Unassociated Document


    
      Exhibit
        10.8
 

    

    MORTGAGE
      LOAN FLOW PURCHASE, SALE & SERVICING AGREEMENT


     

    dated
      as of January 1, 2006

     

    between

     

    RWT
      HOLDINGS, INC.,

    Purchaser

     

    PHH
      MORTGAGE CORPORATION 

     

    (formerly
      known as Cendant Mortgage Corporation) and

     

    BISHOP’S
      GATE RESIDENTIAL MORTGAGE TRUST

    (formerly
      known as Cendant Residential Mortgage Trust)

    Sellers

     

    and

     

    REDWOOD
      TRUST, INC.

    Guarantor

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    TABLE
      OF CONTENTS

     

    
      
        	 	 	 	
                Page

              
	 	 	 	 
	
                ARTICLE
                  I:

              	
                DEFINITIONS

              	 	
                1

              
	 	 	 	 
	
                Section
                  1.01

              	
                Defined
                  Terms

              	 	
                1

              
	 	 	 	 
	
                ARTICLE
                  II:

              	
                SALE
                  AND CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES;
                  BOOKS AND
                  RECORDS; DELIVERY OF MORTGAGE LOAN DOCUMENTS

              	 	
                14

              
	 	 	 	 
	
                Section
                  2.01

              	
                Sale
                  and Conveyance of Mortgage Loans

              	 	
                14

              
	
                 

              	 	 	 
	
                Section
                  2.02

              	
                Possession
                  of Mortgage Files

              	 	
                15

              
	
                 

              	 	 	 
	
                Section
                  2.03

              	
                Books
                  and Records

              	 	
                16

              
	
                 

              	 	 	 
	
                Section
                  2.04

              	
                Defective
                  Documents; Delivery of Mortgage Loan Documents

              	 	
                16

              
	
                 

              	 	 	 
	
                Section
                  2.05

              	
                Transfer
                  of Mortgage Loans

              	 	
                17

              
	
                 

              	 	 	 
	
                ARTICLE
                  III:

              	
                REPRESENTATIONS,
                  WARRANTIES AND COVENANTS OF THE SELLER; REPURCHASE AND SUBSTITUTION;
                  REVIEW OF MORTGAGE LOANS

              	 	
                18

              
	 	 	 	 
	
                Section
                  3.01

              	
                Representations
                  and Warranties of each Seller

              	 	
                18

              
	 	 	 	 
	
                Section
                  3.02

              	
                Representations
                  and Warranties of the Servicer

              	 	
                21

              
	
                 

              	 	 	 
	
                Section
                  3.03

              	
                Representations
                  and Warranties as to Individual Mortgage Loans

              	 	
                21

              
	 	 	 	 
	
                Section
                  3.04

              	
                Repurchase
                  and Substitution

              	 	
                30

              
	 	 	 	 
	
                Section
                  3.05

              	
                Certain
                  Covenants of each Seller and the Servicer

              	 	
                31

              
	 	 	 	 
	
                ARTICLE
                  IV:

              	
                REPRESENTATIONS
                  AND WARRANTIES OF THE PURCHASER AND CONDITIONS PRECEDENT TO
                  FUNDING

              	 	
                32

              
	 	 	 	 
	
                Section
                  4.01

              	
                Representations
                  and Warranties

              	 	
                32

              
	
                 

              	 	 	 
	
                Section
                  4.02

              	
                Conditions
                  Precedent to Closing

              	 	
                34

              
	
                 

              	 	 	 
	
                ARTICLE
                  V:

              	
                ADMINISTRATION
                  AND SERVICING OF MORTGAGE LOANS

              	 	
                35

              
	 	 	 	 
	
                Section
                  5.01

              	
                PHH
                  Mortgage to Act as Servicer; Servicing Standards; Additional Documents;
                  Consent of the Purchaser

              	 	
                35

              
	
                 

              	 	 	 
	
                Section
                  5.02

              	
                Collection
                  of Mortgage Loan Payments

              	 	
                37

              
	 	 	 	 
	
                Section
                  5.03

              	
                Reports
                  for Specially Serviced Mortgage Loans and Foreclosure
                  Sales

              	 	
                37

              
	 	 	 	 
	
                Section
                  5.04

              	
                Establishment
                  of Collection Account; Deposits in Collection Account

              	 	
                37

              
	 	 	 	 
	
                Section
                  5.05

              	
                Permitted
                  Withdrawals from the Collection Account

              	 	
                38

              
	 	 	 	 
	
                Section
                  5.06

              	
                Establishment
                  of Escrow Accounts; Deposits in Escrow

              	 	
                39

              


      

       

      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

      

       

      
        	
                Section
                  5.07

              	
                Permitted
                  Withdrawals From Escrow Accounts

              	 	
                40

              
	 	 	 	 
	
                Section
                  5.08

              	
                Payment
                  of Taxes, Insurance and Other Charges; Maintenance of Primary Insurance
                  Policies; Collections Thereunder

              	 	
                40

              
	 	 	 	 
	
                Section
                  5.09

              	
                Transfer
                  of Accounts

              	 	
                41

              
	 	 	 	 
	
                Section
                  5.10

              	
                Maintenance
                  of Hazard Insurance

              	 	
                42

              
	 	 	 	 
	
                Section
                  5.11

              	
                Maintenance
                  of Mortgage Impairment Insurance Policy

              	 	
                43

              
	 	 	 	 
	
                Section
                  5.12

              	
                Fidelity
                  Bond; Errors and Omissions Insurance

              	 	
                43

              
	 	 	 	 
	
                Section
                  5.13

              	
                Management
                  of REO Properties

              	 	
                44

              
	
                 

              	 	 	 
	
                Section
                  5.14

              	
                Sale
                  of Specially Serviced Mortgage Loans and REO Properties

              	 	
                46

              
	 	 	 	 
	
                Section
                  5.15

              	
                Realization
                  Upon Specially Serviced Mortgage Loans and REO Properties

              	 	
                46

              
	 	 	 	 
	
                Section
                  5.16

              	
                Investment
                  of Funds in the Collection Account

              	 	
                48

              
	 	 	 	 
	
                Section
                  5.17

              	
                Compensating
                  Interest

              	 	
                49

              
	 	 	 	 
	
                ARTICLE
                  VI:

              	
                REPORTS;
                  REMITTANCES; ADVANCES

              	 	
                49

              
	 	 	 	 
	
                Section
                  6.01

              	
                Remittances

              	 	
                49

              
	 	
                 

              	 	 
	
                Section
                  6.02

              	
                Reporting

              	 	
                50

              
	 	 	 	 
	
                Section
                  6.03

              	
                Monthly
                  Advances by the Servicer

              	 	
                
                  50

                

              
	 	 	 	 
	
                Section
                  6.04

              	
                Non-recoverable
                  Advances

              	 	
                
                  50

                

              
	
                 

              	 	 	 
	
                Section
                  6.05

              	
                Itemization
                  of Servicing Advances

              	 	
                
                  51

                

              
	 	 	 	 
	
                Section
                  6.06

              	
                Officer’s
                  Certificate

              	 	
                51

              
	 	 	 	 
	
                ARTICLE
                  VII:

              	
                GENERAL
                  SERVICING PROCEDURE

              	 	
                51

              
	 	 	 	 
	
                Section
                  7.01

              	
                Enforcement
                  of Due-on-Sale Clauses, Assumption Agreements

              	 	
                51

              
	 	 	 	 
	
                Section
                  7.02

              	
                Satisfaction
                  of Mortgages and Release of Mortgage Files

              	 	
                52

              
	 	 	 	 
	
                Section
                  7.03

              	
                Servicing
                  Compensation

              	 	
                52

              
	 	 	 	 
	
                Section
                  7.04

              	
                Annual
                  Compliance Statement

              	 	
                52

              
	 	 	 	 
	
                Section
                  7.05

              	
                Annual
                  Assessment of Compliance and Attestation Report

              	 	
                53

              
	 	 	 	 
	
                Section
                  7.06

              	
                Purchaser’s
                  Right to Examine Servicer Records

              	 	
                53

              
	 	 	 	 
	
                Section
                  7.07

              	
                Additional
                  Requirements in Connection With Securitization
                  Transactions

              	 	
                53

              
	 	 	 	 
	
                ARTICLE
                  VIII:

              	
                REPORTS
                  TO BE PREPARED BY THE SERVICER

              	 	
                55

              
	 	 	 	 
	
                Section
                  8.01

              	
                The
                  Servicer’s Reporting Requirements

              	 	
                55

              
	 	 	 	 
	
                Section
                  8.02

              	
                Financial
                  Statements

              	 	
                56

              


      

       

      
        
          
          

        

        
          ii

          
            

          

        

        
          
          

        

      

       

      
        	
                ARTICLE
                  IX:

              	
                THE
                  SELLERS

              	 	
                57

              
	 	 	 	 
	
                Section
                  9.01

              	
                Indemnification;
                  Third Party Claims

              	 	
                57

              
	 	 	 	 
	
                Section
                  9.02

              	
                Merger
                  or Consolidation of the Seller

              	 	
                58

              
	 	 	 	 
	
                Section
                  9.03

              	
                Limitation
                  on Liability of the Sellers and Others

              	 	
                58

              
	 	 	 	 
	
                Section
                  9.04

              	
                Servicer
                  Not to Resign

              	 	
                58

              
	 	 	 	 
	
                ARTICLE
                  X:

              	
                DEFAULT

              	 	
                
                  58

                

              
	 	 	 	 
	
                Section
                  10.01

              	
                Events
                  of Default

              	 	
                
                  58

                

              
	 	 	 	 
	
                ARTICLE
                  XI:

              	
                TERMINATION

              	 	
                60

              
	 	 	 	 
	
                Section
                  11.01

              	
                Term
                  and Termination

              	 	
                
                  60

                

              
	 	 	 	 
	
                Section
                  11.02

              	
                Survival

              	 	
                
                  60

                

              
	 	 	 	 
	
                ARTICLE
                  XII:

              	
                GENERAL
                  PROVISIONS

              	 	
                61

              
	 	 	 	 
	
                Section
                  12.01

              	
                Successor
                  to the Servicer

              	 	
                
                  61

                

              
	 	 	 	 
	
                Section
                  12.02

              	
                Governing
                  Law

              	 	
                
                  61

                

              
	 	 	 	 
	
                Section
                  12.03

              	
                Notices

              	 	
                
                  61

                

              
	 	 	 	 
	
                Section
                  12.04

              	
                Severability
                  of Provisions

              	 	
                62

              
	 	 	 	 
	
                Section
                  12.05

              	
                Schedules
                  and Exhibits

              	 	
                
                  62

                

              
	 	 	 	 
	
                Section
                  12.06

              	
                General
                  Interpretive Principles

              	 	
                
                  62

                

              
	 	 	 	 
	
                Section
                  12.07

              	
                Waivers
                  and Amendments, Noncontractual Remedies; Preservation of
                  Remedies

              	 	
                
                  63

                

              
	 	 	 	 
	
                Section
                  12.08

              	
                Captions

              	 	
                
                  63

                

              
	 	 	 	 
	
                Section
                  12.09

              	
                Counterparts;
                  Effectiveness

              	 	
                
                  63

                

              
	
                 

              	 	 	 
	
                Section
                  12.10

              	
                Entire
                  Agreement; Amendment

              	 	
                
                  63

                

              
	 	 	 	 
	
                Section
                  12.11

              	
                Further
                  Assurances

              	 	
                
                  63

                

              
	
                 

              	 	 	 
	
                Section
                  12.12

              	
                Intention
                  of the Seller

              	 	
                64

              
	 	 	 	 
	
                Section
                  12.13

              	
                Guaranty
                  of Purchaser’s Obligations

              	 	
                64

              


      

       

    

    
      
        
        

      

      
        iii

        
          

        

      

      
        
        

      

    

     

    SCHEDULES

    

      
        	
                A.

              	 	
                Mortgage
                  Loan Schedule

              
	
                B.

              	 	
                Content
                  of Mortgage File

              
	
                B-1
                  

              	 	
                Purchaser’s
                  Mortgage File

              
	
                C.

              	 	
                Cendant
                  Guidelines and Restrictions

              


      

    

     

    EXHIBITS

     

    
      	
              Exhibit
                2.05

            	 	
              Form
                of Assignment, Assumption and Recognition Agreement

            
	
              Exhibit
                5.03(a)

            	 	
              Report
                P-4DL

            
	
              Exhibit
                5.03(b)

            	 	
              Report
                S-5L2

            
	
              Exhibit
                5.03(c)

            	 	
              Form
                of Notice of Foreclosure

            
	
              Exhibit
                5.04-1

            	 	
              Form
                of Collection Account Certification

            
	
              Exhibit
                5.04-2

            	 	
              Form
                of Collection Account Letter Agreement

            
	
              Exhibit
                5.06-1

            	 	
              Form
                of Escrow Account Certification

            
	
              Exhibit
                5.06-2

            	 	
              Form
                of Escrow Account Letter Agreement

            
	
              Exhibit
                6.02(a)

            	 	
              Report
                P-139—Monthly
                Statement of Mortgage Accounts

            
	
              Exhibit
                6.02(b)

            	 	
              Report
                S-50Y — Private Pool Detail Report

            
	
              Exhibit
                6.02(c)

            	 	
              Report
                S-213 — Summary of Curtailments Made Remittance Report

            
	
              Exhibit
                6.02(d)

            	 	
              Report
                S-214 — Summary of Paid in Full Remittance Report

            
	
              Exhibit
                6.02(e)

            	 	
              Report
                S-215 — Consolidation of Remittance Report

            
	
              Exhibit
                6.02(f)

            	 	
              Report
                T-62C — Monthly Accounting Report

            
	
              Exhibit
                6.02(g)

            	 	
              Report
                T-62E — Liquidation Report

            
	
              Exhibit
                8.01

            	 	
              Report
                P-195 Delinquency Report

            
	
              Exhibit
                9

            	 	
              Form
                of Officer’s Certificate

            
	
              Exhibit
                10

            	 	
              Form
                of Warranty Bill of Sale

            
	
              Exhibit
                11

            	 	
              Form
                of Assessment of Compliance

            
	
              Exhibit
                12

            	 	
              Form
                of Back-Up SOX Certificate

            


    

     

    
      
        
        

      

      
        iv

        
          

        

      

      
        
        

      

    

     

    MORTGAGE
      LOAN FLOW PURCHASE, SALE & SERVICING AGREEMENT

     

    This
      Mortgage Loan Flow Purchase, Sale & Servicing Agreement, dated as of January
      1, 2006, is entered into between RWT Holdings, Inc., as the Purchaser
      (“Purchaser”), PHH Mortgage Corporation (formerly known as“Cendant Mortgage” and
      referred to herein as “PHH Mortgage) and Bishop’s Gate Residential Mortgage
      Trust (formerly known as Cendant Residential Mortgage Trust) (the “Trust,”
together with PHH Mortgage, the “Sellers” and individually, each a “Seller”), as
      the Sellers, and Redwood Trust, Inc., as the Guarantor
      (“Guarantor”).

     

    PRELIMINARY
      STATEMENT 

     

    1. PHH
      Mortgage is engaged in the business, inter alia,
      of
      making loans to individuals, the repayment of which is secured by a first lien
      mortgage on such individuals’ residences (each, a “Mortgage
      Loan”).
      The
      Trust is engaged in the business of purchasing such Mortgage Loans from PHH
      Mortgage and selling same to investors.

     

    2. Purchaser
      is engaged in the business, inter alia,
      of
      purchasing Mortgage Loans for its own account. 

     

    3. PHH
      Mortgage has established certain terms, conditions and loan programs, as
      described in PHH Mortgage’ s Program and Underwriting Guidelines (the
“PHH
      Guide”)
      and
      Purchaser is willing to purchase Mortgage Loans that comply with the terms
      of
      such terms, conditions and loan programs. The applicable provisions of the
      PHH
      Guide are attached hereto as Schedule C. 

     

    4. Purchaser
      and Sellers desire to establish a flow program whereby PHH Mortgage will make
      Mortgage Loans which meet the applicable provisions of the Cendant Guide, and
      Purchaser will, on a regular basis, purchase such Mortgage Loans from PHH
      Mortgage or the Trust, as applicable, provided the parties agree on the price,
      date and other conditions or considerations as set forth in this
      Agreement.

     

    5. Purchaser
      and Sellers wish to prescribe the terms and manner of purchase by the Purchaser
      and sale by the Sellers of the Mortgage Loans, and the management and servicing
      of the Mortgage Loans by PHH Mortgage, as the Servicer (the “ Servicer”), in
      this Agreement.

     

    NOW,
      THEREFORE, in consideration of the mutual agreements hereinafter set forth,
      the
      Purchaser and the Sellers agree as follows:

     

    ARTICLE
      I:

     

    DEFINITIONS

     

    Section
      1.01 Defined
      Terms.
      Whenever used in this Agreement, the following words and phrases shall have
      the
      following meaning specified in this Article:

     

    “Acceptance
      of Assignment and Assumption of Lease Agreement”: The specific agreement
      creating a first lien on and pledge of the Cooperative Shares and the
      appurtenant Proprietary Lease securing a Cooperative Loan.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    “Affiliate”:
      When used with reference to a specified Person, any Person that (i) directly
      or
      indirectly controls or is controlled by or is under common control with the
      specified Person, (ii) is an officer of, partner in or trustee of, or serves
      in
      a similar capacity with respect to, the specified person or of which the
      specified Person is an officer, partner or trustee, or with respect to which
      the
      specified Person serves in a similar capacity, or (iii) directly or indirectly
      is the beneficial owner of 10% or more of any class of equity securities of
      the
      specified Person or of which the specified person is directly or indirectly
      the
      owner of 10% or more of any class of equity securities.

     

    “Agreement”:
      This Mortgage Loan Flow Purchase, Sale & Servicing Agreement between the
      Purchaser, the Sellers and the Guarantor.

     

    “ALTA”:
      The American Land Title Association.

     

    “Appraised
      Value”: With respect to any Mortgaged Property, the lesser of: (i) 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 FNMA and FHLMC; or (ii) the purchase price paid for
      the
      related Mortgaged Property by the Mortgagor with the proceeds of the Mortgage
      Loan; provided
      that, in
      the case of a Refinanced Mortgage Loan, such value of the Mortgaged Property
      shall be based solely upon the value determined by an appraisal made for the
      originator of such Refinanced Mortgage Loan at the time of origination of such
      Refinanced Mortgage Loan by an appraiser who met the minimum requirements of
      FNMA and FHLMC.

     

    “ARM
      Loan”: An “adjustable rate” Mortgage Loan, the Note Rate of which is subject to
      periodic adjustment in accordance with the terms of the Mortgage
      Note.

     

    “Assignment”:
      An individual assignment of a Mortgage, notice of transfer or equivalent
      instrument in recordable form, sufficient under the laws of the jurisdiction
      wherein the related Mortgaged Property is located to reflect of record the
      sale
      or transfer of the Mortgage Loan.

     

    “Assignment
      of Proprietary Lease”: With respect to a Cooperative Loan, an assignment of the
      Proprietary Lease sufficient under the laws of the jurisdiction wherein the
      related Cooperative Unit is located to reflect the assignment of such
      Proprietary Lease.

     

    “Assessment
      of Compliance”: The statement as defined in Section 7.05 hereto.

     

    “Attestation
      Report”: The report as defined in Section 7.05 hereto.

     

    “Assignment
      of Recognition Agreement”: With respect to a Cooperative Loan, an assignment of
      the Recognition Agreement sufficient under the laws of the jurisdiction wherein
      the related Cooperative Unit is located to reflect the assignment of such
      Recognition Agreement.

     

    “Back-Up
      SOX Certificate”: The certificate as defined in Section 7.07
      hereto.

     

    “Bankruptcy
      Code”: The Bankruptcy Reform Act of 1978 (11 U.S.C. §§ 101-1330), as amended,
      modified, or supplemented from time to time, and any successor statute, and
      all
      rules and regulations issued or promulgated in connection
      therewith.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    “Business
      Day”: Any day other than (i) a Saturday or Sunday, or (ii) a day on which the
      Federal Reserve is closed.

     

    “Cendant
      Guide”: As defined in paragraph 3 of the Preliminary Statement to this
      Agreement.

     

    “Code”:
      The Internal Revenue Code of 1986, as amended.

     

    “Collection
      Account”: The separate trust account or accounts created and maintained pursuant
      to Section
      5.04
      which shall be entitled “PHH Mortgage Corporation, as servicer and custodian for
      the Purchaser of Mortgage Loans under the Mortgage Loan Flow Purchase, Sale
      & Servicing Agreement, dated as of January 1, 2006.”

     

    “Compliance
      Statement”: The statement as defined in Section 7.04 hereto.

     

    “Condemnation
      Proceeds”: All awards or settlements in respect of a taking of an entire
      Mortgaged Property or a part thereof by exercise of the power of eminent domain
      or condemnation.

     

    “Consent”:
      A document executed by the Cooperative Corporation (i) consenting to the sale
      of
      the Cooperative Unit to the Mortgagor and (ii) certifying that all maintenance
      charges relating to the Cooperative Unit have been paid.

     

    “Cooperative
      Corporation”: With respect to any Cooperative Loan, the cooperative apartment
      corporation that holds legal title to the related Cooperative Project and grants
      occupancy rights to units therein to stockholders through Proprietary Leases
      or
      similar arrangements.

     

    “Cooperative
      Lien Search”: A search for (a) federal tax liens, mechanics’ liens, lis pendens,
      judgments of record or otherwise against (i) the Cooperative Corporation and
      (ii) the seller of the Cooperative Unit, (b) filings of Financing Statements
      and
      (c) the deed of the Cooperative Project into the Cooperative
      Corporation.

     

    “Cooperative
      Loan”: A Mortgage Loan that is secured by a first lien on and a perfected
      security interest in Cooperative Shares and the related Proprietary Lease
      granting exclusive rights to occupy the related Cooperative Unit in the building
      owned by the related Cooperative Corporation.

     

    “Cooperative
      Project”: With respect to any Cooperative Loan, all real property and
      improvements thereto and rights therein and thereto owned by a Cooperative
      Corporation including without limitation the land, separate dwelling units
      and
      all common elements.

     

    “Cooperative
      Shares”: With respect to any Cooperative Loan, the shares of stock issued by a
      Cooperative Corporation and allocated to a Cooperative Unit and represented
      by a
      stock certificates.

     

    “Cooperative
      Unit”: With respect to any Cooperative Loan, a specific unit in a Cooperative
      Project.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    “Credit
      Documents”: Those documents, comprising part of the Mortgage File, required of
      the Mortgagor, as described in Section 2 (Specific Loan Program Guidelines)
      of
      the Cendant Guide. The Credit Documents are specified on Schedule B-3
      hereto.

     

    “Cut-off
      Date” : The first day of the month in which the respective Funding Date
      occurs.

     

    “Defective
      Mortgage Loan”: As defined in Section
      3.04(3).

     

    “Deleted
      Mortgage Loan”: A Mortgage Loan replaced or to be replaced with a Qualified
      Substitute Mortgage Loan.

     

    “Depositor”:
      With respect to any Securitization Transaction, the “depositor”, if any,
      specified by the Purchaser and identified in related transaction
      documents.

     

    “Determination
      Date”: The 15th day of each calendar month, commencing on the 15th
      day of
      the month following the Funding Date, or, if such 15th day is not a Business
      Day, the Business Day immediately preceding such 15th day.

     

    “Distribution
      Report”: In connection with any Securitization Transaction, a distribution
      report on Form 10-D required to be filed with the SEC under Regulation
      AB.

     

    “Due
      Date”: With respect to any Mortgage Loan, the day of the month on which each
      Monthly Payment is due thereon, exclusive of any days of grace.

     

    “Due
      Period”: With respect to each Remittance Date, the period commencing on the
      first day of the month immediately preceding the month of such Remittance Date
      and ending on the last day of the month immediately preceding the month of
      such
      Remittance Date.

     

    “Eligible
      Account”: One or more accounts (i) that are maintained with a depository
      institution the long-term unsecured debt obligations of which have been rated
      by
      each Rating Agency in one of its two highest rating categories at the time
      of
      any deposit therein, (ii) that are trust accounts with any depository
      institution held by the depository institution in its capacity as a corporate
      trustee, or (iii) the deposits in which are insured by the FDIC (to the limits
      established by the FDIC) and the uninsured deposits in which are otherwise
      secured such that the Purchaser has a claim with respect to the funds in such
      accounts or a perfected first security interest against any collateral securing
      such funds that is superior to claims of any other depositors or creditors
      of
      the depository institution with which such accounts are maintained. In addition,
      solely with respect to Mortgage Loans which are not part of a securitization,
      “Eligible Account” shall include any accounts that meet the standards
      established from time to time by FNMA for eligible custodial
      depositories.

     

    “Environmental
      Assessment”: A “Phase I” environmental assessment of a Mortgaged Property
      prepared by an Independent Person who regularly conducts environmental
      assessments and who has any necessary license(s) required by applicable law
      and
      has five years experience in conducting environmental assessments.

     

    “Environmental
      Conditions Precedent to Foreclosure”: As defined in Section
      5.15.

     

    “Environmental
      Laws”: All federal, state, and local statutes, laws, regulations, ordinances,
      rules, judgments, orders, decrees or other governmental restrictions relating
      to
      the environment or to emissions, discharges or releases of pollutants,
      contaminants or industrial, toxic or hazardous substances or wastes into the
      environment, including ambient air, surface water, ground water, or land, or
      otherwise relating to the manufacture, processing, distribution, use, treatment,
      storage, disposal, transport or handling of pollutants, contaminants or
      industrial, toxic or hazardous substances or wastes or the cleanup or other
      remediation thereof.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    “Escrow
      Account”: The separate trust account or accounts created and maintained pursuant
      to Section
      5.06
      which shall be entitled “PHH Mortgage Corporation, as servicer and custodian for
      the Purchaser under the Mortgage Loan Flow Purchase, Sale & Servicing
      Agreement, dated as of August 1, 2002 (as amended), and various
      mortgagors.”

     

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

     

    “Estoppel
      Letter”: A document executed by the Cooperative Corporation certifying, with
      respect to a Cooperative Unit, (i) the appurtenant Proprietary Lease will be
      in
      full force and effect as of the date of issuance thereof, (ii) the related
      Stock
      Certificate was registered in the Mortgagor’s name and the Cooperative
      Corporation has not been notified of any lien upon, pledge of, levy of execution
      on or disposition of such Stock Certificate, and (iii) the Mortgagor is not
      in
      default under the appurtenant Proprietary Lease and all charges due the
      Cooperative Corporation have been paid.

     

    “Event
      of
      Default”: Any one of the conditions or circumstances enumerated in Section
      10.01.

     

    “Exchange
      Act”: The Securities Exchange Act of 1934, as amended.

     

    “FDIC”:
      The Federal Deposit Insurance Corporation or any successor
      organization.

     

    “FHLMC”:
      The Federal Home Loan Mortgage Corporation (also known as Freddie Mac) or any
      successor organization.

     

    “FHLMC
      Servicing Guide”: The FHLMC/Freddie Mac Sellers’ and Servicers’ Guide in effect
      on and after the Funding Date.

     

    “Fidelity
      Bond”: A fidelity bond to be maintained by the Servicer pursuant to Section
      5.12.

     

    “Financing
      Statement”: A financing statement in the form of a UCC-1 filed pursuant to the
      Uniform Commercial Code to perfect a security interest in the Cooperative Shares
      and Pledge Instruments.

     

    “Financing
      Statement Change”: A financing statement in the form of a UCC-3 filed to
      continue, terminate, release, assign or amend an existing Financing
      Statement.

     

    “FNMA”:
      The Federal National Mortgage Association (also known as Fannie Mae) or any
      successor organization.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    “FNMA
      Guide”: The FNMA/Fannie Mae Selling Guide and the Servicing Guide, collectively,
      in effect on and after the Funding Date.

     

    “Funding
      Date”: Each date (up to four per month) that Purchaser purchases Mortgage Loans
      from the Sellers hereunder. 

     

    “Gross
      Margin”: With respect to each ARM Loan, the fixed percentage added to the Index
      on each Rate Adjustment Date, as specified in each related Mortgage Note and
      listed in the Mortgage Loan Schedule.

     

    “Guarantor”:
      Redwood Trust, Inc., or its successor in interest.

     

    “Independent”:
      With respect to any specified Person, such Person who: (i) does not have any
      direct financial interest or any material indirect financial interest in the
      applicable Mortgagor, the Sellers, the Purchaser, or their Affiliates; and
      (b)
      is not connected with the applicable Mortgagor, the Sellers, the Purchaser,
      or
      their respective Affiliates as an officer, employee, promoter, underwriter,
      trustee, member, partner, shareholder, director, or Person performing similar
      functions.

     

    “Index”:
      With respect to each ARM Loan, on each Rate Adjustment Date, the applicable
      rate
      index set forth on the Mortgage Loan Schedule, which shall be an index described
      on such Mortgage Loan Schedule.

     

    “Insolvency
      Proceeding”: With respect to any Person: (i) any case, action, or proceeding
      with respect to such Person before any court or other governmental authority
      relating to bankruptcy, reorganization, insolvency, liquidation, receivership,
      dissolution, winding-up, or relief of debtors; or (ii) any general assignment
      for the benefit of creditors, composition, marshaling of assets for creditors,
      or other, similar arrangement in respect of the creditors generally of such
      Person or any substantial portion of such Person’s creditors; in any case
      undertaken under federal, state or foreign law, including the Bankruptcy
      Code.

     

    “Insurance
      Proceeds”: Proceeds of any Primary Insurance Policy, title policy, hazard policy
      or other insurance policy covering a Mortgage Loan, if any, to the extent such
      proceeds 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
      Servicer would follow in servicing mortgage loans held for its own or its
      Affiliates’ account or managed by it for third-party institutional
      investors.

     

    “Legal
      Documents”: Those documents, comprising part of the Mortgage File, set forth in
      Schedule B-1 of this Agreement.

     

    “Lender-Paid
      Mortgage Insurance Rate”: With respect to any Mortgage Loan, the Lender-Paid
      Mortgage Insurance Rate for any “lender-paid” Primary Insurance Policy shall be
      a per annum rate equal to the percentage indicated on the Mortgage Loan
      Schedule.

     

    “Liquidation
      Proceeds”: Amounts, other than Insurance Proceeds and Condemnation Proceeds,
      received by the Servicer in connection with the liquidation of a defaulted
      Mortgage Loan through trustee’s sale, foreclosure sale or otherwise, other than
      amounts received following the acquisition of an REO Property in accordance
      with
      the provisions hereof.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    “Loan-to-Value
      Ratio” or “LTV”: With respect to any Mortgage Loan, the original principal
      balance of such Mortgage Loan divided by the lesser of the Appraised Value
      of
      the related Mortgaged Property or the purchase price. The Loan-to-Value Ratio
      of
      any Additional Collateral Mortgage Loan (as defined in Exhibit 11 hereto) shall
      be calculated by reducing the principal balance of such Additional Collateral
      Mortgage Loan by the amount of Additional Collateral (as defined in Exhibit
      11
      hereto) with respect to such Mortgage Loan.

     

    “MAI
      Appraiser”: With respect to any real property, a member of the American
      Institute of Real Estate Appraisers with a minimum of 5 years of experience
      appraising real property of a type similar to the real property being appraised
      and located in the same geographical area as the real property being
      appraised.

     

    “Master
      Servicer”: With respect to any Securitization Transaction, the “master
      servicer”, if any, identified by the Purchaser and identified in related
      transaction documents.

     

    “Maximum
      Rate”: With respect to each ARM Loan, the rate per annum set forth in the
      related Mortgage Note as the maximum Note Rate thereunder. The Maximum Rate
      as
      to each ARM Loan is set forth on the related Mortgage Loan
      Schedule.

     

    “Minimum
      Rate”: With respect to each ARM Loan, the rate per annum set forth in the
      related Mortgage Note as the minimum Note Rate thereunder. The Minimum Rate
      as
      to each ARM Loan is set forth on the related Mortgage Loan
      Schedule.

