserves with respect thereto.

                                   ARTICLE V.

               INDEMNIFICATION WITH RESPECT TO THE MORTGAGE LOANS


     Section 5.01 INDEMNIFICATION.

          (a) The Originator agrees to indemnify and hold harmless the
Purchaser, each of its directors, each of its officers and each person or entity
who controls the Purchaser or any such person, within the meaning of Section 15
of the Securities Act, against any and all losses, claims, damages or
liabilities, joint and several, as incurred, to which the Purchaser, or any such
person or entity may become subject, under the Securities Act or otherwise, and
will reimburse the Purchaser, each such director and officer and each such
controlling person for any legal or other expenses incurred by the Purchaser or
such controlling person in connection with investigating or defending any such
losses, claims, damages or liabilities, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of any material fact
contained in the Prospectus Supplement or any amendment or supplement to the
Prospectus Supplement approved in writing by the Originator or the omission or
the alleged omission to state therein a material fact necessary in order to make
the statements in the Prospectus Supplement or any amendment or supplement to
the Prospectus Supplement approved in writing by the Originator, in the light of
the circumstances under which they were made, not misleading, but only to the
extent that such untrue statement or alleged untrue statement or omission or
alleged omission relates to the Originator Information contained in the
Prospectus Supplement, (ii) any untrue statement or alleged untrue statement of
any material fact contained in the information on any computer tape furnished to
the Purchaser or an affiliate thereof by or on behalf of the Originator
containing information regarding the assets of the Trust or (iii) any untrue
statement or


                                       19

<PAGE>



alleged untrue statement of any material fact contained in any information
provided by the Originator to the Purchaser or any affiliate thereof, or any
material omission from the information purported to be provided hereby, and
disseminated to PriceWaterhouseCoopers L.L.P. or prospective investors (directly
or indirectly through available information systems) in connection with the
issuance, marketing or offering of the Certificates. This indemnity agreement
will be in addition to any liability which the Originator may otherwise have.

          (b) The Purchaser agrees to indemnify and hold harmless the Seller and
the Originator, each of their respective officers, directors and each person or
entity who controls the Seller, the Originator or any such person, against any
and all losses, claims, damages or liabilities, joint and several, to which the
Seller, the Originator or any such person or entity may become subject, under
the Securities Act or otherwise, and will reimburse the Seller and/or the
Originator for any legal or other expenses incurred by the Seller, the
Originator, each such officer and director and such controlling person in
connection with investigating or defending any such losses, claims, damages or
liabilities insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Prospectus
Supplement or any amendment or supplement to the Prospectus Supplement or the
omission or the alleged omission to state therein a material fact necessary in
order to make the statements in the Prospectus Supplement or any amendment or
supplement to the Prospectus Supplement, in the light of the circumstances under
which they were made, not misleading, but only to the extent that such untrue
statement or alleged untrue statement or omission or alleged omission is not
contained in the Originator Information in the Prospectus Supplement. This
indemnity agreement will be in addition to any liability which the Purchaser may
otherwise have.

          (c) Promptly after receipt by any indemnified party under this Article
V of notice of any claim or the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against any
indemnifying party under this Article V, notify the indemnifying party in
writing of the claim or the commencement of that action; PROVIDED, HOWEVER, that
the failure to notify an indemnifying party shall not relieve it from any
liability which it may have under this Article V except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify any indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under this Article V.

     If any such claim or action shall be brought against an indemnified party,
and it shall notify the indemnifying party thereof, the indemnifying party shall
be entitled to participate therein and, to the extent that it wishes, jointly
with any other similarly notified indemnifying party, to assume the defense
thereof with counsel reasonably satisfactory to the indemnified party. After
notice from the indemnifying party to the indemnified party of its election to
assume the defense of such claim or action, the indemnifying party shall not be
liable to the indemnified party under this Article V for any legal or other
expenses subsequently incurred by the indemnified party in connection with the
defense thereof other than reasonable costs of investigation.

     Any indemnified party shall have the right to employ separate counsel in
any such action and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless: (i) the employment thereof has been specifically authorized by the


                                       20

<PAGE>



indemnifying party in writing; (ii) such indemnified party shall have been
advised in writing by such counsel that there may be one or more legal defenses
available to it which are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it is
advisable for such indemnified party to employ separate counsel; or (iii) the
indemnifying party has failed to assume the defense of such action and employ
counsel reasonably satisfactory to the indemnified party, in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party, it being understood, however, the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to local counsel) at any time for all such indemnified parties, which
firm shall be designated in writing by the Purchaser, if the indemnified parties
under this Article V consist of the Purchaser, by the Originator, if the
indemnified parties in this Article V consist of the Originator, or by the
Seller, if the indemnified parties under this Article V consist of the Seller.

     Each indemnified party, as a condition of the indemnity agreements
contained in Section 5.01 (a) and (b) hereof, shall use its best efforts to
cooperate with the indemnifying party in the defense of any such action or
claim. No indemnifying party shall be liable for any settlement of any such
action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to consent to a settlement of any action, the indemnifying
party agrees that it shall be liable for any settlement of any proceeding
effected without its written consent if such settlement is entered into more
than 30 days after receipt by such indemnifying party of the aforesaid request
and the indemnifying party has not previously provided the indemnified party
with written notice of its objection to such settlement. No indemnifying party
shall effect any settlement of any pending or threatened proceeding in respect
of which an indemnified party is or could have been a party and indemnity is or
could have been sought hereunder, without the written consent of such
indemnified party, unless settlement includes an unconditional release of such
indemnified party from all liability and claims that are the subject matter of
such proceeding.

     (d) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in this Article is
for any reason held to be unenforceable although applicable in accordance with
its terms, the Seller and the Originator, on the one hand, and the Purchaser, on
the other, shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said indemnity agreement
incurred by the Seller, the Originator and the Purchaser in such proportions as
shall be appropriate to reflect the relative benefits received by the Seller and
the Originator on the one hand and the Purchaser on the other from the sale of
the Mortgage Loans such that the Purchaser is responsible for the lesser of (i)
0.25% thereof and (ii) 0.25% of the aggregate proceeds to the Seller from the
sale of the Mortgage Loans and the Originator shall be responsible for the
balance; PROVIDED, HOWEVER, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be


                                       21

<PAGE>



entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section, each officer and director of
the Purchaser and each person, if any, who controls the Purchaser within the
meaning of Section 15 of the Securities Act shall have the same rights to
contribution as the Purchaser, each director of the Originator, each officer of
the Originator, and each person, if any, who controls the Originator within the
meaning of Section 15 of the Securities Act shall have the same rights to
contribution as the Originator and each director of the Seller, each officer of
the Seller, and each person, if any, who controls the Seller within the meaning
of Section 15 of the Securities Act shall have the same rights to contribution
as the Seller.

          (e) The Originator agrees to indemnify and to hold each of the
Purchaser, the Trustee, each of the officers and directors of each such entity
and each person or entity who controls each such entity or person and each
Certificateholder harmless against any and all claims, losses, penalties, fines,
forfeitures, legal fees and related costs, judgments, and any other costs, fees
and expenses that the Purchaser, the Trustee, or any such person or entity and
any Certificateholder may sustain in any way (i) related to the failure of the
Originator to perform its duties in compliance with the terms of this Agreement,
(ii) arising from a breach by the Originator of its representations and
warranties in Section 3.01, 3.02 or 3.03 of this Agreement or (iii) related to
the origination or prior servicing of the Mortgage Loans by reason of any acts,
omissions, or alleged acts or omissions of the Originator, the Seller or any
servicer. The Originator shall immediately notify the Purchaser, the Trustee and
each Certificateholder if a claim is made by a third party with respect to this
Agreement. The Originator shall assume the defense of any such claim and pay all
expenses in connection therewith, including reasonable counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be entered
against the Purchaser, the Trustee or any such person or entity and/or any
Certificateholder in respect of such claim.

                                   ARTICLE VI.

                                   TERMINATION


     Section 6.01 TERMINATION. The respective obligations and responsibilities
of the Originator, the Seller and the Purchaser created hereby shall terminate,
except for the Originator's indemnity obligations as provided herein upon the
termination of the Trust as provided in Article X of the Pooling and Servicing
Agreement.

                                  ARTICLE VII.

                            MISCELLANEOUS PROVISIONS


     Section 7.01 AMENDMENT. This Agreement may be amended from time to time by
the Originator, the Seller and the Purchaser, by written agreement signed by the
Originator, the Seller and the Purchaser.



                                       22

<PAGE>



     Section 7.02 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.

     Section 7.03 NOTICES. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered at or mailed by registered mail, postage prepaid, addressed as
follows:

     if to the Originator:

                  Option One Mortgage Corporation
                  3 Ada
                  Irvine, CA 92618
                  Attention: William L. O'Neill

or such other address as may hereafter be furnished to the Purchaser and the
Seller in writing by the Originator.

     if to the Purchaser:

                  Option One Mortgage Acceptance Corporation
                  3 Ada
                  Irvine, CA 92618
                  Attention: William L. O'Neill

or such other address as may hereafter be furnished to the Seller and the
Originator in writing by the Purchaser.

     if to the Seller:

                  Option One Owner Trust 2002-3
                  c/o Wilmington Trust Company
                  One Rodney Square North
                  1100 North Market Street
                  Wilmington, Delaware 19890
                  Attention: Corporate Trust Administration

or such other address as may hereafter be furnished to the Originator and the
Purchaser in writing by the Seller.

     Section 7.04 SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions of terms of this Agreement shall be held
invalid for any reason whatsoever, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity of
enforceability of the other provisions of this Agreement.



                                       23

<PAGE>



     Section 7.05 COUNTERPARTS. 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 and such
counterparts, together, shall constitute one and the same agreement.

     Section 7.06 FURTHER AGREEMENTS. The Purchaser, the Seller and the
Originator each agree to execute and deliver to the other such additional
documents, instruments or agreements as may be necessary or reasonable and
appropriate to effectuate the purposes of this Agreement or in connection with
the issuance of any series of Certificates representing interests in the
Mortgage Loans.

     Without limiting the generality of the foregoing, as a further inducement
for the Purchaser to purchase the Mortgage Loans from the Seller, the Originator
will cooperate with the Purchaser in connection with the sale of any of the
securities representing interests in the Mortgage Loans. In that connection, the
Originator will provide to the Purchaser any and all information and appropriate
verification of information, whether through letters of its auditors and counsel
or otherwise, as the Purchaser shall reasonably request and will provide to the
Purchaser such additional representations and warranties, covenants, opinions of
counsel, letters from auditors, and certificates of public officials or officers
of the Originator as are reasonably required in connection with such
transactions and the offering of investment grade securities rated by the Rating
Agencies.

     Section 7.07 INTENTION OF THE PARTIES. It is the intention of the parties
that the Purchaser is purchasing, and the Seller is selling, the Mortgage Loans
rather than pledging the Mortgage Loans to secure a loan by the Purchaser to the
Seller. Accordingly, the parties hereto each intend to treat the transaction for
federal income tax purposes and all other purposes as a sale by the Seller, and
a purchase by the Purchaser, of the Mortgage Loans. The Purchaser will have the
right to review the Mortgage Loans and the related Mortgage Files to determine
the characteristics of the Mortgage Loans which will affect the federal income
tax consequences of owning the Mortgage Loans and the Seller will cooperate with
all reasonable requests made by the Purchaser in the course of such review.

     Section 7.08 SUCCESSORS AND ASSIGNS, ASSIGNMENT OF PURCHASE AGREEMENT. This
Agreement shall bind and inure to the benefit of and be enforceable by the
Seller, the Originator, the Purchaser, the Trustee and the NIMs Insurer, if any.
The NIMs Insurer, if any, shall be a third party beneficiary hereof and may
enforce the terms hereof as if a party hereto. The obligations of the Seller and
the Originator under this Agreement cannot be assigned or delegated to a third
party without the consent of the Purchaser which consent shall be at the
Purchaser's sole discretion, except that the Purchaser acknowledges and agrees
that the Seller or the Originator may assign its obligations hereunder to any
Person into which the Seller or the Originator is merged or any corporation
resulting from any merger, conversion or consolidation to which the Seller or
the Originator is a party or any Person succeeding to the business of the Seller
or the Originator. The parties hereto acknowledge that the Purchaser is
acquiring the Mortgage Loans for the purpose of contributing them to a trust
that will issue a series of Certificates representing undivided interests in
such Mortgage Loans. As an inducement to the Purchaser to purchase the Mortgage
Loans, the Seller and the Originator each acknowledge and consent to the
assignment by the Purchaser to the Trustee of all of the Purchaser's rights
against the Seller and the Originator pursuant to this Agreement insofar


                                       24

<PAGE>



as such rights relate to Mortgage Loans transferred to the Trustee and to the
enforcement or exercise of any right or remedy against the Seller or the
Originator pursuant to this Agreement by the Trustee. Such enforcement of a
right or remedy by the Trustee shall have the same force and effect as if the
right or remedy had been enforced or exercised by the Purchaser directly.

     Section 7.09 SURVIVAL. The representations and warranties set forth in
Sections 3.01, 3.02 and 3.03 and the provisions of Article V hereof shall
survive the purchase of the Mortgage Loans hereunder.

     Section 7.10 OWNER TRUSTEE. It is expressly understood and agreed by the
parties to this Agreement that (a) this Agreement is executed and delivered by
Wilmington Trust Company, not individually or personally but solely as Owner
Trustee of the Seller, in the exercise of the powers and authority conferred and
vested in it as trustee, (b) each of the representations, undertakings and
agreements herein made on the part of the Seller is made and intended not as
personal representations, undertakings and agreements by Wilmington Trust
Company but is made and intended for the purpose of binding only the Seller, (c)
nothing herein contained shall be construed as creating any liability on
Wilmington Trust Company, individually or personally, to perform any covenant
either expressed or implied contained herein, all such liability, if any, being
expressly waived by the parties to this Agreement and by any person claiming by,
through or under the parties to this Agreement and (d) under no circumstances
shall Wilmington Trust Company be personally liable for the payment of any
indebtedness or expenses of the Seller or be liable for the breach or failure of
any obligation, representation, warranty or covenant made or undertaken by the
Seller under this Agreement or any other document.






                                       25

<PAGE>



     IN WITNESS WHEREOF, the Seller, the Originator and the Purchaser have
caused their names to be signed to this Mortgage Loan Purchase Agreement by
their respective officers thereunto duly authorized as of the day and year fist
above written.

                                            OPTION ONE MORTGAGE ACCEPTANCE
                                            CORPORATION,
                                            as Purchaser


                                            By:   ______________________________
                                                  Name:
                                                  Title:


                                            OPTION ONE MORTGAGE CORPORATION,
                                                     as Originator


                                            By:   ______________________________
                                                  Name:
                                                  Title:

                                            OPTION ONE OWNER TRUST 2002-3,
                                            as Seller


                                            By:   Wilmington Trust Company, not
                                                  in its individual capacity but
                                                  solely as Owner Trustee.