     

    “Monthly
      Advance”: The aggregate amount of the advances made by the Servicer on any
      Remittance Date pursuant to and as more fully described in Section
      6.03.

     

    “Monthly
      Payment”: The scheduled monthly payment of principal and interest on a Mortgage
      Loan which is payable by a Mortgagor under the related Mortgage
      Note.

     

    “Monthly
      Period”: Initially, the period from the Funding Date through to and including
      the first Record Date during the term hereof, and, thereafter, the period
      commencing on the day after each Record Date during the term hereof and ending
      on the next succeeding Record Date during the term hereof (or, if earlier,
      the
      date on which this Agreement terminates).

     

    “Mortgage”:
      The mortgage, deed of trust or other instrument securing a Mortgage Note, which
      creates a first lien on either (i) with respect to a Mortgage Loan other than
      a
      Cooperative Loan, an unsubordinated estate in fee simple in real property or
      (ii) with respect to a Cooperative Loan, the Proprietary Lease and related
      Cooperative Shares, which in either case secures the Mortgage Note.

     

    “Mortgaged
      Property”: With respect to a Mortgage Loan, the underlying real property
      securing repayment of a Mortgage Note, consisting of a fee simple
      estate.

     

    “Mortgage
      File”: With respect to a particular Mortgage Loan, those origination and
      servicing documents, escrow documents, and other documents as are specified
      on
      Schedule B-1 to this Agreement and any additional documents required to be
      added
      to the Mortgage File pursuant to the related Purchase Price and Terms
      Letter.

     

    “Mortgage
      Loan”: Each individual mortgage loan or Cooperative Loan (including all
      documents included in the Mortgage File evidencing the same, all Monthly
      Payments, Principal Prepayments, Insurance Proceeds, Condemnation Proceeds,
      Liquidation Proceeds, and other proceeds relating thereto, and any and all
      rights, benefits, proceeds and obligations arising therefrom or in connection
      therewith) which is the subject of this Agreement and the related Purchase
      Price
      and Terms Letter. The Mortgage Loans subject to this Agreement shall be
      identified on Mortgage Loan Schedules prepared in connection with each Funding
      Date.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    “Mortgage
      Loan Schedule”: The list of Mortgage Loans identified on each Funding Date that
      sets forth the information with respect to each Mortgage Loan that is specified
      on Schedule A hereto (as amended from time to time to reflect the addition
      of
      any Qualified Substitute Mortgage Loans). A Mortgage Loan Schedule will be
      prepared for each Funding Date.

     

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

     

    “Mortgagor”:
      The obligor on a Mortgage Note.

     

    “Negative
      Amortization”: That portion of interest accrued at the Note Rate in any month
      which exceeds the Monthly Payment on the related Mortgage Loan for such month
      and which, pursuant to the terms of the Mortgage Note, is added to the principal
      balance of the Mortgage Loan. 

     

    “Non-recoverable
      Advance”: As of any date of determination, any Monthly Advance or Servicing
      Advance previously made or any Monthly Advance or Servicing Advance proposed
      to
      be made in respect of a Mortgage Loan which, in the good faith judgment of
      the
      Servicer and in accordance with the servicing standard set forth in Section
      5.01,
      will not or, in the case of a proposed advance, would not be ultimately
      recoverable pursuant to Section 5.05 (3) or (4) hereof. The determination by
      the
      Servicer that it has made a Non-recoverable Advance or that any proposed advance
      would constitute a Non-recoverable Advance shall be evidenced by an Officer's
      Certificate satisfying the requirements of Section
      6.04
      hereof and delivered to the Purchaser on or before the Determination Date in
      any
      month.

     

    “Note
      Rate”: With respect to any Mortgage Loan at any time any determination thereof
      is to be made, the annual rate at which interest accrues thereon.

     

    “Offering
      Materials”: All documents, tapes, or other materials relating to the Mortgage
      Loans provided by Seller to Purchaser prior to Purchaser submitting its bid
      to
      purchase the Mortgage loans.

     

    “Officers’
      Certificate”: A certificate signed by (i) the President or a Vice President and
      (ii) the Treasurer or the Secretary or one of the Assistant Treasurers or
      Assistant Secretaries of the Servicer, and delivered by the Servicer to the
      Purchaser as required by this Agreement.

     

    “Payment
      Adjustment Date”: The date on which Monthly Payments shall be adjusted. Payment
      Adjustment Date shall occur on the date which is eleven months from the first
      payment date for the Mortgage Loan, unless otherwise specified in the Mortgage
      Note, and on each anniversary of such first Payment Adjustment Date.


     

    “Payoff”:
      With respect to any Mortgage Loan, any payment or recovery received in advance
      of the last scheduled Due Date of such Mortgage Loan, which payment or recovery
      consists of principal in an amount equal to the outstanding principal balance
      of
      such Mortgage Loan, all accrued and unpaid prepayment penalties, premiums,
      and/or interest with respect thereto, and all other unpaid sums due with respect
      to such Mortgage Loan.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    “Periodic
      Rate Cap”: With respect to each ARM Loan, the provision in each Mortgage Note
      that limits permissible increases and decreases in the Note Rate on any Rate
      Adjustment Date to not more than ‘a specified’ percentage point.

     

    “Permitted
      Investments”: Investments that mature, unless payable on demand, not later than
      the Business Day preceding the related Remittance Date; provided
      that
      such investments shall only consist of the following:

     

    (i) direct
      obligations of, or obligations fully guaranteed as to 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) repurchase
      obligations (the collateral for which is held by a third party) with respect
      to
      any security described in clause (i) above, provided that the long-term
      unsecured obligations of the party agreeing to repurchase such obligations
      are
      at the time rated by each Rating Agency in one of its two highest rating
      categories;

     

    (iii) certificates
      of deposit, time deposits and bankers’ acceptances of any bank or trust company
      incorporated under the laws of the United States or any state, provided that
      the
      long-term unsecured debt obligations of such bank or trust company (or, in
      the
      case of the principal depository institution of a depository institution holding
      company, the long-term unsecured debt obligations of the depository institution
      holding company) at the date of acquisition thereof have been rated by each
      Rating Agency in one of its two highest rating categories;

     

    (iv) commercial
      paper (having original maturities of not more than 365 days) of any corporation
      incorporated under the laws of the United States or any state thereof which
      on
      the date of acquisition has been rated by each Rating Agency in its highest
      rating category; and

     

    (v) any
      other
      demand, money market or time deposit account or obligation, or interest-bearing
      or other security or investment, acceptable to the Purchaser (such acceptance
      evidenced in writing);

     

    provided further
      that
“Permitted Investments” shall not include any instrument described hereunder
      which evidences either the right to receive (a) only interest with respect
      to
      the obligations underlying such instrument or (b) both principal and interest
      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.

     

    “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.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    “Pledge
      Instruments”: With respect to each Cooperative Loan, the Stock Power, the
      Assignment of the Proprietary Lease, the Assignment of the Mortgage Note and
      the
      Acceptance of Assignment and Assumption of Lease Agreement.

     

    “Prepaid
      Monthly Payment”: Any Monthly Payment received prior to its scheduled Due Date
      and which is intended to be applied to a Mortgage Loan on its scheduled Due
      Date.

     

    “Primary
      Insurance Policy”: Each primary policy of mortgage insurance in effect with
      respect to a Mortgage Loan and as so indicated on the Mortgage Loan Schedule,
      or
      any replacement policy therefor obtained by the Servicer pursuant to Section
      5.08.

     

    “Principal
      Prepayment”: Any payment or other recovery of principal on a Mortgage Loan
      (including a Payoff), other than a Monthly Payment or a Prepaid Monthly Payment
      which is received in advance of its scheduled Due Date, including any prepayment
      penalty or premium thereon, which is not accompanied by an amount of interest
      representing scheduled interest due on any date or dates in any month or months
      subsequent to the month of prepayment and which is intended to reduce the
      principal balance of the Mortgage Loan.

     

    “Proprietary
      Lease”: The lease on a Cooperative Unit evidencing the possessory interest of
      the owner of the Cooperative Shares in such Cooperative Unit.

     

    “Purchase
      Price and Terms Letter”: With respect to any pool of Mortgage Loans purchased
      and sold on any Funding Date, the letter agreement between the Purchaser and
      Seller (including any exhibits, schedules and attachments thereto), setting
      forth the terms and conditions of such transaction and describing the Mortgage
      Loans to be purchased by the Purchaser on such Funding Date. A Purchase Price
      and Terms Letter may relate to more than one pool of Mortgage Loans to be
      purchased on one or more Funding Dates hereunder.

     

    “Purchaser”:
      RWT Holdings, Inc., or its successor in interest or any successor under this
      Agreement appointed as herein provided.

     

    “Purchaser’s
      Account”: The account of the Purchaser at a bank or other entity most recently
      designated in a written notice by the Purchaser to the Sellers as the
“Purchaser’s Account.”

     

    “Purchase
      Price”: As to each Mortgage Loan to be sold hereunder, the price set forth in
      the Mortgage Loan Schedule and the related Purchase Price and Terms
      Letter.

     

    “Qualified
      Mortgage Insurer”: American Guaranty Corporation, Commonwealth Mortgage
      Assurance Company, General Electric Mortgage Insurance Companies, Mortgage
      Guaranty Insurance Corporation, PMI Mortgage Insurance Company, Republic
      Mortgage Insurance Company or United Guaranty Residential Insurance
      Corporation.

     

    “Qualified
      Substitute Mortgage Loan”: A Mortgage Loan substituted by a Seller for a Deleted
      Mortgage Loan which must, on the date of such substitution, (i) have an
      outstanding principal balance, after deduction of all scheduled payments due
      and
      received in the month of substitution (or in the case of a substitution of
      more
      than one mortgage loan for a Deleted Mortgage Loan, an aggregate principal
      balance), not in excess of the Unpaid Principal Balance of the Deleted Mortgage
      Loan and not less than ninety percent (90%) of the Unpaid Principal Balance
      of
      the Deleted Mortgage Loan (the amount of any shortfall to be distributed by
      the
      applicable Seller to the Purchaser in the month of substitution), (ii) have
      a
      remaining term to maturity not greater than (and not more than one year less
      than) that of the Deleted Mortgage Loan, (iii) have a Note Rate not less than
      (and not more than one percentage point greater than) the Note Rate of the
      Deleted Mortgage Loan, (iv) with respect to each ARM Loan, have a Minimum Rate
      not less than that of the Deleted Mortgage Loan, (v) with respect to each ARM
      Loan, have a Maximum Rate not less than that of the Deleted Mortgage Loan and
      not more than two (2) percentage points above that of the Deleted Mortgage
      Loan,
      (vi) with respect to each Adjustable Rate Mortgage Loan, have a Gross Margin
      not
      less than that of the Deleted Mortgage Loan, (vii) with respect to each ARM
      Loan, have a Periodic Rate Cap equal to that of the Deleted Mortgage Loan,
      (viii) have a Loan-to-Value Ratio at the time of substitution equal to or less
      than the Loan-to-Value Ratio of the Deleted Mortgage Loan at the time of
      substitution, (ix) with respect to each ARM Loan, have the same Rate Adjustment
      Date as that of the Deleted Mortgage Loan, (x) with respect to each ARM Loan,
      have an Index as provided herein for all ARM Loans subject to this Agreement,
      (xi) comply as of the date of substitution with each representation and warranty
      set forth in Sections
      3.01,
      3.02 and 3.03, (xii) be in the same credit grade category as the Deleted
      Mortgage Loan and (xiii) have the same prepayment penalty term.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    “Rate
      Adjustment Date”: With respect to each ARM Loan, the date on which the Note Rate
      adjusts.

     

    “Rating
      Agency”: Standard & Poor’s Ratings Services, a division of The McGraw-Hill
      Companies, Moody’s Investors Service, Inc., and Fitch, Inc. 

     

    “Recognition
      Agreement”: An agreement among a Cooperative Corporation, a lender and a
      Mortgagor with respect to a Cooperative Loan whereby such parties (i)
      acknowledge that such lender may make, or intends to make, such Cooperative
      Loan, and (ii) make certain agreements with respect to such Cooperative
      Loan.

     

    “Record
      Date”: The close of business of the last Business Day of the month immediately
      preceding the month of the related Remittance Date.

     

    “Refinanced
      Mortgage Loan”: A Mortgage Loan that was made to a Mortgagor who owned the
      Mortgaged Property prior to the origination of such Mortgage Loan and the
      proceeds of which were used in whole or part to satisfy an existing
      mortgage.

     

    “Regulation
      AB”: Subpart 229.1100—Asset-Backed Securities (Regulation AB), 17 C.F.R.
      Sections 229.1100-1123, as such may be amended from time to time, and subject
      to
      such clarification and interpretation as have been provided by the SEC in the
      adopting release (Asset-Backed Securities, Securities Act Release No. 33-8518,
      70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005) or by the staff of the SEC, or as
      may
      be provided by the SEC or its staff from time to time.

     

    “REMIC”:
      A “real estate mortgage investment conduit” within the meaning of Section 860D
      of the Internal Revenue Code or any similar tax vehicle providing for the
      pooling of assets (such as a Financial Asset Security Investment
      Trust).

     

    “Remittance
      Date”: The 18th
      day of
      each calendar month, commencing on the 18th
      day of
      the month following the Funding Date, or, if such 18th
      day
      is
      not a Business Day, then the next Business Day immediately preceding such
      18th
      day.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    “Remittance
      Rate”: With respect to each Mortgage Loan, the related Note Rate minus the
      Servicing Fee Rate.

     

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

     

    “REO
      Disposition Proceeds”: All amounts received with respect to any REO
      Disposition.

     

    “REO
      Property”: A Mortgaged Property acquired by the Servicer on behalf of the
      Purchaser as described in Section
      5.13.

     

    “Repurchase
      Price”: As to (a) any Defective Mortgage Loan required to be repurchased
      hereunder with respect to which a breach occurred or (b) any Mortgage Loan
      required to be repurchased pursuant to Section
      3.04
      and/or Section
      7.02, an
      amount equal to the Unpaid Principal Balance of such Mortgage Loan at the time
      of repurchase multiplied by the Purchase Price; plus
      (2)
      interest on such Mortgage Loan at the applicable Note Rate from the last date
      through which interest has been paid and distributed to the Purchaser hereunder
      to the date of repurchase; minus
      (3)
      any
      amounts received in respect of such Defective Mortgage Loan which are being
      held
      in the Collection Account for future remittance.

     

    “Scheduled
      Principal Balance”: With respect to any Mortgage Loan, (i) the outstanding
      principal balance as of the Funding Date after application of principal payments
      due on or before such date whether or not received, minus (ii) all amounts
      previously remitted to the Purchaser with respect to such Mortgage Loan
      representing (a) payments or other recoveries of principal, or (b) advances
      of
      principal made pursuant to Section
      6.03.

     

    “SEC”:
      The United States Securities and Exchange Commission.

     

    “Securities
      Act”: The Securities Act of 1933, as amended.

     

    “Securitization
      Transaction”: Any transaction involving either (1) a sale or other transfer of
      some or all of the Mortgage Loans directly or indirectly to an issuing entity
      in
      connection with an issuance of publicly offered or privately placed, rated
      or
      unrated mortgage-backed securities or (2) an issuance of publicly offered or
      privately placed, rated or unrated securities, the payments on which are
      determined primarily by reference to one or more portfolios of residential
      mortgage loans consisting, in whole or in part, of some or all of the Mortgage
      Loans.

     

    “Securitization
      Trust”: With respect to a Securitization Transaction, the “trust”, if any,
      specified by the Purchaser and identified in the related transaction
      documents.

     

    “Sellers”:
      PHH Mortgage Corporation, a New Jersey corporation and Bishop’s Gate Residential
      Mortgage Trust (formerly known as Cendant Residential Mortgage Trust), a
      Delaware business trust, or their successors in interest or any successor under
      this Agreement appointed as herein provided.

     

    “Servicer”:
      PHH Mortgage Corporation, a New Jersey corporation.

     

    “Servicer’s
      Mortgage File”: The documents pertaining to a particular Mortgage Loan which are
      specified on Exhibit
      B-2
      attached
      hereto and any additional documents required to be included or added to the
      “Servicer’s Mortgage File” pursuant to this Agreement.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    “Servicing
      Advances”: All “out of pocket” costs and expenses that are customary, reasonable
      and necessary which are incurred by the Servicer in the performance of its
      servicing obligations hereunder, including (without duplication) (i) reasonable
      attorneys’ fees and (ii) the cost of (a) the preservation, restoration and
      protection of the Mortgaged Property, (b) any enforcement or judicial
      proceedings, including foreclosures, (c) the servicing, management and
      liquidation of any Specially Serviced Mortgaged Loans and/or any REO Property,
      and (d) compliance with the Servicer’s obligations under Section
      5.08.

     

    “Servicing
      Event”: Any of the following events with respect to any Mortgage Loan: (i) any
      Monthly Payment being more than 60 days delinquent; (ii) any filing of an
      Insolvency Proceeding by or on behalf of the related Mortgagor, any consent
      by
      or on behalf of the related Mortgagor to the filing of an Insolvency Proceeding
      against such Mortgagor, or any admission by or on behalf of such Mortgagor
      of
      its inability to pay such Person’s debts generally as the same become due; (iii)
      any filing of an Insolvency Proceeding against the related Mortgagor that
      remains undismissed or unstayed for a period of 60 days after the filing
      thereof; (iv) any issuance of any attachment or execution against, or any
      appointment of a conservator, receiver or liquidator with respect to, all or
      substantially all of the assets of the related Mortgagor or with respect to
      any
      Mortgaged Property; (v) any receipt by the Servicer of notice of the foreclosure
      or proposed foreclosure of any other lien on the related Mortgaged Property;
      (vi) any proposal of a material modification (as reasonably determined by the
      Seller) to such Mortgage Loan due to a default or imminent default under such
      Mortgage Loan; or (vii) in the reasonable judgment of the Servicer, the
      occurrence, or likely occurrence within 60 days, of a payment default with
      respect to such Mortgage Loan that is likely to remain uncured by the related
      Mortgagor within 60 days thereafter.

     

    “Servicing
      Fee”: The annual fee, payable monthly to the Servicer out of the interest
      portion of the Monthly Payment actually received on each Mortgage Loan. The
      Servicing Fee with respect to each Mortgage Loan for any calendar month (or
      a
      portion thereof) shall be 1/12 of the product of (i) the Scheduled Principal
      Balance of the Mortgage Loan and (ii) the Servicing Fee Rate applicable to
      such
      Mortgage Loan.

     

    “Servicing
      Fee Rate”: (i) with respect to any ARM Loan, 0.375% per annum; provided
      that,
      prior to the first Rate Adjustment Date with respect to any such Mortgage Loan,
      such rate may be, at the Servicer’s option, not less than 0.25% per annum; and
      (ii) with respect to any Mortgage Loan other than an ARM Loan, 0.25% per annum.
      

     

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

     

    “Specially
      Serviced Mortgage Loan”: A Mortgage Loan as to which a Servicing Event has
      occurred and is continuing.

     

    “Stock
      Certificate”: With respect to a Cooperative Loan, the certificates evidencing
      ownership of the Cooperative Shares issued by the Cooperative
      Corporation.

     

    “Stock
      Power”: With respect to a Cooperative Loan, an assignment of the Stock
      Certificate or an assignment of the Cooperative Shares issued by the Cooperative
      Corporation.

     

    
      
        
        

      

      
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    “Trust”:
      Bishop’s Gate Residential Mortgage Trust.

     

    “Uniform
      Commercial Code”: The Uniform Commercial Code as in effect on the date hereof in
      the State of New York; provided that if by reason of mandatory provisions of
      law, the perfection or the effect of perfection or non-perfection of the
      security interest in any collateral is governed by the Uniform Commercial Code
      as in effect in a jurisdiction other than New York, “Uniform Commercial Code”
shall mean the Uniform Commercial Code as in effect in such other jurisdiction
      for purposes of the provisions hereof relating to such perfection or effect
      of
      perfection or non-perfection.

     

    “Unpaid
      Principal Balance”: With respect to any Mortgage Loan, at any time, the actual
      outstanding principal balance then payable by the Mortgagor under the terms
      of
      the related Mortgage Note including any cumulative Negative
      Amortization.

     

    “Warranty
      Bill of Sale”: A warranty bill of sale with respect to the Mortgage Loans
      purchased on a Funding Date in the form annexed hereto as Exhibit
      10.

     

    ARTICLE
      II:

     

    SALE
      AND CONVEYANCE OF MORTGAGE LOANS;

    POSSESSION
      OF MORTGAGE FILES; BOOKS AND RECORDS;

    DELIVERY
      OF MORTGAGE LOAN DOCUMENTS

     

    Section
      2.01 Sale
      and Conveyance of Mortgage Loans.

     

    Seller
      agrees to sell and Purchaser agrees to purchase, from time to time, those
      certain Mortgage Loans identified in a Mortgage Loan Schedule, at the price
      and
      on the terms set forth herein and in the related Purchase Price and Terms
      Letter. Purchaser, on any Funding Date, shall be obligated to purchase only
      such
      Mortgage Loans set forth in the applicable Mortgage Loan Schedule, subject
      to
      the terms and conditions of this Agreement and the related Purchase Price and
      Terms Letter. 

     

    Purchaser
      will purchase Mortgage Loan(s) from Seller, up to four (4) times per month
      on
      such Funding Dates as may be agreed upon by Purchaser and Seller. The closing
      shall, at Purchaser’s option be either: by telephone, confirmed by letter or
      wire as the parties shall agree; or conducted in person at such place, as the
      parties shall agree. On the Funding Date and subject to the terms and conditions
      of this Agreement, each Seller will sell, transfer, assign, set over and convey
      to the Purchaser, without recourse except as set forth in this Agreement, and
      the Purchaser will purchase, all of the right, title and interest of the
      applicable Seller in and to the Mortgage Loans being conveyed by it hereunder,
      as identified on the Mortgage Loan Schedule. 

     

    Examination
      of the Mortgage Files may be made by Purchaser or its designee as follows.
      No
      later than 5 Business Days prior to the Funding Date, Seller will deliver to
      Purchaser or its custodian, Legal Documents required pursuant to Schedule B-1.
      Within 30 days following each funding date , Seller shall make the Credit
      Documents available to Purchaser upon Purchaser’s request for review, at
      Seller’s place of business and during reasonable business hours. If Purchaser
      makes such examination and identifies any Mortgage Loans that do not conform
      to
      the Cendant Guide, such Mortgage Loans will be deleted from the Mortgage Loan
      Schedule at Purchaser’s discretion. Purchaser may, at its option and without
      notice to Seller, purchase all or part of the Mortgage Loans without conducting
      any partial or complete examination. The fact that Purchaser has conducted
      or
      has failed to conduct any partial or complete examination of the Mortgage Loan
      files shall not affect Purchaser’s rights to demand repurchase, substitution or
      other relief as provided herein.

     

    
      
        
        

      

      
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    On
      the
      Funding Date and in accordance with the terms herein, Purchaser will pay to
      Seller, by wire transfer of immediately available funds, the Purchase Price,
      together with interest, if any, accrued from the Cut-off Date through the day
      immediately preceding the Funding Date, according to the instructions to be
      provided, respectively, by PHH Mortgage and the Trust. Seller, simultaneously
      with the payment of the Purchase Price, shall execute and deliver to Purchaser
      a
      Warranty Bill of Sale with respect to the Mortgage Loans in the form annexed
      hereto as Exhibit
      10.

     

    Purchaser
      shall be entitled to all scheduled principal due after the Cut-off Date, all
      other recoveries of principal collected after the Cut-off Date and all payments
      of interest on the Mortgage Loans (minus that portion of any such payment which
      is allocable to the period prior to the Cut-off Date). Notwithstanding the
      foregoing, on the first Remittance Date after the Funding Date the Purchaser
      shall be entitled to receive the interest accrued from the Cut-off Date through
      the day immediately preceding the Funding Date. The principal balance of each
      Mortgage Loan as of the Cut-off Date is determined after application of payments
      of principal due on or before the Cut-off Date whether or not collected.
      Therefore, payments of scheduled principal and interest prepaid for a due date
      beyond the Cut-off Date shall not be
      applied to the principal balance as of the Cut-off Date. Such prepaid amounts
      shall be the property of Purchaser. Seller shall hold any such prepaid amounts
      for the benefit of Purchaser for subsequent remittance by Seller to Purchaser.
      All scheduled payments of principal due on or before the Cut-off Date and
      collected by Seller after the Cut-off Date shall belong to Seller.

     

    Section
      2.02 Possession
      of Mortgage Files.

     

    Upon
      the
      sale of any Mortgage Loan, the ownership of such Mortgage Loan, including the
      Mortgage Note, the Mortgage, the contents of the related Mortgage File and
      all
      rights, benefits, payments, proceeds and obligations arising therefrom or in
      connection therewith, shall then be vested in the Purchaser, and the ownership
      of all records and documents with respect to such Mortgage Loan prepared by
      or
      which come into the possession of the Seller shall immediately vest in the
      Purchaser and, to the extent retained by the Seller, shall be retained and
      maintained, in trust, by the Seller at the will of the Purchaser in a custodial
      capacity only. The contents of such Mortgage File not delivered to the Purchaser
      are and shall be held in trust by the Seller for the benefit of the Purchaser
      as
      the owner thereof and the Sellers’ possession of the contents of each Mortgage
      File so retained is at the will of the Purchaser for the sole purpose of
      servicing the related Mortgage Loan, and such retention and possession by the
      Seller is in a custodial capacity only. Mortgage Files shall be maintained
      separately from the other books and records of the Seller. Each Seller shall
      release from its custody of the contents of any Mortgage File only in accordance
      with written instructions from the Purchaser, except where such release is
      required as incidental to the Servicer ’s servicing of the Mortgage Loans or is
      in connection with a repurchase or substitution of any such Mortgage Loan
      pursuant to Section
      3.04.

     

    Any
      documents released to a Seller or the Servicer in connection with the
      foreclosure or servicing of any Mortgage Loan shall be held by such Person
      in
      trust for the benefit of the Purchaser in accordance with this Section
      2.02.
      Such Person shall return to the Purchaser such documents when such Person’s need
      therefor in connection with such foreclosure or servicing no longer exists
      (unless sooner requested by the Purchaser); provided
      that, if
      such Mortgage Loan is liquidated, then, upon the delivery by a Seller or the
      Servicer to the Purchaser of a request for the release of such documents and
      a
      certificate certifying as to such liquidation, the Purchaser shall promptly
      release and, to the extent necessary, deliver to such Person such
      documents.

     

    
      
        
        

      

      
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    Section
      2.03 Books
      and Records.

     

    The
      sale
      of each of its Mortgage Loans shall be reflected on the applicable Seller’s
      balance sheet and other financial statements as a sale of assets by the
      applicable Seller. Each Seller shall be responsible for maintaining, and shall
      maintain, a complete set of books and records for the Mortgage Loans it conveyed
      to the Purchaser which shall be clearly marked to reflect the sale of each
      Mortgage Loan to the Purchaser and the ownership of each Mortgage Loan by the
      Purchaser.

     

    Section
      2.04 Defective
      Documents; Delivery of Mortgage Loan Documents.

     

    If,
      subsequent to the related Funding Date, the Purchaser or either Seller finds
      any
      document or documents constituting a part of a Mortgage File to be defective
      or
      missing in any material respect (in this Section 2.04, a “Defect”), the party
      discovering such Defect shall promptly so notify the other parties. If the
      Defect pertains to the Mortgage Note or the Mortgage, then the applicable Seller
      shall have a period of 45 days within which to correct or cure any such defect
      after the earlier of such Seller’s discovery of same or such Seller being
      notified of same. If such Defect can ultimately be cured but is not reasonably
      expected to be cured within such 45 day period, such Seller shall have such
      additional time as is reasonably determined by the Purchaser to cure or correct
      such Defect provided that such Seller has commenced curing or correcting such
      Defect and is diligently pursuing same. If the Defect pertains to any other
      document constituting a part of a Mortgage File, then such Seller shall have
      a
      period of 90 days within which to correct or cure any such Defect after the
      earlier of such Seller’s discovery of same or such Seller being notified of
      same. If such Defect can ultimately be cured but is not reasonably expected
      to
      be cured within the 90 day period, then such Seller shall have such additional
      time as is reasonably determined by the Purchaser to cure or correct such Defect
      provided such Seller has commenced curing or correcting such Defect and is
      diligently pursuing same. PHH Mortgage hereby covenants and agrees that, if
      any
      material Defect cannot be corrected or cured, the related Mortgage Loan shall
      automatically constitute, upon the expiration of the applicable cure period
      described above and without any further action by any other party, a Defective
      Mortgage Loan, whereupon PHH Mortgage shall repurchase such Mortgage Loan by
      paying to the Purchaser the Repurchase Price therefor in accordance with
Section
      3.04(3)
      and (4).

     

    The
      applicable Seller will, with respect to each Mortgage Loan to be purchased
      by
      the Purchaser, deliver and release to the Purchaser the Legal Documents as
      set forth in Section 2.01. If the applicable Seller cannot deliver an original
      Mortgage with evidence of recording thereon, original assumption, modification
      and substitution agreements with evidence of recording thereon or an original
      intervening assignment with evidence of recording thereon within the applicable
      time periods, then such Seller shall promptly deliver to the Purchaser such
      original Mortgages and original intervening assignments with evidence of
      recording indicated thereon upon receipt thereof from the public recording
      official, except in cases where the original Mortgage or original intervening
      assignments are retained permanently by the recording office, in which case,
      such Seller shall deliver a copy of such Mortgage or intervening assignment,
      as
      the case may be, certified to be a true and complete copy of the recorded
      original thereof. If the applicable Seller cannot deliver the original security
      instrument or if an original intervening assignment has been lost, then the
      applicable Seller will deliver a copy of such security instrument or intervening
      assignment, certified by the local public recording official. If the original
      title policy has been lost, the applicable Seller will deliver a duplicate
      original title policy. 

     

    
      
        
        

      

      
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    If
      the
      original Mortgage was not delivered pursuant to the preceding paragraph, then
      the applicable Seller shall use its best efforts to promptly secure the delivery
      of such originals and shall cause such originals to be delivered to the
      Purchaser promptly upon receipt thereof. Notwithstanding the foregoing, if
      the
      original Mortgage, original assumption, modification, and substitution
      agreements, the original of any intervening assignment or the original policy
      of
      title insurance is not so delivered to the Purchaser within 180 days
      following the Funding Date, then, upon written notice by the Purchaser to PHH
      Mortgage, the Purchaser may, in its sole discretion, then elect (by providing
      written notice to PHH Mortgage) to treat such Mortgage Loan as a Defective
      Mortgage Loan, whereupon PHH Mortgage shall repurchase such Mortgage Loan by
      paying to the Purchaser the Repurchase Price therefor in accordance with
Section
      3.04(3)
      and (4) or substitute a Qualified Substitute Mortgage Loan as therein provided.
      It is understood that from time to time certain local recorder offices become
      backlogged with document volume. It is agreed that the Seller will provide
      an
      Officer’s Certificate to document that the Seller has performed all necessary
      tasks to insure delivery of the required documentation within 180 days and
      the
      delay beyond 180 is caused by the backlog. If the delay exceeds 360 days,
      regardless of the backlog the Purchaser may elect to collect the documents
      with
      its own resources with the reasonable cost and expense to be borne by the
      Seller. The fact that the Purchaser has conducted or failed to conduct any
      partial or complete examination of the Mortgage Files shall not affect its
      right
      to demand repurchase or any other remedies provided in this
      Agreement.

     

    At
      the
      Purchaser’s request, the Assignments shall be promptly recorded in the name of
      the Purchaser or in the name of a Person designated by the Purchaser in all
      appropriate public offices for real property records. If any such Assignment
      is
      lost or returned unrecorded because of a defect therein, then the applicable
      Seller shall promptly prepare a substitute Assignment to cure such defect and
      thereafter cause each such Assignment to be duly recorded. All recording fees
      related to such a one-time recordation of the Assignments to or by a Seller
      shall be paid by the applicable Seller.

     

    Section
      2.05 Transfer
      of Mortgage Loans.

     

    Subject
      to the provisions of this Section
      2.05,
      the Purchaser shall have the right, without the consent of the Sellers, at
      any
      time and from time to time, to assign any of the Mortgage Loans and all or
      any
      part of its interest under this Agreement and designate any person to exercise
      any rights of the Purchaser hereunder, and the assignees or designees shall
      accede to the rights and obligations hereunder of the Purchaser with respect
      to
      such Mortgage Loans. The Sellers recognize that the Mortgage Loans may be
      divided into “packages” for resale (“Mortgage Loan Packages”). 

     

    All
      of
      the provisions of this Agreement shall inure to the benefit of the Purchaser
      and
      any such assignees or designees. All references to the Purchaser shall be deemed
      to include its assignees or designees. Utilizing resources reasonably available
      to the Seller without incurring any cost except the Seller’s overhead and
      employees’ salaries, the applicable Seller shall cooperate in any such
      assignment of the Mortgage Loans and this Agreement; provided
      that the
      Purchaser shall bear all costs associated with any such assignment of the
      Mortgage Loans and this Agreement other than such Seller’s overhead or employees
’ salaries. 

     

    
      
        
        

      

      
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    The
      Servicer and the Purchaser acknowledge that the Servicer shall continue to
      remit
      payments to the Purchaser on the Remittance Date after the transfer of the
      Mortgage Loans, unless the Servicer was notified in writing of the new record
      owner of the Mortgage Loans prior to the immediately preceding Record Date,
      in
      which case, the Servicer shall remit to the new record owner (or trustee or
      master servicer, as the case may be) of the Mortgage Loans.

     

    The
      Servicer and Purchaser agree that in no event will the Servicer be required
      to
      remit funds or send remittance reports to more than four (4) Persons (not
      including the Servicer or any Affiliate or transferee thereof) at any given
      time
      with respect to any Mortgage Loans sold on a particular Funding
      Date.

     

    Any
      prospective assignees of the Purchaser who have entered into a commitment to
      purchase any of the Mortgage Loans may review and underwrite the Servicer’s
      servicing and origination operations, upon reasonable prior notice to the
      Servicer, and the Servicer shall cooperate with such review and underwriting
      to
      the extent such prospective assignees request information or documents that
      are
      reasonably available and can be produced without unreasonable expense or effort.
      The Servicer shall make the Mortgage Files related to the Mortgage Loans held
      by
      the Servicer available at the Servicer’s principal operations center for review
      by any such prospective assignees during normal business hours upon reasonable
      prior notice to the Servicer (in no event less than 5 Business Days prior
      notice). The Servicer may, in its sole discretion, require that such prospective
      assignees sign a confidentiality agreement with respect to such information
      disclosed to the prospective assignee which is not available to the public
      at
      large and a release agreement with respect to its activities on the Servicer’s
      premises.

     

    The
      Servicer shall keep at its servicing office books and records in which, subject
      to such reasonable regulations as it may prescribe, the Servicer shall note
      transfers of Mortgage Loans. The Purchaser may, subject to the terms of this
      Agreement, sell and transfer, in whole or in part, any or all of the Mortgage
      Loans; provided
      that no
      such sale and transfer shall be binding upon the Servicer unless such transferee
      shall agree in writing to an Assignment, Assumption and Recognition Agreement,
      in substantially the form of Exhibit
      2.05
      attached
      hereto, and an executed copy of such Assignment, Assumption and Recognition
      Agreement shall have been delivered to the Servicer. The Servicer shall evidence
      its acknowledgment of any transfers of the Mortgage Loans to any assignees
      of
      the Purchaser by executing such Assignment, Assumption and Recognition
      Agreement. The Servicer shall mark its books and records to reflect the
      ownership of the Mortgage Loans by any such assignees, and the previous
      Purchaser shall be released from its obligations hereunder accruing after the
      date of transfer to the extent such obligations relate to Mortgage Loans sold
      by
      the Purchaser. This Agreement shall be binding upon and inure to the benefit
      of
      the Purchaser and the Servicer and their permitted successors, assignees and
      designees.

     

    ARTICLE
      III:

     

    REPRESENTATIONS,
      WARRANTIES AND COVENANTS OF THE SELLER; 

    REPURCHASE
      AND SUBSTITUTION; REVIEW OF MORTGAGE LOANS

     

    Section
      3.01 Representations
      and Warranties of each Seller.

     

    Each
      Seller, as to itself, represents, warrants and covenants to the Purchaser that
      as of each Funding Date or as of such date specifically provided
      herein:

     

    
      
        
        

      

      
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    (1) Due
      Organization.
      The
      Seller is an entity duly organized, validly existing and in good standing under
      the laws of its jurisdiction of organization, and has all licenses necessary
      to
      carry on its business now being conducted and is licensed, qualified and in
      good
      standing under the laws of each state where a Mortgaged Property is located
      or
      is otherwise exempt under applicable law from such qualification or is otherwise
      not required under applicable law to effect such qualification; no demand for
      such qualification has been made upon the Seller by any state having
      jurisdiction and in any event the Seller is or will be in compliance with the
      laws of any such state to the extent necessary to enforce each Mortgage Loan
      and
      with respect to PHH Mortgage, service each Mortgage Loan in accordance with
      the
      terms of this Agreement. 

     

    (2) Due
      Authority.
      The
      Seller had the full power and authority and legal right to originate the
      Mortgage Loans that it originated, if any, and to acquire the Mortgage Loans
      that it acquired. The Seller has the full power and authority to hold each
      Mortgage Loan, to sell each Mortgage Loan and 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, constitutes a legal, valid and binding obligation of the Seller,
      enforceable against it in accordance with its terms, subject to applicable
      bankruptcy, reorganization, receivership, conservatorship, insolvency,
      moratorium and other laws relating to or affecting creditors’ rights generally
      or the rights of creditors of banks and to the general principles of equity
      (whether such enforceability is considered in a proceeding in equity or at
      law).


     

    (3) No
      Conflict.
      The
      execution and delivery of this Agreement, the acquisition or origination, as
      applicable, of the Mortgage Loans by the Seller, the sale of the Mortgage Loans,
      the consummation of the transactions contemplated hereby, or the fulfillment
      of
      or compliance with the terms and conditions of this Agreement, will not conflict
      with or result in a breach of any of the terms, conditions or provisions of
      the
      Seller’s organizational documents and bylaws or any legal restriction or any
      agreement or instrument to which the Seller is now a party or by which it is
      bound, or constitute a default or result in an acceleration under any of the
      foregoing, or result in the violation of any law, rule, regulation, order,
      judgment or decree to which the Seller or its property is subject, or impair
      the
      ability of the Purchaser to realize on the Mortgage Loans;

     

    (4) Ability
      to Perform.
      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;

     

    (5) No
      Material Default.
      Neither
      the Seller nor any of its Affiliates is in material default under any agreement,
      contract, instrument or indenture of any nature whatsoever to which the Seller
      or any of its Affiliates is a party or by which it (or any of its assets) is
      bound, which default would have a material adverse effect on the ability of
      the
      Seller to perform under this Agreement, nor, to the best of the Seller’s
      knowledge, has any event occurred which, with notice, lapse of time or both,
      would constitute a default under any such agreement, contract, instrument or
      indenture and have a material adverse effect on the ability of the Seller to
      perform its obligations under this Agreement;

     

    
      
        
        

      

      
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    (6) Financial
      Statements.
      PHH
      Mortgage has delivered to the Purchaser financial statements as to its fiscal
      year ended December 31,2004. Except
      as
      has previously been disclosed to the Purchaser in writing: (a) such financial
      statements fairly present the results of operations and changes in financial
      position for such period and the financial position at the end of such period
      of
      PHH Mortgage and its subsidiaries; and (b) such financial statements are true,
      correct and complete as of their respective dates and have been prepared in
      accordance with generally accepted accounting principles consistently applied
      throughout the periods involved, except as set forth in the notes thereto.
      The
      Trust has delivered to the Purchaser financial statements dated as of December
      31, 2004 (the “Trust Financials”) and such Trust Financials fairly present the
      results of operations and changes in financial position for such period and
      the
      financial position at the end of such period of the Trust. Except as has
      previously been disclosed to the Purchaser in writing, there has been no change
      in such Trust Financials since their date and the Trust is not aware of any
      errors or omissions therein;

     

    (7) No
      Change in Business.
      There
      has been no change in the business, operations, financial condition, properties
      or assets of the applicable Seller since (i) in the case of PHH Mortgage, the
      date of its financial statements and (ii) in the case of the Trust, the date
      of
      delivery of the Trust Financials, that would have a material adverse effect
      on
      the ability of the applicable Seller to perform its obligations under this
      Agreement;

     

    (8) No
      Litigation Pending.
      There
      is no action, suit, proceeding or investigation pending or, to the best of
      the
      Seller’s knowledge, threatened, against the Seller, which, either in any one
      instance or in the aggregate, if determined adversely to the Seller would
      adversely affect the sale of the Mortgage Loans to the Purchaser or the
      execution, delivery or enforceability of this Agreement or result in any
      material liability of the Seller, or draw into question the validity of this
      Agreement, or have a material adverse effect on the financial condition of
      the
      Seller;

     

    (9) No
      Consent Required.
      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, the delivery of the Mortgage
      Files
      to the Purchaser, the sale of the Mortgage Loans to the Purchaser or the
      consummation of the transactions contemplated by this Agreement or, if required,
      such approval has been obtained prior to the Funding Date;

     

    (10) Ordinary
      Course of Business.
      The
      consummation of the transactions contemplated by this Agreement is 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 in effect in any applicable jurisdiction;

     

    (11) No
      Broker.
      The
      Seller has not dealt with any broker or agent or anyone else who might be
      entitled to a fee or commission in connection with this transaction;
      and

     

    (12) No
      Untrue Information.
      Neither
      this Agreement nor any statement, report or other agreement, document or
      instrument furnished or to be furnished pursuant to this Agreement contains
      or
      will contain any materially untrue statement of fact or omits or will omit
      to
      state a fact necessary to make the statements contained therein not
      misleading. 

     

    
      
        
        

      

      
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    (13) Non-solicitation.
      The
      Seller agrees that it shall not solicit any Mortgagors (in writing or otherwise)
      to refinance any of the Mortgage Loans; provided
      that
      mass advertising or mailings (such as placing advertisements on television,
      on
      radio, in magazines or in newspapers or including messages in billing
      statements) that are not exclusively directed towards the Mortgagors shall
      not
      constitute solicitation and shall not violate this covenant;

     

    Section
      3.02 Representations
      and Warranties of the Servicer.

     

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

     

    (1) Ability
      to Service.
      The
      Servicer is an approved seller/servicer for FNMA and FHLMC in good standing
      and
      is a mortgagee approved by the Secretary of Housing and Urban Development
      pursuant to Section 203 of the National Housing Act, with facilities, procedures
      and experienced personnel necessary for the servicing of mortgage loans of
      the
      same type as the Mortgage Loans. No event has occurred that would make the
      Servicer unable to comply with FNMA or FHLMC eligibility requirements or that
      would require notification to either FNMA or FHLMC;

     

    (2) No
      Litigation Pending.
      There
      is no action, suit, proceeding or investigation pending or, to the best of
      the
      Servicer’s knowledge, threatened, against the Servicer which, either in any one
      instance or in the aggregate, if determined adversely to the Servicer would
      adversely affect the ability of the Servicer to service the Mortgage Loans
      hereunder in accordance with the terms hereof or have a material adverse effect
      on the financial condition of the Servicer; and

     

    (3) Collection
      Practices.
      The
      collection practices used by the Servicer with respect to each Mortgage Note
      and
      Mortgage have been in all respects legal, proper and prudent in the mortgage
      servicing business. 

     

    (4) Non-solicitation.
      The
      Servicer agrees that it shall not solicit any Mortgagors (in writing or
      otherwise) to refinance any of the Mortgage Loans; provided
      that
      mass advertising or mailings (such as placing advertisements on television,
      on
      radio, in magazines or in newspapers or including messages in billing
      statements) that are not exclusively directed towards the Mortgagors shall
      not
      constitute solicitation and shall not violate this covenant;

     

    Section
      3.03 Representations
      and Warranties as to Individual Mortgage Loans.

     

    With
      respect to each Mortgage Loan, the applicable Seller hereby makes the following
      representations and warranties to the Purchaser on which the Purchaser
      specifically relies in purchasing such Mortgage Loan. Such representations
      and
      warranties speak as of the Funding Date unless otherwise indicated, but shall
      survive any subsequent transfer, assignment or conveyance of such Mortgage
      Loans:

     

    (1) Mortgage
      Loan as Described.
      Such
      Mortgage Loan complies with the terms and conditions set forth herein, and
      all
      of the information set forth with respect thereto on the Mortgage Loan Schedule
      is true and correct in all material respects;

     

    (2) Complete
      Mortgage Files.
      The
      instruments and documents specified in Section
      2.02 with
      respect to such Mortgage Loan have been delivered to the Purchaser in compliance
      with the requirements of Article
      II. The
      Seller is in possession of a Mortgage File respecting such Mortgage Loan, except
      for such documents as have been previously delivered to the
      Purchaser;

     

    
      
        
        

      

      
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    (3) Owner
      of Record.
      The
      Mortgage relating to such Mortgage Loan has been duly recorded in the
      appropriate recording office, and the applicable Seller or Servicer is the
      owner
      of record of such Mortgage Loan and the indebtedness evidenced by the related
      Mortgage Note;

     

    (4) Payments
      Current.
      All
      payments required to be made up to and including the Funding Date for such
      Mortgage Loan under the terms of the Mortgage Note have been made, such that
      such Mortgage Loan is not delinquent 30 days or more on the Funding Date.
      Unless otherwise disclosed in the Offering Materials or the Mortgage Loan
      Schedule, there has been no delinquency, exclusive of any period of grace,
      in
      any payment by the Mortgagor thereunder during the twelve months preceding
      the
      Funding Date; and, if the Mortgage Loan is a Cooperative Loan, no foreclosure
      action or private or public sale under the Uniform Commercial Code has ever
      been
      threatened or commenced with respect to the Cooperative Loan;

     

    (5) No
      Outstanding Charges.
      There
      are no delinquent taxes, insurance premiums, assessments, including assessments
      payable in future installments, or other outstanding charges affecting the
      Mortgaged Property related to such Mortgage Loan;

     

    (6) Original
      Terms Unmodified.
      The
      terms of the Mortgage Note and the Mortgage related to such Mortgage Loan (and
      the Proprietary Lease and the Pledge Instruments with respect to each
      Cooperative Loan,) have not been impaired, waived, altered or modified in any
      material respect, except as specifically set forth in the related Mortgage
      Loan
      Schedule;

     

    (7) No
      Defenses.
      The
      Mortgage Note and the Mortgage related to such Mortgage Loan (and the Acceptance
      of Assignment and Assumption of Lease Agreement related to each Cooperative
      Loan) are not subject to any right of rescission, set-off or defense, including
      the defense of usury, nor will the operation of any of the terms of such
      Mortgage Note and such Mortgage, or the exercise of any right thereunder, render
      such Mortgage unenforceable, in whole or in part, or subject to any right of
      rescission, set-off or defense, including the defense of usury and no such
      right
      of rescission, set-off or defense has been asserted with respect thereto;


     

    (8) Hazard
      Insurance.
      (a) All
      buildings upon the Mortgaged Property related to such Mortgage Loan are insured
      by an insurer acceptable to FNMA or FHLMC against loss by fire, hazards of
      extended coverage and such other hazards as are customary in the area where
      such
      Mortgaged Property is located, pursuant to insurance policies conforming to
      the
      requirements of either Section
      5.10 or
Section
      5.11.
      All such insurance policies (collectively, the “hazard insurance policy”)
      contain a standard mortgagee clause naming the originator of such Mortgage
      Loan,
      its successors and assigns, as mortgagee. Such policies are the valid and
      binding obligations of the insurer, and all premiums thereon due to date have
      been paid. The related Mortgage obligates the Mortgagor thereunder to maintain
      all such insurance at such Mortgagor’s cost and expense, and on such Mortgagor’s
      failure to do so, authorizes the holder of such Mortgage to maintain such
      insurance at such Mortgagor’s cost and expense and to seek reimbursement
      therefor from such Mortgagor; or (b) in the case of a condominium or unit in
      a
      planned unit development (“PUD”) project that is not covered by an individual
      policy, the condominium or PUD project is covered by a “master” or “blanket”
policy and there exists and is in the Servicer’s Mortgage File a certificate of
      insurance showing that the individual unit that secures the first mortgage
      is
      covered under such policy. The insurance policy contains a standard mortgagee
      clause naming the originator of such Mortgage Loan (and its successors and
      assigns), as insured mortgagee. Such policies are the valid and binding
      obligations of the insurer, and all premiums thereon have been paid. The
      insurance policy provides for advance notice to the Seller or Servicer if the
      policy is canceled or not renewed, or if any other change that adversely affects
      the Seller’s interests is made; the certificate includes the types and amounts
      of coverage provided, describes any endorsements that are part of the “master”
policy and would be acceptable pursuant to the FNMA Guide;

     

    
      
        
        

      

      
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    (9) Compliance
      With Applicable Laws.
      All
      requirements of any federal, state or local law (including usury, truth in
      lending, real estate settlement procedures, consumer credit protection, equal
      credit opportunity or disclosure laws) applicable to the origination and
      servicing of such Mortgage Loan have been complied with in all material
      respects;

     

    (10) No
      Satisfaction of Mortgage.
      The
      Mortgage related to such Mortgage Loan has not been satisfied, canceled or
      subordinated, in whole or in part, or rescinded, and the related Mortgaged
      Property has not been released from the lien of such Mortgage, in whole or
      in
      part, nor has any instrument been executed that would effect any such release,
      cancellation, subordination or rescission;

     

    (11) Valid
      First Lien.
      The
      Mortgage including any Negative Amortization, related to such Mortgage Loan
      is a
      valid, subsisting and enforceable perfected first lien on the related Mortgaged
      Property, including all improvements on the related Mortgaged Property, which
      Mortgaged Property is free and clear of any encumbrances and liens having
      priority over the first lien of the Mortgage subject only to (a) the lien of
      current real estate taxes and special assessments not yet due and payable,
      (b)
      covenants, conditions and restrictions, rights of way, easements and other
      matters of the public record as of the date of recording of such Mortgage which
      are acceptable to mortgage lending institutions generally, are referred to
      in
      the lender’s title insurance policy and do not adversely affect the market value
      or intended use of the related Mortgaged Property, and (c) other matters to
      which like properties are commonly subject which do not individually or in
      the
      aggregate materially interfere with the benefits of the security intended to
      be
      provided by such Mortgage or the use, enjoyment, or market value of the related
      Mortgaged Property; with respect to each Cooperative Loan, each Acceptance
      of
      Assignment and Assumption of Lease Agreement creates a valid, enforceable and
      subsisting first security interest in the collateral securing the related
      Mortgage Note subject only to (a) the lien of the related Cooperative
      Corporation for unpaid assessments representing the obligor's pro rata share
      of
      the Cooperative Corporation’s payments for its blanket mortgage, current and
      future real property taxes, insurance premiums, maintenance fees and other
      assessments to which like collateral is commonly subject and (b) other matters
      to which like collateral is commonly subject which do not materially interfere
      with the benefits of the security intended to be provided by the Acceptance
      of
      Assignment and Assumption of Lease Agreement; provided, however, that the
      appurtenant Proprietary Lease may be subordinated or otherwise subject to the
      lien of any mortgage on the Cooperative Project;

     

    (12) Validity
      of Documents.
      The
      Mortgage Note and the Mortgage related to such Mortgage Loan (and the Acceptance
      of Assignment and Assumption of Lease Agreement with respect to each Cooperative
      Loan) 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
      general equitable principles (regardless whether such enforcement is considered
      in a proceeding in equity or at law);

     

    
      
        
        

      

      
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    (13) Valid
      Execution of Documents.
      All
      parties to the Mortgage Note and the Mortgage related to such Mortgage Loan
      had
      legal capacity to enter into such Mortgage Loan and to execute and deliver
      the
      related Mortgage Note and the related Mortgage and the related Mortgage Note
      and
      the related Mortgage have been duly and properly executed by such parties;
      with
      respect to each Cooperative Loan, all parties to the Mortgage Note and the
      Mortgage Loan had legal capacity to execute and deliver the Mortgage Note,
      the
      Acceptance of Assignment and Assumption of Lease Agreement, the Proprietary
      Lease, the Stock Power, the Recognition Agreement, the Financing Statement
      and
      the Assignment of Proprietary Lease and such documents have been duly and
      properly executed by such parties; each Stock Power (i) has all signatures
      guaranteed or (ii) if all signatures are not guaranteed, then such Cooperative
      Shares will be transferred by the stock transfer agent of the Cooperative
      Corporation if the Seller undertakes to convert the ownership of the collateral
      securing the related Cooperative Loan;

     

    (14) Full
      Disbursement of Proceeds.
      Such
      Mortgage Loan has closed and the proceeds of such Mortgage Loan have been fully
      disbursed prior to the Funding Date; provided
      that,
      with respect to any Mortgage Loan originated within the previous 120 days,
      alterations and repairs with respect to the related Mortgaged Property or any
      part thereof may have required an escrow of funds in an amount sufficient to
      pay
      for all outstanding work within 120 days of the origination of such Mortgage
      Loan, and, if so, such funds are held in escrow by the Seller, a title company
      or other escrow agent;

     

    (15) Ownership.
      The
      Mortgage Note and the Mortgage related to such Mortgage Loan have not been
      assigned, pledged or otherwise transferred by the applicable Seller, in whole
      or
      in part, and the Seller has good and marketable title thereto, and the Seller
      is
      the sole owner thereof (and with respect to any Cooperative Loan, the sole
      owner
      of the related Acceptance of Assignment and Assumption of Lease Agreement)and
      has full right and authority to transfer and sell such Mortgage Loan, and is
      transferring such Mortgage Loan to the Purchaser free and clear of any
      encumbrance, equity, lien, pledge, charge, claim or security
      interest;

     

    (16) Doing
      Business.
      All
      parties that have had any interest in such 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
      licensing requirements of the laws of the state wherein the related Mortgaged
      Property is located;

     

    (17) Title
      Insurance.
      (a)
      Such Mortgage Loan is covered by an ALTA lender’s title insurance policy or
      short form title policy acceptable to FNMA and FHLMC (or, in jurisdictions
      where
      ALTA policies are not generally approved for use, a lender’s title insurance
      policy acceptable to FNMA and FHLMC), issued by a title insurer acceptable
      to
      FNMA and FHLMC and qualified to do business in the jurisdiction where the
      related Mortgaged Property is located, insuring (subject to the exceptions
      contained in clauses (11)(a) and (b) above) the Seller or Servicer, its
      successors and assigns as to the first priority lien of the related Mortgage
      in
      the original principal amount of such Mortgage Loan including any Negative
      Amortization and in the case of ARM Loans, against any loss by reason of the
      invalidity or unenforceability of the lien resulting from the provisions of
      such
      Mortgage providing for adjustment to the applicable Note Rate and Monthly
      Payment. Additionally, either such lender’s title insurance policy affirmatively
      insures that there is ingress and egress to and from the Mortgaged Property
      or
      the Seller warrants that there is ingress and egress to and from the Mortgaged
      Property and the lender’ s title insurance policy affirmatively insures against
      encroachments by or upon the related Mortgaged Property or any interest therein
      or any other adverse circumstance that either is disclosed or would have been
      disclosed by an accurate survey. The Seller or Servicer is the sole insured
      of
      such lender’s title insurance policy, and such lender’s title insurance policy
      is in full force and effect and will be in full force and effect upon the
      consummation of the transactions contemplated by this Agreement and will inure
      to the benefit of the Purchaser without any further act. No claims have been
      made under such lender’s title insurance policy, neither the Seller, nor to the
      best of Seller’s knowledge, any prior holder of the related Mortgage has done,
      by act or omission, anything that would impair the coverage of such lender’s
      insurance policy, and there is no act, omission, condition, or information
      that
      would impair the coverage of such lender’s insurance policy; (b) The mortgage
      title insurance policy covering each unit mortgage in a condominium or PUD
      project related to such Mortgage Loan meets all requirements of FNMA and
      FHLMC;

     

    
      
        
        

      

      
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    (18) No
      Defaults.
      (a)
      There is no default, breach, violation or event of acceleration existing under
      the Mortgage, the Mortgage Note, or any other agreements, documents, or
      instruments related to such Mortgage Loan; (b) to the best of the Seller’s
      knowledge, there is no event that, with the lapse of time, the giving of notice,
      or both, would constitute such a default, breach, violation or event of
      acceleration; (c) the Mortgagor(s) with respect to such Mortgage Loan is (1)
      not
      in default under any other Mortgage Loan or (2) the subject of an Insolvency
      Proceeding; (d) no event of acceleration has previously occurred, and no notice
      of default has been sent, with respect to such Mortgage Loan; (e) in no event
      has the Seller waived any of its rights or remedies in respect of any default,
      breach, violation or event of acceleration under the Mortgage, the Mortgage
      Note, or any other agreements, documents, or instruments related to such
      Mortgage Loan; and (f) with respect to each Cooperative Loan, there is no
      default in complying with the terms of the Mortgage Note, the Acceptance of
      Assignment and Assumption of Lease Agreement and the Proprietary Lease and
      all
      maintenance charges and assessments (including assessments payable in the future
      installments, which previously became due and owing) have been paid, and the
      Seller has the right under the terms of the Mortgage Note, Acceptance of
      Assignment and Assumption of Lease Agreement and Recognition Agreement to pay
      any maintenance charges or assessments owed by the Mortgagor;

     

    (19) No
      Mechanics’ Liens.
      As of
      the date of origination of such Mortgage Loan, there were no mechanics’ or
      similar liens, except such liens as are expressly insured against by a title
      insurance policy, 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;

     

    (20) Location
      of Improvements; No Encroachments.
      As of
      the date of origination of such Mortgage Loan, to the best of the Seller’s
      knowledge, all improvements that were considered in determining the Appraised
      Value of the related Mortgaged Property lay wholly within the boundaries and
      building restriction lines of such Mortgaged Property, and no improvements
      on
      adjoining properties encroach upon such Mortgaged Property except as permitted
      under the terms of the FNMA Guide and the FHLMC Selling Guide; to the best
      of
      the Seller’s knowledge, no improvement located on or part of any Mortgaged
      Property is in violation of any applicable zoning law or regulation, and all
      inspections, licenses and certificates required to be made or issued with
      respect to all occupied portions of such Mortgaged Property, and with respect
      to
      the use and occupancy of the same, including certificates of occupancy, have
      been made or obtained from the appropriate authorities;

     

    
      
        
        

      

      
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    (21) Origination;
      Payment Terms.
      Principal payments on such Mortgage Loan commenced or will commence no more
      than
      60 days after funds were disbursed in connection with such Mortgage Loan.
      If the interest rate on the related Mortgage Note is adjustable, the adjustment
      is based on the Index set forth on the related Mortgage Loan Schedule. The
      related Mortgage Note is payable on the first day of each month in arrears,
      in
      accordance with the payment terms described on the related Mortgage Loan
      Schedule. With respect to any Mortgage Loan subject to Negative Amortization
      the
      Monthly Payments are sufficient during the period following each Payment
      Adjustment Date to fully amortize the outstanding principal balance as of the
      first day of such period (including any Negative Amortization) over the original
      term thereof in accordance with the terms and conditions set forth in the
      Mortgage Note ;

     

    (22) Due
      On
      Sale.
      Except
      as noted otherwise on the Mortgage Loan Schedule, the related Mortgage contains
      the usual and customary “due-on-sale” clause or other similar provision for the
      acceleration of the payment of the Unpaid Principal Balance of such Mortgage
      Loan if the related Mortgaged Property or any interest therein is sold or
      transferred without the prior consent of the mortgagee thereunder;

     

    (23) Prepayment
      Penalty.
      Except
      as noted otherwise on the Mortgage Loan Schedule, such Mortgage Loan is not
      subject to any Prepayment Penalty;

     

    (24) Mortgaged
      Property Undamaged; No Condemnation.
      To the
      best of the Seller’s knowledge, as of the Funding Date, the related Mortgaged
      Property (and with respect to a Cooperative Loan, the related Cooperative
      Project and Cooperative Unit) is free of material damage and waste and there
      is
      no proceeding pending for the total or partial condemnation
      thereof;

     

    (25) Customary
      Provisions.
      The
      related Mortgage contains customary and enforceable provisions that render
      the
      rights and remedies of the holder thereof adequate for the realization against
      the related Mortgaged Property of the benefits of the security provided thereby,
      including, (a) in the case of a Mortgage designated as a deed of trust, by
      trustee’s sale, and (b) in the case of a Mortgage, otherwise by judicial
      foreclosure;

     

    (26) Conformance
      With Underwriting Standards.
      Such
      Mortgage Loan was underwritten in accordance with the Cendant Guide;


     

    (27) Appraisal.
      The
      Mortgage File contains an appraisal of the related Mortgaged Property on forms
      and with riders approved by FNMA and FHLMC, signed prior to the approval of
      such
      Mortgage Loan application by an appraiser, duly appointed by the originator
      of
      such Mortgage Loan, whose compensation is not affected by the approval or
      disapproval of such Mortgage Loan and who met the minimum qualifications of
      FNMA
      and FHLMC for appraisers. Each appraisal of the Mortgage Loan was made in
      accordance with the relevant provisions of the Financial Institutions Reform,
      Recovery, and Enforcement Act of 1989;

     

    (28) Deeds
      of Trust.
      If the
      related Mortgage constitutes a deed of trust, then a trustee, duly qualified
      under applicable law to serve as such, has been properly designated and
      currently so serves and is named in such Mortgage, and no fees or expenses
      are
      or will become payable by the Purchaser to the trustee under such deed of trust,
      except in connection with a trustee’s sale after default by the related
      Mortgagor;

     

    
      
        
        

      

      
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    (29) LTV;
      Primary Mortgage Insurance Policy.
      Except
      with respect to Additional Collateral Mortgage Loans (as defined in Exhibit
      11
      hereto), if such Mortgage Loan had a Loan-to-Value Ratio of more than 80% at
      origination, such Mortgage Loan is and will be subject to a Primary Insurance
      Policy issued by a Qualified Mortgage Insurer, which insures the Seller or
      Servicer, its successors and assigns and insureds in the amount set forth on
      the
      Mortgage Loan Schedule; provided that, a Primary Mortgage Insurance Policy
      will
      not be required for any Cooperative Loan if (i) the proceeds of such Cooperative
      Loan were used to purchase a Cooperative Unit at the “insider's price” when the
      building was converted to a Cooperative Corporation, (ii) the value of the
      Cooperative Unit for purposes of establishing the LTV at origination was such
      “insider's price”, (iii) the principal amount of the Cooperative Loan at
      origination was not more than 100% of such “insider's price” and (iv) the LTV at
      origination, as calculated using the Appraised Value at origination, was less
      than or equal to 80%. All provisions of such Primary Insurance Policy have
      been
      and are being complied with, such policy is in full force and effect, and all
      premiums due thereunder have been paid. Any related Mortgage subject to any
      such
      Primary Insurance Policy (other than a “lender-paid” Primary Insurance Policy)
      obligates the Mortgagor thereunder to maintain such insurance for the time
      period required by law and to pay all premiums and charges in connection
      therewith. As of the date of origination, the Loan-to-Value Ratio of such
      Mortgage Loan is as specified in the applicable Mortgage Loan
      Schedule;

     

    (30) Occupancy.
      As of
      the date of origination of such Mortgage Loan, to the best of the Seller’s
      knowledge, the related Mortgaged Property (or with respect to a Cooperative
      Loan, the related Cooperative Unit) is lawfully occupied under applicable law
      and all inspections, licenses and certificates required to be made or issued
      with respect to all occupied portions of the Mortgaged Property (or with respect
      to a Cooperative Loan, the related Cooperative Unit) and, with respect to the
      use and occupancy of the same, including but not limited to certificates of
      occupancy, have been made or obtained from the appropriate
      authorities;

     

    (31) Supervision
      and Examination by a Federal or State Authority.
      Each
      Mortgage Loan either was (a) closed in the name of the PHH Mortgage, or (b)
      closed in the name of another entity that is either a savings and loan
      association, a savings bank, a commercial bank, credit union, insurance company
      or an institution which is supervised and examined by a federal or state
      authority, or a mortgagee approved by the Secretary of Housing and Urban
      Development pursuant to Sections 203 and 211 of the National Housing Act (a
“HUD
      Approved Mortgagee”), and was so at the time such Mortgage Loan was originated
      (PHH Mortgage or such other entity, the “Originator”) or (c) closed in the name
      of a loan broker under the circumstances described in the following sentence.
      If
      such Mortgage Loan was originated through a loan broker, such Mortgage Loan
      met
      the Originator’s underwriting criteria at the time of origination and was
      originated in accordance with the Originator’s policies and procedures and the
      Originator acquired such Mortgage Loan from the loan broker contemporaneously
      with the origination thereof. The Mortgage Loans that the Trust is selling
      to
      Purchaser were originated by or on behalf of PHH Mortgage and subsequently
      assigned to the Trust.