                                            By:   ______________________________
                                                  Name:
                                                  Title:





<PAGE>


                                   SCHEDULE I

                                 MORTGAGE LOANS
                                 --------------


                                 FILED BY PAPER








                                       I-1




<PAGE>


================================================================================







                        OPTION ONE MORTGAGE CORPORATION,

                                    as Seller


                                       and


                   OPTION ONE MORTGAGE ACCEPTANCE CORPORATION,

                                  as Purchaser




                        MORTGAGE LOAN PURCHASE AGREEMENT

                          Dated as of January 13, 2003



                  Fixed Rate and Adjustable Rate Mortgage Loans

                      Option One Mortgage Loan Trust 2003-1
                    Asset-Backed Certificates, Series 2003-1





================================================================================




<PAGE>



                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

                                   ARTICLE I.

                                   DEFINITIONS
Section 1.01   Definitions.....................................................1

                                   ARTICLE II.

                SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.01   Sale of Mortgage Loans..........................................2
Section 2.02   Obligations of Seller Upon Sale.................................2
Section 2.03   Payment of Purchase Price for the Mortgage Loans................5

                                  ARTICLE III.

               REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01   Seller Representations and Warranties Relating to the
               Mortgage Loans..................................................6
Section 3.02   Seller Representations and Warranties Relating to the Seller...12
Section 3.03   Remedies For Breach of Representations and Warranties..........14

                                   ARTICLE IV.

                               SELLER'S COVENANTS
Section 4.01   Covenants of the Seller. ......................................15

                                   ARTICLE V.
               INDEMNIFICATION WITH RESPECT TO THE MORTGAGE LOANS
Section 5.01   Indemnification................................................16

                                   ARTICLE VI.

                                   TERMINATION
Section 6.01   Termination....................................................19

                                  ARTICLE VII.

                            MISCELLANEOUS PROVISIONS
Section 7.01   Amendment......................................................19
Section 7.02   Governing Law..................................................19
Section 7.03   Notices........................................................19
Section 7.04   Severability of Provisions.....................................19
Section 7.05   Counterparts...................................................20


                                        i

<PAGE>



Section 7.06   Further Agreements.............................................20
Section 7.07   Intention of the Parties.......................................20
Section 7.08   Successors and Assigns, Assignment of Purchase Agreement.......20
Section 7.09   Survival.......................................................21



                                       ii

<PAGE>



          MORTGAGE LOAN PURCHASE AGREEMENT, dated as of January 13, 2003 (the
"Agreement"), between Option One Mortgage Corporation (the "Seller") and Option
One Mortgage Acceptance Corporation (the "Purchaser").

                               W I T N E S S E T H

          WHEREAS, the Seller is the owner of (a) the notes or other evidence of
indebtedness (the "Mortgage Notes") so indicated on Schedule I hereto referred
to below and (b) the other documents or instruments constituting the Mortgage
File (collectively, the "Mortgage Loans"); and

          WHEREAS, the Seller, as of the date hereof, owns the mortgages (the
"Mortgages") on the properties (the "Mortgaged Properties") securing such
Mortgage Loans, including rights to (a) any property acquired by foreclosure or
deed in lieu of foreclosure or otherwise and (b) the proceeds of any insurance
policies covering the Mortgage Loans or the Mortgaged Properties or the obligors
on the Mortgage Loans; and

          WHEREAS, the parties hereto desire that the Seller sell the Mortgage
Loans to the Purchaser pursuant to the terms of this Agreement; and

          WHEREAS, pursuant to the terms of a Pooling and Servicing Agreement
dated as of January 1, 2002 (the "Pooling and Servicing Agreement") among the
Purchaser as depositor, the Seller as master servicer and Wells Fargo Bank
Minnesota, National Association as trustee (the "Trustee"), the Purchaser will
convey the Mortgage Loans to Option One Mortgage Loan Trust 2003-1 (the
"Trust");

          WHEREAS, the Seller is obligated, in connection with the transactions
contemplated by this Agreement, to make certain representations, warranties and
covenants with respect to itself and the Mortgage Loans.

          NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:

                                   ARTICLE I.

                                   DEFINITIONS


     Section 1.01 DEFINITIONS. All capitalized terms used but not defined herein
and below shall have the meanings assigned thereto in the Pooling and Servicing
Agreement.

     "SELLER INFORMATION": The information in the Prospectus Supplement
     as follows: under "SUMMARY OF TERMS--Mortgage Loans," "SUMMARY OF
     TERMS--Primary Mortgage Insurance," the first sentence under the
     fourth bullet point under "RISK FACTORS--Unpredictability of
     Prepayments and Effect on Yields," "RISK FACTORS--Delinquent
     Mortgage Loan Risk," the third sentence under "RISK FACTORS--
     Balloon Loan Risks," the first sentence under "RISK


                                      1

<PAGE>



     FACTORS--Second Lien Loan Risk," "RISK FACTORS--Convertible Mortgage
     Loan Risk," the first sentence of the third paragraph under "RISK
     FACTORS--Potential Inadequacy of Credit Enhancement for the Offered
     Certificates," the second sentence under the fourth bullet point
     under "RISK FACTORS--Interest Generated by the Mortgage Loans May Be
     Insufficient to Maintain Overcollateralization," the second sentence
     under "RISK FACTORS--High Loan-to-Value Ratios Increase Risk of
     Loss," "THE MORTGAGE POOL," "OPTION ONE MORTGAGE CORPORATION," the
     first sentence under "DESCRIPTION OF THE CERTIFICATES--The PMI
     Policy," and the first sentence of the sixth paragraph under "YIELD,
     PREPAYMENT AND MATURITY CONSIDERATIONS."

                                   ARTICLE II.

                SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE

     Section 2.01 SALE OF MORTGAGE LOANS.

          (a) The Seller, concurrently with the execution and delivery of this
Agreement, does hereby sell, and in connection therewith hereby assigns to the
Purchaser, effective as of the Closing Date, without recourse, (i) all of its
right, title and interest in and to each Mortgage Loan, including the related
Cut-off Date Principal Balance, all interest accruing thereon on and after the
Cut-off Date and all collections in respect of interest and principal due on or
after the Cut-off Date; (ii) property which secured such Mortgage Loan and which
has been acquired by foreclosure or deed in lieu of foreclosure; (iii) its
interest in any insurance policies (including the PMI Policy) in respect of the
Mortgage Loans and (iv) all proceeds of any of the foregoing.

          (b) [Reserved].

     Section 2.02 OBLIGATIONS OF SELLER UPON SALE. In connection with any
transfer pursuant to Section 2.01 hereof, the Seller further agrees, at its own
expense on or prior to the Closing Date, (a) to cause its books and records to
indicate that the Mortgage Loans have been sold to the Purchaser pursuant to
this Agreement, (b) to deliver to the Purchaser and the Trustee a computer file
containing a true and complete list of all such Mortgage Loans specifying for
each such Mortgage Loan, as of the Cut-off Date, (i) its account number and (ii)
the Cut-off Date Principal Balance. Such file, which forms a part of Exhibit D
to the Pooling and Servicing Agreement, shall also be marked as Schedule I to
this Agreement and is hereby incorporated into and made a part of this Agreement
and (c) to deliver to the Purchaser and the Trustee the ETT (as defined in the
PMI Policy) with respect to the Mortgage Loans.

     In connection with any conveyance by the Seller, the Seller shall on behalf
of the Purchaser deliver to, and deposit with the Trustee, as assignee of the
Purchaser, on or before the Closing Date, the following documents or instruments
with respect to each Mortgage Loan:

               (i) the original Mortgage Note, endorsed either (A) in blank, in
which case the Trustee shall cause the endorsement to be completed or (B) in the
following form: "Pay to


                                        2

<PAGE>



the order of Wells Fargo Bank Minnesota, National Association, as Trustee,
without recourse", or with respect to any lost Mortgage Note, an original Lost
Note Affidavit stating that the original mortgage note was lost, misplaced or
destroyed, together with a copy of the related mortgage note; PROVIDED, HOWEVER,
that such substitutions of Lost Note Affidavits for original Mortgage Notes may
occur only with respect to Mortgage Loans, the aggregate Cut-off Date Principal
Balance of which is less than or equal to 1.00% of the Pool Balance as of the
Cut-off Date;

               (ii) the original Mortgage with evidence of recording thereon,
and the original recorded power of attorney, if the Mortgage was executed
pursuant to a power of attorney, with evidence of recording thereon or, if such
Mortgage or power of attorney has been submitted for recording but has not been
returned from the applicable public recording office, has been lost or is not
otherwise available, a copy of such Mortgage or power of attorney, as the case
may be, certified to be a true and complete copy of the original submitted for
recording;

               (iii) an original Assignment of Mortgage, in form and substance
acceptable for recording. The Mortgage shall be assigned either (A) in blank,
without recourse or (B) to "Wells Fargo Bank Minnesota, National Association, as
Trustee, without recourse";

               (iv) an original copy of any intervening assignment of Mortgage
showing a complete chain of assignments;

               (v) the original or a certified copy of lender's title insurance
policy; and

               (vi) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any.

     The Seller hereby confirms to the Purchaser and the Trustee that it has
made the appropriate entries in its general accounting records to indicate that
such Mortgage Loans have been transferred to the Trustee and constitute part of
the Trust in accordance with the terms of the Pooling and Servicing Agreement.

     If any of the documents referred to in Section 2.02(ii), (iii) or (iv)
above has as of the Closing Date been submitted for recording but either (x) has
not been returned from the applicable public recording office or (y) has been
lost or such public recording office has retained the original of such document,
the obligations of the Seller to deliver such documents shall be deemed to be
satisfied upon (1) delivery to the Trustee or the Custodian no later than the
Closing Date, of a copy of each such document certified by the Seller in the
case of (x) above or the applicable public recording office in the case of (y)
above to be a true and complete copy of the original that was submitted for
recording and (2) if such copy is certified by the Seller, delivery to the
Trustee or the Custodian, promptly upon receipt thereof of either the original
or a copy of such document certified by the applicable public recording office
to be a true and complete copy of the original. If the original lender's title
insurance policy, or a certified copy thereof, was not delivered pursuant to
Section 2.02(v) above, the Seller shall deliver or cause to be delivered to the
Trustee or the Custodian, the original or a copy of a written commitment or
interim binder or preliminary report of title issued by the title insurance or
escrow company, with the original or a certified copy thereof to be delivered to
the Trustee or the Custodian, promptly upon receipt thereof. The Seller shall
deliver or cause to


                                        3

<PAGE>



be delivered to the Trustee or the Custodian promptly upon receipt thereof any
other documents constituting a part of a Mortgage File received with respect to
any Mortgage Loan, including, but not limited to, any original documents
evidencing an assumption or modification of any Mortgage Loan.

     Upon discovery or receipt of notice of any materially defective document
in, or that a document is missing from, a Mortgage File, the Seller shall have
120 days to cure such defect or deliver such missing document to the Purchaser.
If the Seller does not cure such defect or deliver such missing document within
such time period, the Seller shall either repurchase or substitute for such
Mortgage Loan pursuant to Section 2.03 of the Pooling and Servicing Agreement.

     The Purchaser hereby acknowledges its acceptance of all right, title and
interest to the Mortgage Loans and other property, now existing and hereafter
created, conveyed to it pursuant to Section 2.01.

     The parties hereto intend that the transaction set forth herein be a sale
by the Seller to the Purchaser of all the Seller's right, title and interest in
and to the Mortgage Loans and other property described above. In the event the
transaction set forth herein is deemed not to be a sale, the Seller, hereby
grants to the Purchaser a security interest in all of the Seller's right, title
and interest in, to and under the Mortgage Loans and other property described
above, whether now existing or hereafter created, to secure all of the Seller's
obligations hereunder; and this Agreement shall constitute a security agreement
under applicable law.

     The Seller shall cause the Assignments which were delivered in blank to be
completed and shall cause all Assignments referred to in Section 2.02(iii)
hereof and, to the extent necessary, in Section 2.02(iv) hereof to be recorded.
The Seller shall be required to deliver such Assignments for recording within 90
days of the Closing Date. Notwithstanding the foregoing, however, for
administrative convenience and facilitation of servicing and to reduce closing
costs, the Assignments of Mortgage shall not be required to be submitted for
recording with respect to any Mortgage Loan in any jurisdiction where the Rating
Agencies do not require recordation in order to receive the ratings on the
Certificates at the time of their initial issuance; PROVIDED, HOWEVER, each
Assignment shall be submitted for recording by the Seller in the manner
described above, at no expense to the Trust Fund or Trustee, upon the earliest
to occur of: (i) reasonable direction by Holders of Certificates entitled to at
least 25% of the Voting Rights, (ii) the occurrence of a Master Servicer Event
of Termination, (iii) the occurrence of a bankruptcy, insolvency or foreclosure
relating to the Master Servicer, (iv) the occurrence of a servicing transfer as
described in Section 7.02 hereof, (v) if the Seller is not the Master Servicer
and with respect to any one Assignment the occurrence of a bankruptcy,
insolvency or foreclosure relating to the Mortgagor under the related Mortgage
and (vi) any Mortgage Loan that is 90 days or more Delinquent. Upon (a) receipt
of written notice from the Trustee that recording of the Assignments is required
pursuant to one or more of the conditions (excluding (v) and (vi) above) set
forth in the preceding sentence or (b) upon the occurrence of condition (v) or
(vi) in the preceding sentence, the Seller shall be required to deliver such
Assignments for recording as provided above, promptly and in any event within 30
days following receipt of such notice. Notwithstanding the foregoing, if the
Seller fails to pay the cost of recording the Assignments, such expense will be
paid by the Trustee and the Trustee shall be reimbursed for such expenses by the
Trust. The Seller shall furnish the Trustee, or its designated agent, with a
copy of each Assignment submitted for recording. In the event that any such
Assignment is lost or


                                        4

<PAGE>



returned unrecorded because of a defect therein, the Seller shall promptly have
a substitute Assignment prepared or have such defect cured, as the case may be,
and thereafter cause each such Assignment to be duly recorded. In the event that
any Mortgage Note is endorsed in blank as of the Closing Date, within ninety
(90) days of the Closing Date the Seller shall cause to be completed such
endorsements "Pay to the order of Wells Fargo Bank Minnesota, National
Association, as Trustee, without recourse."

     The Seller shall forward to the Purchaser original documents evidencing an
assumption, modification, consolidation or extension of any Mortgage Loan
entered into in accordance with the Pooling and Servicing Agreement within two
weeks of their execution; PROVIDED, HOWEVER, that the Seller shall provide the
Purchaser with a certified true copy of any such document submitted for
recordation within two weeks of 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 365 days of its submission for recordation. In the event that
the Seller cannot provide a copy of such document certified by the public
recording office within such 365 day period, the Seller shall deliver to the
Purchaser, within such 365 day period, an Officer's Certificate of the Master
Servicer which shall (A) identify the recorded document, (B) state that the
recorded document has not been delivered to the Purchaser due solely to a delay
caused by the public recording office, (C) state the amount of time generally
required by the applicable recording office to record and return a document
submitted for recordation, if known, and (D) specify the date the applicable
recorded document is expected to be delivered to the Purchaser, and, upon
receipt of a copy of such document certified by the public recording office, the
Seller shall immediately deliver such document to the Purchaser. In the event
the appropriate public recording office will not certify as to the accuracy of
such document, the Seller shall deliver a copy of such document certified by an
officer of the Seller to be a true and complete copy of the original to the
Purchaser.

     Section 2.03 PAYMENT OF PURCHASE PRICE FOR THE MORTGAGE LOANS.

     In consideration of the sale of the Mortgage Loans from the Seller to the
Purchaser on the Closing Date, the Purchaser agrees to pay to the Seller on the
Closing Date (the "Purchase Price") by transfer of (i) immediately available
funds in an amount equal to $15,594,507.26 and (ii) a 1.30% percentage interest
in the Class C Certificates, the Class P Certificates and the Class R
Certificates (collectively the "Option One Certificates") which Option One
Certificates shall be registered in the name of Option One Mortgage Corporation.
The Seller shall pay, and be billed directly for, all expenses incurred by the
Purchaser in connection with the issuance of the Certificates, including,
without limitation, printing fees incurred in connection with the prospectus
relating to the Certificates, blue sky registration fees and expenses, fees and
expenses of Purchaser's counsel, fees of the Rating Agencies requested to rate
the Certificates, accountant's fees and expenses and the fees and expenses of
the Trustee and other out-of-pocket costs, if any.



                                        5

<PAGE>




                                  ARTICLE III.

               REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH


     Section 3.01 SELLER REPRESENTATIONS AND WARRANTIES RELATING TO THE MORTGAGE
LOANS. The Seller hereby represents and warrants with respect to the Mortgage
Loans to the Purchaser that as of the Closing Date or as of such date
specifically provided herein:

          (a) The Seller has good title to and is the sole owner and holder of
the Mortgage Loan;

          (b) Immediately prior to the transfer and assignment to the Purchaser,
the Mortgage Note and the Mortgage Loan were not subject to an assignment or
pledge, and the Seller has full right and authority to sell and assign the
Mortgage Loan;

          (c) The Seller is transferring such Mortgage Loan to the Purchaser
free and clear of any and all liens, pledges, charges or security interests of
any nature encumbering the Mortgage Loans;

          (d) The information set forth on Schedule I is true and correct in all
material respects as of the Cut-off Date or such other date as may be indicated
in such schedule;

          (e) The Mortgage Loan has been acquired, serviced, collected and
otherwise dealt with by the Seller and any affiliate of the Seller in compliance
with all applicable federal, state and local laws and regulations and the terms
of the related Mortgage Note and Mortgage;

          (f) The related Mortgage Note and Mortgage are genuine and each is the
legal, valid and binding obligation of the maker thereof, enforceable in
accordance with its terms except as such enforcement may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by general equity principles
(regardless of whether such enforcement is considered in a proceeding in equity
or at law);

          (g) The related Mortgage is a valid and enforceable first or second
lien on the related Mortgaged Property, which Mortgaged Property is free and
clear of all encumbrances and liens (including mechanics liens) having priority
over the first or second lien of the Mortgage except for: (i) liens for real
estate taxes and assessments not yet due and payable; (ii) covenants, conditions
and restrictions, rights of way, easements and other matters of public record as
of the date of recording of such Mortgage, such exceptions appearing of record
being acceptable to mortgage lending institutions generally or specifically
reflected or considered in the lender's title insurance policy delivered to the
originator of the Mortgage Loan and referred to in the appraisal made in
connection with the origination of the related Mortgage Loan, (iii) other
matters to which like properties are commonly subject which do not materially
interfere with the benefits of the security intended to be provided by such
Mortgage and (iv) the first lien on the Mortgaged Property, in the case of the
Mortgages that are second liens;


                                        6

<PAGE>



          (h) Any security agreement, chattel mortgage or equivalent document
related to such Mortgage Loan establishes and creates a valid and enforceable
first or second lien on the Mortgaged Property;

          (i) As of the last calendar day of December 2002 and with respect to
any Mortgage Loan that had a payment due on or before December 1, 2002, except
with respect to 0% of the Mortgage Loans by the aggregate Cut-off Date Principal
Balance of the Mortgage Loans, the related Monthly Payment due on December 1,
2002 has been received. In addition, .9% of the Mortgage Loans have been 30 or
more days delinquent in the last 12 months and .9% of the Mortgage Loans have
been 30 or more days delinquent for two payment periods in the last 12 months;

          (j) The Seller has not advanced funds, or induced, solicited or
knowingly received any advance of funds by a party other than the Mortgagor,
directly or indirectly, for the payment of any amount required under the
Mortgage Loan;

          (k) The Seller has not impaired, waived, altered or modified the
related Mortgage or Mortgage Note in any material respect, or satisfied,
canceled, rescinded or subordinated such Mortgage or Mortgage Note in whole or
in part or released all or any material portion of the Mortgaged Property from
the lien of the Mortgage, or executed any instrument of release, cancellation,
rescission or satisfaction of the Mortgage Note or Mortgage;

          (l) As of the Cut-off Date, the Mortgage has not been satisfied,
canceled or subordinated, in whole or in part, or rescinded, and the Mortgaged
Property has not been released from the lien of the Mortgage, in whole or in
part (except for a release that does not materially impair the security of the
Mortgage Loan or a release the effect of which is reflected in the Loan-to-Value
Ratio for the Mortgage Loan as set forth in the Schedule of Mortgage Loans), nor
has any instrument been executed that would effect any such release,
cancellation, subordination or rescission;

          (m) No Mortgage Loan is subject to any right of rescission, set-off,
counterclaim or defense, including the defense of usury, nor will the operation
of any of the terms of any Mortgage Note or Mortgage, or the exercise of any
right thereunder, render either the Mortgage Note or the Mortgage unenforceable
in whole or in part, or subject to any right of rescission, set-off,
counterclaim or defense, including the defense of usury, and no such right of
rescission, set-off, counterclaim or defense has been asserted with respect
thereto;

          (n) To the Seller's knowledge, there is no proceeding pending for the
total or partial condemnation and no eminent domain proceedings pending
affecting any Mortgaged Property;

          (o) Each Mortgage Loan is covered by either (i) a mortgage title
insurance policy or other generally acceptable form of insurance policy
customary in the jurisdiction where the Mortgaged Property is located or (ii) if
generally acceptable in the jurisdiction where the Mortgaged Property is
located, an attorney's opinion of title given by an attorney licensed to
practice law in the jurisdiction where the Mortgaged Property is located. All of
the Seller's rights under such policies, opinions or other instruments shall be
transferred and assigned to Purchaser upon sale and


                                        7

<PAGE>



assignment of the Mortgage Loans hereunder. The title insurance policy has been
issued by a title insurer licensed to do business in the jurisdiction where the
Mortgaged Property is located, insuring the original lender, its successor and
assigns, as to the first or second priority lien of the Mortgage in the original
principal amount of the Mortgage Loan, subject to the exceptions contained in
such policy. The Seller is the sole insured of such mortgagee title insurance
policy, and such mortgagee title insurance policy is in full force and effect
and will be in force and effect upon the consummation of the transactions
contemplated by this Agreement. Neither the Seller nor any affiliate of the
Seller has made, and the Seller has no knowledge of, any claims under such
mortgagee title insurance policy. The Seller is not aware of any action by a
prior holder and neither the Seller nor any affiliate of the Seller has done, by
act or omission, anything which could impair the coverage or enforceability of
such mortgagee title insurance policy or the accuracy of such attorney's opinion
of title;

          (p) There is no material default, breach, violation or event of
acceleration existing under the related Mortgage or the related Mortgage Note
and no event which, with the passage of time or with notice and the expiration
of any grace or cure period, would constitute a material default, breach,
violation or event of acceleration, other than a payment delinquency that is for
a payment due after the date specified in (i) above. Neither the Seller nor any
affiliate of the Seller has waived any default, breach, violation or event of
acceleration;

          (q) With respect to any Mortgage Loan which provides for an adjustable
interest rate, all rate adjustments have been performed in accordance with the
terms of the related Mortgage Note or subsequent modifications, if any;

          (r) To the Seller's knowledge, there are no delinquent taxes, ground
rents, water charges, sewer rents, assessments, insurance premiums, leasehold
payments, including assessments payable in future installments or other
outstanding charges, affecting the related Mortgaged Property;

          (s) No foreclosure proceedings are pending against the Mortgaged
Property and the Mortgage Loan is not subject to any pending bankruptcy or
insolvency proceeding, and to the Seller's best knowledge, no material
litigation or lawsuit relating to the Mortgage Loan is pending;

          (t) The Mortgage Loan obligates the mortgagor thereunder to maintain a
hazard insurance policy ("Hazard Insurance") in an amount at least equal to the
lesser of (i) the maximum insurable value of such improvements or (ii) the
principal balance of the Mortgage Loan with a standard mortgagee clause, in
either case in an amount sufficient to avoid the application of any
"co-insurance provisions," and, if it was in place at origination of the
Mortgage Loan, flood insurance, at the mortgagor's cost and expense. If the
Mortgaged Property is in an area identified in the Federal Register by the
Federal Emergency Management Agency ("FEMA") as having special flood hazards, a
flood insurance policy is in effect which met the requirements of FEMA at the
time such policy was issued. The Mortgage obligates the Mortgagor to maintain
the Hazard Insurance, and, if applicable, flood insurance policy at the
Mortgagor's cost and expense, and on the Mortgagor's failure to do so,
authorizes the holder of the Mortgage to obtain and maintain such insurance at
the Mortgagor's cost and expense, and to seek reimbursement therefor from the
Mortgagor. The Mortgaged Property is covered by Hazard Insurance;



                                        8

<PAGE>



          (u) The Mortgage Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage and the security
interest of any applicable security agreement or chattel mortgage;

          (v) The Mortgage contains an enforceable provision for the
acceleration of the payment of the unpaid principal balance of the Mortgage Loan
in the event that the Mortgaged Property is sold or transferred without the
prior written consent of the Mortgagee thereunder. The Mortgage contains
customary and enforceable provisions such as to render the rights and remedies
of the holder thereof adequate for the realization against the Mortgaged
Property of the benefits of the security provided thereby, including (i) in the
case of a Mortgage designated as a deed of trust, by trustee's sale or judicial
foreclosure and (ii) otherwise by judicial foreclosure. Since the date of
origination of the Mortgage Loan, the Mortgaged Property has not been subject to
any bankruptcy proceeding or foreclosure proceeding and the Mortgagor has not
filed for protection under applicable bankruptcy laws. There is no homestead or
other exemption available to the Mortgagor that would interfere with the right
to sell the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage. In the event the Mortgage constitutes a deed of trust, a trustee, duly
qualified under applicable law to serve as such, as been properly designated and
currently so serves and is named in the Mortgage, and no fees or expenses are or
will become payable by Purchaser to the trustee under the deed of trust, except
in connection with a trustee's sale after default by the related Mortgagor. The
Mortgagor has not notified the Seller or any affiliate of the Seller and the
Seller has no knowledge of any relief requested or allowed to the Mortgagor
under the Soldiers and Sailors Civil Relief Act of 1940;

          (w) Except as set forth in the appraisal which forms part of the
related Mortgage File, the Mortgaged Property, normal wear and tear excepted, is
undamaged by waste, fire, earthquake or earth movement, windstorm, flood,
tornado or other casualty so as to affect materially and adversely the value of
the Mortgaged Property as security for the Mortgage Loan or the use for which
the premises were intended;

          (x) To the Seller's knowledge, there was no fraud involved in the
origination of the Mortgage Loan by the mortgagee or by the Mortgagor, any
appraiser or any other party involved in the origination of the Mortgage Loan;

          (y) Each Mortgage File contains an appraisal of the Mortgaged Property
indicating an appraised value equal to the appraised value identified for such
Mortgaged Property on the Mortgage Loan Schedule. Each appraisal has been
performed in accordance with the provisions of the Financial Institutions
Reform, Recovery and Enforcement Act of 1989;

          (z) To the best of the Seller's knowledge, all parties which have had
any interest in the Mortgage Loan, whether as mortgagee, assignee, pledgee or
otherwise, are (or, during the period in which they held and disposed of such
interest, were) in compliance with any and all applicable "doing business" and
licensing requirements of the laws of the state wherein the Mortgaged Property
is located;

          (aa) No improvements on the related Mortgaged Property (upon which
value was given) encroach on adjoining properties (and in the case of a
condominium unit, such improvements


                                        9

<PAGE>



are within the project with respect to that unit), and no improvements on
adjoining properties encroach upon the Mortgaged Property unless there exists in
the Mortgage File a title Policy with endorsements which insure against losses
sustained by the insured as a result of such encroachments;

          (bb) Each Mortgage Loan was originated or acquired by a savings and
loan association, a savings bank, a commercial bank or similar banking
institution which is supervised and examined by a federal or state authority, or
by a mortgagee approved by the Secretary of HUD. Each Mortgage Loan was
originated substantially in accordance with the Seller's underwriting criteria,
which are at least as stringent as the underwriting criteria set forth in the
Prospectus Supplement. Each Mortgage Loan is currently being serviced by the
Seller and has been serviced by the Seller since the date of origination of such
Mortgage Loan;

          (cc) (i) Principal payments on the Mortgage Loan commenced no more
than two months after the proceeds of the Mortgage Loan were disbursed and (ii)
each Mortgage Note is payable on the first day of each month;

          (dd) Other than with respect to not more than 0% of the Mortgage Loans
(by aggregate principal balance of the Mortgage Loans as of the Cut-off Date),
which are "balloon payment" mortgage loans, each Mortgage Loan is fully
amortizing;

          (ee) The Mortgage Loan bears interest at the Mortgage Rate and the
Mortgage Note does not permit negative amortization. No Mortgage Loan bearing
interest at an adjustable rate permits the Mortgagor to convert the Mortgage
Loan to a fixed rate Mortgage Loan;

          (ff) With respect to escrow deposits, if any, all such payments are in
the possession of, or under the control of, the Master Servicer and there exist
no deficiencies in connection therewith for which customary arrangements for
repayment thereof have not been made. No escrow deposits or escrow advances or
other charges or payments due the Master Servicer have been capitalized under
any Mortgage or the related Mortgage Note;

          (gg) No Mortgage Loan contains provisions pursuant to which scheduled
payments are: (i) paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor; or (ii) paid by any source other than the Mortgagor or contains any
other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;

          (hh) As of the origination date of each Mortgage Loan, the related
Mortgaged Property is lawfully permitted to be occupied under applicable law;

          (ii) No law relating to servicing, collection or notification
practices and no law relating to origination practices, has been violated in
connection with any Mortgage Loan transferred to the Purchaser pursuant to this
Agreement, including, without limitation, usury, truth in lending, real estate
settlement procedures, consumer credit protection, equal credit opportunity or
disclosure laws. The Mortgage Loan has been serviced in accordance with the
terms of the Mortgage Note;



                                       10

<PAGE>



          (jj) No Mortgage Loan was made in connection with (a) the construction
or rehabilitation of a Mortgaged Property or (b) facilitating the trade-in or
exchange of a Mortgaged Property;

          (kk) The proceeds of the Mortgage Loan have been fully disbursed to or
for the account of the Mortgagor and there is no obligation for the Mortgagee to
advance additional funds thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage have been paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due to the, Mortgagee pursuant to the Mortgage Note or Mortgage;

          (ll) There are no mechanics' or similar liens or claims that have been
filed for work, labor or material (and no rights are outstanding that under law
could give rise to such lien) affecting the related Mortgaged Property that are
or may be liens prior to, or equal or coordinate with, the lien of the related
Mortgage;

          (mm) As to each Mortgage Loan, interest is calculated on the Mortgage
Note on the basis of twelve 30-day months and a 360 day year;