     

    (32) Adjustments.
      All of
      the terms of the related Mortgage Note pertaining to interest rate adjustments,
      payment adjustments and adjustments of the outstanding principal balance, if
      any, are enforceable and such adjustments will not affect the priority of the
      lien of the related Mortgage; all such adjustments on such Mortgage Loan have
      been made properly and in accordance with the provisions of such Mortgage
      Loan;

     

    
      
        
        

      

      
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    (33) Insolvency
      Proceedings; Soldiers’ and Sailors’ Relief Act.
      To the
      best of the Seller’s knowledge, the related Mortgagor (1) is not the subject of
      any Insolvency Proceeding; and (2) has not requested any relief allowed to
      such
      Mortgagor under the Soldiers’ and Sailors’ Civil Relief Act of
      1940;

     

    (34) FNMA/FHLMC
      Documents.
      Such
      Mortgage Loan was closed on standard FNMA or FHLMC documents or on such
      documents otherwise acceptable to them;

     

    (35) Unless
      otherwise disclosed in the Offering Materials or the Mortgage Loan Schedule,
      no
      Mortgage Loan contains provisions pursuant to which Monthly Payments are (a)
      paid or partially paid with funds deposited in any separate account established
      by the Seller, the Mortgagor, or anyone on behalf of the Mortgagor, (b) paid
      by
      any source other than the Mortgagor or (c) 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;

     

    (36) The
      Assignment is in recordable form and is acceptable for recording under the
      laws
      of the jurisdiction in which the Mortgaged Property is located;

     

    (37) Any
      principal advances made to the Mortgagor prior to the Cut-off Date have been
      consolidated with the outstanding principal amount secured by the Mortgage,
      and
      the secured principal amount, as consolidated, bears a single interest rate
      and
      single repayment term. The consolidated principal amount does not exceed the
      original principal amount of the Mortgage Loan plus any Negative
      Amortization;

     

    (38) Unless
      otherwise disclosed in the Offering Materials or the Mortgage Loan Schedule,
      no
      Mortgage Loan has a balloon payment feature. With respect to any Mortgage Loan
      with a balloon payment feature, the Mortgage Note is payable in Monthly Payments
      based on a thirty year amortization schedule and has a final Monthly Payment
      substantially greater than the proceeding Monthly Payment which is sufficient
      to
      amortize the remaining principal balance of the Mortgage Loan;

     

    (39) If
      the
      residential dwelling on the Mortgaged Property is a condominium unit or a unit
      in a planned unit development (other than a de minimis planned unit development)
      such condominium or planned unit development project meets the eligibility
      requirements of the Cendant Guide;

     

    (40) No
      Mortgage Loan is subject to the provisions of the Homeownership and Equity
      Protection Act of 1994;

     

    (41) Unless
      otherwise disclosed in the Offering Materials or the Mortgage Loan Schedule,
      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;

     

    (42) The
      Seller has no knowledge of any circumstances or condition with respect to the
      Mortgage, the Mortgage Property (or with respect to a Cooperative Loan, the
      Acceptance of Assignment and Assumption of Lease Agreement, the Cooperative
      Unit
      or the Cooperative Project), the Mortgagor or the Mortgagor’s credit standing
      that can reasonably be expected to cause the Mortgage Loan to be an unacceptable
      investment, cause the Mortgage Loan to become delinquent, or adversely affect
      the value of the Mortgage Loan;

     

    
      
        
        

      

      
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    (43) Interest
      on each Mortgage Loan is calculated on the basis of a 360-day year consisting
      of
      twelve 30-day months;

     

    (44) To
      the
      best of Seller’s knowledge, the Mortgaged Property is in material compliance
      with all applicable environmental laws pertaining to environmental hazards
      including, without limitation, asbestos, and neither the Seller nor, to the
      Seller’s knowledge, the related Mortgagor, has received any notice of any
      violation or potential violation of such law; 

     

    (45) Unless
      otherwise disclosed in the Offering Materials or the Mortgage Loan Schedule,
      no
      Mortgage Loan is subject to negative amortization;

     

    (46) With
      respect to each Cooperative Loan, a Cooperative Lien Search has been made by
      a
      company competent to make the same which company is acceptable to FNMA and
      qualified to do business in the jurisdiction where the Cooperative Unit is
      located; 

     

    (47) With
      respect to each Cooperative Loan, (i) the terms of the related Proprietary
      Lease
      is longer than the terms of the Cooperative Loan, (ii) there is no provision
      in
      any Proprietary Lease which requires the Mortgagor to offer for sale the
      Cooperative Shares owned by such Mortgagor first to the Cooperative Corporation,
      (iii) there is no prohibition in any Proprietary Lease against pledging the
      Cooperative Shares or assigning the Proprietary Lease and (iv) the Recognition
      Agreement is on a form of agreement published by the Aztech Document Systems,
      Inc. or includes provisions which are no less favorable to the lender than
      those
      contained in such agreement;

     

    (48) With
      respect to each Cooperative Loan, each original UCC financing statement,
      continuation statement or other governmental filing or recordation necessary
      to
      create or preserve the perfection and priority of the first priority lien and
      security interest in the Cooperative Shares and Proprietary Lease has been
      timely and properly made. Any security agreement, chattel mortgage or equivalent
      document related to the Cooperative Loan and delivered to the Mortgagor or
      its
      designee establishes in the Mortgagor a valid and subsisting perfected first
      lien on and security interest in the Mortgaged Property described therein,
      and
      the Mortgagor has full right to sell and assign the same; and

     

    (49) With
      respect to each Cooperative Loan, each Acceptance of Assignment and Assumption
      of Lease Agreement contains enforceable provisions such as to render the rights
      and remedies of the holder thereof adequate for the realization of the benefits
      of the security provided thereby. The Acceptance of Assignment and Assumption
      of
      Lease Agreement contains an enforceable provision for the acceleration of the
      payment of the unpaid principal balance of the Mortgage Note in the event the
      Cooperative Unit is transferred or sold without the consent of the holder
      thereof.

     

    (50) No
      fraud,
      error, omission, misrepresentation, or negligence with respect to a Mortgage
      Loan has taken place on the part of any person, including without limitation,
      the Mortgagor, any appraiser, any builder or developer or any other party
      involved in the origination of the Mortgage Loan. 

     

    
      
        
        

      

      
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    Section
      3.04 Repurchase
      and Substitution.

     

    (1) 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
      of
      any Mortgage File.

     

    (2) Upon
      discovery by either of the Sellers or the Purchaser of a breach of any of the
      representations and warranties contained in Sections
      3.01,
      3.02 or 3.03 that materially and adversely affects the interest of the Purchaser
      (or that materially and adversely affects the interests of the Purchaser in
      the
      related Mortgage Loan, in the case of a representation or warranty relating
      to a
      particular Mortgage Loan), the party discovering such breach shall give prompt
      written notice to the other. 

     

    (3) Unless
      permitted a greater period of time to cure as set forth in Section
      2.04,
      the applicable Seller shall have a period of 60 days from the earlier of either
      discovery by or receipt of written notice from the Purchaser to the Seller
      of
      any breach of any of the representations and warranties contained in
Sections
      3.01,
      3.02 or 3.03 that materially and adversely affects the interest of the Purchaser
      (or that materially and adversely affects the interests of the Purchaser in
      the
      related Mortgage Loan, in the case of a representation or warranty relating
      to a
      particular Mortgage Loan) (a “Defective Mortgage Loan”; provided
      that
“Defective Mortgage Loan” shall also include (a) any Mortgage Loan treated or
      designated as such in accordance with Section
      2.04 and
      (b) any Mortgage Loan regarding which the Mortgagor fails to make the first
      regularly scheduled payment of principal and interest) within which to correct
      or cure such breach. If such breach can ultimately be cured but is not
      reasonably expected to be cured within the 60-day period, then the applicable
      Seller shall have such additional time, if any, as is reasonably determined
      by
      the Purchaser to cure such breach provided that the Seller has commenced curing
      or correcting such breach and is diligently pursuing same. Each Seller hereby
      covenants and agrees with respect to each Mortgage Loan conveyed by it that,
      if
      any breach relating thereto cannot be corrected or cured within the applicable
      cure period or such additional time, if any, as is reasonably determined by
      the
      Purchaser, then such Seller shall, at the direction of the Purchaser, repurchase
      the Defective Mortgage Loan at the applicable Repurchase Price. Notwithstanding
      anything to the contrary contained herein, if the first regularly scheduled
      payment of principal and interest due under any Mortgage Loan has been
      delinquent more than 30 days, or becomes delinquent after the Funding Date
      and
      remains delinquent for a period of 30 days, the Purchaser may, by written notice
      to the applicable Seller, require that the Seller repurchase the related
      Mortgage Loan. However, if the Seller provides evidence that the delinquency
      was
      due to a servicing setup error, no repurchase shall be required. Within 10
      Business Days following the delivery of any such written notice from the
      Purchaser, the applicable Seller shall repurchase the specified Mortgage Loan
      by
      paying the Repurchase Price therefor by wire transfer of immediately available
      funds directly to the Purchaser’s Account.

     

    Notwithstanding
      the previous paragraph, the applicable Seller may, at its option and assuming
      that such Seller has a Qualified Substitute Mortgage Loan or Loans, rather
      than
      repurchase the Mortgage Loan as provided above, remove such Mortgage Loan
      (“Deleted Mortgage Loan”) and substitute in its place a Qualified Substitute
      Mortgage Loan or Loans, provided
      that in
      no event may any such substitution be made later than the second anniversary
      after the Cut-off Date. If the applicable Seller has no Qualified Substitute
      Mortgage Loan, it shall repurchase the Defective Mortgage Loan. 

     

    
      
        
        

      

      
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    As
      to any
      Deleted Mortgage Loan for which the applicable Seller substitutes a Qualified
      Substitute Mortgage Loan or Loans, the applicable Seller shall effect such
      substitution by delivering to the Purchaser or its designee for such Qualified
      Substitute Mortgage Loan or Loans the Legal Documents as are required by
Section
      2. Upon
      such substitution, such Qualified Substitute Mortgage Loan or Loans shall be
      subject to the terms of this Agreement in all respects, and the applicable
      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,
      3.02 and 3.03. 

     

    For
      any
      month in which the applicable Seller substitutes one or more Qualified
      Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the applicable
      Seller will determine the amount (if any) by which the aggregate principal
      balance of all such Qualified Substitute Mortgage Loans as of the date of
      substitution (after application of scheduled principal payments due in the
      month
      of substitution which have been received or as to which an advance has been
      made) is less than the aggregate outstanding principal balance of all such
      Deleted Mortgage Loans. The amount of such shortfall shall be paid by the
      applicable Seller on the date of such substitution) by wire transfer of
      immediately available funds directly to the Purchaser’s Account. 

     

    (4) Any
      repurchase of a Defective Mortgage Loan required hereunder shall be accomplished
      by payment of the applicable Repurchase Price within 3 Business Days of
      expiration of the applicable time period referred to above in paragraph 3.04(3)
      by wire transfer of immediately available funds directly to the Purchaser’s
      Account. It is understood and agreed that the obligations of a Seller (a) set
      forth in this Section
      3.04(3)
      to cure any breach of such Seller’s representations and warranties contained in
Sections
      3.01,
      3.02 and 3.03 or to repurchase the Defective Mortgage Loan(s) and (b) set forth
      in Section
      9.01 to
      indemnify the Purchaser in connection with any breach of a Seller’s
      representations and warranties contained in Sections
      3.01,
      3.02 and 3.03 shall constitute the sole remedies of the Purchaser respecting
      a
      breach of such representations and warranties.

     

    (5) The
      parties further agree that, in recognition of the Trust’s rights against PHH
      Mortgage with respect to the Mortgage Loans acquired by it from PHH Mortgage
      and
      conveyed to the Purchaser hereunder, the Purchaser shall have the right to
      cause
      PHH Mortgage to repurchase directly any Defective Mortgage Loan (other than
      as a
      result of a breach by the Trust of Section
      3.03 (3)
      or 3.03(15) hereof, in which case the Purchaser shall have the right to cause
      the Trust to repurchase directly the Defective Mortgage Loan) acquired hereunder
      by the Purchaser from the Trust.

     

    Section
      3.05 Certain
      Covenants of each Seller and the Servicer.

     

    Without
      incurring undue effort or any cost except the Seller’s overhead or employees ’
salaries, each Seller shall take reasonable steps to assist the Purchaser,
      if
      the Purchaser so requests by 30 days’ advance written notice to the related
      Seller or Sellers, in re-selling the Mortgage Loans in a whole loan sale or
      in
      securitizing the Mortgage Loans and selling undivided interests in such Mortgage
      Loans in a public offering or private placement or selling participating
      interests in such Mortgage Loans, which steps may include, (a) providing any
      information relating to the Mortgage Loans reasonably necessary to assist in
      the
      preparation of any disclosure documents, (b) providing information relating
      to
      delinquencies and defaults with respect to the Servicer’s servicing portfolio
      (or such portion thereof as is similar to the Mortgage Loans), (c) entering
      into
      any other servicing, custodial or other similar agreements, that are consistent
      with the provisions of this Agreement, and which contain such provisions as
      are
      customary in securitizations rated “AAA” (including a securitization involving a
      REMIC or CMO) (a “Securitization”) and (d) provide such opinions of counsel as
      are customary in such transactions, provided, however, that any opinion of
      outside counsel shall be provided at Purchaser’s expense. In connection with
      such a Securitization, the Purchaser may be required to engage a master servicer
      or trustee to determine the allocation of payments to and make remittances
      to
      the certificateholders, at the Purchaser’s sole cost and expense. In the event
      that a master servicer or trustee is requested by the Purchaser to determine
      the
      allocation of payments and to make remittances to the certificateholders, the
      Servicer agrees to service the Mortgage Loans in accordance with the reasonable
      and customary requirements of such Securitization, which may include the
      Servicer’s acting as a subservicer in a master servicing arrangement. With
      respect to the then owners of the Mortgage Loans, the Servicer shall thereafter
      deal solely with such master servicer or trustee, as the case may be with
      respect to such Mortgage Loans which are subject to the Securitization and
      shall
      not be required to deal with any other party with respect to such Mortgage
      Loans. The cost of such securitization shall be borne by the Purchaser, other
      than the Seller’s overhead or employees’ salaries.

     

    
      
        
        

      

      
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    ARTICLE
      IV:

     

    REPRESENTATIONS
      AND WARRANTIES OF THE PURCHASER

    AND
      CONDITIONS PRECEDENT TO FUNDING

     

    Section
      4.01 Representations
      and Warranties.

     

    The
      Purchaser represents, warrants and covenants to the Seller that as of each
      Funding Date or as of such date specifically provided herein:

     

    (1) Due
      Organization.
      The
      Purchaser is an entity duly organized, validly existing and in good standing
      under the laws of its jurisdiction of organization, and has all licenses
      necessary to carry on its business now being conducted and is licensed,
      qualified and in good standing under the laws of each state where a Mortgaged
      Property is located or is otherwise exempt under applicable law from such
      qualification or is otherwise not required under applicable law to effect such
      qualification; no demand for such qualification has been made upon the Purchaser
      by any state having jurisdiction and in any event the Purchaser is or will
      be in
      compliance with the laws of any such state to the extent necessary to enforce
      each Mortgage Loan. 

     

    (2) Due
      Authority.
      The
      Purchaser had the full power and authority and legal right to acquire the
      Mortgage Loans that it acquired. The Purchaser has the full power and authority
      to hold each Mortgage Loan, to sell each Mortgage Loan and to execute, deliver
      and perform, and to enter into and consummate, all transactions contemplated
      by
      this Agreement. The Purchaser 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
      Seller, constitutes a legal, valid and binding obligation of the Purchaser,
      enforceable against it in accordance with its terms, subject to applicable
      bankruptcy, reorganization, receivership, conservatorship, insolvency,
      moratorium and other laws relating to or affecting creditors’ rights generally
      or the rights of creditors of banks and to the general principles of equity
      (whether such enforceability is considered in a proceeding in equity or at
      law);

     

    
      
        
        

      

      
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    (3) No
      Conflict.
      None of
      the execution and delivery of this Agreement, the acquisition or origination,
      as
      applicable, of the Mortgage Loans by the Purchaser, the purchase of the Mortgage
      Loans, the consummation of the transactions contemplated hereby, or the
      fulfillment of or compliance with the terms and conditions of this Agreement,
      will conflict with or result in a breach of any of the terms, conditions or
      provisions of the Purchaser’s organizational documents and bylaws or any legal
      restriction or any agreement or instrument to which the Purchaser is now a
      party
      or by which it is bound, or constitute a default or result in an acceleration
      under any of the foregoing, or result in the violation of any law, rule,
      regulation, order, judgment or decree to which the Purchaser or its property
      is
      subject, or impair the ability of the Purchaser to realize on the Mortgage
      Loans, or impair the value of the Mortgage Loans;

     

    (4) Ability
      to Perform.
      The
      Purchaser 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;

     

    (5) No
      Material Default.
      The
      Purchaser is not in material default under any agreement, contract, instrument
      or indenture of any nature whatsoever to which the Purchaser is a party or
      by
      which it (or any of its assets) is bound, which default would have a material
      adverse effect on the ability of the Purchaser to perform under this Agreement,
      nor, to the best of the Purchaser’s knowledge, has any event occurred which,
      with notice, lapse of time or both would constitute a default under any such
      agreement, contract, instrument or indenture and have a material adverse effect
      on the ability of the Purchaser to perform its obligations under this
      Agreement;

     

    (6) No
      Change in Business.
      There
      has been no change in the business, operations, financial condition, properties
      or assets of the Purchaser since the date of the Purchaser’s financial
      statements that would have a material adverse effect on the ability of the
      Purchaser to perform its obligations under this Agreement; 

     

    (7) Litigation
      Pending.
      There
      is no action, suit, proceeding or investigation pending or, to the best of
      the
      Purchaser’s knowledge, threatened, against the Purchaser, which, either in any
      one instance or in the aggregate, if determined adversely to the Purchaser
      would
      adversely affect the purchase of the Mortgage Loans or the execution, delivery
      or enforceability of this Agreement or result in any material liability of
      the
      Purchaser, or draw into question the validity of this Agreement, or the Mortgage
      Loans or have a material adverse effect on the financial condition of the
      Purchaser;

     

    (8) Broker.
      The
      Purchaser has not dealt with any broker or agent or anyone else who might be
      entitled to a fee or commission in connection with this
      transaction.

     

    (9) No
      Consent Required.
      No
      consent, approval, authorization or order of any court or governmental agency
      or
      body is required for the execution, delivery and performance by the Purchaser
      of
      or compliance by the Purchaser with this Agreement, the purchase of the Mortgage
      Loans from the Seller or the consummation of the transactions contemplated
      by
      this Agreement or, if required, such approval has been obtained prior to the
      Funding Date; 

     

    (10) Ordinary
      Course of Business.
      The
      consummation of the transactions contemplated by this Agreement is in the
      ordinary course of business of the Purchaser; 

     

    (11) Non-Petition
      Agreement.
      The
      Purchaser covenants and agrees that it shall not, prior to the date which is
      one
      year and one day (or if longer, the applicable preference period then in effect)
      after the payment in full of all rated obligations of Bishop’s Gate Residential
      Mortgage Trust, acquiesce, petition or otherwise, directly or indirectly, invoke
      or cause Bishop’s Gate Residential Mortgage Trust to invoke the process of any
      governmental authority for the purpose of commencing or sustaining a case
      against Bishop’s Gate Residential Mortgage Trust under any federal or state
      bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
      assignee, trustee, custodian, sequestrator, or other similar official of
      Bishop’s Gate Residential Mortgage Trust. This covenant and agreement shall be
      binding upon the Purchaser and any assignee or transferee of the
      Purchaser;

     

    
      
        
        

      

      
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    (12) No
      Untrue Information.
      Neither
      this Agreement nor any statement, report or other agreement, document or
      instrument furnished or to be furnished pursuant to this Agreement contains
      or
      will contain any materially untrue statement of fact or omits or will omit
      to
      state a fact necessary to make the statements contained therein not misleading;
      

     

    (13) Non-solicitation.
      The
      Purchaser agrees that it shall not solicit any Mortgagors (in writing or
      otherwise) to refinance any of the Mortgage Loans; provided
      that
      mass advertising or mailings (such as placing advertisements on television,
      on
      radio, in magazines or in newspapers or including messages in billing
      statements) that are not exclusively directed towards the Mortgagors shall
      not
      constitute solicitation and shall not violate this covenant; and

     

    (14) Privacy.
      Purchaser agrees and acknowledges that as to all nonpublic personal information
      received or obtained by it with respect to any Mortgagor: (a) such information
      is and shall be held by Purchaser in accordance with all applicable law,
      including but not limited to the privacy provisions of the Gramm-Leach Bliley
      Act; (b) such information is in connection with a proposed or actual secondary
      market sale related to a transaction of the Mortgagor for purposes of 16
      C.F.R.§313.14(a)(3); and (c) Purchaser is hereby prohibited from disclosing or
      using any such information other than to carry out the express provisions of
      this Agreement, or as otherwise permitted by applicable law.

     

    Section
      4.02 Conditions
      Precedent to Closing.

     

    Each
      purchase of Mortgage Loans hereunder shall be subject to each of the following
      conditions:

     

    
      	 	
              (a)

            	
              All
                of the representations and warranties of Seller under the Cendant
                Guide,
                and of Seller and Purchaser under this Agreement shall be true and
                correct
                as of the Funding Date, and no event shall have occurred which, with
                notice or the passage of time, would constitute an Event of Default
                under
                this Agreement or under the Cendant
                Guide;

            


    

     

    
      	 	
              (b)

            	
              Purchaser
                shall have received, or Purchaser’s attorneys shall have received in
                escrow, all closing documents as specified herein, in such forms
                as are
                agreed upon and acceptable to Purchaser, duly executed by all signatories
                other than Purchaser as required pursuant to the respective terms
                thereof;

            


    

     

    
      	 	
              (c)

            	
              All
                other terms and conditions of this Agreement shall have been complied
                with.

            


    

     

    Subject
      to the foregoing conditions, Purchaser shall pay to Seller on each Funding
      Date
      the applicable Purchase Price as provided herein.

     

    
      
        
        

      

      
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    ARTICLE
      V:

     

    ADMINISTRATION
      AND SERVICING OF MORTGAGE LOANS

     

    
      	
            	Section
              5.01	
              PHH
                Mortgage to Act as Servicer; Servicing Standards; Additional Documents;
                Consent of the Purchaser.

            


    

     

    (1) The
      Servicer, as independent contract servicer, shall service and administer the
      Mortgage Loans and REO Property from and after each Funding Date in accordance
      with the terms and provisions of the Mortgage Loans, applicable law and the
      terms and provisions of this Agreement for and on behalf of, and in the best
      interests of, the Purchaser (without taking into account any relationship the
      Servicer may have with any Mortgagor or other Person, the participation, if
      any,
      of the Servicer in any financing provided in connection with the sale of any
      Mortgaged Property, or the Servicer’s obligation to advance any expenses or
      incur any costs in the performance of its duties hereunder) in accordance with
      a
      standard that is not less than the higher of (a) the same care, skill, prudence
      and diligence with which it services similar assets held for its own or its
      Affiliates’ account and (b) the same care, skill, prudence and diligence with
      which it services similar assets for third party institutional investors, in
      each case giving due consideration to customary and usual standards of practice
      of prudent institutional mortgage loan servicers utilized with respect to
      mortgage loans comparable to the Mortgage Loans. Subject to the foregoing
      standards, in connection with such servicing and administration, the Servicer
      shall seek to maximize the timely recovery of principal and interest on the
      Mortgage Notes; provided
      that
      nothing contained herein shall be construed as an express or implied guarantee
      by the Servicer of the collectibility of payments on the Mortgage Loans or
      shall
      be construed as impairing or adversely affecting any rights or benefits
      specifically provided by this Agreement to the Seller, including with respect
      to
      Servicing Fees.

     

    In
      the
      event that any of the Mortgage Loans included on the Mortgage Loan Schedule
      for
      a particular Funding Date are Additional Collateral Mortgage Loans (as defined
      in Exhibit 11 hereto), Seller and Purchaser shall enter into an Additional
      Collateral Assignment and Servicing Agreement, substantially in the form of
      Exhibit 11 hereto, and such Additional Collateral Mortgage Loans will be
      serviced in accordance with the terms of the related Additional Collateral
      Assignment and Servicing Agreement and the terms of this Agreement.

     

    (2) To
      the
      extent consistent with Section
      5.01(1)
      and further subject to any express limitations set forth in this Agreement,
      the
      Servicer (acting alone or, solely in the circumstances permitted hereunder,
      acting through a subservicer) shall have full power and authority to do or
      cause
      to be done any and all things that it may deem necessary or desirable in
      connection with such servicing and administration, including the power and
      authority (a) to execute and deliver, on behalf of the Purchaser, customary
      consents or waivers and other instruments and documents (including estoppel
      certificates), (b) to consent to transfers of any Mortgaged Property and
      assumptions of the Mortgage Notes and related Mortgages, (c) to submit claims
      to
      collect any Insurance Proceeds and Liquidation Proceeds, (d) to consent to
      the
      application of any Insurance Proceeds or Condemnation Proceeds to the
      restoration of the applicable Mortgaged Property or otherwise, (e) to bring
      an
      action in a court of law, including an unlawful detainer action, to enforce
      rights of the Purchaser with respect to any Mortgaged Property, (f) to execute
      and deliver, on behalf of the Purchaser, documents relating to the management,
      operation, maintenance, repair, leasing, marketing and sale of any Mortgaged
      Property or any REO Property, and (g) to effectuate foreclosure or other
      conversion of the ownership of the Mortgaged Property securing any Mortgage
      Loan; provided
      that the
      Servicer shall not take any action not provided for in this Agreement that
      is
      materially inconsistent with or materially prejudices the interest of the
      Purchaser in any Mortgage Loan or under this Agreement. If reasonably requested
      by the Servicer, the Purchaser shall furnish the Servicer with any powers of
      attorney and other documents reasonably necessary or appropriate to enable
      the
      Servicer to service and administer the Mortgage Loans and the REO Properties,
      including documents relating to the foreclosure, receivership, management,
      operation, maintenance, repair, leasing, marketing and sale (in foreclosure
      or
      otherwise) of any Mortgaged Property or any REO Property. 

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

     

    (3) Notwithstanding
      anything to the contrary contained herein:

     

    (a) the
      Servicer acknowledges that the Purchaser will retain title to, and ownership
      of,
      the Mortgage Loans and the REO Properties and that the Servicer does not hereby
      acquire any title to, security interest in, or other rights of any kind in
      or to
      any Mortgage Loan or REO Property or any portion thereof;

     

    (b) the
      Servicer shall not file any lien or any other encumbrance on, exercise any
      right
      of setoff against, or attach or assert any claim in or on any Mortgage Loan
      or
      REO Property, unless authorized pursuant to a judicial or administrative
      proceeding or a court order;

     

    (c) the
      Servicer shall, in servicing the Mortgage Loans, follow and comply with the
      servicing guidelines established by FNMA, provided
      that the
      Servicer shall specifically notify the Purchaser in writing and obtain the
      Purchaser’s written consent prior to the Servicer taking any of the following
      actions: (1) modifying, amending or waiving any of the financial terms of,
      or
      making any other material modifications to, a Mortgage Loan, except the Servicer
      may, upon the Mortgagor’s request, accept a principal prepayment and re-amortize
      the then remaining principal balance over the then remaining term of the loan
      (resulting in a lower scheduled monthly payment but no change in the maturity
      date); (2) selling any Specially Serviced Mortgage Loan; (3) making, with
      respect to any Specially Serviced Mortgage Loan or REO Property, Servicing
      Advances provided
      that the
      Servicer shall not be required to so advise the Purchaser to the extent that
      each related Servicing Advance as to the related Mortgaged Property or REO
      Property is in the best interests of the Purchaser or other owner of the
      Mortgage Loan and that are deemed to be recoverable by the Servicer; (4)
      forgiving principal or interest on, or permitting to be satisfied at a discount,
      any Mortgage Loan; (5) accepting substitute or additional collateral, or
      releasing any collateral, for a Mortgage Loan. If the Purchaser has not approved
      or rejected in writing any proposed action(s) recommended by the Servicer to
      be
      taken hereunder within 20 Business Days of the date such recommendation is
      made,
      then the Purchaser shall be deemed to have rejected such recommended action(s)
      and the Servicer shall not take any such action(s);

     

    (d) the
      Servicer shall notify the Purchaser of any modification, waiver or amendment
      of
      any term of any Mortgage Loan and the date thereof and shall deliver to the
      Purchaser, for deposit in the related Mortgage File, an original counterpart
      of
      the agreement relating to such modification, waiver or amendment promptly
      following the execution thereof;

     

    (e) the
      Servicer shall remain primarily liable for the full performance of its
      obligations hereunder notwithstanding any appointment by the Servicer of a
      subservicer or subservicers hereunder; and 

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

     

    (f) the
      Purchaser may at any time and from time to time, in its sole discretion, upon
      10
      Business Days written notice to the Servicer, terminate the Servicer’s servicing
      obligations hereunder with respect to (1) any REO Property or (2) any Mortgage
      Loan that, in accordance with the Purchaser’s internal credit classification
      criteria, has been classified as “doubtful” or a “loss.” Upon the effectiveness
      of any such termination of the Servicer’s servicing obligations with respect to
      any such REO Property or Mortgage Loan, the Servicer shall deliver all
      agreements, documents, and instruments related thereto to the Purchaser, in
      accordance with applicable law.

     

    Section
      5.02 Collection
      of Mortgage Loan Payments.

     

    Continuously
      from the date hereof until the principal and interest on all Mortgage Loans
      are
      paid in full, the Servicer will proceed diligently to collect all payments
      due
      under each Mortgage Loan when the same shall become due and payable and shall,
      to the extent such procedures shall be consistent with this Agreement and the
      terms and provisions of any related Primary Insurance Policy, follow such
      collection procedures as it follows with respect to mortgage loans comparable
      to
      the Mortgage Loans, which procedures shall in any event comply with the
      servicing standards set forth in Section
      5.01.
      Furthermore, the Servicer shall ascertain and estimate annual ground rents,
      taxes, assessments, fire and hazard insurance premiums, mortgage insurance
      premiums, and all other charges that, as provided in the Mortgages, will become
      due and payable to the end that the installments payable by the Mortgagors
      will
      be sufficient to pay such charges as and when they become due and
      payable.

     

    Section
      5.03 Reports
      for Specially Serviced Mortgage Loans and Foreclosure Sales.

     

    The
      Servicer shall, within five (5) calendar days following each Record Date,
      deliver to the Purchaser monthly reports (substantially in the form of
Exhibit
      5.03(a)
      and
Exhibit
      5.03(b)
      attached
      hereto) with respect to all Specially Serviced Mortgage Loans. In addition,
      the
      Servicer shall, within one (1) Business Day following the occurrence of any
      foreclosure sale with respect to any Mortgaged Property, deliver to the
      Purchaser a notice of foreclosure sale substantially in the form of Exhibit
      5.03(c)
      attached
      hereto.