          (nn) The Mortgaged Property consists of one of the following: detached
or semi-detached one- to four-family dwelling units, townhouses, individual
condominium units and individual units in planned unit developments, or
manufactured homes;

          (oo) Each Mortgage Loan constitutes a "qualified mortgage" within the
meaning of Section 860G(a)(3) of the Code;

          (pp) The Mortgage Loans were not intentionally selected by the Seller
in a manner intended to adversely affect the Purchaser or the Trust;

          (qq) The representations, warranties and covenants, set forth in this
Section shall survive the Closing Date;

          (rr) The Mortgage Loans have original terms to maturity ranging from
10 to 30 years;

          (ss) With respect to the Mortgage Loans, no more than 22.06%; 17.47%;
16.77% and 9.43% of the Mortgage Loans, by Cut-off Date Principal Balance will
be secured by Mortgaged Properties located in California, Massachusetts, New
Jersey and New York, respectively; and 77.92% of the Mortgage Loans, by Cut-off
Date Principal Balance will be secured by real property with a single family
residence erected thereon and approximately 2.47% of the Mortgage Loans, by the
Cut-off Date Principal Balance are secured by condominiums;

          (tt) As of the Cut-off Date, each Mortgage Loan had a
Loan-to-Value-Ratio that was less than or equal to 95%;



                                       11

<PAGE>



          (uu) With respect to each Mortgage Loan, the Mortgage Note related
thereto bears a fixed Mortgage Rate or an adjustable Mortgage Rate which will be
adjusted on each Adjustment Date to equal the Index plus the Gross Margin,
rounded to the nearest or next highest 0.125%, subject to the Periodic Rate Cap,
the Maximum Mortgage Rate and the Minimum Mortgage Rate;

          (vv) The average Cut-off Date Principal Balance of the Mortgage Loans
is $187,885.63;

          (ww) No Mortgage Loan is subject to the requirements of the Home
Ownership and Equity Protection Act of 1994 ("HOEPA") and no Mortgage Loan is in
violation of any state law or ordinance similar to HOEPA;

          (xx) No proceeds from any Mortgage Loan were used to purchase single
premium credit insurance policies as part of the origination of, or as a
condition to closing, such Mortgage Loan;

          (yy) No Mortgage Loan has a Prepayment Charge term longer than five
years after its origination;

          (zz) Each Group I Mortgage Loan had a Principal Balance at origination
which conformed with Fannie Mae/Freddie Mac guidelines and none of the Group I
Mortgage Loans (by aggregate principal balance of the Group I Mortgage Loans as
of the Cut-off Date) were originated with points/fees in excess of 5.00%.

          (aaa) Each Mortgage Loan conforms, and all Mortgage Loans in the
aggregate conform, in all material respects, to the description thereof set
forth in the Prospectus Supplement;

          (bbb) With respect to second lien Mortgage Loans, either (a) no
consent for the Mortgage Loan is required by the holder of the related first
lien or (b) such consent has been obtained and is contained in the Mortgage
File; and

          (ccc) Each Mortgage Note is comprised of one original promissory note
and each such promissory note constitutes an "instrument" for purposes of
section 9-102(a)(65) of the UCC;

          (ddd) Each Mortgage Loan satisfies the eligibility for purchase
requirements and was originated in compliance with Lender Letter # LL03-00 dated
April 11, 2000 for Fannie Mae Sellers (the "Lender Letter");

          (eee) No borrower was encouraged or required to select a Mortgage Loan
product offered by the Originator which is a higher cost product designed for
less creditworthy borrowers, unless at the time of the Mortgage Loan's
origination, such borrower did not qualify taking into account credit history
and debt-to-income ratios for a lower-cost credit product then offered by the
Originator or any affiliate of the Originator. If, at the time of loan
application, the borrower may have qualified for a for a lower-cost credit
product then offered by any mortgage lending affiliate of the Originator, the
Originator referred the borrower's application to such affiliate for
underwriting consideration;


                                       12

<PAGE>



          (fff) The methodology used in underwriting the extension of credit for
each Mortgage Loan employs objective mathematical principles which relate the
borrower's income, assets and liabilities to the proposed payment and such
underwriting methodology does not rely on the extent of the borrower's equity in
the collateral as the principal determining factor in approving such credit
extension. Such underwriting methodology confirmed that at the time of
origination (application/approval) the borrower had a reasonable ability to make
timely payments on the Mortgage Loan;

          (ggg) With respect to any Mortgage Loan that contains a provision
permitting imposition of a premium upon a prepayment prior to maturity: (i)
prior to the loan's origination, the borrower agreed to such premium in exchange
for a monetary benefit, including but not limited to a rate or fee reduction,
(ii) prior to the loan's origination, the borrower was offered the choice of
another mortgage product that did not require payment of such a premium, (iii)
the prepayment premium is disclosed to the borrower in the loan documents
pursuant to applicable state and federal law, and (iv) notwithstanding any state
or federal law to the contrary, the Master Servicer shall not impose such
prepayment premium in any instance when the mortgage debt is accelerated as the
result of the borrower's default in making the loan payments;

          (hhh) No borrower was required to purchase any credit life,
disability, accident or health insurance product as a condition of obtaining the
extension of credit. No borrower obtained a prepaid single-premium credit life,
disability, accident or health insurance policy in connection with the
origination of the Mortgage Loan;

          (iii) All points and fees related to each Group I Mortgage Loan were
disclosed in writing to the borrower in accordance with applicable state and
federal law. Except in the case of a Group I Mortgage Loan in an original
principal amount of less than $60,000 which would have resulted in an
unprofitable origination, no borrower was charged "points and fees" (whether or
not financed) in an amount greater than 5% of the principal amount of such loan,
such 5% limitation calculated in accordance with the Lender Letter. All fees and
charges (including finance charges) and whether or not financed, assessed,
collected or to be collected in connection with the origination and servicing of
each Group I Mortgage Loan has been disclosed in writing to the borrower in
accordance with applicable state and federal law and regulation; and

          (jjj) The Group II Mortgage Loans that are "Covered Loans" within the
meaning of the Georgia Fair Lending Act (the "Georgia Act") comply with all
material provisions of the Georgia Act, and as of the Closing Date, any Group II
Mortgage Loans that are Covered Loan that has refinanced an existing "Home
Loan," within the meaning of the Georgia Act, within the previous five years,
the Covered Loan has provided a reasonable, tangible net benefit to the borrower
considering all of the circumstances. None of the Group II Mortgage Loans
constitute a "high cost mortgage" under the Georgia Act.

     Section 3.02 SELLER REPRESENTATIONS AND WARRANTIES RELATING TO THE SELLER.
The Seller represents, warrants and covenants to the Purchaser as of the Closing
Date or as of such other date specifically provided herein or in the applicable
Assignment and Conveyance:



                                       13

<PAGE>



               (i) The Seller is duly organized, validly existing and in good
standing as a corporation under the laws of the State of California and is and
will remain in compliance with the laws of each state in which any Mortgaged
Property is located to the extent necessary to ensure the enforceability of each
Mortgage Loan in accordance with the terms of this Agreement;

               (ii) The Seller has the full power and authority to hold each
Mortgage Loan, to sell each Mortgage Loan, to execute, deliver and perform, and
to enter into and consummate, all transactions contemplated by this Agreement.
The Seller has duly authorized the execution, delivery and performance of this
Agreement, has duly executed and delivered this Agreement and this Agreement,
assuming due authorization, execution and delivery by the Purchaser and the
Seller, constitutes a legal, valid and binding obligation of the Seller,
enforceable against it in accordance with its terms except as the enforceability
thereof may be limited by bankruptcy, insolvency or reorganization. At the time
of the sale of each Mortgage Loan by the Seller, the Seller had the full power
and authority to hold each Mortgage Loan and to sell each Mortgage Loan;

               (iii) The execution and delivery of this Agreement by the Seller
and the performance of and compliance with the terms of this Agreement will not
violate the Seller's articles of incorporation or by-laws or constitute a
default under or result in a breach or acceleration of, any material contract,
agreement or other instrument to which the Seller is a party or which may be
applicable to the Seller or its assets;

               (iv) The Seller is not in violation of, and the execution and
delivery of this Agreement by the Seller and its performance and compliance with
the terms of this Agreement will not constitute a violation with respect to, any
order or decree of any court or any order or regulation of any federal, state,
municipal or governmental agency having jurisdiction over the Seller or its
assets, which violation might have consequences that would materially and
adversely affect the condition (financial or otherwise) or the operation of the
Seller or its assets or might have consequences that would materially and
adversely affect the performance of its obligations and duties hereunder;

               (v) The Seller is a HUD approved mortgagee pursuant to Section
203 and Section 211 of the National Housing Act. No event has occurred,
including but not limited to a change in insurance coverage, which would make
the Seller unable to comply with HUD eligibility requirements or which would
require notification to HUD;

               (vi) The Seller does not believe, nor does it have any reason or
cause to believe, that it cannot perform each and every covenant contained in
this Agreement;

               (vii) There are no actions or proceedings against, or
investigations known to it of, the Seller before any court, administrative or
other tribunal (A) that might prohibit its entering into this Agreement, (B)
seeking to prevent the sale of the Mortgage Loans or the consummation of the
transactions contemplated by this Agreement or (C) that might prohibit or
materially and adversely affect the performance by the Seller of its obligations
under, or validity of enforceability of, this Agreement;



                                       14

<PAGE>



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

               (ix) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Seller. The sale of the
Mortgage Loans was in the ordinary course of business of the Seller and the
assignment and conveyance of the Mortgage Notes and the Mortgages by the Seller
are not subject to the bulk transfer or any similar statutory provisions;

               (x) The information delivered by the Seller to the Purchaser with
respect to the Seller's loan loss, foreclosure and delinquency experience on
mortgage loans underwritten to similar standards as the Mortgage Loans and
covering mortgaged properties similar to the Mortgaged Properties, is true and
correct in all material respects as of the date of such report;

               (xi) Except with respect to any statement regarding the
intentions of the Purchaser, or any other statement contained herein the truth
or falsity of which is dependant solely upon the actions of the Purchaser, this
Agreement does not contain any untrue statement of material fact or omit to
state a material fact necessary to make the statements contained herein not
misleading. The written statements, reports and other documents prepared and
furnished or to be prepared and furnished by the Seller pursuant to this
Agreement or in connection with the transactions contemplated hereby taken in
the aggregate do not contain any untrue statement of material fact or omit to
state a material fact necessary to make the statements contained therein not
misleading; and

               (xii) The Seller has not transferred the Mortgage Loans with any
intent to hinder, delay or defraud any of its creditors.

     Section 3.03 REMEDIES FOR BREACH OF REPRESENTATIONS AND WARRANTIES. It is
understood and agreed that the representations and warranties set forth in
Sections 3.01 and 3.02 shall survive the sale of the Mortgage Loans to the
Purchaser and shall inure to the benefit of the Purchaser, notwithstanding any
restrictive or qualified endorsement on any Mortgage Note or Assignment or the
examination or lack of examination of any Mortgage File. With respect to the
representations and warranties contained herein that are made to the knowledge
or the best knowledge of the Seller or as to which the Seller has no knowledge,
if it is discovered that the substance of any such representation and warranty
is inaccurate and the inaccuracy materially and adversely affects the value of
the related Mortgage Loan, or the interest therein of the Purchaser or the
Purchaser's assignee, designee or transferee, then notwithstanding the Seller's
lack of knowledge with respect to the substance of such representation and
warranty being inaccurate at the time the representation and warranty was made,
such inaccuracy shall be deemed a breach of the applicable representation and
warranty and the Seller shall take such action described in the following
paragraphs of this Section 3.03 in respect of such Mortgage Loan. Upon discovery
by either the Seller, the Master Servicer or the Purchaser of a breach of any of
the foregoing representations and warranties that materially and adversely
affects the value of the Mortgage Loans or the interest of the Purchaser (or
which materially and adversely affects the interests of the Purchaser in the
related Mortgage Loan


                                       15

<PAGE>



in the case of a representation and warranty relating to a particular Mortgage
Loan), the party discovering such breach shall give prompt written notice to the
others.

     Within 120 days of the earlier of either discovery by or notice to the
Seller of any breach of a representation or warranty made by the Seller that
materially and adversely affects the value of a Mortgage Loan or the Mortgage
Loans or the interest therein of the Purchaser, the Seller shall use its best
efforts promptly to cure such breach in all material respects and, if such
breach cannot be cured, the Seller shall, at the Purchaser's option, repurchase
such Mortgage Loan at the Purchase Price. In the event that a breach shall
involve any representation or warranty set forth in Section 3.02 and such breach
cannot be cured within 120 days of the earlier of either discovery by or notice
to the Seller of such breach, all of the Mortgage Loans shall, at the
Purchaser's option, be repurchased by the Seller at the Purchase Price. The
Seller may, at the request of the Purchaser and assuming the Seller has a
Qualified Substitute Mortgage Loan, rather than repurchase a deficient Mortgage
Loan as provided above, remove such Mortgage Loan and substitute in its place a
Qualified Substitute Mortgage Loan or Loans. If the Seller does not provide a
Qualified Substitute Mortgage Loan or Loans, it shall repurchase the deficient
Mortgage Loan. Any repurchase of a Mortgage Loan(s) pursuant to the foregoing
provisions of this Section 3.03 shall occur on a date designated by the
Purchaser and shall be accomplished by deposit in accordance with Section 2.03
of the Pooling and Servicing Agreement. Any repurchase or substitution required
by this Section shall be made in a manner consistent with Section 2.03 of the
Pooling and Servicing Agreement.

     At the time of substitution or repurchase of any deficient Mortgage Loan,
the Purchaser and the Seller shall arrange for the reassignment of the
repurchased or substituted Mortgage Loan to the Seller and the delivery to the
Seller of any documents held by the Trustee relating to the deficient or
repurchased Mortgage Loan. In the event the Purchase Price is deposited in the
Collection Account, the Seller shall, simultaneously with such deposit, give
written notice to the Purchaser that such deposit has taken place. Upon such
repurchase, the Mortgage Loan Schedule shall be amended to reflect the
withdrawal of the repurchased Mortgage Loan from this Agreement.

     As to any Deleted Mortgage Loan for which the Seller substitutes a
Qualified Substitute Mortgage Loan or Loans, the Seller shall effect such
substitution by delivering to the Purchaser or its designee for such Qualified
Substitute Mortgage Loan or Loans the Mortgage Note, the Mortgage, the
Assignment and such other documents and agreements as are required by the
Pooling and Servicing Agreement, with the Mortgage Note endorsed as required
therein. The Seller shall deposit in the Collection Account the Monthly Payment
less the Servicing Fee due on such Qualified Substitute Mortgage Loan or Loans
in the month following the date of such substitution. Monthly Payments due with
respect to Qualified Substitute Mortgage Loans in the month of substitution will
be retained by the Seller. For the month of substitution, distributions to the
Purchaser will include the Monthly Payment due on such Deleted Mortgage Loan in
the month of substitution, and the Seller shall thereafter be entitled to retain
all amounts subsequently received by the Seller in respect of such Deleted
Mortgage Loan. Upon such substitution, the Qualified Substitute Mortgage Loans
shall be subject to the terms of this Agreement in all respects, and the Seller
shall be deemed to have made with respect to such Qualified Substitute Mortgage
Loan or Loans as of the date of substitution, the covenants, representations and
warranties set forth in Sections 3.01 and 3.02.



                                       16

<PAGE>



     It is understood and agreed that the representations and warranties set
forth in Section 3.01 shall survive delivery of the respective Mortgage Files to
the Trustee on behalf of the Purchaser.

     It is understood and agreed that the obligations of the Seller set forth in
Section 3.03 to cure, repurchase and substitute for a defective Mortgage Loan
and to indemnify the Purchaser as provided in Section 5.01 constitute the sole
remedies of the Purchaser respecting a missing or defective document or a breach
of the representations and warranties contained in Section 3.01 or 3.02.

                                   ARTICLE IV.

                               SELLER'S COVENANTS

     Section 4.01 COVENANTS OF THE SELLER. The Seller hereby covenants that
except for the transfer hereunder, the Seller will not sell, pledge, assign or
transfer to any other Person, or grant, create, incur, assume or suffer to exist
any Lien on any Mortgage Loan, or any interest therein; the Seller will notify
the Trustee, as assignee of the Purchaser, of the existence of any Lien on any
Mortgage Loan immediately upon discovery thereof, and the Seller will defend the
right, title and interest of the Trust, as assignee of the Purchaser, in, to and
under the Mortgage Loans, against all claims of third parties claiming through
or under the Seller or the Seller; provided, however, that nothing in this
Section 4.01 shall prevent or be deemed to prohibit the Seller from suffering to
exist upon any of the Mortgage Loans any Liens for municipal or other local
taxes and other governmental charges if such taxes or governmental charges shall
not at the time be due and payable or if the Seller shall currently be
contesting the validity thereof in good faith by appropriate proceedings and
shall have set aside on its books adequate reserves with respect thereto.

                                   ARTICLE V.

               INDEMNIFICATION WITH RESPECT TO THE MORTGAGE LOANS

     Section 5.01 INDEMNIFICATION.

          (a) The Seller agrees to indemnify and hold harmless the Purchaser,
each of its directors, each of its officers and each person or entity who
controls the Purchaser or any such person, within the meaning of Section 15 of
the Securities Act, against any and all losses, claims, damages or liabilities,
joint and several, as incurred, to which the Purchaser, or any such person or
entity may become subject, under the Securities Act or otherwise, and will
reimburse the Purchaser, each such director and officer and each such
controlling person for any legal or other expenses incurred by the Purchaser or
such controlling person in connection with investigating or defending any such
losses, claims, damages or liabilities, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of any material fact
contained in the Prospectus Supplement or any amendment or supplement to the
Prospectus Supplement approved in writing by the Seller or the omission or the
alleged omission to state therein a material fact necessary in order to make the
statements in the Prospectus Supplement or any amendment or supplement to the
Prospectus Supplement approved in writing by the Seller, in the light of the
circumstances under which they were made, not misleading, but only to the extent
that such untrue statement or alleged untrue statement or omission


                                       17

<PAGE>



or alleged omission relates to the Seller Information contained in the
Prospectus Supplement, (ii) any untrue statement or alleged untrue statement of
any material fact contained in the information on any computer tape furnished to
the Purchaser or an affiliate thereof by or on behalf of the Seller containing
information regarding the assets of the Trust or (iii) any untrue statement or
alleged untrue statement of any material fact contained in any information
provided by the Seller to the Purchaser or any affiliate thereof, or any
material omission from the information purported to be provided hereby, and
disseminated to Price Waterhouse Coopers L.L.P. or prospective investors
(directly or indirectly through available information systems) in connection
with the issuance, marketing or offering of the Certificates. This indemnity
agreement will be in addition to any liability which the Seller may otherwise
have.

          (b) The Purchaser agrees to indemnify and hold harmless the Seller,
its officers, directors and each person or entity who controls the Seller, or
any such person, against any and all losses, claims, damages or liabilities,
joint and several, to which the Seller or any such person or entity may become
subject, under the Securities Act or otherwise, and will reimburse the Seller
for any legal or other expenses incurred by the Seller, each officer and
director and controlling person in connection with investigating or defending
any such losses, claims, damages or liabilities insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in the Prospectus Supplement or any amendment or supplement to the
Prospectus Supplement or the omission or the alleged omission to state therein a
material fact necessary in order to make the statements in the Prospectus
Supplement or any amendment or supplement to the Prospectus Supplement, in the
light of the circumstances under which they were made, not misleading, but only
to the extent that such untrue statement or alleged untrue statement or omission
or alleged omission is not contained in the Seller Information in the Prospectus
Supplement. This indemnity agreement will be in addition to any liability which
the Purchaser may otherwise have.

          (c) Promptly after receipt by any indemnified party under this Article
V of notice of any claim or the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against any
indemnifying party under this Article V, notify the indemnifying party in
writing of the claim or the commencement of that action; PROVIDED, HOWEVER, that
the failure to notify an indemnifying party shall not relieve it from any
liability which it may have under this Article V except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify any indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under this Article V.

     If any such claim or action shall be brought against an indemnified party,
and it shall notify the indemnifying party thereof, the indemnifying party shall
be entitled to participate therein and, to the extent that it wishes, jointly
with any other similarly notified indemnifying party, to assume the defense
thereof with counsel reasonably satisfactory to the indemnified party. After
notice from the indemnifying party to the indemnified party of its election to
assume the defense of such claim or action, the indemnifying party shall not be
liable to the indemnified party under this Article V for any legal or other
expenses subsequently incurred by the indemnified party in connection with the
defense thereof other than reasonable costs of investigation.



                                       18

<PAGE>



     Any indemnified party shall have the right to employ separate counsel in
any such action and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless: (i) the employment thereof has been specifically authorized by the
indemnifying party in writing; (ii) such indemnified party shall have been
advised in writing by such counsel that there may be one or more legal defenses
available to it which are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it is
advisable for such indemnified party to employ separate counsel; or (iii) the
indemnifying party has failed to assume the defense of such action and employ
counsel reasonably satisfactory to the indemnified party, in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party, it being understood, however, the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to local counsel) at any time for all such indemnified parties, which
firm shall be designated in writing by the Purchaser, if the indemnified parties
under this Article V consist of the Purchaser or by the Seller, if the
indemnified parties in this Article V consist of the Seller.

     Each indemnified party, as a condition of the indemnity agreements
contained in Section 5.01 (a) and (b) hereof, shall use its best efforts to
cooperate with the indemnifying party in the defense of any such action or
claim. No indemnifying party shall be liable for any settlement of any such
action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to consent to a settlement of any action, the indemnifying
party agrees that it shall be liable for any settlement of any proceeding
effected without its written consent if such settlement is entered into more
than 30 days after receipt by such indemnifying party of the aforesaid request
and the indemnifying party has not previously provided the indemnified party
with written notice of its objection to such settlement. No indemnifying party
shall effect any settlement of any pending or threatened proceeding in respect
of which an indemnified party is or could have been a party and indemnity is or
could have been sought hereunder, without the written consent of such
indemnified party, unless settlement includes an unconditional release of such
indemnified party from all liability and claims that are the subject matter of
such proceeding.

          (d) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in this Article is
for any reason held to be unenforceable although applicable in accordance with
its terms, the Seller, on the one hand, and the Purchaser, on the other, shall
contribute to the aggregate losses, liabilities, claims, damages and expenses of
the nature contemplated by said indemnity agreement incurred by the Seller and
the Purchaser in such proportions as shall be appropriate to reflect the
relative benefits received by the Seller on the one hand and the Purchaser on
the other from the sale of the Mortgage Loans such that the Purchaser is
responsible for the lesser of (i) 0.25% thereof and (ii) 0.25% of the aggregate
proceeds to the Seller from the sale of the Mortgage Loans and the Seller shall
be responsible for the balance; PROVIDED,


                                       19

<PAGE>



HOWEVER, that no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section, each officer and director of
the Purchaser and each person, if any, who controls the Purchaser within the
meaning of Section 15 of the Securities Act shall have the same rights to
contribution as the Purchaser and each director of the Seller, each officer of
the Seller, and each person, if any, who controls the Seller within the meaning
of Section 15 of the Securities Act shall have the same rights to contribution
as the Seller.

          (e) The Seller agrees to indemnify and to hold each of the Purchaser,
the Trustee, each of the officers and directors of each such entity and each
person or entity who controls each such entity or person and each
Certificateholder harmless against any and all claims, losses, penalties, fines,
forfeitures, legal fees and related costs, judgments, and any other costs, fees
and expenses that the Purchaser, the Trustee, or any such person or entity and
any Certificateholder may sustain in any way (i) related to the failure of the
Seller to perform its duties in compliance with the terms of this Agreement,
(ii) arising from a breach by the Seller of its representations and warranties
in Section 3.01 or 3.02 of this Agreement or (iii) related to the origination or
prior servicing of the Mortgage Loans by reason of any acts, omissions, or
alleged acts or omissions of the Seller or any servicer. The Seller shall
immediately notify the Purchaser, the Trustee and each Certificateholder if a
claim is made by a third party with respect to this Agreement. The Seller shall
assume the defense of any such claim and pay all expenses in connection
therewith, including reasonable counsel fees, and promptly pay, discharge and
satisfy any judgment or decree which may be entered against the Purchaser, the
Trustee or any such person or entity and/or any Certificateholder in respect of
such claim.

                                   ARTICLE VI.

                                   TERMINATION

     Section 6.01 TERMINATION. The respective obligations and responsibilities
of the Seller and the Purchaser created hereby shall terminate, except for the
Seller's indemnity obligations as provided herein upon the termination of the
Trust as provided in Article X of the Pooling and Servicing Agreement.

                                  ARTICLE VII.

                            MISCELLANEOUS PROVISIONS

     Section 7.01 AMENDMENT. This Agreement may be amended from time to time by
the Seller and the Purchaser, by written agreement signed by the Seller and the
Purchaser.

     Section 7.02 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.



                                       20

<PAGE>



     Section 7.03 NOTICES. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered at or mailed by registered mail, postage prepaid, addressed as
follows:

     if to the Seller:

                  Option One Mortgage Corporation
                  3 Ada
                  Irvine, CA 92618
                  Attention: William L. O'Neill

or such other address as may hereafter be furnished to the Purchaser in writing
by the Seller.

     if to the Purchaser:

                  Option One Mortgage Acceptance Corporation
                  3 Ada
                  Irvine, CA 92618
                  Attention: William L. O'Neill

or such other address as may hereafter be furnished to the Seller in writing by
the Purchaser.

     Section 7.04 SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions of terms of this Agreement shall be held
invalid for any reason whatsoever, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity of
enforceability of the other provisions of this Agreement.

     Section 7.05 COUNTERPARTS. 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 and such
counterparts, together, shall constitute one and the same agreement.

     Section 7.06 FURTHER AGREEMENTS. The Purchaser and the Seller each agree to
execute and deliver to the other such additional documents, instruments or
agreements as may be necessary or reasonable and appropriate to effectuate the
purposes of this Agreement or in connection with the issuance of any series of
Certificates representing interests in the Mortgage Loans.

     Without limiting the generality of the foregoing, as a further inducement
for the Purchaser to purchase the Mortgage Loans from the Seller, the Seller
will cooperate with the Purchaser in connection with the sale of any of the
securities representing interests in the Mortgage Loans. In that connection, the
Seller will provide to the Purchaser any and all information and appropriate
verification of information, whether through letters of its auditors and counsel
or otherwise, as the Purchaser shall reasonably request and will provide to the
Purchaser such additional representations and warranties, covenants, opinions of
counsel, letters from auditors, and certificates of public


                                       21

<PAGE>



officials or officers of the Seller as are reasonably required in connection
with such transactions and the offering of investment grade securities rated by
the Rating Agencies.

     Section 7.07 INTENTION OF THE PARTIES. It is the intention of the parties
that the Purchaser is purchasing, and the Seller is selling, the Mortgage Loans
rather than pledging the Mortgage Loans to secure a loan by the Purchaser to the
Seller. Accordingly, the parties hereto each intend to treat the transaction for
federal income tax purposes and all other purposes as a sale by the Seller, and
a purchase by the Purchaser, of the Mortgage Loans. The Purchaser will have the
right to review the Mortgage Loans and the related Mortgage Files to determine
the characteristics of the Mortgage Loans which will affect the federal income
tax consequences of owning the Mortgage Loans and the Seller will cooperate with
all reasonable requests made by the Purchaser in the course of such review.

     Section 7.08 SUCCESSORS AND ASSIGNS, ASSIGNMENT OF PURCHASE AGREEMENT. This
Agreement shall bind and inure to the benefit of and be enforceable by the
Seller, the Purchaser, the Trustee and the NIMs Insurer, if any. The NIMs
Insurer, if any, shall be a third party beneficiary hereof and may enforce the
terms hereof as if a party hereto. The obligations of the Seller under this
Agreement cannot be assigned or delegated to a third party without the consent
of the Purchaser which consent shall be at the Purchaser's sole discretion,
except that the Purchaser acknowledges and agrees that the Seller may assign its
obligations hereunder to any Person into which the Seller is merged or any
corporation resulting from any merger, conversion or consolidation to which the
Seller is a party or any Person succeeding to the business of the Seller. The
parties hereto acknowledge that the Purchaser is acquiring the Mortgage Loans
for the purpose of contributing them to a trust that will issue a series of
Certificates representing undivided interests in such Mortgage Loans. As an
inducement to the Purchaser to purchase the Mortgage Loans, the Seller
acknowledges and consents to the assignment by the Purchaser to the Trustee of
all of the Purchaser's rights against the Seller pursuant to this Agreement
insofar as such rights relate to Mortgage Loans transferred to the Trustee and
to the enforcement or exercise of any right or remedy against the Seller
pursuant to this Agreement by the Trustee. Such enforcement of a right or remedy
by the Trustee shall have the same force and effect as if the right or remedy
had been enforced or exercised by the Purchaser directly.

     Section 7.09 SURVIVAL. The representations and warranties set forth in
Sections 3.01 and 3.02 and the provisions of Article V hereof shall survive the
purchase of the Mortgage Loans hereunder.






                                       22

<PAGE>



          IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed to this Mortgage Loan Purchase Agreement by their respective
officers thereunto duly authorized as of the day and year fist above written.


                                               OPTION ONE MORTGAGE ACCEPTANCE
                                               CORPORATION,
                                                 as Purchaser


                                               By_______________________________
                                               Name:
                                               Title:


                                               OPTION ONE MORTGAGE CORPORATION,
                                                 as Seller


                                               By:______________________________
                                               Name:
                                               Title:








                                       23

<PAGE>


                                   SCHEDULE I

                                 MORTGAGE LOANS



                                 FILED BY PAPER




                                       I-1





<PAGE>



                                    EXHIBIT D

                             MORTGAGE LOAN SCHEDULE

                                [FILED BY PAPER]




                                       D-1

<PAGE>



                                    EXHIBIT E

                        REQUEST FOR RELEASE OF DOCUMENTS

To:      Wells Fargo Bank Minnesota, National Association,
         1015 10th Avenue S.E.
         Minneapolis, MN 55414
         Attn: Inventory Control

               Re:    Pooling and Servicing Agreement dated as of January
                      1, 2003 among Option One Mortgage Acceptance
                      Corporation, as Depositor, Option One Mortgage
                      Corporation, as Master Servicer and Wells Fargo
                      Bank Minnesota, National Association, as Trustee
                      ----------------------------------------------------

     In connection with the administration of the Mortgage Loans held by you as
Trustee pursuant to the above-captioned Pooling and Servicing Agreement, we
request the release, and hereby acknowledge receipt of the Trustee's Mortgage
File for the Mortgage Loan described below, for the reason indicated.