     

    Section
      5.04 Establishment
      of Collection Account; Deposits in Collection Account.

     

    The
      Servicer shall segregate and hold all funds collected and received pursuant
      to
      each Mortgage Loan separate and apart from any of its own funds and general
      assets and shall establish and maintain one or more Collection Accounts, in
      the
      form of time deposit or demand accounts. The creation of any Collection Account
      shall be evidenced by a certification in the form of Exhibit
      5.04-1
      attached
      hereto, in the case of an account established with the Servicer, or a letter
      agreement in the form of Exhibit
      5.04-2
      attached
      hereto, in the case of an account held by a depository other than the Servicer.
      In either case, a copy of such certification or letter agreement shall be
      furnished to the Purchaser.

     

    The
      Servicer shall deposit in the Collection Account on a daily basis, within two
      Business Days after receipt (or as otherwise required pursuant to this Agreement
      in the case of clauses (8), (9), (10) and (11) of this Section
      5.04)
      and retain therein the following payments and collections received or made
      by it
      subsequent to each Funding Date, or received by it prior to the Funding Date
      but
      allocable to a period subsequent thereto, other than in respect of principal
      and
      interest on the Mortgage Loans due on or before the Funding Date:

     

    
      	 	
              (4)

            	
              all
                payments on account of principal, including Principal Prepayments,
                on the
                Mortgage Loans;

            


    

    
       

      
        
          
          

        

        
          37

          
            

          

        

        
          
          

        

         

      

    

    
      	 	
              (5)

            	
              all
                payments on account of interest on the Mortgage
                Loans;

            


    

     

    
      	 	
              (6)

            	
              all
                Liquidation Proceeds;

            


    

     

    
      	 	
              (7)

            	
              all
                REO Proceeds;

            


    

     

    
      	 	
              (8)

            	
              all
                Insurance Proceeds, including amounts required to be deposited pursuant
                to
                Sections
                5.10 and 5.11, other than proceeds to be held in the Escrow Account
                and
                applied to the restoration or repair of the Mortgaged Properties
                or
                released to the applicable Mortgagors in accordance with the Servicer’s
                normal servicing procedures, the related Mortgages or applicable
                law;

            


    

     

    
      	 	
              (9)

            	
              all
                Condemnation Proceeds affecting any Mortgaged Property which are
                not
                released to a Mortgagor in accordance with the Servicer’s normal servicing
                procedures, the related Mortgage or applicable
                law;

            


    

     

    
      	 	
              (10)

            	
              any
                Monthly Advances in accordance with Section
                6.03;

            


    

     

    
      	 	
              (11)

            	
              any
                amounts required to be deposited by the Servicer pursuant to Section
                5.11 in connection with the deductible clause in any blanket hazard
                insurance policy, such deposit to be made from the Servicer’s own funds
                without reimbursement therefor;

            


    

     

    
      	 	
              (12)

            	
              any
                amounts required to be deposited by the Servicer pursuant to Section
                5.16
                in connection with any losses on Permitted
                Investments;

            


    

     

    
      	 	
              (13)

            	
              any
                amounts required to be deposited in the Collection Account pursuant
                to
                Sections
                7.01 or 7.02 or otherwise pursuant to the terms hereof;
                and

            


    

     

    
      	 	
              (11)

            	
              any
                amounts required to be deposited in the Collection Account pursuant
                to
                Section
                5.17.

            


    

    


    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 late payment charges and assumption fees,
      to the extent permitted by Section
      7.01,
      need not be deposited by the Servicer in the Collection Account and shall be
      retained by the Servicer as additional compensation. 

     

    Section
      5.05 Permitted
      Withdrawals from the Collection Account.

     

    The
      Servicer may, from time to time in accordance with the provisions hereof,
      withdraw amounts from the Collection Account for the following purposes (without
      duplication):

     

    (1) to
      reimburse itself for unreimbursed Monthly Advances and Servicing Advances that
      the Servicer has determined to be Non-Recoverable Advances as provided in
Section
      6.04;

     

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

     

    (2) to
      make
      payments to the Purchaser in the amounts, at the times and in the manner
      provided for in Section
      6.01;

     

    (3) to
      reimburse itself for Monthly Advances, the Servicer’s right to reimburse itself
      pursuant to this Subsection
      (3)
      being limited to amounts received on the related Mortgage Loan which represent
      late payments of principal and/or interest with respect to which any such
      Monthly Advance was made;

     

    (4) to
      reimburse itself for unreimbursed Servicing Advances and for unreimbursed
      Monthly Advances, the Servicer’s right to reimburse itself pursuant to this
Subsection
      (4) with
      respect to any Mortgage Loan being limited to related Liquidation Proceeds,
      Condemnation Proceeds, Insurance Proceeds and such other amounts as may be
      collected by the Servicer from the Mortgagor or otherwise relating to the
      Mortgage Loan, it being understood that, in the case of such reimbursement,
      the
      Servicer’s right thereto shall be prior to the rights of the Purchaser, except
      that, where a Seller or the Servicer is required to repurchase (or substitute
      a
      Qualified Substitute Mortgage Loan for) a Mortgage Loan pursuant to Sections
      2.04,
      3.04 and/or 7.02, the Servicer’s right to such reimbursement shall be subsequent
      and subordinate to the payment to the Purchaser of the applicable Repurchase
      Price (or delivery of a Qualified Substitute Mortgage Loan) and all other
      amounts required to be paid to the Purchaser with respect to such Mortgage
      Loan;

     

    (5) to
      pay to
      itself, solely out of the interest portion of the Monthly Payment actually
      received with respect to a Mortgage Loan during the period ending on the most
      recent Determination Date, the Servicing Fee with respect to such Mortgage
      Loan;

     

    (6) to
      pay to
      itself as additional servicing compensation (a) any interest earned on funds
      in
      the Collection Account (all such interest to be withdrawn monthly not later
      than
      each Remittance Date) and (b) any prepayment penalties or premiums relating
      to
      any Principal Prepayments; provided
      that no
      such amounts shall be payable as servicing compensation to the extent they
      relate to a Mortgage Loan with respect to which a default, breach, violation,
      or
      event of acceleration exists or would exist but for the lapse of time, the
      giving of notice, or both;

     

    (7) to
      pay to
      itself with respect to each Mortgage Loan that has been repurchased pursuant
      to
Sections
      2.04,
      3.04 and/or 7.02 all amounts received thereon and not distributed as of the
      date
      on which the related Repurchase Price is determined (except to the extent that
      such amounts constitute part of the Repurchase Price to be remitted to the
      Purchaser);

     

    (8) to
      remove
      any amounts deposited into the Collection Account in error; and

     

    (9) to
      clear
      and terminate the Collection Account upon the termination of this Agreement,
      with any funds contained therein to be distributed in accordance with the terms
      of this Agreement.

     

    The
      Servicer shall keep and maintain a separate, detailed accounting, on a Mortgage
      Loan-by-Mortgage Loan basis, for the purpose of justifying any withdrawal from
      the Collection Account pursuant to this Section.

     

    Section
      5.06 Establishment
      of Escrow Accounts; Deposits in Escrow.

     

    The
      Servicer shall segregate and hold all funds collected and received pursuant
      to
      each Mortgage Loan which constitute Escrow Payments separate and apart from
      any
      of its own funds and general assets and shall establish and maintain one or
      more
      Escrow Accounts, in the form of time deposit or demand accounts. The creation
      of
      any Escrow Account shall be evidenced by a certification in the form shown
      on
Exhibit
      5.06-1
      attached
      hereto, in the case of an account established with the Servicer, or a letter
      agreement in the form shown on Exhibit
      5.06-2
      attached
      hereto, in the case of an account held by a depository other than the Servicer,
      such depository having been consented to by the Purchaser. In either case,
      a
      copy of such certification or letter agreement shall be furnished to the
      Purchaser.

     

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

     

    The
      Servicer shall deposit in each Escrow Account on a daily basis, and retain
      therein, (i) all Escrow Payments collected on account of the related Mortgage
      Loans for the purpose of effecting timely payment of any such items as required
      under the terms of this Agreement, and (ii) all Insurance Proceeds which are
      to
      be applied to the restoration or repair of any Mortgaged Property. The Servicer
      shall make withdrawals therefrom only to effect such payments as are required
      under Sections
      5.07
      and/or 5.08. The Servicer shall be entitled to retain any interest paid on
      funds
      deposited in the Escrow Account by the depository institution other than
      interest on escrowed funds required by law to be paid to the Mortgagor and,
      to
      the extent required by law, the Servicer shall pay interest on escrowed funds
      to
      the Mortgagor notwithstanding that the Escrow Account is non-interest bearing
      or
      that interest paid thereon is insufficient for such purposes, without any right
      of reimbursement therefor.

     

    Section
      5.07 Permitted
      Withdrawals From Escrow Accounts.

     

    Withdrawals
      from any Escrow Account may be made by the Servicer only (i) to effect timely
      payments of ground rents, taxes, assessments, water rates, hazard insurance
      premiums, Primary Insurance Policy premiums, if applicable, and comparable
      items
      constituting Escrow Payments for the related Mortgage, (ii) to reimburse the
      Servicer for any Servicing Advance made by the Servicer with respect to a
      related Mortgage Loan but only from amounts received on the related Mortgage
      Loan that represent late payments or collections of Escrow Payments thereunder,
      (iii) to refund to the Mortgagor any funds as may be determined to be overages,
      (iv) if permitted by applicable law, for transfer to the Collection Account
      in
      accordance with the terms of this Agreement, (v) for application to the
      restoration or repair of the Mortgaged Property in accordance with the terms
      of
      the related Mortgage Loan, (vi) to pay to the Servicer, or to the Mortgagor
      to
      the extent required by law, any interest paid on the funds deposited in the
      Escrow Account, (vii) to reimburse a Mortgagor in connection with the making
      of
      the Payoff of the related Mortgage Loan or the termination of all or part of
      the
      escrow requirement in connection with the Mortgage Loan, (viii) to remove any
      amounts deposited into the Escrow Account in error; or (ix) to clear and
      terminate the Escrow Account on the termination of this Agreement.

     

    
      	
            	Section
              5.08	
              Payment
                of Taxes, Insurance and Other Charges; Maintenance of Primary Insurance
                Policies; Collections Thereunder.

            


    

     

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

     

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

     

    The
      Servicer shall maintain in full force and effect a Primary Insurance Policy,
      conforming in all respects to the description set forth in Section
      3.03(29), issued by an insurer described in that Section, with respect to each
      Mortgage Loan for which such coverage is required. Such coverage will be
      maintained until the Loan-to-Value Ratio of the related Mortgage Loan is reduced
      to 75% or less in the case of a Mortgage Loan having a Loan-to-Value Ratio
      at
      origination in excess of 80% or until such time, if any, as such insurance
      is
      required to be released in accordance with the provisions of applicable law
      including, but not limited to, the Homeowners Protection Act of 1998. The
      Servicer shall assure that all premiums due under any Primary Insurance Policy
      are paid in a timely manner, but, shall be entitled to reimbursement pursuant
      to
      the terms of this Agreement for premiums paid by the Servicer on behalf of
      any
      Mortgagor who is obligated to pay such premiums but fails to do so. The Servicer
      shall not cancel or refuse to renew any Primary Insurance Policy in effect
      on
      the Funding Date that is required to be kept in force under this Agreement
      unless a replacement Primary Insurance Policy for such canceled or nonrenewed
      policy is obtained from and maintained with an insurer that satisfies the
      standards set forth in Section
      3.03(29). The Servicer shall not take any action which would result in
      noncoverage under any applicable Primary Insurance Policy of any loss which,
      but
      for the actions of the Servicer, would have been covered thereunder. In
      connection with any assumption or substitution agreement entered into or to
      be
      entered into pursuant to Section
      7.01,
      the Servicer shall promptly notify the insurer under the related Primary
      Insurance Policy, if any, of such assumption or substitution of liability in
      accordance with the terms of such policy and shall take all actions which may
      be
      required by such insurer as a condition to the continuation of coverage under
      the Primary Insurance Policy. If such Primary Insurance Policy is terminated
      as
      a result of such assumption or substitution of liability, then the Servicer
      shall obtain, and, except as otherwise provided above, maintain, a replacement
      Primary Insurance Policy as provided above.

     

    In
      connection with its activities as servicer, the Servicer agrees to prepare
      and
      present, on behalf of itself and the Purchaser, claims to the insurer under
      any
      Primary Insurance Policy in a timely fashion in accordance with the terms of
      such policies and, in this regard, to take such action as shall be necessary
      to
      permit recovery under any Primary Insurance Policy respecting a defaulted
      Mortgage Loan. Pursuant to Section
      5.04,
      any amounts collected by the Servicer under any Primary Insurance Policy shall
      be deposited in the Collection Account, subject to withdrawal in accordance
      with
Section
      5.05.

     

    Section
      5.09 Transfer
      of Accounts.

     

    The
      Servicer may transfer the Collection Account or any Escrow Account to a
      different depository institution from time to time; provided
      that (i)
      no such transfer shall be made unless all certifications or letter agreements
      required under Section
      5.04
      have been executed and delivered by the parties thereto; and (ii) concurrently
      upon any such transfer, the Servicer shall give written notice thereof to the
      Purchaser. Notwithstanding anything to the contrary contained herein, the
      Collection Account and each Escrow Account shall at all times constitute
      Eligible Accounts.

     

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

     

    Section
      5.10 Maintenance
      of Hazard Insurance.

     

    The
      Servicer shall cause to be maintained for each Mortgage Loan fire and hazard
      insurance with extended coverage as is customary in the area where the Mortgaged
      Property is located in an amount that is at least equal to the lesser of (a)
      the
      maximum insurable value of the improvements securing such Mortgage Loan and
      (b)
      the greater of (1) the Unpaid Principal Balance of such Mortgage Loan or (2)
      an
      amount such that the proceeds thereof shall be sufficient to prevent the
      Mortgagor and/or the loss payee from becoming a co-insurer.

     

    If
      any
      Mortgaged Property is in an area identified by the Federal Emergency Management
      Agency as having special flood hazards and such flood insurance has been made
      available, then the Servicer will cause to be maintained a flood insurance
      policy meeting the requirements of the current guidelines of the Federal
      Insurance Administration with a generally acceptable insurance carrier, in
      an
      amount representing coverage not less than the lesser of (a) the minimum amount
      required, under the terms of coverage, to compensate for any damage or loss
      on a
      replacement cost basis (or the outstanding principal balance of the related
      Mortgage Loan if replacement cost coverage is not available for the type of
      building insured) or (b) the maximum amount of insurance which is available
      under the Flood Disaster Protection Act of 1973, as amended (assuming that
      the
      area in which such Mortgaged Property is located is participating in such
      program).

     

    The
      Servicer shall also maintain on each REO Property fire, hazard and liability
      insurance, and to the extent required and available under the Flood Disaster
      Protection Act of 1973, as amended, flood insurance with extended coverage
      in an
      amount which is at least equal to the lesser of (a) the maximum insurable value
      of the improvements which are a part of such property and (b) the outstanding
      principal balance of the related Mortgage Loan at the time it became an REO
      Property plus accrued interest at the Note Rate and related Servicing
      Advances.

     

    All
      such
      policies shall be endorsed with standard mortgagee clauses with loss payable
      to
      the Servicer, or upon request to the Purchaser, and shall provide for at least
      30 days prior written notice of any cancellation, reduction in the amount of,
      or
      material change in, coverage to the Servicer. The Servicer shall not interfere
      with the Mortgagor’s freedom of choice in selecting either his insurance carrier
      or agent, provided
      that the
      Servicer shall not accept any such insurance policies from insurance companies
      unless such companies (a) currently reflect (1) a general policyholder’s rating
      of B+ or better and a financial size category of III or better in Best’s Key
      Rating Guide, or (2) a general policyholder’s rating of “A” or “A-“ or better in
      Best’s Key Rating Guide, and (b) are licensed to do business in the state
      wherein the related Mortgaged Property is located. Notwithstanding the
      foregoing, the Servicer may accept a policy underwritten by Lloyd’s of London
      or, if it is the only coverage available, coverage under a state’s Fair Access
      to Insurance Requirement (FAIR) Plan. If a hazard policy becomes in danger
      of
      being terminated, or the insurer ceases to have the ratings noted above, the
      Servicer shall notify the Purchaser and the related Mortgagor, and shall use
      its
      best efforts, as permitted by applicable law, to obtain from another qualified
      insurer a replacement hazard insurance policy substantially and materially
      similar in all respects to the original policy. In no event, however, shall
      a
      Mortgage Loan be without a hazard insurance policy at any time, subject only
      to
Section
      5.11.

     

    
      
        
        

      

      
        42

        
          

        

      

      
        
        

      

    

     

    Pursuant
      to Section
      5.04,
      any amounts collected by the Servicer under any such policies other than amounts
      to be deposited in the Escrow Account and applied to the restoration or repair
      of the Mortgaged Property or REO Property, or released to the Mortgagor in
      accordance with the Servicer’s normal servicing procedures, shall be deposited
      in the Collection Account within two Business Days after receipt, subject to
      withdrawal in accordance with Section
      5.05.
      Any cost incurred by the Servicer in maintaining any such insurance shall not,
      for the purpose of calculating remittances to the Purchaser, 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 need
      be
      required by the Servicer of the Mortgagor or maintained on property acquired
      in
      respect of the Mortgage Loan, other than pursuant to such applicable laws and
      regulations as shall at any time be in force and as shall require such
      additional insurance.

     

    Section
      5.11 Maintenance
      of Mortgage Impairment Insurance Policy.

     

    If
      the
      Servicer obtains and maintains a blanket policy issued by an issuer that has
      a
      Best’s Key rating of A+:V insuring against hazard losses on all of the Mortgage
      Loans, then, to the extent such policy provides coverage in an amount equal
      to
      the amount required pursuant to Section
      5.10 and
      otherwise complies with all other requirements of Section
      5.10, it
      shall conclusively be deemed to have satisfied its obligations as set forth
      in
Section
      5.10, it
      being understood and agreed that such policy may contain a deductible clause,
      in
      which case the Servicer shall, if there shall not have been maintained on the
      related Mortgaged Property or REO Property a policy complying with Section
      5.10 and
      there shall have been one or more losses which would have been covered by such
      policy, deposit in the Collection Account the amount not otherwise payable
      under
      the blanket policy because of such deductible clause; provided
      that the
      Servicer shall not be entitled to obtain reimbursement therefor. In connection
      with its activities as servicer of the Mortgage Loans, the Servicer agrees
      to
      prepare and present, on behalf of the Purchaser, claims under any such blanket
      policy in a timely fashion in accordance with the terms of such policy. Upon
      request of the Purchaser, the Servicer shall cause to be delivered to the
      Purchaser a certified true copy of such policy and a statement from the insurer
      thereunder that such policy shall in no event be terminated or materially
      modified without 30 days’ prior written notice to the Purchaser.

     

    Section
      5.12 Fidelity
      Bond; Errors and Omissions Insurance.

     

    The
      Servicer shall maintain, at its own expense, a blanket fidelity bond and an
      errors and omissions insurance policy, with broad coverage with responsible
      companies that would meet the requirements of FNMA and FHLMC on all officers,
      employees or other Persons acting in any capacity with regard to the Mortgage
      Loan to handle funds, money, documents and papers relating to the Mortgage
      Loans. The Fidelity Bond and errors and omissions insurance shall be in the
      form
      of the “Mortgage Banker’s Blanket Bond” and shall protect and insure the
      Servicer against losses, including losses arising by virtue of any Mortgage
      Loan
      not being satisfied in accordance with the procedures set forth in Section
      7.02
      and/or losses resulting from or arising in connection with forgery, theft,
      embezzlement, fraud, errors and omissions and negligent acts of or by such
      Persons. Such Fidelity Bond shall also protect and insure the Servicer against
      losses in connection with the failure to maintain any insurance policies
      required pursuant to this Agreement and the release or satisfaction of a
      Mortgage Loan without having obtained payment in full of the indebtedness
      secured thereby. No provision of this Section
      5.12
      requiring the Fidelity Bond and errors and omissions insurance shall diminish
      or
      relieve the Servicer from its duties and obligations as set forth in this
      Agreement. The minimum coverage under any such bond and insurance policy shall
      be at least equal to the corresponding amounts required by FNMA in the FNMA
      Guide and by FHLMC in the FHLMC Servicing Guide. The Servicer shall cause to
      be
      delivered to the Purchaser on or before the Funding Date: (i) a certified true
      copy of the Fidelity Bond and insurance policy; (ii) a written statement from
      the surety and the insurer that such Fidelity Bond or insurance policy shall
      in
      no event be terminated or materially modified without 30 days’ prior written
      notice to the Purchaser; and (iii) written evidence reasonably satisfactory
      to
      the Purchaser that such Fidelity Bond or insurance policy provides that the
      Purchaser is a beneficiary or loss payee thereunder.

     

    
      
        
        

      

      
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    Section
      5.13 Management
      of REO Properties.

     

    If
      title
      to any Mortgaged Property is acquired in foreclosure or by deed in lieu of
      foreclosure (each, an “REO Property”), the deed or certificate of sale shall be
      taken in the name of the Purchaser or the Person (which may be the Servicer
      for
      the benefit of the Purchaser) designated by the Purchaser, or in the event
      the
      Purchaser notifies the Servicer that the Purchaser or such Person is not
      authorized or permitted to hold title to real property in the state where the
      REO Property is located, or would be adversely affected under the “doing
      business” or tax laws of such state by so holding title, the deed or certificate
      of sale shall be taken in the name of such Person or Persons as shall be
      consistent with an opinion of counsel obtained by the Purchaser from an attorney
      duly licensed to practice law in the state where the REO Property is located.
      The Servicer (acting alone or through a subservicer), on behalf of the
      Purchaser, shall, subject to Section
      5.01(3)(c), dispose of any REO Property pursuant to Section
      5.14.
      Unless an appraisal prepared by an MAI Appraiser who is Independent in
      accordance with the provisions of 12 C.F.R. 225.65 shall have been obtained
      in
      connection with the acquisition of such REO Property, promptly following any
      acquisition by the Purchaser (through the Servicer) of an REO Property, the
      Servicer shall obtain a narrative appraisal thereof (at the expense of the
      Purchaser) in order to determine the fair market value of such REO Property.
      The
      Servicer shall promptly notify the Purchaser of the results of such appraisal
      and forward such appraisal to the Purchaser. The Servicer shall also cause
      each
      REO Property to be inspected promptly upon the acquisition of title thereto
      and
      shall cause each REO Property to be inspected at least annually thereafter,
      and
      Servicer shall be entitled to be reimbursed for expenses in connection therewith
      in accordance with this Agreement. The Servicer shall make or cause to be made
      a
      written report of each such inspection. Such reports shall be retained in the
      Servicer’s Mortgage File and copies thereof shall be forwarded by the Servicer
      to the Purchaser. The Servicer shall also furnish to the Purchaser the
      applicable reports required under Section
      8.01.

     

    Notwithstanding
      anything to the contrary contained herein, if a REMIC election has been or
      is to
      be made with respect to the arrangement under which the Mortgage Loans and
      the
      REO Properties are held, then the Servicer shall manage, conserve, protect
      and
      operate each REO Property in a manner that does not cause such REO Property
      to
      fail to qualify as “foreclosure property” within the meaning of Section
      86OG(a)(8) of the Code or result in the receipt by such REMIC of any “income
      from non-permitted assets” within the meaning of Section 86OF(a)(2)(B) or any
“net income from foreclosure property” within the meaning of Section 86OG(c)(2)
      of the Code (or comparable provisions of any successor or similar
      legislation).

     

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    

     

    The
      Servicer shall deposit and hold all revenues and funds collected and received
      in
      connection with the operation of each REO Property in the Collection Account,
      and the Servicer shall account separately for revenues and funds received or
      expended with respect to each REO Property.

     

    The
      Servicer shall have full power and authority, subject only to the specific
      requirements and prohibitions of this Agreement (and, in particular,
Section
      5.01(3)(c)), to do any and all things in connection with any REO Property as
      are
      consistent with the servicing standards set forth in Section
      5.01. In
      connection therewith, the Servicer shall deposit or cause to be deposited on
      a
      daily basis in the Collection Account all revenues and collections received
      or
      collected by it with respect to each REO Property, including all proceeds of
      any
      REO Disposition. Subject to Section
      5.15,
      the Servicer shall withdraw (without duplication) from the Collection Account,
      but solely from the revenues and collections received or collected by it with
      respect to a specific REO Property, such funds necessary for the proper
      operation, management and maintenance of such REO Property, including the
      following:

     

    
      	 	
              (10)

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

            


    

     

    
      	 	
              (11)

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

            


    

     

    
      	 	
              (12)

            	
              all
                customary and reasonable costs and expenses necessary to maintain,
                repair,
                appraise, evaluate, manage or operate such REO Property (including
                the
                customary and reasonable costs incurred by any “managing agent” retained
                by the Servicer in connection with the maintenance, management or
                operation of such REO Property);

            


    

     

    
      	 	
              (13)

            	
              all
                reasonable costs and expenses of restoration improvements, deferred
                maintenance and tenant improvements;
                and

            


    

     

    
      	 	
              (14)

            	
              all
                other reasonable costs and expenses, including reasonable attorneys’ fees,
                that the Servicer may suffer or incur in connection with its performance
                of its obligations under this Section (other than costs and expenses
                that
                the Servicer is expressly obligated to bear pursuant to this
                Agreement).

            


    

     

    To
      the
      extent that amounts on deposit in the Collection Account are insufficient for
      the purposes set forth in clauses (1) through (5) above, the Servicer shall,
      subject to Section
      6.04,
      advance the amount of funds required to cover the shortfall with respect
      thereto. The Servicer shall promptly notify the Purchaser in writing of any
      failure by the Servicer to make a Servicing Advance of the type specified in
      clauses (1) or (2) above (irrespective of whether such Servicing Advance is
      claimed to be non-recoverable by the Servicer pursuant to Section
      6.04).


     

    Following
      the consummation of an REO Disposition, the Servicer shall remit to the
      Purchaser, in accordance with Section
      6.01,
      any proceeds from such REO Disposition in the Collection Account following
      the
      payment of all expenses and Servicing Advances relating to the subject REO
      Property.

     

    
      
        
        

      

      
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    Section
      5.14 Sale
      of Specially Serviced Mortgage Loans and REO Properties.

     

    Subject
      to Section
      5.01
      (and, specifically, Section
      5.01(3)(c)) and Section
      5.15,
      the Servicer shall offer to sell any REO Property in the manner that is in
      the
      best interests of the Purchaser or other owner of the REO, but no later than
      the
      time determined by the Servicer to be sufficient to result in the sale of such
      REO Property on or prior to the time specified in Section
      5.15. In
      accordance with the servicing standards set forth in Section
      5.01,
      the Servicer or designated agent of the Servicer shall solicit bids and offers
      from Persons for the purchase of any Specially Serviced Mortgage Loan or REO
      Property and, upon receipt thereof, promptly (but in any event within 3 Business
      Days) present such bids and offers to the Purchaser. The Servicer shall not
      accept any bid or offer for any Specially Serviced Mortgage Loan or REO Property
      except in compliance with Section
      5.01(3)(c). The Purchaser may reject any bid or offer if the Purchaser
      determines the rejection of such bid or offer would be in the best interests
      of
      the Purchaser. The Purchaser shall notify the Servicer of such determination
      within three (3) Business Days of notice of any such bids from the Servicer.
      If
      the Purchaser rejects any bid or offer, the Servicer shall, if appropriate,
      seek
      an extension of the 3 year period referred to in Section
      5.15.

     

    Subject
      to Section
      5.01
      (and, specifically, Section
      5.01(3)(c)) and Section
      5.15,
      the Servicer shall act on behalf of the Purchaser in negotiating and taking
      any
      other action necessary or appropriate in connection with the sale of any
      Specially Serviced Mortgage Loan or REO Property, including the collection
      of
      all amounts payable in connection therewith. The terms of sale of any Specially
      Serviced Mortgage Loan or REO Property shall be in the sole discretion of the
      Purchaser. Any sale of a Specially Serviced Mortgage Loan or any REO Disposition
      shall be without recourse to, or representation or warranty by, the Purchaser
      or
      the Servicer, and, if consummated in accordance with the terms of this
      Agreement, then the Servicer shall have no liability to the Purchaser with
      respect to the purchase price therefor accepted by the Purchaser. The proceeds
      of any sale after deduction of the expenses of such sale incurred in connection
      therewith shall be promptly deposited in (a) if such sale is an REO Disposition,
      in the Collection Account in accordance with Section
      5.13 and
      (b) in any other circumstance, the Collection Account in accordance with
Section
      5.04.

     

    Section
      5.15 Realization
      Upon Specially Serviced Mortgage Loans and REO Properties.

     

    Subject
      to Section
      5.01(3)(c), the Servicer shall foreclose upon or otherwise comparably convert
      the ownership of properties securing such of the Specially Serviced Mortgage
      Loans as come into and continue in default and as to which (a) in the reasonable
      judgment of the Servicer, no satisfactory arrangements can, in accordance with
      prudent lending practices, be made for collection of delinquent payments
      pursuant to Section
      5.01
      and (b) such foreclosure or other conversion is otherwise in accordance with
      Section
      5.01.
      The Servicer shall not be required to expend its own funds in connection with
      any foreclosure or towards the restoration, repair, protection or maintenance
      of
      any property unless it shall determine that such expenses will be recoverable
      to
      it as Servicing Advances either through Liquidation Proceeds or through
      Insurance Proceeds (in accordance with Section
      5.05) or
      from any other source relating to the Specially Serviced Mortgage Loan. The
      Servicer shall be required to advance funds for all other costs and expenses
      incurred by it in any such foreclosure proceedings; provided
      that it
      shall be entitled to reimbursement thereof from the proceeds of liquidation
      of
      the related Mortgaged Property, as contemplated by Section
      5.05.

     

    
      
        
        

      

      
        46

        
          

        

      

      
        
        

      

    

     

    Upon
      any
      Mortgaged Property becoming an REO Property, the Servicer shall promptly notify
      the Purchaser thereof, specifying the date on which such Mortgaged Property
      became an REO Property. Pursuant to its efforts to sell such REO Property,
      the
      Servicer shall, either itself or through an agent selected by it, protect and
      conserve such REO Property in accordance with the servicing standards set forth
      in Section
      5.01 and
      may, subject to Section
      5.01(3)(c) and incident to its conservation and protection of the interests
      of
      the Purchaser, rent the same, or any part thereof, for the period to the sale
      of
      such REO Property.

     

    Notwithstanding
      anything to the contrary contained herein, the Purchaser shall not, and the
      Servicer shall not on the Purchaser’s behalf, acquire any real property (or
      personal property incident to such real property) except in connection with
      a
      default or a default that is imminent on a Mortgage Loan. If the Purchaser
      acquires any real property (or personal property incident to such real property)
      in connection with such a default, then such property shall be disposed of
      by
      the Servicer in accordance with this Section and Section
      5.14 as
      soon as possible but in no event later than 2 years after its acquisition by
      the
      Servicer on behalf of the Purchaser, unless the Servicer obtains, at the expense
      of the Purchaser, in a timely fashion an extension from the Internal Revenue
      Service for an additional specified period.

     

    Any
      recommendation of the Servicer to foreclose on a defaulted Mortgage Loan shall
      be subject to a determination by the Servicer that the proceeds of such
      foreclosure would exceed the costs and expenses of bringing such a proceeding.
      The income earned from the management of any REO Property, net of reimbursement
      to the Servicer for Servicing Advances incurred with respect to such REO
      Property under Section
      5.13,
      shall be applied to the payment of the costs and expenses set forth in
Section
      5.13(4),
      with any remaining amounts to be promptly deposited in the Collection Account
      in
      accordance with Section
      5.13.