MORTGAGE LOAN NUMBER:

MORTGAGOR NAME. ADDRESS & ZIP CODE:

REASON FOR REQUESTING DOCUMENTS (check one):

________ 1.   Mortgage Paid in Full

________ 2.   Foreclosure

________ 3.   Substitution

________ 4.   Other Liquidation (Repurchases, etc.)

________ 5.   Nonliquidation Reason:


Address to which Trustee should deliver
the Trustee's Mortgage File:
________________________________________________________________________________
________________________________________________________________________________



                                       E-1

<PAGE>




                                        By:_____________________________________
                                                 (authorized signer)

                                        Issuer:_________________________________

                                        Address:________________________________

                                        Date:___________________________________

TRUSTEE

Wells Fargo Bank Minnesota, National Association

          Please acknowledge the execution of the above request by your
          signature and date below:

          _________________________      ___________________
          Signature                      Date

          Documents returned to Trustee:


          _________________________      ___________________
          Trustee                        Date




                                       E-2

<PAGE>



                                   EXHIBIT F-1

                     FORM OF TRUSTEE'S INITIAL CERTIFICATION

                                                    January 15, 2003


Option One Mortgage Acceptance Corporation       Option One Mortgage Corporation
3 Ada                                            3 Ada
Irvine, California 92618                         Irvine, California 92618


          Re:  Pooling and Servicing Agreement dated as of January 1,
               2003 among Option One Mortgage Acceptance Corporation, as
               Depositor, Option One Mortgage Corporation, as Master
               Servicer and Wells Fargo Bank Minnesota, National
               Association, as Trustee
               ---------------------------------------------------------

Ladies and Gentlemen:

          Attached is the Trustee's preliminary exception report delivered in
accordance with Section 2.02 of the referenced Pooling and Servicing Agreement
(the "Pooling and Servicing Agreement"). Capitalized terms used but not
otherwise defined herein shall have the meanings set forth in the Pooling and
Servicing Agreement.

          The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in the Mortgage File pertaining to the Mortgage Loans
identified on the Mortgage Loan Schedule, (ii) the collectability, insurability,
effectiveness or suitability of any such Mortgage Loan or (iii) whether any
Mortgage File included any of the documents specified in clause (vi) of Section
2.01 of the Pooling and Servicing Agreement.

                                         WELLS FARGO BANK MINNESOTA,
                                         NATIONAL ASSOCIATION



                                         By:_____________________________
                                         Name:
                                         Title:



                                       F-1

<PAGE>



                                   EXHIBIT F-2

                      FORM OF TRUSTEE'S FINAL CERTIFICATION

                                                      ___________________
                                                           [Date]



Option One Mortgage Acceptance Corporation
3 Ada
Irvine, California 92618

          Re:  Pooling and Servicing Agreement dated as of January 1,
               2003 among Option One Mortgage Acceptance Corporation, as
               Depositor, Option One Mortgage Corporation, as Master
               Servicer and Wells Fargo Bank Minnesota, National
               Association, as Trustee
               ---------------------------------------------------------

Ladies and Gentlemen:

          In accordance with Section 2.02 of the Pooling and Servicing
Agreement, the undersigned, as Trustee, hereby certifies that as to each
Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage loan
paid in full or listed on Schedule I hereto) it (or its custodian) has received
the applicable documents listed in Section 2.01 of the Pooling and Servicing
Agreement.

          The undersigned hereby certifies that as to each Mortgage Loan
identified on the Mortgage Loan Schedule, other than any Mortgage Loan listed on
Schedule I hereto, it has reviewed the documents listed above and has determined
that each such document appears to be complete and, based on an examination of
such documents, the information set forth in the Mortgage Loan Schedule is
correct.

          The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in the Mortgage File pertaining to the Mortgage Loans
identified on the Mortgage Loan Schedule, (ii) the collectability, insurability,
effectiveness or suitability of any such Mortgage Loan or (iii) whether any
Mortgage File included any of the documents specified in clause (vi) of Section
2.01 of the Pooling and Servicing Agreement.




                                   F-2

<PAGE>



          Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement. This
Certificate is qualified in all respects by the terms of said Pooling and
Servicing Agreement.

                                         WELLS FARGO BANK MINNESOTA, NATIONAL
                                         ASSOCIATION, as Trustee



                                         By:__________________________________
                                         Name:
                                         Title:



                                   F-3

<PAGE>



                               EXHIBIT F-3

                     FORM OF RECEIPT OF MORTGAGE NOTE




Option One Mortgage Acceptance Corporation
3 Ada
Irvine, California 92618


             Re:  Option One Mortgage Loan Trust 2003-1,
                  Asset-Backed Certificates Series 2003-1
                  ---------------------------------------

Ladies and Gentlemen:

     Pursuant to Section 2.01 of the Pooling and Servicing Agreement, dated as
of January 1, 2003, among Option One Mortgage Acceptance Corporation as
Depositor, Option One Mortgage Corporation as Master Servicer and Wells Fargo
Bank Minnesota, National Association. as Trustee (the "Trustee"), we hereby
acknowledge the receipt of the original Mortgage Notes (a copy of which is
attached hereto as Exhibit 1) with any exceptions thereto listed on Exhibit 2.

                                         WELLS FARGO BANK MINNESOTA, NATIONAL
                                         ASSOCIATION,
                                         as Trustee



                                         By:____________________________________
                                         Name:
                                         Title:




                                       F-3

<PAGE>



                                    EXHIBIT G

                           LOSS MITIGATION PROCEDURES

          FAS 140 P &S RELEVANT PROVISIONS - RECOVERY FOR DEFAULT LOANS

COLLECTIONS DEPARTMENT PRE-FORECLOSURE PROCESS:

At 33 calendar days delinquent, all borrowers are sent a 30-day pre-foreclosure
demand letter. Borrowers in states that require more than a 30-day period are
given the amount of time specified by state law.

Borrowers who are unable to pay the total amount past due are reviewed for
foreclosure based upon the following criteria:

     "Early Indicator" default risk score. Those borrowers with risk scores that
suggest a strong statistical likelihood of continuing default, are approved for
foreclosure as soon as 48 hours after expiration of the demand letter
(approximately 64 calendar days delinquent).

     A.   Moderate risk with willingness and ability. Those borrowers with a
          moderate statistical likelihood of continuing default who demonstrate
          a willingness and ability to pay (as defined above), are solicited for
          extended (up to 6 months) repayment plans in which a portion of all
          past due payments are divided equally by 6 and a monthly payment
          schedule is established which consists of a "good faith" payment of
          some portion of the past due amount, one regular monthly installment
          and 1/6th of the remaining past due amount.

     B.   Low risk with willingness and ability. Those borrowers with a low risk
          of continuing default are actively solicited for placement on a
          repayment plan and/or are granted additional time to resolve their
          financial difficulties informally in arrangement with a loan
          counselor. Foreclosure is not typically initiated if or until the loan
          becomes 90+ days delinquent and the borrower is unable or unwilling to
          continue to make reasonable repayment arrangements.

     C.   Broken repayment plans. Those borrowers who are placed on extended
          repayment plans but fail to make their scheduled payments, are
          approved for foreclosure as soon as 48 hours after the payment plan is
          broken.

All borrowers are given all reasonable opportunities to pay the total amount
past due (including all contractually permitted fees and charges) prior to the
expiration of the 30 day demand letters. Borrowers who fail to contact Option
One collections when past due, who repeatedly break promises to pay, who have a
willingness but no financial ability, or apparent financial ability but no
willingness, may be referred to foreclosure at any time after the expiration of
the 30-day demand letter, without regard to any other factor, but as a general
rule, a loan is referred to foreclosure no later than the 120th day of
delinquency. The guidelines outlined herein presuppose at least some reasonable
degree of willingness and ability.



                                       G-1

<PAGE>



PRE-CONVEYANCE OF TITLE:

Initial contact is made for discovery of mortgagor's intent and a minimum
requirement of two attempted contacts per month is required. In general, contact
made or attempted within the first 48 hours establishes categories as follows:
Willingness and Ability, No Willingness or Willingness and No Ability. Each
category provides a subset of options for loss mitigation efforts and the
options are ranked within each category as follows:

     1.   WILLINGNESS AND ABILITY-- Typically the mortgagor(s) reason for
          default is temporary and a foreseeable solution is probable. The
          standard options negotiated, ranked in priority are:

          A.  Full Reinstatement
          B.  Payoff
          C.  Standard 6 month payment plan
          D.  Extension of the payment plan
          E.  Forbearance
          F.  Pre-Sale/Pre-Foreclosure Sale
          G.  Short Payoff
          H.  Modification

     2.   NO WILLINGNESS -- Typically the mortgagor(s) is unclear of options to
          mitigate default and avoidsall calls or is brief and discloses little
          when contact is made. In this category efforts are made to continue
          attempts to contact and/or counsel mortgagor(s). When no contact is
          made, Skip Tracing, promotional items and/or letters are mailed in
          attempts to stimulate communication.


     3.   WILLINGNESS AND NO ABILITY -- Mortgagor(s) want to save home or remedy
          the default, however do not have resources to do so. In this scenario,
          the standard options negotiated, ranked in priority are:

          A.  Payoff
          B.  Assumption
          C.  Pre-Sale/Pre-Foreclosure Sale
          D.  Short Payoff
          E.  Deed In Lieu of Foreclosure
          F.  Write-Off
          G.  Modification

Foreclosure process is also running parallel to the Loss Mitigation efforts and
in the event no workout is achieved then the Master Servicer obtains title
through foreclosure sale, from which the REO Department will attempt to seek
complete recovery from the sale of said property.

LIST OF ALL LOSS MITIGATION OPTIONS USED:
     -    Full Reinstatement
     -    Payoff
     -    Six (6) Month Re-Payment Plan


                                       G-2

<PAGE>



     -    Extension of Six (6) Month Payment Plan
     -    Forbearance
     -    Short Payoff
     -    Pre sale/Pre-Foreclosure Sale
     -    Assumption
     -    Modification
     -    Deed In Lieu of Foreclosure
     -    Write-off

CONVEYANCE OF TITLE:

Once title is acquired as a result of foreclosure sale, Deed In Lieu of
Foreclosure or otherwise, the property is assigned to an REO Agent for complete
and timely disposition. REO Broker/Agents are selected and retained using the
following criteria:

     -    Experience
     -    Possess Error and Omissions Insurance
     -    Licensed to sell Real Property in the related region
     -    Adhere to Option One Mortgage Corporation's Standards

Review of the current values obtained on the subject property will determine the
marketing strategy and the strategy will focus on disposing of the property in a
timely and practical manner. An analysis worksheet is completed to establish the
marketing strategy on the property.



                                       G-3

<PAGE>



                                    EXHIBIT H

                           FORM OF LOST NOTE AFFIDAVIT

     Personally appeared before me the undersigned authority to administer
oaths, ______________________ who first being duly sworn deposes and says:
Deponent is ______________________ of ______________________, successor by
merger to ______________________ ("Seller") and who has personal knowledge of
the facts set out in this affidavit.

On ______________________, ______________________ did execute and deliver a
promissory note in the principal amount of $______________.

     That said note has been misplaced or lost through causes unknown and is
presently lost and unavailable after diligent search has been made. Seller's
records show that an amount of principal and interest on said note is still
presently outstanding, due, and unpaid, and Seller is still owner and holder in
due course of said lost note.

     Seller executes this Affidavit for the purpose of inducing Wells Fargo Bank
Minnesota, National Association, as trustee on behalf of Option One Mortgage
Loan Trust 2003-1, Asset-Backed Certificates Series 2003-1, to accept the
transfer of the above described loan from Seller.

     Seller agrees to indemnify Wells Fargo Bank Minnesota, National
Association, Option One Mortgage Acceptance Corporation and Option One Mortgage
Corporation harmless for any losses incurred by such parties resulting from the
above described promissory note has been lost or misplaced.

By:  ____________________
     ____________________

STATE OF                 )
                         )       SS:
COUNTY OF                )

     On this _____ day of , 20__, before me, a Notary Public, in and for said
County and State, appeared , who acknowledged the extension of the foregoing and
who, having been duly sworn, states that any representations therein contained
are true.

     Witness my hand and Notarial Seal this ____________ day of 20__.

____________________________
____________________________
My commission expires _____________.



                                       H-1

<PAGE>



                                    EXHIBIT I

                                   [RESERVED]



                                       I-1

<PAGE>



                                    EXHIBIT J

                    FORM OF INVESTMENT LETTER [NON-RULE 144A]

                                     [DATE]


Option One Mortgage Acceptance                   Wells Fargo Bank Minnesota,
Corporation                                      National Association
3 Ada                                            9062 Old Annapolis Road
Irvine, California 92618                         Columbia, Maryland 21045-1951

               Re:   Option One Mortgage Loan Trust 2003-1,
                     Asset-Backed Certificates Series 2003-1
                     ---------------------------------------

Ladies and Gentlemen:

     In connection with our acquisition of the above-captioned Certificates, we
certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we are an
"accredited investor," as defined in Regulation D under the Act, and have such
knowledge and experience in financial and business matters that we are capable
of evaluating the merits and risks of investments in the Certificates, (c) we
have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) we are not an employee benefit plan that is
subject to the Employee Retirement Income Security Act of 1974, as amended, or a
plan that is subject to Section 4975 of the Internal Revenue Code of 1986, as
amended, nor are we acting on behalf of any such plan, (e) we are acquiring the
Certificates for investment for our own account and not with a view to any
distribution of such Certificates (but without prejudice to our right at all
times to sell or otherwise dispose of the Certificates in accordance with clause
(g) below), (f) we have not offered or sold any Certificates to, or solicited
offers to buy any Certificates from, any person, or otherwise approached or
negotiated with any person with respect thereto, or taken any other action which
would result in a violation of Section 5 of the Act, and (g) we will not sell,
transfer or otherwise dispose of any Certificates unless (1) such sale, transfer
or other disposition is made pursuant to an effective registration statement
under the Act or is exempt from such registration requirements, and if
requested, we will at our expense provide an opinion of counsel satisfactory to
the addressees of this Certificate that such sale, transfer or other disposition
may be made pursuant to an exemption from the Act, (2) the purchaser or
transferee of such Certificate has executed and delivered to you a certificate
to substantially the same effect as this certificate, and (3) the purchaser or
transferee has otherwise complied with any conditions for transfer set forth in
the Pooling and Servicing Agreement.