     

    If,
      in
      the exercise of its servicing obligations with respect to any Mortgaged Property
      hereunder, the Servicer deems it is necessary or advisable to obtain an
      Environmental Assessment, then the Servicer shall so obtain an Environmental
      Assessment, it being understood that all reasonable costs and expenses incurred
      by the Servicer in connection with any such Environmental Assessment (including
      the cost thereof) shall be deemed to be Servicing Advances recoverable by the
      Servicer pursuant to Section
      5.13(4).
      Such Environmental Assessment shall (a) assess whether (1) such Mortgaged
      Property is in material violation of applicable Environmental Laws or (2) after
      consultation with an environmental expert, taking the actions necessary to
      comply with applicable Environmental Laws is reasonably likely to produce a
      greater recovery on a net present value basis than not taking such actions,
      and
      (b) identify whether (1) any circumstances are present at such Mortgaged
      Property relating to the use, management or disposal of any hazardous materials
      for which investigation, testing, monitoring, containment, clean-up or re
      mediation could be required under any federal, state or local law or regulation,
      or (2) if such circumstances exist, after consultation with an environmental
      expert, taking such actions is reasonably likely to produce a greater recovery
      on a present value basis than not taking such actions. (The conditions described
      in the immediately preceding clauses (a) and (b) shall be referred to herein
      as
“Environmental
      Conditions Precedent to Foreclosure.”)
      If
      any such Environmental Assessment so warrants, the Servicer is hereby authorized
      to and shall perform such additional environmental testing as it deems necessary
      and prudent to establish the satisfaction of the foregoing Environmental
      Conditions Precedent to Foreclosure or to proceed as set forth below (such
      additional testing thereafter being included in the term “Environmental
      Assessment”).

     

    
      
        
        

      

      
        47

        
          

        

      

      
        
        

      

    

     

    If
      an
      Environmental Assessment deemed necessary or advisable by the Servicer in
      accordance with this Section 5.15 establishes that any of the Environmental
      Conditions Precedent to Foreclosure is not satisfied with respect to any
      Mortgaged Property, but the Servicer in good faith reasonably believes that
      it
      is in the best economic interest of the Purchaser to proceed against such
      Mortgaged Property and, if title thereto is acquired, to take such remedial,
      corrective or other action with respect to the unsatisfied condition or
      conditions as may be prescribed by applicable law to satisfy such condition
      or
      conditions, then the Servicer shall so notify the Purchaser. If, pursuant to
      Section
      5.01(3)(c), the Purchaser has notified the Servicer in writing to proceed
      against such Mortgaged Property, then the Servicer shall so proceed. The cost
      of
      any remedial, corrective or other action contemplated by the preceding sentence
      in respect of any of the Environmental Conditions Precedent to Foreclosure
      that
      is not satisfied shall not be an expense of the Servicer and the Servicer shall
      not be required to expend or risk its own funds or otherwise incur any financial
      liability in connection with any such action.

     

    If
      an
      Environmental Assessment deemed necessary or advisable by the Servicer in
      accordance with this Section
      5.15
      establishes that any of the Environmental Conditions Precedent to Foreclosure
      is
      not satisfied with respect to any Mortgaged Property and, in accordance with
      Section
      5.01(3)(c), the Purchaser elects or is deemed to have elected not to proceed
      against such Mortgaged Property, then the Servicer shall, subject to
Section
      5.01(3)(c), take such action as it deems to be in the best economic interest
      of
      the Purchaser (other than proceeding against the Mortgaged Property or directly
      or indirectly becoming the owner or operator thereof) as determined in
      accordance with the servicing standard set forth in Section
      5.01 and
      is hereby authorized at such time as it deems appropriate to release such
      Mortgaged Property from the lien of the related Mortgage.

     

    Prior
      to
      the Servicer taking any action with respect to the use, management or disposal
      of any hazardous materials on any Mortgaged Property, the Servicer shall request
      the approval of the Purchaser in accordance with Section
      5.01(3)(c) and, if such action is approved by the Purchaser, (a) keep the
      Purchaser apprised of the progress of such action; and (b) take such action
      in
      compliance with all applicable Environmental Laws.

     

    Section
      5.16 Investment
      of Funds in the Collection Account.

     

    The
      Servicer may direct any depository institution which holds the Collection
      Account to invest the funds in the Collection Account in one or more Permitted
      Investments bearing interest. All such Permitted Investments shall be held
      to
      maturity, unless payable on demand. In the event amounts on deposit in the
      Collection Account are at any time invested in a Permitted Investment payable
      on
      demand, the Servicer shall:

     

    
      	 	
              (a)

            	
              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

            


    

     

    
      	 	
              (b)

            	
              demand
                payment of all amounts due thereunder promptly upon determination
                by the
                Servicer or notice from the Purchaser that such Permitted Investment
                would
                not constitute a Permitted Investment in respect of funds thereafter
                on
                deposit in the Collection Account.

            


    

     

    
      
        
        

      

      
        48

        
          

        

      

      
        
        

      

    

     

    All
      income and gain realized from investment of funds deposited in the Collection
      Account shall be for the benefit of the Servicer and shall be subject to its
      withdrawal in accordance with Section
      5.05.
      The
      Servicer shall deposit in the Collection Account the amount of any loss incurred
      in respect of any Permitted Investment immediately upon realization of such
      loss.

     

    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 Purchaser
      may elect to take such action, or instruct the Servicer to take such action,
      as
      may be appropriate to enforce such payment or performance, including the
      institution and prosecution of appropriate proceedings, at the expense of the
      Servicer.

     

    Section
      5.17 Compensating
      Interest.

    


    Not
      later
      than the close of business on the Business Day preceding each Remittance Date,
      the Servicer shall from its own funds deposit in the Collection Account an
      amount equal to the lesser of (i) the aggregate of the interest on the amount
      of
      each Principal Prepayment included in such remittance at the related Remittance
      Rate from the date of such Principal Prepayment to the end of the month in
      which
      such Principal Prepayment occurred, to the extent not collected from payments
      on
      or other recovery in respect of the related Mortgage Loan and (ii) the aggregate
      of the Servicing Fees in respect of the most recently ended calendar
      month.”

    


    ARTICLE
      VI:

     

    REPORTS;
      REMITTANCES; ADVANCES

     

    Section
      6.01 Remittances.

     

    (1) On
      each
      Remittance Date, the Servicer shall remit to the Purchaser (a) all amounts
      credited to the Collection Account as of the close of business on the last
      day
      of the related Due Period (including (1) the amount of any Principal Prepayment,
      together with interest thereon at the related Remittance Rate to the end of
      the
      month in which prepayment of the related Mortgage Loan occurs to the extent
      deposited pursuant to Section
      5.17,
      and (2) all proceeds of any REO Disposition net of amounts payable to the
      Servicer pursuant to Section
      5.13),
      net of charges against or withdrawals from the Collection Account in accordance
      with Section
      5.05,
      which charges against or withdrawals from the Collection Account the Servicer
      shall make solely on such Remittance Date, plus (b) all Monthly Payments that
      were delinquent on the last day of the related Due Period but received prior
      to
      the close of business on the related Determination Date, plus (c) all Monthly
      Advances, if any, which the Servicer is obligated to remit pursuant to
Section
      6.03;
provided
      that the
      Servicer shall not be required to remit, until the next following Remittance
      Date, any amounts attributable to Monthly Payments collected but due on a Due
      Date or Dates subsequent to the related Due Period.

     

    (2) All
      remittances made to the Purchaser on each Remittance Date will be made to the
      Purchaser by wire transfer of immediately available funds accordingly to the
      instructions that will be provided by Purchaser to the Servicer.

     

    (3) With
      respect to any remittance received by the Purchaser after the Business Day
      on
      which such payment was due, the Servicer shall pay to the Purchaser interest
      on
      any such late payment at an annual rate equal to One-month LIBOR (as published
      in the Wall Street Journal) plus 200 basis points, but in no event greater
      than
      the maximum amount permitted by applicable law. Such interest shall be paid
      by
      the Servicer to the Purchaser on the date such late payment is made and shall
      cover the period commencing with the Business Day on which such payment was
      due
      and ending with the Business Day on which such payment is made, both inclusive.
      Such interest shall be remitted along with such late payment. Neither the
      payment by the Servicer nor the acceptance by the Purchaser of any such interest
      shall be deemed an extension of time for payment or a waiver by the Purchaser
      of
      any Event of Default.

     

    
      
        
        

      

      
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    Section
      6.02 Reporting.

     

    On
      or
      before the 5th
      calendar
      day (or, if such day is not a Business Day, on the immediately succeeding
      Business Day) of each month during the term hereof, the Servicer shall deliver
      to the Purchaser monthly accounting reports in the form of Exhibits
      6.02(a)
      through
6.02(g)
      attached
      hereto with respect to the most recently ended Monthly Period. Such monthly
      accounting reports shall include information as to the aggregate Unpaid
      Principal Balance of all Mortgage Loans, the scheduled amortization of all
      Mortgage Loans, any delinquencies and the amount of any Principal Prepayments
      as
      of the most recently ended Record Date. 

     

    The
      Servicer shall provide the Purchaser with such information concerning the
      Mortgage Loans as is necessary for the Purchaser to prepare its federal income
      tax return as the Purchaser may reasonably request from time to
      time.

     

    Section
      6.03 Monthly
      Advances by the Servicer.

     

    (1) Not
      later
      than the close of business on the Business Day immediately preceding each
      Remittance Date, the Servicer shall deposit in the Collection Account an amount
      equal to all Monthly Payments not previously advanced by the Servicer (with
      interest adjusted to the Remittance Rate) that were due on a Mortgage Loan
      and
      delinquent at the close of business on the related Determination Date. The
      Servicer may reduce the total amount to be deposited in the Collection Account
      as required by the foregoing sentence by the amount of funds in the Collection
      Account which represent Prepaid Monthly Payments.

     

    (2) The
      Servicer’s obligations to make Monthly Advances as to any Mortgage Loan will
      continue through the last Monthly Payment due prior to the payment in full
      of
      the Mortgage Loan, or through the Remittance Date prior to the Remittance Date
      for the remittance of all Liquidation Proceeds and other payments or recoveries
      (including Insurance Proceeds, Condemnation Proceeds and REO Disposition
      Proceeds) with respect to the Mortgage Loan; provided
      that
      such obligation shall cease if the Servicer furnishes to the Purchaser an
      Officers’ Certificate evidencing the determination by the Servicer in accordance
      with Section
      6.04
      that an advance with respect to such Mortgage Loan would constitute a
      Non-recoverable Advance.

     

    Section
      6.04 Non-recoverable
      Advances.

     

    The
      determination by the Servicer that it has made a Non-recoverable Advance or
      that
      any Monthly Advance or Servicing Advance, if made, would constitute a
      Non-recoverable Advance shall be evidenced by an Officers’ Certificate delivered
      to the Purchaser detailing the reasons for such determination.

     

    
      
        
        

      

      
        50

        
          

        

      

      
        
        

      

    

     

    Section
      6.05 Itemization
      of Servicing Advances.

     

    The
      Servicer shall provide the Purchaser with an itemization of all Servicing
      Advances incurred or made by the Servicer hereunder as the Purchaser may from
      time to time reasonably request. 

     

    Section
      6.06 Officer’s
      Certificate.

     

    The
      Seller shall deliver to the Purchaser an Officer’s Certificate in the form
      attached hereto as Exhibit
      9
      on the
      Initial Funding Date and upon Purchaser’s reasonable request thereafter.


     

    ARTICLE
      VII:

     

    GENERAL
      SERVICING PROCEDURE

     

    Section
      7.01 Enforcement
      of Due-on-Sale Clauses, Assumption Agreements.

     

    (1) The
      Servicer will, to the extent it has knowledge of any conveyance or prospective
      conveyance by any Mortgagor of the Mortgaged Property (whether by absolute
      conveyance or by contract of sale, and whether or not the Mortgagor remains
      or
      is to remain liable under the Mortgage Note and/or the Mortgage), exercise
      its
      rights to accelerate the maturity of such Mortgage Loan under any “ due-on-sale”
clause applicable thereto; provided
      that the
      Servicer shall not exercise any such rights if prohibited by law from doing
      so
      or if the exercise of such rights would impair or threaten to impair any
      recovery under the related Primary Insurance Policy, if any.

     

    (2) If
      the
      Servicer is prohibited from enforcing such “due-on-sale” clause, then the
      Servicer will enter into an assumption agreement with the Person to whom the
      Mortgaged Property has been conveyed or is proposed to be conveyed, pursuant
      to
      which such Person becomes liable under the Mortgage Note and, to the extent
      permitted by applicable state law, the Mortgagor remains liable thereon. (For
      purposes of this Section
      7.01,
      the term “assumption” is deemed to also include a sale of the Mortgaged Property
      subject to the Mortgage that is not accompanied by an assumption or substitution
      of liability agreement.) If any Mortgage Loan is to be assumed, then the
      Servicer shall inquire into the creditworthiness of the proposed transferee
      and
      shall use the same underwriting criteria for approving the credit of the
      proposed transferee that are used with respect to underwriting mortgage loans
      of
      the same type as the Mortgage Loans. Where an assumption is allowed, the
      Servicer, with the prior written consent of the primary mortgage insurer, if
      any, and subject to the conditions of Section
      7.01(3),
      shall, and is hereby authorized to, enter into a substitution of liability
      agreement with the Person to whom the Mortgaged Property is proposed to be
      conveyed pursuant to which the original mortgagor is released from liability
      and
      such Person is substituted as mortgagor and becomes liable under the related
      Mortgage Note. Any such substitution of liability agreement shall be in lieu
      of
      an assumption agreement. In no event shall the Note Rate, the amount of the
      Monthly Payment or the final maturity date be changed. The Servicer shall notify
      the Purchaser that any such substitution of liability or assumption agreement
      has been completed by forwarding to the Purchaser the original of any such
      substitution of liability or assumption agreement, which document shall be
      added
      to the related Purchaser’s Mortgage File and shall, for all purposes, be
      considered a part of such Purchaser’s Mortgage File to the same extent as all
      other documents and instruments constituting a part thereof. Any fee collected
      by the Servicer for entering into an assumption or substitution of liability
      agreement shall be retained by the Servicer as additional compensation for
      servicing the Mortgage Loans.

     

    
      
        
        

      

      
        51

        
          

        

      

      
        
        

      

    

     

    (3) If
      the
      credit of the proposed transferee does not meet such underwriting criteria,
      then
      the Servicer shall, to the extent permitted by the Mortgage or the Mortgage
      Note
      and by applicable law, accelerate the maturity of the Mortgage
      Loan.

     

    Section
      7.02 Satisfaction
      of Mortgages and Release of Mortgage Files.

     

    Upon
      the
      payment in full of any Mortgage Loan, the Servicer will immediately notify
      the
      Purchaser by a certification of a Servicing Officer, 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
      5.04
      have been or will be so deposited and shall request delivery to it of the
      Purchaser’s Mortgage File held by the Purchaser. Upon receipt of such
      certification and request, the Purchaser shall promptly release or cause to
      be
      released the related mortgage documents to the Servicer and the Servicer shall
      promptly prepare and process any satisfaction or release. No expense incurred
      in
      connection with any instrument of satisfaction or deed of reconveyance shall
      be
      chargeable to the Collection Account.

     

    If
      the
      Servicer satisfies or releases a Mortgage without having obtained payment in
      full of the indebtedness secured by the Mortgage, or should it otherwise take
      such action which results in a reduction of the coverage under the Primary
      Insurance Policy, if any, then the Servicer shall promptly give written notice
      thereof to the Purchaser, and, within 10 Business Days following written demand
      therefor from the Purchaser to the Servicer, the Servicer shall repurchase
      the
      related Mortgage Loan by paying to the Purchaser the Repurchase Price therefor
      by wire transfer of immediately available funds directly to the Purchaser’s
      Account.

     

    Section
      7.03 Servicing
      Compensation.

     

    As
      compensation for its services hereunder, the Servicer shall be entitled to
      retain from interest payments on the Mortgage Loans the amounts provided for
      as
      the Servicing Fee. The Servicing Fee in respect of a Mortgage Loan for a
      particular month shall become payable only upon the receipt by the Servicer
      from
      the Mortgagor of the full Monthly Payment in respect of such Mortgage Loan.
      Additional servicing compensation in the form of assumption fees, as provided
      in
Section
      7.01,
      late payment charges and other servicer compensation for modifications, short
      sales, and other shall be retained by the Servicer to the extent not required
      to
      be deposited in the Collection Account. The Servicer shall be required to pay
      all expenses incurred by it in connection with its servicing activities
      hereunder and shall not be entitled to reimbursement therefor except as
      specifically provided for herein.

     

    Section
      7.04 Annual
      Compliance Statement.

     

    The
      Servicer will deliver to the Purchaser and any Master Servicer, no later than
      March 1 of each year, beginning with March 1, 2007, an Officers’ Certificate
      (“Compliance Statement”) to the effect that (i) a review of the activities of
      the Servicer during the preceding calendar year and of performance under this
      Agreement has been made under such officer’s supervision, and (ii) to the best
      of such officers’ knowledge, based on such review, the Servicer has fulfilled
      all of its obligations under this Agreement in all material respects throughout
      such year, or, if there has been a failure to fulfill any such obligation in
      any
      material respect, specifying each such failure and the nature and status
      thereof.

     

    
      
        
        

      

      
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    Section
      7.05 Annual
      Assessment of Compliance and Attestation Report.

     

    The
      Servicer shall deliver to the Purchaser and any Master Servicer, no later than
      March 1 of each year, beginning March 1, 2007, an assessment of compliance
      with
      servicing criteria on a certification substantially in the form of Exhibit
      11
      hereto (“Assessment of Compliance”), or such other form as mutually agreed upon
      by the Servicer and the Purchaser, and related attestation report (“Attestation
      Report”) as of and for the period ending on December 31 of the preceding
      calendar year, which Assessment of Compliance and Attestation Report will relate
      to each of the servicing criteria identified as the Servicer’s responsibility on
      Schedule 1122 thereto (the “Servicing Criteria”) and shall comply with the
      provisions of Regulation AB. Each such Assessment of Compliance shall include
      (a) a statement of the party’s responsibility for assessing compliance with the
      Servicing Criteria, (b) a statement that such party used the criteria identified
      in Item 1122 (d) of Regulation AB to assess compliance with the Servicing
      Criteria, (c) disclosure of any material instance of noncompliance identified
      by
      such party, and (d) a statement that a registered public accounting firm has
      issued an Attestation Report on such party’s Assessment of Compliance with the
      Servicing Criteria.

     

    Section
      7.06 Purchaser’s
      Right to Examine Servicer Records.

     

    The
      Purchaser shall have the right to examine and audit, during business hours
      or at
      such other times as are reasonable under applicable circumstances, upon ten
      days
      advance notice any and all of (i) the credit and other loan files relating
      to
      the Mortgage Loans or the Mortgagors, (ii) any and all books, records,
      documentation or other information of the Servicer (whether held by the Servicer
      or by another) relating to the servicing of the Mortgage Loans and (iii) any
      and
      all books, records, documentation or other information of the Servicer (whether
      held by the Servicer or by another) that are relevant to the performance or
      observance by the Servicer of the terms, covenants or conditions of this
      Agreement. The Servicer shall be obligated to make the foregoing information
      available to the Purchaser at the site where such information is stored;
provided
      that the
      Purchaser shall be required to pay all reasonable costs and expenses incurred
      by
      the Servicer in making such information available.

     

    Section
      7.07 Additional
      Requirements in Connection With Securitization Transactions.

     

    Back-Up
      SOX Certification.
      In
      connection with any Securitization Transaction, the Servicer shall provide
      to
      the Purchaser and the Master Servicer, no later than March 1 of each year in
      which the Trust is required to file a Form 10-K with the SEC in connection
      with
      a Pass-Through Transfer, an Officer’s Certificate (a “Back-Up SOX
      Certification”) in the form of Exhibit
      12
      attached
      hereto.

    


    Servicer
      Information. If so requested by the Purchaser or any Depositor in connection
      with any Securitization Transaction, the Servicer shall provide such information
      regarding the Servicer, as servicer of the Mortgage Loans, and any Subservicer,
      as is reasonably requested for the purpose of compliance with Item 1108 of
      Regulation AB.

    


    Additional
      Monthly Reporting Requirements:

    


    In
      connection with any Securitization Transaction, the Servicer shall provide
      to
      the Purchaser and the Master Servicer prompt notice of the occurrence of any
      of
      the following: any event of default under the terms of this Agreement; any
      merger, consolidation or sale of substantially all of the assets of the
      Servicer; the Servicer’s engagement of any subservicer, contractor or vendor to
      perform or assist in the performance of any of the Servicer’s obligations under
      this Agreement; any material litigation involving the Servicer; and any
      affiliation or other significant relationship between the Servicer and other
      transaction parties, as such parties are identified to the Servicer by the
      Purchaser or any Depositor in writing in advance of such Securitization
      Transaction.

     

    
      
        
        

      

      
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    No
      later
      than ten days prior to the deadline for the filing of any Distribution Report
      that includes any of the Mortgage Loans serviced by the Servicer, the Servicer
      shall provide to the Purchaser and the Master Servicer notice of the occurrence
      of any of the following events along with all information, data and materials
      related thereto as may be required to be included in the related Distribution
      Report (as specified in the provisions of Regulation AB referenced
      below):

    


    
      	 	
              (a)

            	
              any
                material changes to the Servicer’s definition or determination of
                delinquencies, charge-offs and uncollectible accounts (Item 1121
                (a) (9)
                of Regulation AB);

            


    

    


    
      	 	
              (b)

            	
              any
                material modifications, extensions or waivers of pool asset terms,
                fees,
                penalties or payments during the distribution period or that have
                cumulatively become material over time (Item 1121(a) (11) of Regulation
                AB);

            


    

    


    
      	 	
              (c)

            	
              material
                breaches of pool asset representations or warranties or transaction
                covenants (Item 1121(a) (12) of Regulation AB);
                and

            


    

    


    
      	 	
              (d)

            	
              information
                regarding new asset-backed security issuances backed by the same
                pool
                assets, any pool asset changes (such as, additions, substitutions
                or
                repurchases), and any material changes in origination, underwriting
                or
                other criteria for acquisition or selection of pool assets (Item
                1121(a)
                (14) of Regulation AB).

            


    

    


    Additional
      Information.
      The
      Servicer shall provide to the Purchaser and the Master Servicer such additional
      information as the Purchaser or Master Servicer may reasonably request,
      including evidence of the authorization of the person signing any certification
      or statement, financial information and reports, and such other information
      related to the Servicer or its performance hereunder.

    


    Intention
      of the Parties and Interpretation.
      The
      Purchaser and the Servicer acknowledge and agree that the purpose of Sections
      7.04, 7.05 and this 7.07 is to facilitate compliance by the Master Servicer
      and
      the Depositor with the provisions of Regulation AB, as such may be amended
      from
      time to time and subject to clarification and interpretive advice as may be
      issued by the staff of the SEC from time to time. Therefore, the Servicer agrees
      that (a) the obligations of the Servicer hereunder shall be interpreted in
      such
      a manner as to accomplish that purpose, (b) the Servicer’s obligations hereunder
      will be supplemented and modified as necessary to be consistent with any such
      amendments, interpretive advice or guidance, convention or consensus among
      active participants in the asset-backed securities markets, advice of counsel,
      or otherwise in respect of the requirements of Regulation AB, (c) the Servicer
      shall comply with requests made by the Master Servicer or the Depositor for
      delivery of additional or different information as the Master Servicer or the
      Depositor may determine in good faith is necessary to comply with the provisions
      of Regulation AB, and (d) no amendment of this Agreement shall be required
      to
      effect such changes in the Servicer’s obligations as are necessary to
      accommodate evolving interpretations of the provisions of Regulation
      AB.

     

    
      
        
        

      

      
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    Neither
      the Purchaser, nor any Depositor or Master Servicer shall exercise its right
      to
      request delivery of information or other performance under these provisions
      other than in good faith, or for purposes other than compliance with the
      Securities Act, the Exchange Act and the rules and regulations of the SEC
      thereunder (or the provision in a private offering of disclosure comparable
      to
      that required under the Securities Act). The Purchaser (including any of its
      assignees or designees, any Depositor and any Master Servicer) shall cooperate
      with the Servicer by providing timely notice of requests for information under
      these provisions and by reasonably limiting such requests to information
      required, in the Purchaser’s reasonable judgment, to comply with Regulation
      AB.

    


    Indemnification.
      The
      Servicer shall indemnify and hold harmless the Purchaser, the Master Servicer
      and each of their directors, officers, employees, agents and affiliates (each,
      an “Indemnified Party”) from and against any and all claims, losses, damages,
      penalties, fines, forfeitures, reasonable legal fees and related costs,
      judgments and other costs and expenses sustained by an Indemnified Party arising
      out of or based upon (i) any breach by the Servicer of any of its obligations
      under Section 7.04, 7.05 or 7.07, including particularly its obligations to
      provide any Compliance Statement, Assessment of Compliance, Attestation Report
      or any information, data or materials required to be provided by the Servicer
      under this Agreement and included in any Exchange Act report; (b) any untrue
      statement of a material fact contained or alleged to be contained in any
      information, data or material provided by the Servicer under Sections 7.04,
      7.05
      or 7.07 hereof (the “Servicer Information”) or the omission or alleged omission
      to state in the Servicer Information a material fact required to be stated
      in
      the Servicer Information or necessary in order to make the statements therein,
      in the light of the circumstances under which they were made, not misleading;
      or
      (c) the negligence, bad faith or willful misconduct of the Servicer in
      connection with its performance under Sections 7.04, 7.05 and 7.07. If the
      indemnification provided for herein is unavailable or insufficient to hold
      harmless an Indemnified Party , then the Servicer agrees that it shall
      contribute to the amount paid or payable by an Indemnified Party as a result
      of
      any claims, losses, damages or liabilities incurred by an Indemnified Party
      in
      such proportion as is appropriate to reflect the relative fault of the
      Indemnified Party on one hand and the Servicer on the other. The indemnification
      in this subsection shall survive the termination of this Agreement or the
      termination of any party to this Agreement.

    


    Master
      Servicer as Third Party Beneficiary.
      For
      purposes of Sections 7.04. 7.05 and 7.07 related to the requirements for
      delivery of Assessments of Compliance, Attestation Reports, Compliance
      Statements, Back-Up SOX Certificates and additional monthly reporting
      requirements, the Master Servicer shall be considered a third-party beneficiary
      of this Agreement, entitled to all rights and benefits hereof as if it were
      a
      party to the Agreement.

     

    ARTICLE
      VIII:

     

    REPORTS
      TO BE PREPARED BY THE SERVICER

     

    Section
      8.01 The
      Servicer’s Reporting Requirements.

     

    Electronic
      Format.
      If
      requested by the Purchaser, the Servicer shall supply any and all information
      regarding the Mortgage Loans and the REO Properties, including all reports
      required to be delivered pursuant to Section
      5.03,
Section
      6.02 and
      this Section
      8.01, to
      the Purchaser in electronic format reasonably acceptable to Purchaser, unless
      otherwise limited by the servicing system utilized by the Servicer.

     

    
      
        
        

      

      
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    Additional
      Reports; Further Assurances.
      On or
      before the 3rd
      Business
      Day preceding each Determination Date, the Servicer shall deliver to the
      Purchaser (i) a report, acceptable to the Purchaser, describing in reasonable
      detail all Mortgage Loans that are 90 days or more delinquent and the Servicer’s
      activities in connection with such delinquencies and (ii) a report
      (substantially in the form of Exhibit
      8.01
      attached
      hereto) with respect to delinquent Mortgage Loans. Utilizing resources
      reasonably available to the Servicer without incurring any cost except the
      Servicer’s overhead and employees’ salaries, the Servicer shall furnish to the
      Purchaser during the term of this Agreement such periodic, special or other
      reports, information or documentation, whether or not provided for herein,
      as
      shall be reasonably requested by the Purchaser with respect to Mortgage Loans
      or
      REO Properties (provided the Purchaser shall have given the Servicer reasonable
      notice and opportunity to prepare such reports, information or documentation),
      including any reports, information or documentation reasonably required to
      comply with any regulations of any governmental agency or body having
      jurisdiction over the Purchaser, all such reports or information to be as
      provided by and in accordance with such applicable instructions and directions
      as the Purchaser may reasonably request. If any of such reports are not
      customarily prepared by the Servicer or require that the Servicer program data
      processing systems to create the reports, then the Purchaser shall pay to the
      Servicer a fee mutually agreed to by the Purchaser and the Servicer taking
      into
      account the Servicer’s actual time and cost in preparing such reports. The
      Servicer agrees to execute and deliver all such instruments and take all such
      action as the Purchaser, from time to time, may reasonably request in order
      to
      effectuate the purposes and to carry out the terms of this
      Agreement.

     

    Section
      8.02 Financial
      Statements.

     

    The
      Servicer understands that, in connection with marketing the Mortgage Loans,
      the
      Purchaser may make available to any prospective purchaser of the Mortgage Loans
      the Servicer’s audited financial statements for its fiscal year 1999 and its
      audited financial statements for fiscal year 2000, together with any additional
      statements provided pursuant to the next sentence. During the term hereof,
      the
      Servicer will deliver to the Purchaser audited financial statements for each
      of
      its fiscal years following the Funding Date and all other financial statements
      prepared following the Funding Date to the extent any such statements are
      available upon request to the public at large.

     

    The
      Servicer also agrees to make available upon reasonable notice and during normal
      business hours to any prospective purchasers of the Mortgage Loans a
      knowledgeable financial or accounting officer for the purpose of answering
      questions respecting recent developments affecting the Servicer or the financial
      statements of the Servicer which may affect, in any material respect, the
      Servicer’s ability to comply with its obligations under this Agreement, and to
      permit any prospective purchasers upon reasonable notice and during normal
      business hours to inspect the Servicer’s servicing facilities for the purpose of
      satisfying such prospective purchasers that the Servicer has the ability to
      service the Mortgage Loans in accordance with this Agreement.

     

    
      
        
        

      

      
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    ARTICLE
      IX:

     

    THE
      SELLERS

     

    Section
      9.01 Indemnification;
      Third Party Claims.

     

    Each
      Seller shall indemnify and hold harmless the Purchaser, its directors, officers,
      agents, employees, and assignees (each, an “Indemnified Party”) from and against
      any costs, damages, expenses (including reasonable attorneys’ fees and costs,
      irrespective of whether or not incurred in connection with the defense of any
      actual or threatened action, proceeding, or claim), fines, forfeitures,
      injuries, liabilities or losses (“Losses”) suffered or sustained in any way by
      any such Person, no matter how or when arising (including Losses incurred or
      sustained in connection with any judgment, award, or settlement), in connection
      with or relating to (i) a breach by such Seller of any of its representations
      and warranties contained in Article
      III or
      (ii) a breach by such Seller of any of its covenants and other obligations
      contained herein including any failure to service the Mortgage Loans in
      compliance with the terms hereof and in accordance with the standard of care
      in
Section
      9.03.
      The applicable Seller shall immediately (i) notify the Purchaser if a claim
      is
      made by a third party with respect to this Agreement, any Mortgage Loan and/or
      any REO Property (ii) assume (with the prior written consent of the Purchaser)
      the defense of any such claim and pay all expenses in connection therewith,
      including attorneys’ fees, and (iii) promptly pay, discharge and satisfy any
      judgment, award, or decree that may be entered against it or the Purchaser
      in
      respect of such claim. Nothing contained herein shall prohibit the Purchaser,
      at
      its expense, from retaining its own counsel to assist in any such proceedings
      or
      to observe such proceedings; provided
      that
      neither Seller shall be obligated to pay or comply with any settlement to which
      it has not consented. The Servicer shall be reimbursed from amounts on deposit
      in the Collection Account for all amounts advanced by it pursuant to the second
      preceding sentence except when the claim in any way relates to the Servicer’s
      indemnification pursuant to this Section
      9.01.

     

    Section
      9.02 Merger
      or Consolidation of the Seller.

     

    Each
      Seller will keep in full effect its existence, rights and franchises as a
      corporation or a Delaware business trust, as applicable, under the laws of
      the
      state of its organization and will obtain and preserve its qualification to
      do
      business as a foreign entity in each jurisdiction in which such qualification
      is
      or shall be necessary to protect the validity and enforceability of this
      Agreement or any of the Mortgage Loans and to perform its duties under this
      Agreement.