                                       J-1

<PAGE>



                                       Very truly yours,

                                       [NAME OF TRANSFEREE]


                                       By: _______________________________
                                                  Authorized Officer



                                       J-2

<PAGE>



                       FORM OF RULE 144A INVESTMENT LETTER

                                           [DATE]


Option One Mortgage Acceptance                 Wells Fargo Bank Minnesota,
Corporation                                    National Association
3 Ada                                          9062 Old Annapolis Road
Irvine, California 92618                       Columbia, Maryland 21045-1951


                 Re:   Option One Mortgage Loan Trust 2003-1,
                       Asset-Backed Certificates Series 2003-1
                       ---------------------------------------

Ladies and Gentlemen:

     In connection with our acquisition of the above Certificates we certify
that:

     (a) we understand that the Certificates are not being registered under the
Securities Act of 1933, as amended (the "Act"), or any state securities laws and
are being transferred to us in a transaction that is exempt from the
registration requirements of the Act and any such laws;

     (b) we have had the opportunity to ask questions of and receive answers
from the Depositor concerning the purchase of the Certificates and all matters
relating thereto or any additional information deemed necessary to our decision
to purchase the Certificates;

     (c) we are not an employee benefit plan that is subject to the Employee
Retirement Income Security Act of 1974, as amended, or a plan that is subject to
Section 4975 of the Internal Revenue Code of 1986, as amended, nor are we acting
on behalf of any such plan;

     (d) we have not, nor has anyone acting on our behalf offered, transferred,
pledged, sold or otherwise disposed of the Certificates, any interest in the
Certificates or any other similar security to, or solicited any offer to buy or
accept a transfer, pledge or other disposition of the Certificates, any interest
in the Certificates or any other similar security from, or otherwise approached
or negotiated with respect to the Certificates, any interest in the Certificates
or any other similar security with, any person in any manner, or made any
general solicitation by means of general advertising or in any other manner, or
taken any other action, that would constitute a distribution of the Certificates
under the Securities Act or that would render the disposition of the
Certificates a violation of Section 5 of the Securities Act or require
registration pursuant thereto, nor will act, nor has authorized or will
authorize any person to act, in such manner with respect to the Certificates;

     (e) we are a "qualified institutional buyer" as that term is defined in
Rule 144A under the Securities Act and have completed either of the forms of
certification to that effect attached hereto as Annex 1 or Annex 2. We are aware
that the sale to us is being made in reliance on Rule 144A. We are acquiring the
Certificates for our own account or for resale pursuant to Rule 144A and
further, understand that such Certificates may be resold, pledged or transferred
only (i) to a person


                                       J-3

<PAGE>



reasonably believed to be a qualified institutional buyer that purchases for its
own account or for the account of a qualified institutional buyer to whom notice
is given that the resale, pledge or transfer is being made in reliance on Rule
144A, or (ii) pursuant to another exemption from registration under the
Securities Act; and

     (f) either (i) we are not an employee benefit or other plan subject to the
prohibited transaction provisions of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA), or Section 4975 of the Internal Revenue Code of
1986, as amended ("Plan"), or any other person (including an investment manager,
a named fiduciary or a trustee of any Plan) acting, directly or indirectly, on
behalf of or purchasing any Certificate with "plan assets" of any Plan within
the meaning of the Department of Labor ("DOL") regulation at 29 C.F.R.
ss.2510.3-101 or (ii) we have provided the Trustee, the Depositor and the Master
Servicer with an opinion of counsel acceptable to and in form and substance
satisfactory to such parties to the effect that the purchase of Certificates is
permissible under applicable law, will not constitute or result in any
non-exempt prohibited transaction under ERISA or Section 4975 of the Code and
will not subject the Trustee, the Depositor or the Master Servicer to any
obligation or liability (including obligations or liabilities under ERISA or
Section 4975 of the Code) in addition to those undertaken in the Pooling and
Servicing Agreement.

                                       Very truly yours,

                                       [NAME OF TRANSFEREE]



                                       By:_____________________________________
                                                   Authorized Officer



                                                        J-4

<PAGE>



                                                            ANNEX 1 TO EXHIBIT J
                                                            --------------------

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
            --------------------------------------------------------

          [For Transferees Other Than Registered Investment Companies]

          The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:

          1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.

          2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned
and/or invested on a discretionary basis $_______1 in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A and (ii)
the Buyer satisfies the criteria in the category marked below.

          ______ CORPORATION, ETC. The Buyer is a corporation (other than a
          bank, savings and loan association or similar institution),
          Massachusetts or similar business trust, partnership, or charitable
          organization described in Section 501 (c) (3) of the Internal Revenue
          Code of 1986, as amended.

          ______ BANK. The Buyer (a) is a national bank or banking institution
          organized under the laws of any State, territory or the District of
          Columbia, the business of which is substantially confined to banking
          and is supervised by the State or territorial banking commission or
          similar official or is a foreign bank or equivalent institution, and
          (b) has an audited net worth of at least $25,000,000 as demonstrated
          in its latest annual financial statements, A COPY OF WHICH IS ATTACHED
          HERETO.

          ______ SAVINGS AND LOAN. The Buyer (a) is a savings and loan
          association, building and loan association, cooperative bank,
          homestead association or similar institution, which is supervised and
          examined by a State or Federal authority having supervision over any
          such institutions or is a foreign savings and loan association or
          equivalent institution and (b) has an audited net worth of at least
          $25,000,000 as demonstrated in its latest annual financial statements,
          A COPY OF WHICH IS ATTACHED HERETO.

          ______ BROKER-DEALER. The Buyer is a dealer registered pursuant to
          Section 15 of the Securities Exchange Act of 1934.

----------------------

1    Buyer must own and/or invest on a discretionary basis at least $100,000,000
     in securities unless Buyer is a dealer, and, in that case, Buyer must own
     and/or invest on a discretionary basis at least $10,000,000 in securities.


                                       J-5

<PAGE>



          ______ INSURANCE COMPANY. The Buyer is an insurance company whose
          primary and predominant business activity is the writing of insurance
          or the reinsuring of risks underwritten by insurance companies and
          which is subject to supervision by the insurance commissioner or a
          similar official or agency of a State, territory or the District of
          Columbia.

          ______ STATE OR LOCAL PLAN. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any agency or
instrumentality of the State or its political subdivisions, for the benefit of
its employees.

          ______ ERISA PLAN. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act of 1974.

          ______ INVESTMENT ADVISOR. The Buyer is an investment advisor
          registered under the Investment Advisors Act of 1940.

          ______ SMALL BUSINESS INVESTMENT COMPANY. Buyer is a small business
investment company licensed by the U.S. Small Business Administration under
Section 301(c) or (d) of the Small Business Investment Act of 1958.

          ______ BUSINESS DEVELOPMENT COMPANY. Buyer is a business development
          company as defined in Section 202(a)(22) of the Investment Advisors
          Act of 1940.

          3. The term "SECURITIES" as used herein DOES NOT INCLUDE (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit (v)
loan participations, (vi) repurchase agreements, (vii) securities owned but
subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.

          4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used the
cost of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.

          5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.


                                       J-6

<PAGE>



          6. Until the date of purchase of the Rule 144A Securities, the Buyer
will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.



                                       ________________________________________
                                                  Print Name of Buyer

                                       By:_____________________________________
                                       Name:
                                       Title:

                                       Date:___________________________________


                                                           J-7

<PAGE>



                                                            ANNEX 2 TO EXHIBIT J
                                                            --------------------

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
            --------------------------------------------------------

           [For Transferees That are Registered Investment Companies]

          The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:

          1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.

          2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyers Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.

          _______ The Buyer owned $___________ in securities (other than the
          excluded securities referred to below) as of the end of the Buyer's
          most recent fiscal year (such amount being calculated in accordance
          with Rule 144A).

          _______ The Buyer is part of a Family of Investment Companies which
          owned in the aggregate $_____________ in securities (other than the
          excluded securities referred to below) as of the end of the Buyer's
          most recent fiscal year (such amount being calculated in accordance
          with Rule 144A).

                    3. The term "FAMILY OF INVESTMENT COMPANIES" as used herein
          means two or more registered investment companies (or series thereof)
          that have the same investment adviser or investment advisers that are
          affiliated (by virtue of being majority owned subsidiaries of the same
          parent or because one investment adviser is a majority owned
          subsidiary of the other).

                    4. The term "SECURITIES" as used herein does not include (i)
          securities of issuers that are affiliated with the Buyer or are part
          of the Buyer's Family of Investment Companies, (ii) securities issued
          or guaranteed by the U.S. or any instrumentality thereof, (iii) bank
          deposit notes and certificates of deposit, (iv)


                                       J-8

<PAGE>


          loan participations, (v) repurchase agreements, (vi) securities owned
          but subject to a repurchase agreement and (vii) currency, interest
          rate and commodity swaps.

                    5. The Buyer is familiar with Rule 144A and understands that
          the parties listed in the Rule 144A Transferee Certificate to which
          this certification relates are relying and will continue to rely on
          the statements made herein because one or more sales to the Buyer will
          be in reliance on Rule 144A. In addition, the Buyer will only purchase
          for the Buyer's own account.

                    6. Until the date of purchase of the Certificates, the
          undersigned will notify the parties listed in the Rule 144A Transferee
          Certificate to which this certification relates of any changes in the
          information and conclusions herein. Until such notice is given, the
          Buyer's purchase of the Certificates will constitute a reaffirmation
          of this certification by the undersigned as of the date of such
          purchase.

                                           ____________________________________
                                           Print Name of Buyer or Adviser


                                           By: ________________________________
                                           Name:
                                           Title

                                           IF AN ADVISER:

                                           ____________________________________
                                                     Print Name of Buyer

                                           Date:_______________________________



                                       J-9

<PAGE>



                                    EXHIBIT K

                     AFFIDAVIT OF TRANSFER OF R CERTIFICATES
                           PURSUANT TO SECTION 5.02(d)

                     OPTION ONE MORTGAGE LOAN TRUST 2003-1,
                    ASSET-BACKED CERTIFICATES, SERIES 2003-1

STATE OF               )
                       ) ss..
COUNTY OF              )

          The undersigned, being first duly sworn, deposes and says as follows

          1. The undersigned is an officer of, the proposed Transferee of an
Ownership Interest in Class R Certificates (the "Certificate") issued pursuant
to the Pooling and Servicing Agreement (the "Agreement"), relating to the
above-referenced Certificates, among Option One Mortgage Acceptance Corporation,
as Depositor, Option One Mortgage Corporation, as Master Servicer (the "Master
Servicer") and Wells Fargo Bank Minnesota, National Association, as Trustee (the
"Trustee"). Capitalized terms used, but not defined herein shall have the
meanings ascribed to such terms in the Agreement. The Transferee has authorized
the undersigned to make this affidavit on behalf of the Transferee.

          2. The Transferee is, as of the date hereof and will be, as of the
date of the Transfer, a Permitted Transferee. The Transferee is acquiring its
Ownership Interest in the Certificate either (i) for its own account or (ii) as
nominee, trustee or agent for another Person and has attached hereto an
affidavit from such Person in substantially the same form as this affidavit. The
Transferee has no knowledge that any such affidavit is false.

          3. The Transferee has been advised of, and understands that (i) a tax
will be imposed on Transfers of the Certificate to Persons that are not
Permitted Transferees; (ii) such tax will be imposed on the transferor, or, if
such Transfer is through an agent (which includes a broker, nominee or
middleman) to a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent Transferee furnished to such Person an affidavit that
such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.

          4. The Transferee has been advised of, and understands that a tax will
be imposed on a "pass-through entity" holding the Certificate if at any time
during the taxable year of the pass-through entity a Person that is not a
Permitted Transferee is the record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the pass-through
entity does not have actual knowledge that such affidavit is false. (For this
purpose, a "pass-through entity" includes a regulated investment company, a real
estate investment trust or common trust fund, a partnership, trust or estate,
and certain


                                       K-1

<PAGE>



cooperatives and, except as may be provided in Treasury Regulations, persons
holding interests in pass-through entities as a nominee for another Person.)

          5. The Transferee has reviewed the provisions of Section 5.02(d) of
the Agreement and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by and
to abide by the provisions of Section 5.02(d) of the Agreement and the
restrictions noted on the face of the Certificate. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.

          6. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as Exhibit L to the Agreement (a "Transferor Certificate") to the
effect that such Transferee has no actual knowledge that the Person to which the
Transfer is to be made is not a Permitted Transferee.

          7. The Transferee does not have the intention to impede the assessment
or collection of any tax legally required to be paid with respect to the
Certificate.

          8. The Transferee's taxpayer identification number is _______________.

          9. The Transferee is a United States Person as defined in the
Agreement.

          10. The Transferee is aware that the Certificate may be a
"non-economic residual interest" within the meaning of proposed Treasury
regulations promulgated pursuant to the Code and that the transferor of a
non-economic residual interest will remain liable for any taxes due with respect
to the income on such residual interest, unless no significant purpose of the
transfer was to impede the assessment or collection of tax.

          11. The Transferee is not an employee benefit plan that is subject to
ERISA or a plan that is subject to Section 4975 of the Code, nor is it acting on
behalf of such a plan.


                                       K-2

<PAGE>



          IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer and its corporate seal to be hereunto affixed, duly
attested, this _______ day of _______, ____.

                                           [NAME OF TRANSFEREE]

                                           By:_______________________________
                                           Name:
                                           Title:

[Corporate Seal]

ATTEST:

_____________________________
[Assistant] Secretary

     Personally appeared before me the above-named , known or proved to me to be
the same person who executed the foregoing instrument and to be the of the
Transferee, and acknowledged that he executed the same as his free act and deed
and the free act and deed of the Transferee.

     Subscribed and sworn before me this ____ day of __________, ____.


                                           __________________________________
                                                      NOTARY PUBLIC

         My Commission expires the ____________ day of __________, ____.




                                       K-3

<PAGE>



                                    EXHIBIT L

                         FORM OF TRANSFEROR CERTIFICATE

                                     [DATE]



Option One Mortgage Acceptance
Corporation
3 Ada
Irvine, California 92618


         Re:   Option One Mortgage Loan Trust 2003-1,
               Asset-Backed Certificates Series 2003-1
               ---------------------------------------

Ladies and Gentlemen:

     In connection with our disposition of the above Certificates we certify
that (a) we understand that the Certificates have not been registered under the
Securities Act of 1933, as amended (the "Act"), and are being disposed by us in
a transaction that is exempt from the registration requirements of the Act, (b)
we have not offered or sold any Certificates to, or solicited offers to buy any
Certificates from, any person, or otherwise approached or negotiated with any
person with respect thereto, in a manner that would be deemed, or taken any
other action which would result in, a violation of Section 5 of the Act, (c) to
the extent we are disposing of a Class [ ] Certificate, we have no knowledge the
Transferee is not a Permitted Transferee and (d) no purpose of the proposed
disposition of a Class [ ] Certificate is to impede the assessment or collection
of tax.