     

    Any
      Person into which a Seller may be merged or consolidated, or any corporation
      resulting from any merger, conversion or consolidation (including by means
      of
      the sale of all or substantially all of such Seller’s assets to such Person) to
      which the Seller shall be a party, or any Person succeeding to the business
      of
      the Seller, shall be the successor of the Seller 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
      that,
      unless otherwise consented to by the Purchaser, the successor or surviving
      Person, in the case of a merger or consolidation, etc. of the Servicer, shall
      be
      an institution qualified to service mortgage loans on behalf of FNMA and FHLMC
      in accordance with the requirements of Section 3.02(1), shall not cause a rating
      on any security backed by a Mortgage Loan to be downgraded and shall satisfy
      the
      requirements of Section 12.01 with respect to the qualifications of a successor
      to such Seller.

     

    
      
        
        

      

      
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    Section
      9.03 Limitation
      on Liability of the Sellers and Others.

     

    Neither
      the Sellers nor any of the officers, employees or agents of the Sellers shall
      be
      under any liability to the Purchaser for any action taken or for refraining
      from
      the taking of any action in good faith pursuant to this Agreement or pursuant
      to
      the express written instructions of the Purchaser, or for errors in judgment
      made in good faith; provided
      that
      this provision shall not protect the Sellers or any such Person against any
      breach of warranties or representations made herein, or failure to perform
      its
      obligations in compliance with any standard of care set forth in this Agreement,
      or any liability which would otherwise be imposed by reasons of willful
      misfeasance, bad faith, gross negligence or any breach in the performance of
      the
      obligations and duties hereunder. The Sellers and any officer, employee or
      agent
      of the Sellers may rely in good faith on any document of any kind reasonably
      believed by the Sellers or such Person to be genuine and prima facie
      properly
      executed and submitted by any Person respecting any matters arising
      hereunder.

     

    The
      Sellers shall not be under any obligation to appear in, prosecute or defend
      any
      legal action that is not incidental to their duties hereunder and which in
      their
      opinion may involve them in any expense or liability; provided
      that the
      Sellers may in their discretion undertake any such action that it may deem
      necessary or desirable in respect of this Agreement and the rights and duties
      of
      the parties hereto. In such event, the legal expenses and costs of such action
      and any liability resulting therefrom shall be expenses, costs and liabilities
      for which the Sellers shall be entitled to be reimbursed therefor out of the
      Collection Account. This indemnity shall survive the termination of this
      Agreement. 

     

    Section
      9.04 Servicer
      Not to Resign.

     

    With
      respect to the retention by PHH Mortgage of the servicing of the Mortgage Loans
      and the REO Properties hereunder, PHH Mortgage acknowledges that the Purchaser
      has acted in reliance upon PHH Mortgage’s Independent status, the adequacy of
      its servicing facilities, plan, personnel, records and procedures, its
      integrity, reputation and financial standing and the continuance thereof.
      Consequently, PHH Mortgage shall not assign the servicing rights retained by
      it
      hereunder to any third party nor resign from the obligations and duties hereby
      imposed on it except (i) with the approval of the Purchaser, such approval
      not
      to be unreasonably withheld, or (ii) 3 Business Days following any determination
      that its duties hereunder are no longer permissible under applicable law and
      such incapacity cannot be cured by PHH Mortgage. Any determination permitting
      the transfer of the servicing rights or the resignation of PHH Mortgage under
      Subsection
      (ii)
      hereof shall be evidenced by an opinion of counsel to such effect delivered
      to
      the Purchaser, which opinion of counsel shall be in form and substance
      reasonably acceptable to the Purchaser.

     

    ARTICLE
      X:

     

    DEFAULT

     

    Section
      10.01 Events
      of Default.

     

    In
      case
      one or more of the following events shall occur and be continuing:

     

    
      	 	
              (1)

            	
              any
                failure by the Servicer to remit to the Purchaser any payment required
                to
                be made under the terms of this Agreement which continues unremedied
                for a
                period of 3 Business Days unless such failure to remit is due to
                a cause
                beyond the Servicer’s control, including an act of God, act of civil,
                military or governmental authority, fire, epidemic, flood, blizzard,
                earthquake, riot, war, or sabotage, provided
                that the Servicer gives the Purchaser notice of such cause promptly
                and
                uses its reasonable efforts to correct such failure to remit and
                does so
                remit within 2 Business Days following the end of the duration of
                the
                cause of such failure to remit;

            


    

     

    
      
        
        

      

      
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              (2)

            	
              any
                failure on the part of a Seller/Servicer duly to observe or perform
                in any
                material respect any of the covenants or agreements on the part of
                such
                Seller/Servicer set forth in this Agreement which continues unremedied
                for
                a period of 30 days after the date on which written notice of such
                failure, requiring the same to be remedied, shall have been given
                to the
                applicable Seller/Servicer by the Purchaser; provided
                that such 30-day period shall not begin with respect to any failure
                to
                cure, repurchase or substitute in accordance with Sections
                2.04 and/or 3.04 until the expiration of the cure periods provided
                for in
                Sections
                2.04 and/or 3.04, as applicable; 

            


    

     

    
      	 	
              (3)

            	
              any
                filing of an Insolvency Proceeding by or on behalf of a Seller/Servicer,
                any consent by or on behalf of a Seller/Servicer to the filing of
                an
                Insolvency Proceeding against a Seller/Servicer, or any admission
                by or on
                behalf of a Seller/Servicer of its inability to pay its debts generally
                as
                the same become due;

            


    

     

    
      	 	
              (4)

            	
              any
                filing of an Insolvency Proceeding against a Seller/Servicer that
                remains
                undismissed or unstayed for a period of 60 days after the filing
                thereof;

            


    

     

    
      	 	
              (5)

            	
              any
                issuance of any attachment or execution against, or any appointment
                of a
                conservator, receiver or liquidator with respect to, all or substantially
                all of the assets of a
                Seller/Servicer;

            


    

     

    
      	 	
              (6)

            	
              any
                failure or inability of PHH Mortgage to be eligible to service Mortgage
                Loans for FNMA or FHLMC;

            


    

     

    
      	 	
              (7)

            	
              any
                sale, transfer, assignment, or other disposition by a Seller/Servicer
                of
                all or substantially all of its property or assets to a Person who
                does
                not meet the qualifications enumerated or incorporated by reference
                into
                Section
                9.02, any assignment by a Seller/Servicer of this Agreement or any
                of a
                Seller’s/Servicer’s rights or obligations hereunder except in accordance
                with Section
                9.04, or any action taken or omitted to be taken by a Seller/Servicer
                in
                contemplation or in furtherance of any of the foregoing, without
                the
                consent of the Purchaser; or

            


    

     

    
      	 	
              (8)

            	
              any
                failure by the Seller to be in compliance with applicable “doing business”
                or licensing laws of any jurisdiction where Mortgaged Property is
                located;

            


    

     

    then,
      and
      in each and every such case, so long as an Event of Default shall not have
      been
      remedied, the Purchaser, by notice in writing to the Sellers may, in addition
      to
      whatever rights the Purchaser may have at law or in equity to damages, including
      injunctive relief and specific performance, terminate all the rights and
      obligations of the Sellers under this Agreement and in and to the Mortgage
      Loans
      and the proceeds thereof subject to Section
      12.01,
      without the Purchaser’s incurring any penalty or fee of any kind whatsoever in
      connection therewith; provided
      that,
      upon the occurrence of an Event of Default under Subsection
      (3), (4)
      or (5) of this Section
      10.01,
      this Agreement and all authority and power of the Sellers hereunder (whether
      with respect to the Mortgage Loans, the REO Properties or otherwise) shall
      automatically cease. On or after the receipt by the Sellers of such written
      notice, all authority and power of the Sellers under this Agreement (whether
      with respect to the Mortgage Loans or otherwise) shall cease. Notwithstanding
      the occurrence of an Event of Default, the Sellers or the Servicer, as
      applicable, shall be entitled to all amounts due to such party and remaining
      unpaid on such date of termination.

     

    
      
        
        

      

      
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    ARTICLE
      XI:

     

    TERMINATION

     

    Section
      11.01 Term
      and Termination.

     

    (1) The
      servicing obligations of the Servicer under this Agreement may be terminated
      as
      provided in Section 10.01 hereof.

     

    (2) In
      any
      case other than as provided under Subsection
      (1)
      hereof, the respective obligations and responsibilities of the Sellers hereunder
      shall terminate upon: (a) the later of the final payment or other liquidation
      (or any advance with respect thereto) of the last Mortgage Loan or the
      disposition of all REO Property and the remittance of all funds due hereunder;
      or (b) the mutual written consent of the Sellers and the Purchaser.

     

    (3) Upon
      any
      termination of this Agreement or the servicing obligations of the Servicer
      hereunder, then the Servicer shall prepare, execute and deliver all agreements,
      documents and instruments, including all Servicer Mortgage Files, and do or
      accomplish all other acts or things necessary or appropriate to effect such
      termination, all at the Servicer’s sole expense. In any such event, the Servicer
      agrees to cooperate with the Purchaser in effecting the termination of the
      Servicer’s servicing responsibilities hereunder, including the transfer to the
      Purchaser or its designee for administration by it of all cash amounts which
      shall at the time be contained in, or credited by the Servicer to, the
      Collection Account and/or the Escrow Account or thereafter received with respect
      to any Mortgage Loan or REO Property.

     

    Section
      11.02 Survival.

     

    Notwithstanding
      anything to the contrary contained herein, the representations and warranties
      of
      the parties contained herein and in any certificate or other instrument
      delivered pursuant hereto, as well as the other covenants hereof (including
      those set forth in Section
      9.01)
      that, by their terms, require performance after the termination by this
      Agreement, shall survive the delivery and payment for the Mortgage Loans on
      each
      Funding Date as well as the termination of this Agreement and shall inure to
      the
      benefit of the parties, their successors and assigns. Sellers further agree
      that
      the representations, warranties and covenants made by Sellers herein and in
      any
      certificate or other instrument delivered pursuant hereto shall be deemed to
      be
      relied upon by Purchaser notwithstanding any investigation heretofore made
      by
      Purchaser or on Purchaser’s behalf.

     

    
      
        
        

      

      
        60

        
          

        

      

       

    

     

    ARTICLE
      XII:

     

    GENERAL
      PROVISIONS

     

    Section
      12.01 Successor
      to the Servicer.

     

    Upon
      the
      termination of the Servicer’s servicing responsibilities and duties under this
      Agreement pursuant to Section 9.04, 10.01, or 11.01, the Purchaser shall (i)
      succeed to and assume all of the Servicer ’s responsibilities, rights, duties
      and obligations under this Agreement or (ii) appoint a successor servicer which
      shall succeed to all rights and assume all of the responsibilities, duties
      and
      liabilities of the Servicer under this Agreement prior to the termination of
      the
      Servicer’s responsibilities, duties and liabilities under this Agreement. If the
      Servicer’s duties, responsibilities and liabilities under this Agreement should
      be terminated pursuant to the aforementioned sections, then the Servicer shall
      continue to discharge such duties and responsibilities during the period from
      the date it acquires knowledge of such termination until the effective date
      thereof (if applicable) all on the terms and conditions contained herein and
      shall take no action whatsoever that might impair or prejudice the rights or
      financial condition of its successor. The termination of the Servicer’s
      servicing responsibilities pursuant to any of the aforementioned Sections shall
      not, among other things, relieve the Servicer of its obligations pursuant to
      Section 2.04 and/or 7.02, the representations and warranties or other
      obligations set forth in Sections 2.04, 3.01, 3.02 and 3.03 and the remedies
      available to the Purchaser under the various provisions of this Agreement.
      In
      addition, such termination shall not affect any claims that the Purchaser may
      have against the Servicer arising prior to any such termination.

     

    Section
      12.02 Governing
      Law.

     

    This
      Agreement is to be governed by, and construed in accordance with the internal
      laws of the State of New York without giving effect to principals of conflicts
      of laws. The obligations, rights, and remedies of the parties hereunder shall
      be
      determined in accordance with such laws.

     

    Section
      12.03 Notices.

     

    Any
      notices or other communications permitted or required hereunder shall be in
      writing and shall be deemed conclusively to have been given if personally
      delivered, sent by courier with delivery against signature therefor, mailed
      by
      registered mail, postage prepaid, and return receipt requested or transmitted
      by
      telex, telegraph or telecopier and confirmed by a similar writing mailed or
      sent
      by courier as provided above, to (i) in the case of the Purchaser, RWT Holdings,
      Inc., One Belvedere Place, Suite 310, Mill Valley, California 94941, Attention:
      John Isbrandtsen, fax number (415) 381-1773, or such other address as may
      hereafter be furnished to the Sellers in writing by the Purchaser, (ii) in
      the
      case of the PHH Mortgage, PHH Mortgage Corporation, 6000 Atrium Way, Mt. Laurel,
      NJ 08054, Attention: Peter A. Thomas, Vice President, Secondary Marketing,
      fax
      number (__) ___-____, (iii) in the case of the Trust, c/o PHH Mortgage
      Corporation, as Administrator, 6000 Atrium Way, Mt. Laurel, New Jersey 08054,
      Attention: Peter A. Thomas, Vice President, Secondary Marketing, fax number
      (___) ___-____, or such other address as may hereafter be furnished to the
      Purchaser and the Guarantor in writing by the applicable Seller, and (and (iv)
      in the case of the Guarantor, Redwood Trust, Inc., One Belvedere Place, Suite
      300, Mill Valley, California 94941, Attention Brett Nicholas, fax number (415)
      381-1773), or such other address as may hereafter be furnished to the Sellers
      in
      writing by the Guarantor.

     

    
      
        
        

      

      
        61

        
          

        

      

      
        
        

      

    

     

    Section
      12.04 Severability
      of Provisions.

     

    If
      any
      one or more of the covenants, agreements, provisions or terms of this Agreement
      shall be for any reason whatsoever held invalid, the invalidity of any such
      covenant, agreement, provision or term of this Agreement shall in no way affect
      the validity or enforceability of the other provisions of this
      Agreement.

     

    Section
      12.05 Schedules
      and Exhibits.

     

    The
      schedules and exhibits that are attached to this Agreement are hereby
      incorporated herein and made a part hereof by this reference.

     

    Section
      12.06 General
      Interpretive Principles.

     

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

     

    
      	 	
              (1)

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

            


    

     

    
      	 	
              (2)

            	
              any
                reference in this Agreement to this Agreement or any other agreement,
                document, or instrument shall be a reference to this Agreement or
                any
                other such agreement, document, or instrument as the same has been
                amended, modified, or supplemented in accordance with the terms hereof
                and
                thereof (as applicable);

            


    

     

    
      	 	
              (3)

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

            


    

     

    
      	 	
              (4)

            	
              references
                herein to “Articles,” “Sections,” “Subsections,” “Paragraphs, ” and other
                subdivisions without reference to a document are to designated articles,
                sections, subsections, paragraphs and other subdivisions of this
                Agreement, unless the context shall otherwise
                require;

            


    

     

    
      	 	
              (5)

            	
              a
                reference to a subsection without further reference to a section
                is a
                reference to such subsection as contained in the same section in
                which the
                reference appears, and this rule shall also apply to Paragraphs and
                other
                subdivisions;

            


    

     

    
      	 	
              (6)

            	
              a
                reference to a “day” shall be a reference to a calendar
                day;

            


    

     

    
      	 	
              (7)

            	
              the
                words “herein,” “hereof,” “hereunder” and other words of similar import
                refer to this Agreement as a whole and not to any particular provision;
                and 

            


    

     

    
      	 	
              (8)

            	
              the
                terms “include” and “including” shall mean without limitation by reason of
                enumeration .

            


    

     

    
      
        
        

      

      
        62

        
          

        

      

      
        
        

      

    

     

    Section
      12.07 Waivers
      and Amendments, Noncontractual Remedies; Preservation of
      Remedies.

     

    This
      Agreement may be amended, superseded, canceled, renewed or extended and the
      terms hereof may be waived, only by a written instrument signed by authorized
      representatives of the parties or, in the case of a waiver, by an authorized
      representative of the party waiving compliance. No such written instrument
      shall
      be effective unless it expressly recites that it is intended to amend,
      supersede, cancel, renew or extend this Agreement or to waive compliance with
      one or more of the terms hereof, as the case may be. No delay on the part of
      any
      party in exercising any right, power or privilege hereunder shall operate as
      a
      waiver thereof, nor shall any waiver on the part of any party of any such right,
      power or privilege, or any single or partial exercise of any such right, power
      or privilege, preclude any further exercise thereof or the exercise of any
      other
      such right, power or privilege. The rights and remedies herein provided are
      cumulative and are not exclusive of any rights or remedies that any party may
      otherwise have at law or in equity.

     

    Section
      12.08 Captions.

     

    All
      section titles or captions contained in this Agreement or in any schedule or
      exhibit annexed hereto or referred to herein, and the table of contents to
      this
      Agreement, are for convenience only, shall not be deemed a part of this
      Agreement and shall not affect the meaning or interpretation of this
      Agreement.

     

    Section
      12.09 Counterparts;
      Effectiveness.

     

    This
      Agreement may be executed by the parties hereto in separate counterparts, each
      of which when so executed and delivered shall be an original, but all such
      counterparts shall together constitute one and the same instrument. This
      Agreement shall become effective as of the date first set forth herein upon
      the
      due execution and delivery of this Agreement by each of the parties
      hereto.

     

    Section
      12.10 Entire
      Agreement; Amendment.

     

    This
      Agreement (including the schedules and exhibits annexed hereto or referred
      to
      herein), together with the Cendant Guide and each Purchase Price and Terms
      Letter, contains the entire agreement between the parties hereto with respect
      to
      the transactions contemplated hereby and supersedes all prior agreements,
      written or oral, with respect thereto. No amendment, modification or alteration
      of the terms or provisions of this Agreement shall be binding unless the same
      shall be in writing and duly executed by the authorized representatives of
      the
      parties hereto.

     

    Section
      12.11 Further
      Assurances.

     

    Each
      party hereto shall take such additional action as may be reasonably necessary
      to
      effectuate this Agreement and the transactions contemplated hereby. The Sellers
      will promptly and duly execute and deliver to the Purchaser such documents
      and
      assurances and take such further action as the Purchaser may from time to time
      reasonably request in order to carry out more effectively the intent and purpose
      of this Agreement and to establish and protect the rights and remedies created
      or intended to be created in favor of the Purchaser.

     

    
      
        
        

      

      
        63

        
          

        

      

      
        
        

      

    

     

    Section
      12.12 Intention
      of the Seller.

     

    Each
      Seller intends that the conveyance of such Seller’s right, title and interest in
      and to the Mortgage Loans to the Purchaser shall constitute a sale and not
      a
      pledge of security for a loan. If such conveyance is deemed to be a pledge
      of
      security for a loan, however, the applicable Seller intends that the rights
      and
      obligations of the parties to such loan shall be established pursuant to the
      terms of this Agreement. Each Seller also intends and agrees that, in such
      event, (i) the applicable Seller shall be deemed to have granted to the
      Purchaser and its assigns a first priority security interest in such Seller's
      entire right, title and interest in and to the Mortgage Loans, all principal
      and
      interest received or receivable with respect to the Mortgage Loans, all amounts
      held from time to time in the accounts mentioned pursuant to this Agreement
      and
      all reinvestment earnings on such amounts, together with all of the applicable
      Seller’s right, title and interest in and to the proceeds of any title, hazard
      or other insurance policies related to such Mortgage Loans and (ii) this
      Agreement shall constitute a security agreement under applicable law. All rights
      and remedies of the Purchaser under this Agreement are distinct from, and
      cumulative with, any other rights or remedies under this Agreement or afforded
      by law or equity and all such rights and remedies may be exercised concurrently,
      independently or successively.

     

    Section
      12.13 Guaranty
      of Purchaser’s Obligations

     

    Guarantor
      hereby agrees to cause RWT Holdings, Inc. to perform all of its duties and
      obligations as the Purchaser hereunder, guaranties the timely performance of
      such duties and obligations by RWT Holdings, Inc. and agrees to be jointly
      and
      severally liable to the Sellers for all such duties and obligations of RWT
      Holdings, Inc.

     

    
      
        
        

      

      
        64

        
          

        

      

       

    


    IN
      WITNESS WHEREOF, the Sellers, the Purchaser and the Guarantor have caused their
      names to be signed hereto by their respective officers as of the date first
      written above.

     

    
      	 	 	 
	 	
              RWT
                HOLDINGS, INC.

            
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              

              Name:

            
	 	Title:


    

    


    
      	 	 	 
	 	
              PHH
                MORTGAGE CORPORATION

            
	 
 	 
 	 
 
	
            	By:  	 
	 	
              

              Name:
                 

            
	 	Title:


    

     

     

    
      	 	
              BISHOP’S
                GATE RESIDENTIAL 

            
	 	
              MORTGAGE
                TRUST (formerly known as

            
	 	
              CENDANT
                RESIDENTIAL MORTGAGE

            
	 	
              TRUST)

            
	 	 	 
	 	 	 
	
            	By:  	 
	 	
              

              Name:
                 

            
	 	Title:


    

     

    
      	 	 	 
	 	
              REDWOOD
                TRUST, INC.

            
	 
 	 
 	 
 
	
            	By:  	 
	 	
              

              Name:
                 

            
	 	Title:


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      SCHEDULE
        B-1

      


      CONTENTS
        OF PURCHASER'S MORTGAGE FILE


      


      With
        respect to each Mortgage Loan, the Purchaser's Mortgage File shall include
        each
        of the following items, which shall be available for inspection by the
        Purchaser, and which shall be retained by the applicable Seller or delivered
        to
        the Purchaser pursuant to the provisions of the Sellers' Warranties and
        Servicing Agreement.

      


      
        	 	
                1.

              	
                The
                  original Mortgage Note bearing all intervening endorsements, endorsed,
                  at
                  the direction of the Purchaser either (2) in blank and signed in the
                  name of the applicable Seller by an authorized officer. To the
                  extent that
                  there is no space on the face of the Mortgage Notes for endorsements,
                  the
                  endorsement may be contained on an allonge, if state law so allows
                  and the
                  Purchaser is so advised by the Seller that state law so allows.
                  If the
                  Mortgage Loan was acquired by the Seller in a merger, the endorsement
                  must
                  be by "[Seller], successor by merger to [name of predecessor]."
                  If the
                  Mortgage Loan was acquired or originated by the Seller while doing
                  business under another name, the endorsement must be by "[Seller],
                  formerly known as [previous name];"


              


      

      


      
        	 	
                2.

              	
                To
                  the extent applicable, the original of each power of attorney,
                  surety
                  agreement or guaranty agreement with respect to such Mortgage
                  Loan;

              


      

      


      
        	 	
                3.

              	
                The
                  original executed recorded Mortgage (together with the standard
                  adjustable
                  note mortgage rider, and convertible note rider, if applicable,
                  if the
                  Mortgage Loan is an ARM Loan), with evidence of recording thereon,
                  or, if
                  the original executed Mortgage has not yet been returned from the
                  recording office, a copy of the original executed Mortgage certified
                  by
                  the applicable Seller, title insurance company, escrow agent or
                  closing
                  attorney to be a true copy of the original of the Mortgage which
                  has been
                  delivered for recording in the appropriate recording office of
                  the
                  jurisdiction in which the Mortgaged Property is located. The standard
                  FNMA/FHLMC Condominium Rider or PUD Rider must be attached to the
                  Mortgage
                  if the Mortgaged Property is a condominium or is located in a
                  PUD.

              


      

      


      
        	 	
                4.

              	
                The
                  original Assignment of Mortgage for each Mortgage Loan, in form
                  and
                  substance acceptable for recording. The Mortgage shall be assigned,
                  at the
                  direction of the Purchaser either (2) with assignee's name left
                  blank. The Assignment of Mortgage must be duly recorded only on
                  the
                  direction of the Purchaser. If the Mortgage Loan was acquired by
                  the
                  Seller in a merger, the Assignment of Mortgage must be made by
                  "[Seller],
                  successor by merger to [name of predecessor]." If the Mortgage
                  Loan was
                  acquired or originated by the Seller while doing business under
                  another
                  name, the Assignment of Mortgage must be by "[Seller], formerly
                  known as
                  [previous name]."

              


      

      


      
        	 	
                5.

              	
                The
                  original policy of title insurance (or a preliminary title report,
                  binder
                  or commitment if the original title insurance policy has not been
                  received
                  from the insurance company).

              


      

       

      
        
          
          

        

        
          66

          
            

          

        

        
          
          

        

      

       

      
        	 	
                6.

              	
                Originals
                  of any executed intervening assignments of the Mortgage, with evidence
                  of
                  recording thereon or, if the original intervening assignment has
                  not yet
                  been returned from the recording office, a copy of such assignment
                  certified by the Seller to be a true copy of the original of the
                  assignment which has been sent for recording in the appropriate
                  jurisdiction in which the Mortgaged Property is
                  located.

              


      

      


      
        	 	
                7.

              	
                The
                  original Primary Insurance Policy or the electronic certificate
                  number of
                  such policy and the identity of the named
                  mortgagee.

              


      

      


      
        	 	
                8.

              	
                Originals
                  of all assumption, modification and substitution agreements, if
                  any, or,
                  if the originals of any such assumption, modification and substitution
                  agreements have not yet been returned from the recording office,
                  a copy of
                  such instruments certified by the applicable Seller to be a true
                  copy of
                  the original of such instruments which have been sent for recording
                  in the
                  appropriate jurisdictions in which the Mortgaged Properties are
                  located.

              


      

      


      
        	 	
                9.

              	
                Certified
                  copy of the pledge agreement as executed in connection with loans
                  with
                  additional collateral.

              


      

      


      The
        following items should be included in Schedule
        B-1 with
        respect to any Cooperative Loan:

       

      (9) (A) the
        original Mortgage Note, endorsed (on the Mortgage Note or an allonge attached
        thereto) “Pay to the order of _____________, without recourse” and signed by
        facsimile signature in the name of such Seller by an authorized officer,
        with
        all intervening endorsements showing a complete, valid and proper chain of
        title
        from the originator of such Mortgage Loan to such Seller; 

       

      (B) or
        a
        certified copy of the Mortgage Note (endorsed as provided above) together
        with a
        lost note affidavit providing indemnification to the holder thereof for any
        losses incurred due to the fact that the original Mortgage Note is
        missing;

       

      (10) the
        original Acceptance of Assignment and Assumption of Lease Agreement for each
        Mortgage Loan, from such Seller signed by original or by facsimile signature
        to
        __________________, which assignment shall be in form and substance acceptable
        for recording (except for the recording information);

       

      (11) the
        original Stock Certificate and related Stock Power, in blank, executed by
        the
        Mortgagor with such signature guaranteed and original Stock Power, in blank
        executed by the Seller; 

       

      (12) the
        original Proprietary Lease and the Assignment of Proprietary Lease executed
        by
        the Mortgagor in blank or if the Proprietary Lease has been assigned by the
        Mortgagor to the Seller, then the Seller must execute an assignment of the
        Assignment of Proprietary Lease in blank; 

       

      (13) the
        original Recognition Agreement and the original Assignment of Recognition
        Agreement; 

       

      
        
          
          

        

        
          67

          
            

          

        

        
          
          

        

      

       

      (14) the
        recorded state and county Financing Statements and Financing Statement Changes;
        

       

      (15) an
        Estoppel Letter and/or Consent; 

       

      (16) the
        Cooperative Lien Search; 

       

      (17) the
        guaranty of the Mortgage Note and Cooperative Loan, if any; and 

       

      (18) the
        original of any security agreement or similar document executed in connection
        with the Cooperative Loan.

       

      (11) Certified
        copy of the pledge agreement as executed in connection with loans with
        additional collateral.


      
        
          
          

        

        
          68

          
            

          

        

        
          
          

        

      


      EXHIBIT
        2.05

       

      FORM
        OF ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT


       

      THIS
        ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT (this “Assignment”), dated of
        [_______], 200[__], is entered into among [_________________], a
        ___________________ (the “Assignee”), RWT Holdings, Inc. (the “Assignor”), [PHH
        Mortgage Corporation] [Bishop’s Gate Residential Mortgage Trust] the “Seller ”),
        with PHH Mortgage Corporation, as the servicer (the “Servicer”).

       

      RECITALS

       

      WHEREAS
        the Assignor, the Seller and [PHH Mortgage Corporation] [Bishop’s Gate
        Residential Mortgage Trust], the Servicer and Redwood Trust, Inc., as Guarantor,
        have entered into a certain Mortgage Loan Flow Purchase, Sale and Servicing
        Agreement, dated as of August 1, 2002 (as amended or modified to the date
        hereof, the “Agreement”), pursuant to which the Assignor has acquired certain
        Mortgage Loans pursuant to the terms of the Agreement and Servicer has agreed
        to
        service such Mortgage Loans; and

       

      WHEREAS
        the Assignee has agreed, on the terms and conditions contained herein, to
        purchase from the Assignor [certain] [all] of the Mortgage Loans (the “Specified
        Mortgage Loans”) which are subject to the provisions of the Agreement and are
        listed on the mortgage loan schedule attached as Exhibit
        I
        hereto
        (the “Specified Mortgage Loan Schedule”);

       

      NOW,
        THEREFORE, in consideration of the mutual promises contained herein and other
        good and valuable consideration (the receipt and sufficiency of which are
        hereby
        acknowledged), the parties agree as follows:

       

      1. Assignment
        and Assumption

       

      (a) On
        and of
        the date hereof, the Assignor hereby sells, assigns and transfers to the
        Assignee all of its right, title and interest in the Specified Mortgage Loans
        and all rights related thereto as provided under the Agreement to the extent
        relating to the Specified Mortgage Loans, the Assignee hereby accepts such
        assignment from the Assignor, and the Seller hereby acknowledges such assignment
        and assumption.

       

      (b) On
        and as
        of the date hereof, the Assignor represents and warrants to the Assignee
        that
        the Assignor has not taken any action that would serve to impair or encumber
        the
        Assignee’s ownership interests in the Specified Mortgage Loans since the date of
        the Assignor’s acquisition of the Specified Mortgage Loans.

       

      2. Recognition
        of Purchaser

       

      From
        and
        after the date hereof, both the Assignee and the Seller shall note the transfer
        of the Specified Mortgage Loans to the Assignee in their respective books
        and
        records and shall recognize the Assignee as the owner of the Specified Mortgage
        Loans, and Servicer shall service the Specified Mortgage Loans for the benefit
        of the Assignee pursuant to the Agreement, the terms of which are incorporated
        herein by reference. It is the intention of the Seller, the Servicer, the
        Assignee and the Assignor that the Assignment shall be binding upon and inure
        to
        the benefit of the Assignee and the Assignor and their successors and
        assigns.

       

      
        
          
          

        

        
          69

          
            

          

        

        
          
          

        

      

       

      3. Representations
        and Warranties

       

      (a) The
        Assignee represents and warrants that it is a sophisticated investor able
        to
        evaluate the risks and merits of the transactions contemplated hereby, and
        that
        it has not relied in connection therewith upon any statements or representations
        of the Seller or the Assignor other than those contained in the Agreement
        or
        this Assignment.

       

      (b) Each
        of
        the parties hereto represents and warrants that it is duly and legally
        authorized to enter into this Assignment.

       

      (c) Each
        of
        the parties hereto represents and warrants that this Assignment has been
        duly
        authorized, executed and delivered by it and (assuming due authorization,
        execution and delivery thereof by each of the other parties hereto) constitutes
        its legal, valid and binding obligation, enforceable against it 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 equitable principles (regardless of
        whether such enforcement is considered in a proceeding in equity or at
        law).

       

      4. Continuing
        Effect

       

      Except
        as
        contemplated hereby, the Agreement shall remain in full force and effect
        in
        accordance with its terms.

       

      5. Governing
        Law

       

      This
        Assignment and the rights and obligations hereunder shall be governed by
        and
        construed in accordance with the internal laws of the State of New
        York.

       

      6. Notices

       

      Any
        notices or other communications permitted or required under the Agreement
        to be
        made to the Assignee shall be made in accordance with the terms of the Agreement
        and shall be sent to the Assignee as follows: [_____________________], or
        to
        such other address as may hereafter be furnished by the Assignee to the parties
        in accordance with the provisions of the Agreement.