                                           Very truly yours,

                                           TRANSFEROR


                                           _____________________________
                                           By:
                                           Name:
                                           Title:


                                                   L-1

<PAGE>



                                    EXHIBIT M

            FORM OF CERTIFICATION WITH RESPECT TO ERISA AND THE CODE

                                               _____________, 20__


Option One Mortgage Acceptance Corporation     Wells Fargo Bank Minnesota,
3 Ada                                          National Association
Irvine, California 92618                       9062 Old Annapolis Road
                                               Columbia, Maryland 21045-1951
Option One Mortgage Corporation
3 Ada
Irvine, California 92618

                  Re:  Option One Mortgage Loan Trust 2003-1,
                       Asset-Backed Certificates Series 2003-1
                       ---------------------------------------
Dear Sirs:

          _______________________ (the "Transferee") intends to acquire from
_____________________ (the "Transferor") $____________ Initial Certificate
Principal Balance Option One Mortgage Loan Trust 2003-1, Asset-Backed
Certificates Series 2003-1, Class [CE][P][R] (the "Certificates"), issued
pursuant to a Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement") dated as of January 1, 2003 among Option One Mortgage Acceptance
Corporation as depositor (the "Depositor"), Option One Mortgage Corporation as
master servicer (the "Master Servicer") and Wells Fargo Bank Minnesota, National
Association as trustee (the "Trustee"). Capitalized terms used herein and not
otherwise defined shall have the meanings assigned thereto in the Pooling and
Servicing Agreement. The Transferee hereby certifies, represents and warrants
to, and covenants with the Depositor, the Trustee and the Master Servicer the
following:

          The Certificates (i) are not being acquired by, and will not be
transferred to, any employee benefit plan within the meaning of section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or
other retirement arrangement, including individual retirement accounts and
annuities, Keogh plans and bank collective investment funds and insurance
company general or separate accounts in which such plans, accounts or
arrangements are invested, that is subject to Section 406 of ERISA or Section
4975 of the Internal Revenue Code of 1986 (the "Code") (any of the foregoing, a
"Plan"), (ii) are not being acquired with "plan assets" of a Plan within the
meaning of the Department of Labor ("DOL") regulation, 29 C.F.R.ss.2510.3-101,
and (iii) will not be transferred to any entity that is deemed to be investing
in plan assets within the meaning of the DOL regulation at 29 C.F.R.ss.
2510.3-101.

                                           Very truly yours,

                                           _______________________________

                                           By:____________________________
                                           Name:
                                           Title:



<PAGE>




                                    EXHIBIT N

                              FORM OF CAP CONTRACTS

                             Available Upon Request


                                       N-2

<PAGE>



                                    EXHIBIT O

                     FORM OF SUBSEQUENT TRANSFER INSTRUMENT

     Pursuant to this Subsequent Transfer Instrument, dated ________, 2003 (the
"Instrument"), between Option One Mortgage Acceptance Corporation as seller (the
"Depositor"), and Wells Fargo Bank Minnesota, National Association as trustee of
the Option One Mortgage Loan Trust 2003-1 Asset-Backed Certificates, Series
2003-1, as purchaser (the "Trustee"), and pursuant to the Pooling and Servicing
Agreement, dated as of January 1, 2003 (the "Pooling and Servicing Agreement"),
among the Depositor as depositor, Option One Mortgage Corporation as master
servicer and the Trustee as trustee, the Depositor and the Trustee agree to the
sale by the Depositor and the purchase by the Trustee in trust, on behalf of the
Trust, of the Mortgage Loans listed on the attached Schedule of Mortgage Loans
(the "Subsequent Mortgage Loans").

     Capitalized terms used but not otherwise defined herein shall have the
meanings set forth in the Pooling and Servicing Agreement.

     Section 1. CONVEYANCE OF SUBSEQUENT MORTGAGE LOANS.

     (a) The Depositor does hereby sell, transfer, assign, set over and convey
to the Trustee in trust, on behalf of the Trust, without recourse, all of its
right, title and interest in and to the Subsequent Mortgage Loans, and including
all amounts due on the Subsequent Mortgage Loans after the related Subsequent
Cut-off Date, and all items with respect to the Subsequent Mortgage Loans to be
delivered pursuant to Section 2.01 of the Pooling and Servicing Agreement;
provided, however that the Depositor reserves and retains all right, title and
interest in and to amounts due on the Subsequent Mortgage Loans on or prior to
the related Subsequent Cut-off Date. The Depositor, contemporaneously with the
delivery of this Agreement, has delivered or caused to be delivered to the
Trustee each item set forth in Section 2.01 of the Pooling and Servicing
Agreement. The transfer to the Trustee by the Depositor of the Subsequent
Mortgage Loans identified on the Mortgage Loan Schedule shall be absolute and is
intended by the Depositor, the Master Servicer, the Trustee and the
Certificateholders to constitute and to be treated as a sale by the Depositor to
the Trust Fund.

     (b) The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey to the Trustee
without recourse for the benefit of the Certificateholders all the right, title
and interest of the Depositor, in, to and under the Subsequent Mortgage Loan
Purchase Agreement, dated the date hereof, between the Depositor as purchaser
and the Master Servicer as seller, to the extent of the Subsequent Mortgage
Loans.

     (c) Additional terms of the sale are set forth on Attachment A hereto.

     Section 2. REPRESENTATIONS AND WARRANTIES; CONDITIONS PRECEDENT.

     (a) The Depositor hereby confirms that each of the conditions precedent and
the representations and warranties set forth in Section 2.08 of the Pooling and
Servicing Agreement are satisfied as of the date hereof.

     (b) All terms and conditions of the Pooling and Servicing Agreement are
hereby ratified and confirmed; provided, however, that in the event of any
conflict, the provisions of this Instrument shall control over the conflicting
provisions of the Pooling and Servicing Agreement.


                                       O-1

<PAGE>



     Section 3. RECORDATION OF INSTRUMENT.

     To the extent permitted by applicable law, this Instrument, or a memorandum
thereof if permitted under applicable law, is subject to recordation in all
appropriate public offices for real property records in all of the counties or
other comparable jurisdictions in which any or all of 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 Master Servicer at the
Certificateholders' expense on direction of the related Certificateholders, but
only when accompanied by an Opinion of Counsel to the effect that such
recordation materially and beneficially affects the interests of the
Certificateholders or is necessary for the administration or servicing of the
Mortgage Loans.

     Section 4. GOVERNING LAW.

     This Instrument shall be construed in accordance with the laws of the State
of New York and the obligations, rights and remedies of the parties hereunder
shall be determined in accordance with such laws, without giving effect to
principles of conflicts of law.

     Section 5. COUNTERPARTS.

     This Instrument 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 instrument.

     Section 6. SUCCESSORS AND ASSIGNS.

     This Instrument shall inure to the benefit of and be binding upon the
Depositor and the Trustee and their respective successors and assigns.




                                       O-2

<PAGE>



                                        OPTION ONE MORTGAGE ACCEPTANCE
                                        CORPORATION


                                        By:_____________________________________
                                        Name:
                                        Title:


                                        WELLS FARGO BANK MINNESOTA,
                                        NATIONAL ASSOCIATION, as Trustee for
                                        Option One Mortgage Loan Trust 2003-1,
                                        Asset-Backed Certificates, Series 2003-1

                                        By:_____________________________________
                                        Name:
                                        Title:


ATTACHMENTS
A.   Additional terms of sale.
B.   Schedule of Subsequent Mortgage Loans.






                                       O-3

<PAGE>



                                  ATTACHMENT A
                                  ------------

                            ADDITIONAL TERMS OF SALE

     A. General

        1.   Subsequent Cut-off Date: ______________________, 2003
        2.   Subsequent Transfer Date:     _______________________, 2003
        3.   Aggregate Principal Balance of the Subsequent Mortgage Loans as of
             the Subsequent Cut-off Date: $________________
        4.   Purchase Price: 100.00%

     B. The following representations and warranties with respect to each
Subsequent Mortgage Loan determined as of the applicable Subsequent Cut-off
Date: (i) such Subsequent Mortgage Loan may not be 30 or more days delinquent as
of the last day of the month preceding the Subsequent Cut-off Date; (ii) the
original term to stated maturity of such Subsequent Mortgage Loan will not be
less than 120 months and will not exceed 360 months; (iii) the Subsequent
Mortgage Loan may not provide for negative amortization; (iv) such Subsequent
Mortgage Loan will not have a loan-to-value ratio greater than 100.00%; (v) such
Subsequent Mortgage Loans will have, as of the Subsequent Cut-off Date, a
weighted average term since origination not in excess of 6 months; (vi) such
Subsequent Mortgage Loan, if a Fixed Rate Mortgage Loan, shall have a Mortgage
Rate that is not less than [_____] % or greater than [_____] %; (vii) such
Subsequent Mortgage Loan shall have been serviced by the Master Servicer since
origination or the date of purchase; (viii) such Subsequent Mortgage Loan must
have a first payment date occurring on or before [_____], 2002; (ix) if the
Subsequent Mortgage Loan is an Adjustable Rate Mortgage Loan, the Subsequent
Mortgage Loan will have a Gross Margin not less than [_____] %; (x) if the
Subsequent Mortgage Loan is an Adjustable Rate Mortgage Loan, the Subsequent
Mortgage Loan will have a Maximum Mortgage Rate not less than [_____]%; (xi) if
the Subsequent Mortgage Loan is an Adjustable Rate Mortgage Loan, the Subsequent
Mortgage Loan will have a Minimum Mortgage Rate not less than [_____] % and
(xii) such Subsequent Mortgage Loan shall have been underwritten in accordance
with the criteria set forth under "Option One Mortgage Corporation Underwriting
Standards" in the Prospectus Supplement.

     C. Following the purchase of any Subsequent Mortgage Loan by the Trust, the
Mortgage Loans (including such Subsequent Mortgage Loans) will as of the
Subsequent Cut-off Date: (i) have a weighted average original term to stated
maturity of not more than 360 months; (ii) have a weighted average Mortgage Rate
of not less than [_____] % and not more than [_____] %; (iii) have a weighted
average Loan-to-Value Ratio of not more than [_____] %; (iv) have no Mortgage
Loan with a principal balance in excess of $[_____]; (v) will consist of
Mortgage Loans covered by the PMI Policy representing no less than [_____] % of
the aggregate Principal Balance thereof; (v) will consist of Mortgage Loans with
Prepayment Charges representing no less than approximately [_____] % of the
aggregate Principal Balance thereof and (vi) have no more than [___] % of Fixed
Rate Mortgage Loans by aggregate principal balance of the Mortgage Loans as of
the Subsequent Cut-off Date. In addition, the Adjustable Rate Mortgage Loans
will as of the Subsequent Cut-off Date have a weighted average Gross Margin not
less than [_____]% by


                                       O-4

<PAGE>



aggregate principal balance of the Adjustable Rate Mortgage Loans as of the
Subsequent Cut-off Date.

     D. Notwithstanding the foregoing, any Subsequent Mortgage Loan may be
rejected by (i) the NIMs Insurer, if any, or (ii) either Rating Agency if the
inclusion of such Subsequent Mortgage Loan would adversely affect the ratings on
any class of Offered Certificates.


                                       O-5

<PAGE>



                                    EXHIBIT P

                             FORM OF ADDITION NOTICE

                                           [Date]

Wells Fargo Bank Minnesota, National Association
9062 Old Annapolis Road
Columbia, Maryland 21045-1951

               Re:  Pooling and Servicing Agreement dated as of January 1,
                    2003 among Option One Mortgage Acceptance Corporation,
                    as Depositor, Option One Mortgage Corporation, as
                    Master Servicer and Wells Fargo Bank Minnesota,
                    National Association, as Trustee

Ladies and Gentlemen:

     Pursuant to Section 2.08 of the referenced Pooling and Servicing Agreement,
Option One Mortgage Acceptance Corporation has designated Subsequent Mortgage
Loans to be sold to the Trust on __________, 2003, with an aggregate principal
balance of $___________. Capitalized terms not otherwise defined herein have the
meaning set forth in the Pooling and Servicing Agreement.

     Please acknowledge your receipt of this notice by countersigning the
enclosed copy in the space indicated below and returning it to the attention of
the undersigned.









                                       P-1

<PAGE>




                                           Very truly yours,

                                           OPTION ONE MORTGAGE ACCEPTANCE
                                           CORPORATION

                                           By:________________________________
                                           Name:
                                           Title:

Acknowledged and Agreed:

WELLS FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION


By:________________________________
Name:
Title:





<PAGE>



                                   EXHIBIT R-1

      FORM OF CERTIFICATION TO BE PROVIDED BY THE DEPOSITOR WITH FORM 10-K

          Re:    Option One Mortgage Acceptance Corporation, Series 2003-1
                 Asset-Backed Certificates, Series 2003-1

          I, _______________, the senior officer of Option One Mortgage
Acceptance Corporation (the "Registrant") in charge of securitizations, certify
that:

          l. I have reviewed this annual report on Form 10-K, and all reports on
Form 8-K containing distribution and servicing reports filed in respect of
periods included in the year covered by this annual report, of Registrant;

          2. Based on my knowledge, the information in these reports, taken as a
whole, does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading as of the
last day of the period covered by this annual report;

          3. Based on my knowledge, the distribution information and the
servicing information required to be provided to the Trustee by the Master
Servicer under the Pooling and Servicing Agreement is included in these reports;

          4. I am responsible for reviewing the activities performed by the
Master Servicer under the Pooling and Servicing Agreement and based upon the
review required under the Pooling and Servicing Agreement, and except as
disclosed in the report, the Master Servicer has fulfilled its obligations under
the Pooling and Servicing Agreement; and

          5. I have disclosed to the Registrant's certified public accountants
all significant deficiencies relating to the Master Servicer's compliance with
the minimum servicing standards in accordance with a review conducted in
compliance with the Uniform Single Attestation Program for Mortgage Bankers or
similar standard as set forth in the Pooling and Servicing Agreement.

          Capitalized terms used but not defined herein have the meanings
ascribed to them in the Pooling and Servicing Agreement, dated January 1, 2003
(the "Pooling and Servicing Agreement"), among the Registrant as depositor,
Option One Mortgage Corporation as master servicer and Wells Fargo Bank
Minnesota, National Association as trustee.











                                       P-3

<PAGE>



                                           OPTION ONE MORTGAGE ACCEPTANCE
                                           CORPORATION

                                           By:_____________________________
                                           Name:
                                           Title:
                                           Date:




                                       P-4

<PAGE>



                                   EXHIBIT R-2

        FORM OF CERTIFICATION TO BE PROVIDED TO DEPOSITOR BY THE TRUSTEE

          Re:    Option One Mortgage Acceptance Corporation, Series 2003-1
                 Asset-Backed Certificates, Series 2003-1

          I, [identify the certifying individual], a [title] of Wells Fargo Bank
Minnesota, National Association, as Trustee, hereby certify to Option One
Mortgage Acceptance Corporation (the "Depositor"), and its officers, directors
and affiliates, and with the knowledge and intent that they will rely upon this
certification, that:

          1. I have reviewed the annual report on Form 10-K for the fiscal year
[___], and all reports on Form 8-K containing distribution reports filed in
respect of periods included in the year covered by that annual report, of the
Depositor relating to the above-referenced trust;

          2. Based on my knowledge, the information in these distribution
reports prepared by the Trustee, taken as a whole, does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading as of the last day of the period covered by that
annual report; and

          3. Based on my knowledge, the distribution information required to be
provided by the Trustee under the Pooling and Servicing Agreement is included in
these distribution reports.

          Capitalized terms used but not defined herein have the meanings
ascribed to them in the Pooling and Servicing Agreement, dated January 1, 2003
(the "Pooling and Servicing Agreement"), among the Registrant as depositor,
Option One Mortgage Corporation as master servicer and Wells Fargo Bank
Minnesota, National Association as trustee.










                                       P-5

<PAGE>



                                           WELLS FARGO BANK MINNESOTA, NATIONAL
                                           ASSOCIATION, as Trustee


                                           By:__________________________________
                                           Name:
                                           Title:
                                           Date:






                                       P-6

<PAGE>



                                   SCHEDULE I

                           PREPAYMENT CHARGE SCHEDULE

                            (Available Upon Request)





                                       P-7

<PAGE>


                                   SCHEDULE II

                               PMI MORTGAGE LOANS


                            (Available Upon Request)