       

      7. Counterparts

       

      This
        Agreement may be executed in counterparts, each of which when so executed
        shall
        be deemed to be an original and all of which when taken together shall
        constitute one and the same instrument.

       

      8. Definitions

       

      Any
        capitalized term used but not defined in this Agreement has the same meaning
        as
        in the Agreement.

       

      
        
          
          

        

        
          70

          
            

          

        

        
          
          

        

      

       

      IN
        WITNESS WHEREOF, the parties hereto have executed this Assignment the day
        and
        year first above written.

       

      
        	 	
                ASSIGNOR:

              
	 	 
	 	
                REDWOOD
                  TRUST, INC. 

              
	 	
                      

              
	 	
                By: 

              
	 	
                
                  

                

                Name:

                
                  

                

                Title:      

                
                  
  

              


      

       

      
        	 	
                SELLER:

              
	 	 
	 	
                [PHH
                  MORTGAGE CORPORATION]

                [BISHOP’S
                  GATE RESIDENTIAL

                MORTGAGE
                  TRUST]

              
	 	
                       

              
	 	
                By: 

              
	 	
                
                  

                

                Name:

                
                  

                

                Title:      

                
                  
 

              


      

       

      
        	 	
                
                  ASSIGNEE:

                

              
	 	
                       

              
	 	
                By: 

              
	 	
                
                  

                

                Name:

                
                  

                

                Title:      

                
                  
 

              


      

       

      
        	 	
                
                  
                    SERVICER:

                  

                

              
	 	 
	 	
                PHH
                  MORTGAGE CORPORATION

              
	 	
                      

              
	 	
                By: 

              
	 	
                
                  

                

                Name:

                
                  

                

                Title:      

                
                  
 

              


      

       

      
        
          
          

        

        
          71

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
        10

       

      FORM
        OF WARRANTY BILL OF SALE

       

      On
        this
        _______ day of ________, 200__, [PHH Mortgage Corporation] [Bishop's Gate
        Residential Mortgage Trust] ("Seller") as the Seller under that certain Mortgage
        Loan Flow Purchase, Sale & Servicing Agreement, dated as of January 1, 2006
        (the "Agreement") does hereby sell, transfer, assign, set over and convey
        to
        [______________] as Purchaser under the Agreement, without recourse, but
        subject
        to the terms of the Agreement, all rights, title and interest of the Seller
        in
        and to the Mortgage Loans listed on the Mortgage Loan Schedule attached hereto,
        together with the related Mortgage Files and all rights and obligations arising
        under the documents contained therein. Pursuant to Section 2.01 of the
        Agreement, the Seller has delivered to the Purchaser or its custodian the
        Legal
        Documents for each Mortgage Loan to be purchased as set forth in the Agreement.
        The contents of each related Servicer's Mortgage File required to be retained
        by
        PHH Mortgage Corporation ("PHH") to service the Mortgage Loans pursuant to
        the
        Agreement and thus not delivered to the Purchaser are and shall be held in
        trust
        by PHH for the benefit of the Purchaser as the owner thereof. PHH 's possession
        of any portion of each such Servicer's Mortgage File is at the will of the
        Purchaser for the sole purpose of facilitating servicing of the related Mortgage
        Loan pursuant to the Agreement, and such retention and possession by PHH
        shall
        be in a custodial capacity only. The ownership of each Mortgage Note, Mortgage,
        and the contents of the Mortgage File and Servicer's Mortgage File is vested
        in
        the Purchaser and the ownership of all records and documents with respect
        to the
        related Mortgage Loan prepared by or which come into the possession of PHH
        shall
        immediately vest in the Purchaser and shall be retained and maintained, in
        trust, by PHH at the will of the Purchaser in such custodial capacity
        only.

       

      The
        Seller confirms to the Purchaser that the representations and warranties
        set
        forth in Sections 3.01, [3.02] and 3.03 of the Agreement are true and correct
        as
        of the date hereof, and that all statements made in the Sellers' Officer's
        Certificate and all attachments thereto remain complete, true and correct
        in all
        respects as of the date hereof.

       

      Capitalized
        terms used herein and not otherwise defined shall have the meanings set forth
        in
        the Agreement.

      
        
          	 	 	 
	 	
                  [PHH
                    MORTGAGE CORPORATION]

                  
                    [BISHOP'S
                      GATE RESIDENTIAL MORTGAGE TRUST]

                  

                
	 	 
	 	
                  (Seller)

                
	 	 
	 	By:
	 	 
	 	Name:
	 	 
	 	Title:


        

      

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
        11

       

      FORM
        OF ASSESSMENT OF COMPLIANCE 

      


      To 
        RWT
        Holdings and [Master Servicer]

      


      Re: Residential
        Mortgage Loans (including first and second lien, closed-end and revolving
        balance HELOC mortgage loans 

      


      As
        of and
        for the year ended December 31, [     ], the undersigned
        officer of PHH
        Mortgage
        hereby
        certifies as follows:


      


      
        	 	
                1.

              	
                PHH
                  Mortgage
                  is
                  responsible for assessing compliance with the servicing criteria
                  applicable to it (as identified in Schedule 1122 hereto) (the “Servicing
                  Criteria”) for this asset class;

              


      

       

      
        	 	
                2.

              	
                PHH
                  Mortgage
                  used the criteria listed in paragraph (d) of Section 229.1122 of
                  Regulation AB to assess compliance with the Servicing
                  Criteria;

              


      

       

      
        	 	
                3.

              	
                [Except
                  as described below,] PHH
                  Mortgage
                  has complied, in all material respects, with the applicable servicing
                  criteria for this asset class; and 

              


      

      


      [DESCRIBE
        ANY MATERIAL INSTANCE OF NONCOMPLIANCE]

      


      
        	 	
                4.

              	
                a
                  registered public accounting firm has issued an attestation report
                  on
                  PHH
                  Mortgage’s
                  compliance with the Servicing Criteria.


              


      

       

      
        
Signature

      Name:

      Title:

       

      


      [Date]

       

      
        
          
          

        

        
          74

          
            

          

        

        
          
          

        

      

      


      Schedule
        1122 to Exhibit 11

       

      SERVICING
        CRITERIA

      


      NOTE:
        The
        criteria shown with a checked box þ
        are
applicable
        to
PHH
        Mortgage’s
        duties
        under any transaction agreement for any loans covered by this Servicer’s Report.
        Criteria shown with a blank box  ̈
        are
inapplicable
        to this
        servicer.

      


      
        	 	
                (A)

              	
                General
                  Servicing
                  Considerations

              


      

      


      þ Policies
        and procedures are instituted to monitor any performance or other triggers
        and
        events of default in accordance with transaction agreements.

      


      þ If
        any
        material servicing activities are outsourced to third parties, policies and
        procedures are instituted to monitor the third party’s performance and
        compliance with such servicing activities.

      


      þ Any
        requirements in the transaction agreements to maintain a back-up servicer
        for
        the pool assets are maintained.

      


      þ A
        fidelity bond and errors and omissions policy is in effect on the party
        participating in the servicing function throughout the reporting period in
        the
        amount of coverage required by and otherwise in accordance with the terms
        of the
        transaction agreements.

      


      
        	 	
                (B)

              	
                Cash
                  Collection and
                  Administration

              


      

      


      þ Payments
        on pool assets are deposited into the appropriate custodial bank accounts
        and
        related bank clearing accounts no more than two business days following receipt,
        or such other number of days specified in the transaction
        agreements.

      


      þ Disbursements
        made via wire transfer on behalf of an obligor or to an investor are made
        only
        by authorized personnel.

      


      þ Advances
        of funds or guarantees regarding collections, cash flows or distributions,
        and
        any interest or other fees charged for such advances, are made reviewed and
        approved as specified in the transaction agreements.

      


      þ The
        related accounts for the transaction, such as cash reserve accounts or accounts
        established as a form of overcollateralization, are separately maintained
        (e.g.,
        with
        respect to commingling of cash) as set forth in the transaction
        agreements.

       

      
        
          
          

        

        
          75

          
            

          

        

        
          
          

        

      

      


      þ Each
        custodial account is maintained at a federally insured depository institution
        as
        set forth in the transaction agreements. For purposes of this criterion,
        “federally insured depository institution” with respect to a foreign financial
        institution means a foreign financial institution that meets the requirements
        of
        Section 240.13k-1(b)(1) of Regulation AB.

      


      þ Unissued
        checks are safeguarded so as to prevent unauthorized access.

      


      þ Reconciliations
        are prepared on a monthly basis for all asset-backed securities related bank
        accounts, including custodial accounts and related bank clearing accounts.
        These
        reconciliations:


      


      
        	 	
                (A)

              	
                Are
                  mathematically accurate;

              


      

      


      
        	 	
                (B)

              	
                Are
                  prepared within 30 calendar days after the bank statement cutoff
                  date, or
                  such other number of days specified in the transaction
                  agreements;

              


      

      


      
        	 	
                (C)

              	
                Are
                  reviewed and approved by someone other than the person who prepared
                  the
                  reconciliation; and 

              


      

      


      
        	 	
                (D)

              	
                Contain
                  explanations for reconciling items. These reconciling items are
                  resolved
                  within 90 calendar days of their original identification, or such
                  other
                  number of days specified in the transaction
                  agreements.

              


      

      


      (C)
        Investor remittances and reporting

      


      o Reports
        to investors, including those to be filed with the Securities Exchange
        Commission (the “Commission”), are maintained in accordance with the transaction
        agreements and applicable Commission requirements. Specifically, such
        reports:

      


      (A)
        Are
        prepared in accordance with timeframes and other terms set forth in the
        transaction agreements;


      


      (B)
        Provide information calculated in accordance with the terms specified in
        the
        transaction agreements;


      


      (C)
        Are
        filed with the Commission as required by its rules and regulations; and



      
        
          
          

        

        
          76

          
            

          

        

        
          
          

        

      

      


      (D)
        Agree
        with investors’ or the trustee’s records as to the total unpaid principal
        balance and number of pool assets serviced by the servicer.

       

      o Amounts
        due to investors are allocated and remitted in accordance with timeframes,
        distribution priority and other terms set forth in the transaction
        agreements.


      


      o Disbursements
        made to an investor are posted within two business days to the servicer’s
        investor records, or such other number of days specified in the transaction
        agreements.


      


      o Amounts
        remitted to investors per the investor reports agree with cancelled checks,
        or
        other form of payment or custodial bank statements.

      


      (D)
        Pool Asset Administration

      


      þ Collateral
        or security on pool assets is maintained as required by the transaction
        agreements or related pool asset documents.


      


      þ Pool
        assets and related documents are safeguarded as required by the transaction
        agreements.


      


      þ Any
        additions, removals or substitutions to the asset pool are made, reviewed
        and
        approved in accordance with any conditions or requirements in the transaction
        agreements.


      


      þ Payments
        on pool assets, including any payoffs, made in accordance with the related
        pool
        asset documents are posted to the applicable servicer’s obligor records
        maintained no more than two business days after receipt, or such other number
        of
        days specified in the transaction agreements, and allocated to principal,
        interest or other items (e.g.,
        escrow) in accordance with the related asset documents.


      


      þ PHH
        Mortgage’s
        records
        regarding the pool assets agree with PHH Mortgage’s
        records
        with respect to an obligor’s unpaid principal balance.

       

      
        
          
          

        

        
          77

          
            

          

        

        
          
          

        

      

      


      þ Changes
        with respect to the terms or status of an obligor’s pool asset (e.g.,
        loan
        modifications or re-agings) are made, reviewed and approved by authorized
        personnel in accordance with the transaction agreements and related pool
        asset
        documents.


      


      þ Loss
        mitigation or recovery actions (e.g.
        forbearance plans, modifications and deeds in lieu of foreclosure, foreclosures
        and repossessions, as applicable) are initiated, conducted and concluded
        in
        accordance with the timeframes or other requirements established by the
        transaction agreements.


      


      þ Records
        documenting collection efforts are maintained during the period a pool asset
        is
        delinquent in accordance with the transaction agreements. Such records are
        maintained on at least a monthly basis, or such other period specified in
        the
        transaction agreements, and describe PHH
        Mortgage’s
        activities in monitoring delinquent pool assets including, for example, phone
        calls, letters and payment rescheduling plans in cases where delinquency
        is
        deemed temporary (e.g.,
        illness or unemployment).


      


      þ Adjustments
        to interest rates or rates of return for pool assets with variable rates
        are
        computed based on the related pool asset documents.


      


      þ Regarding
        any funds held in trust for an obligor (such as escrow accounts):

       

      (A)
        Such
        funds are analyzed, in accordance with the obligor’s pool asset documents, on at
        least an annual basis, or such other period specified in the transaction
        agreements;

      


      (B)
        Interest on such funds is paid, or credited, to obligors in accordance with
        applicable pool asset documents and state laws; and 

      


      (C)
        Such
        funds are returned to the obligor within 30 calendar days of full repayment
        of
        the related pool asset, or such other number of days specified in the
        transaction agreements.

      


      þ Payments
        made on behalf of an obligor (such as tax or insurance payments) are made
        on or
        before the related penalty or expiration dates, as indicated on the appropriate
        bills or notices for such payments, provided that such support has been received
        by PHH
        Mortgage
        at least
        30 calendar days prior to these dates, or such other number of days specified
        in
        the transaction agreements.

       

      
        
          
          

        

        
          78

          
            

          

        

        
          
          

        

      

       

      þ Any
        late
        payment penalties in connection with any payment to be made on behalf of
        an
        obligor are paid from PHH
        Mortgage’s
        funds
        and not charged to the obligor, unless the late payment was due to obligor’s
        error or omission.


      


      þ Disbursements
        made on behalf of an obligor are posted within two business days to the
        obligor’s records maintained by PHH
        Mortgage,
        or such
        other number of days specified in the transaction agreements. 


      


      þ Delinquencies,
        charge-offs and uncollectible amounts are recognized and recorded in accordance
        with the transaction agreements.

      


      þ Any
        external enhancement or other support, identified in Item 1114(a)(1) through
        (3)
        or Item 1115 of Regulation AB, is maintained as set forth in the transaction
        agreements.

       

      
        
          
          

        

        
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      EXHIBIT
        12

      


      FORM
        OF BACK-UP SOX CERTIFICATION

      


      Re:
        The
        Mortgage Loan Flow Purchase, Sale and Servicing Agreement dated as of January
        1,
        2006 between RWT Holdings, Inc., as Purchaser; PHH Mortgage Corporation and
        Bishop’s Gate Residential Mortgage Trust, as Sellers; and Redwood Trust, Inc. as
        Guarantor

      


      I,
        ___________________________, the __________________ of PHH Mortgage Corporation
        (the “Servicer”), certify to the Purchaser, any Depositor, and the Master
        Servicer, and their officers, with the knowledge and intent that they will
        rely
        upon this certification, that:

      


      (i) I
        have
        reviewed the servicer compliance statement of the Servicer provided in
        accordance with Item 1123 of Regulation AB (the “Compliance Statement”), the
        report on assessment of the Servicer’s compliance with the servicing criteria
        set forth in Item 1122(d) of Regulation AB (the “Servicing Criteria”), provided
        in accordance with Rules 13a-18 and 15d-18 under Securities Exchange Act
        of
        1934, as amended (the “Exchange Act”) and Item 1122 of Regulation AB (the
“Assessment of Compliance”), the registered public accounting firm’s attestation
        report provided in accordance with Rules 13a-18 and 15d-18 under the Exchange
        Act and Section 1122(b) of Regulation AB (the “Attestation Report”), and all
        other data, servicing reports, officer’s certificates and information relating
        to the performance of the Servicer under the terms of the Agreement during
        200[
        ] that were delivered to the Master Servicer pursuant to the Agreement
        (collectively, the “Servicing Information”);

       

      (ii) Based
        on
        my knowledge, the Servicing Information, 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 the light of the circumstances under which
        such
        statements were made, not misleading as of the period covered by or the date
        of
        such reports or information or the date of this certification;

      


      (iii) Based
        on
        my knowledge, all of the Servicing Information required to be provided by
        the
        Servicer under the Agreement has been provided to the Master Servicer and
        the
        Purchaser;

      


      (iv) I
        am
        responsible for reviewing the activities performed by the Servicer under
        the
        Agreement, and based on my knowledge and the compliance review conducted
        in
        preparing the Compliance Statement and except as disclosed in the Compliance
        Statement, the Assessment of Compliance or the Attestation Report, the Servicer
        has fulfilled its obligations under the Agreement in all material respects;
        and

       

      
        
          
          

        

        
          80

          
            

          

        

        
          
          

        

      

      


      (v) The
        Compliance Statement, the Assessment of Compliance and Attestation Report
        required to be provided by the Servicer pursuant to the Agreement, have been
        provided to the Master Servicer and the Purchaser. The Assessment of Compliance
        and the Attestation Report cover all items of the servicing criteria identified
        on Exhibit 11 to the Agreement as applicable to the Servicer. Any material
        instances of noncompliance described in such reports have been disclosed
        to the
        Master Servicer and to the Purchaser. Any material instance of noncompliance
        with the Servicing Criteria has been disclosed in such reports. 

       

      
        	 	 	 
	 	
                PHH
                  MORTGAGE CORPORATION

              
	 	
                (Servicer)

              
	 	
                 

                By: 

                
                  

                

                Name:

                Title:
                  

                Date:

              


      

       

      
        
          
          

        

        
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        PHH
          - SEQUOIA TO TRUSTEE

      

       

      ASSIGNMENT,
        ASSUMPTION AND RECOGNITION AGREEMENT

      


      For

      


      Mortgage
        Loan Flow Purchase, Sale & Servicing Agreement

      


      And

      


      Additional
        Collateral Servicing Agreement


      


      THIS
        ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT, dated as of May 25, 2007
        (the
“Assignment”), is entered into among Sequoia Residential Funding, Inc. (the
“Assignor”), PHH Mortgage Corporation (formerly known as Cendant Mortgage
        Corporation) ("PHH") and Bishop’s Gate Residential Mortgage Trust (formerly
        known as Cendant Residential Mortgage Trust), as the sellers (the “Sellers”),
        and PHH, as the servicer (the “Servicer”), and HSBC Bank USA, National
        Association (“HSBC Bank”) as Trustee under a Pooling and Servicing Agreement
        dated as of May 1, 2007 (the “Pooling and Servicing Agreement”), among the
        Assignor, as Depositor, HSBC Bank (in such Trustee capacity, the “Assignee”),
        and Wells Fargo Bank, N. A., as Master Servicer and Securities
        Administrator.

       

      RECITALS

       

      WHEREAS,
        Redwood Trust, Inc. (“Redwood”), the Sellers and the Servicer have entered into
        a certain Mortgage Loan Flow Purchase, Sale & Servicing Agreement, dated as
        of July 27, 2001, with Redwood as purchaser, PHH as servicer and seller,
        Bishop's Gate Residential Mortgage Trust (formerly known as Cendant Residential
        Mortgage Trust) as seller (as amended or modified to the date hereof, the
“2001
        Flow Servicing Agreement”), and pursuant to the Purchase Price and Terms
        Letter(s) and Warranty Bill(s) of Sale issued under the 2001 Flow Servicing
        Agreement and listed in Appendix A hereto (the “Purchase Price and Terms
        Letter(s)” and “Bill(s) of Sale,” respectively) Redwood acquired from the
        Sellers certain Mortgage Loans (the “Mortgage Loans”) and the Servicer has
        agreed to service such Mortgage Loans. In addition, certain of the Mortgage
        Loans are subject to the Additional Collateral Servicing Agreement, dated
        as of
        July 27, 2001 (the “2001 Additional Collateral Agreement”), between Redwood
        Trust and the Servicer; and

       

      WHEREAS,
        RWT Holdings, Inc. (“RWT Holdings”) has previously acquired from Redwood and has
        sold, assigned and transferred all of its right, title and interest in certain
        of the Mortgage Loans (the “Specified Mortgage Loans”) which are listed on the
        mortgage loan schedule attached as Exhibit
        I
        hereto
        (the “Specified Mortgage Loan Schedule”) and certain rights under the 2001 Flow
        Servicing Agreement and the 2001 Additional Collateral Agreement with respect
        to
        the Specified Mortgage Loans to Assignor; and

       

      WHEREAS,
        the parties hereto agree that notwithstanding anything to the contrary in
        the
        2001 Flow Servicing Agreement and the 2001 Additional Collateral Agreement,
        the
        Specified Mortgage Loans are currently being serviced by PHH pursuant to
        the
        Mortgage Loan Flow Purchase, Sale & Servicing Agreement among RWT Holdings,
        PHH Mortgage Corporation (formerly known as Cendant Mortgage Corporation)
        ("PHH") and Bishop’s Gate Residential Mortgage Trust (formerly known as Cendant
        Residential Mortgage Trust), as Sellers, and PHH, as Servicer, dated January
        1,
        2006 (the “2006 Flow Purchase and Servicing Agreement”) and the Additional
        Collateral Servicing Agreement between RWT Holdings and Servicer dated August
        1,
        2002 (the “2002 Additional Collateral Agreement”) (the 2006 Flow Purchase and
        Servicing Agreement and the 2002 Additional Collateral Agreement collectively
        referred to herein as the “Agreements”); and

       

      
        
          
          

        

        
          82

          
            

          

        

        
          
          

        

      

       

      WHEREAS,
        the parties hereto have agreed that the Specified Mortgage Loans shall be
        subject to the terms of this Assignment.

       

      NOW,
        THEREFORE, in consideration of the mutual promises contained herein and other
        good and valuable consideration (the receipt and sufficiency of which are
        hereby
        acknowledged), the parties agree as follows:

       

      1. Assignment
        and Assumption.

       

      (a) Effective
        on and as of the date hereof, the Assignor hereby pledges, assigns and transfers
        to the Assignee all of its right, title and interest in the Specified Mortgage
        Loans and all of its rights (but none of the Purchaser’s representations,
        warranties or obligations) provided under the Agreements to the extent relating
        to the Specified Mortgage Loans, the Assignee hereby accepts such assignment
        from the Assignor, and the Sellers and the Servicer hereby acknowledge such
        assignment and assumption.

       

      (b) Effective
        on and as of the date hereof, the Assignor represents and warrants to the
        Assignee that the Assignor has not taken any action that would serve to impair
        or encumber the Assignee’s interest in the Specified Mortgage Loans since the
        date of the Assignor’s acquisition of the Specified Mortgage Loans.

       

      2. Recognition
        of the Assignee.

       

      From
        and
        after the date hereof, subject to Section 3 below, the Sellers and the Servicer
        shall recognize the Assignee as the holder of the rights and benefits of
        the
        Purchaser with respect to the Specified Mortgage Loans and the Servicer will
        service the Specified Mortgage Loans for the Assignee as if the Assignee
        and the
        Servicer had entered into separate servicing agreements for the servicing
        of the
        Specified Mortgage Loans in the form of the 2006 Flow Purchase and Servicing
        Agreement and the 2002 Additional Collateral Agreement (each as amended hereby)
        with the Assignee as the Purchaser thereunder, the terms of which Agreements
        are
        incorporated herein by reference and amended hereby. It is the intention
        of the
        parties hereto that this Assignment will be a separate and distinct agreement,
        and the entire agreement, between the parties hereto to the extent of the
        Specified Mortgage Loans and shall be binding upon and for the benefit of
        the
        respective successors and assigns of the parties hereto.

       

      
        
          
          

        

        
          83

          
            

          

        

        
          
          

        

      

       

      3. Assignor’s
        Continuing Rights and Responsibilities.

       

      Notwithstanding
        Sections 1 and 2 above, the parties hereto agree that the Assignor rather
        than
        the Assignee shall have the ongoing rights and responsibilities of the Purchaser
        under the following sections of the Agreements:


      2006
        Flow
        Purchase and Servicing Agreement:

       

      
        	
                Section

              	 	
                Matter

              
	
                2.04,
                  3rd
                  ¶

              	 	
                (a) Defective
                  Documents; Delivery of Mortgage Loan Documents.

              
	 	 	 
	
                3.04(3),
                  1st
                  ¶

              	 	
                (b) Repurchase
                  and Substitution.

              
	 	 	 
	
                5.01(3)(c)
                  and (d)

              	 	
                (c) Consent
                  of the Purchaser.

              
	 	 	 
	
                5.14

              	 	
                (d) Sale
                  of Specially Serviced Mortgage Loans and REO Properties.

              
	 	 	 
	
                5.15,
                  6th
                  and 8th
                  ¶’s

              	 	
                (e) Realization
                  Upon Specially Serviced Mortgage Loans and
                  REO Properties.

              
	 	 	 
	
                7.06

              	 	
                (f) Purchaser’s
                  Right to Examine Servicer Records.

              
	 	 	 
	
                9.01
                  penultimate sentence

              	 	
                (g) Indemnification;
                  Third-Party Claims.

              


      

       

      2002
        Additional
        Collateral Agreement:

       

      
        	
                Section

              	 	
                Matter

              
	
                5(a)
                  and (c)

              	 	
                Surety
                  Bond.

              


      

       

      In
        addition, the Servicer agrees to furnish upon request to the Assignor and
        the
        Master Servicer copies of reports, notices, statements and other communications
        required to be delivered by the Servicer pursuant to any of the sections
        of the
        Agreements referred to above and under the following sections, at the times
        therein specified:

       

      2006
        Flow
        Purchase and Servicing Agreement:

       

      
        	
                Section

              	 	 
	
                5.03

              	 	
                (a) Reports
                  for Specially Serviced Mortgage Loans and Foreclosure
                  Sales.

              
	 	 	 
	
                5.13,
                  1st
                  and 5th
                  ¶’s

              	 	
                (b) Management
                  of REO Properties.

              
	 	 	 
	
                5.15,
                  2nd
                  ¶

              	 	
                (c) Realization
                  Upon Specially Serviced Mortgage Loans and  REO
                  Properties.

              
	 	 	 
	
                6.02

              	 	
                (d) Reporting.

              
	 	 	 
	
                6.04

              	 	
                (e) Non-recoverable
                  Advances.

              


      

       

      
        
          
          

        

        
          84

          
            

          

        

        
          
          

        

      

       

      
        	
                6.05

              	 	
                (f) Itemization
                  of Servicing Advances.

              
	 	 	 
	
                7.02

              	 	
                (g) Satisfaction
                  of Mortgages and Release of Mortgage Files.

              
	 	 	 
	
                7.04

              	 	
                (h)
                  Annual Compliance Statement.

              
	 	 	 
	
                7.05

              	 	
                (i)
                  Annual Assessment of Compliance and Attestation Report.

              
	 	 	 
	
                7.07

              	 	
                (j)
                  Back-Up SOX Certification

              
	 	 	 
	
                8.01

              	 	
                (k) The
                  Servicer’s Reporting Requirements.

              
	 	 	 
	
                8.02,
                  1st
                  ¶

              	 	
                (l) Financial
                  Statements.

              
	 	 	 
	
                9.01

              	 	
                (m) Indemnification;
                  Third-Party Claims

              


      

       

      2002
        Additional
        Collateral Agreement:

       

      N/A.

       

      4. Amendment
        to the Agreements.

       

      The
        parties to this Assignment agree to deem the 2002 Additional Collateral
        Agreement together with the 2006 Flow Purchase and Servicing Agreement, as
        a
        single servicing agreement (the “Combined Servicing Agreement”) for purposes of
        Section 7.04 (Annual Compliance Statement) and 7.05 (Annual Assessment of
        Compliance and Attestation Report) of the 2006 Flow Purchase and Servicing
        Agreement. Accordingly, the certificates delivered by the Servicer pursuant
        to
        those sections shall address all categories applicable to the Combined Servicing
        Agreement. 

       

      In
        addition, the Agreements are hereby amended as set forth in Appendix
        B
        hereto
        with respect to the Specified Mortgage Loans.

       

      5. Representations
        and Warranties.

       

      (a) Each
        of
        the parties hereto represents and warrants that it is duly and legally
        authorized to enter into this Assignment.

       

      (b) Each
        of
        the parties hereto represents and warrants that this Assignment has been
        duly
        authorized, executed and delivered by it and (assuming due authorization,
        execution and delivery thereof by each of the other parties hereto) constitutes
        its legal, valid and binding obligation, enforceable against it 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 equitable principles (regardless of
        whether such enforcement is considered in a proceeding in equity or at
        law).

       

      
        
          
          

        

        
          85

          
            

          

        

        
          
          

        

      

       

      6. Continuing
        Effect.

       

      Except
        as
        contemplated hereby, the Agreements shall remain in full force and effect
        in
        accordance with their terms.

       

      7. Governing
        Law.

       

      This
        Assignment and the rights and obligations hereunder shall be governed by
        and
        construed in accordance with the internal laws of the State of New
        York.

       

      8. Notices.

       

      Any
        notices or other communications permitted or required under the Agreements
        to be
        made to the Assignor and Assignee shall be made in accordance with the terms
        of
        the Agreements and shall be sent to the Assignor and Assignee as follows:
        

      


      Sequoia
        Residential Funding, Inc.

      One
        Belvedere Place, Suite 330

      Mill
        Valley, CA 94941

      Facsimile
        Number: 415-381-1773

      


      HSBC
        Bank
        USA, National Association

      452
        Fifth
        Avenue

      New
        York,
        NY 10018


       

      or
        to
        such other address as may hereafter be furnished by the Assignor or Assignee
        to
        the other parties in accordance with the provisions of the
        Agreements.

       

      9. Counterparts.

       

      This
        Assignment may be executed in counterparts, each of which when so executed
        shall
        be deemed to be an original and all of which when taken together shall
        constitute one and the same instrument.

       

      10. Definitions.

       

      Any
        capitalized term used but not defined in this Assignment has the same meaning
        as
        in the Agreements.

       

      11. Master
        Servicer.

       

      The
        Sellers and the Servicer hereby acknowledge that the Assignee has appointed
        Wells Fargo Bank, N. A. (the “Master Servicer”) to act as master servicer and
        securities administrator under the Pooling and Servicing Agreement and hereby
        agree to treat all inquiries, instructions, authorizations and other
        communications from the Master Servicer as if the same had been received
        from
        the Assignee. The Master Servicer, acting on behalf of the Assignee, shall
        have
        the rights of the Assignee as the Purchaser under the Agreements to enforce
        the
        obligations of the Servicer thereunder. Any notices or other communications
        permitted or required under the Agreements to be made to the Assignee shall
        be
        made in accordance with the terms of the Agreements and shall be sent to
        the
        Master Servicer at the following address:

       

      Wells
        Fargo Bank, N. A.

      P.O.
        Box
        98

      Columbia,
        Maryland 21046 

      (or,
        for
        overnight deliveries, 9062 Old Annapolis Road, Columbia, Maryland
        21045)

      Attention:
        Sequoia Mortgage Trust 2007-2

       

      
        
          
          

        

        
          86

          
            

          

        

        
          
          

        

      

      


      or
        to
        such other address as may hereafter be furnished by the Master Servicer to
        Seller and Servicer. Any such notices or other communications permitted or
        required under the Agreements may be delivered in electronic format unless
        manual signature is required in which case a hard copy of such report or
        communication shall be required.

       

      The
        Servicer further acknowledges that the Assignor has engaged the Master Servicer
        to provide certain default administration and that the Master Servicer, acting
        as agent of the Assignor, may exercise any of the rights of the Purchaser
        retained by the Assignor in Section 3 above.

      


      The
        Servicer shall make all distributions under the Agreements, as they relate
        to
        the Specified Mortgage Loans, to the Master Servicer by wire transfer of
        immediately funds to:

       

      Wells
        Fargo Bank, NA

      San
        Francisco, CA

      ABA#
        121-000-248

      Acct#
        3970771416

      Acct
        Name: SAS Clearing

      FFC:
        53145300

       

      [remainder
        of page intentionally left blank]

       

      
        
          
          

        

        
          87

          
            

          

        

        
          
          

        

      


      IN
        WITNESS WHEREOF, the parties hereto have executed this Assignment the day
        and
        year first above written.

      
         

        
          	 	
                  
                    ASSIGNOR:

                  

                
	 	 
	 	SEQUOIA
                  RESIDENTIAL FUNDING, INC.
	 	
                         

                
	 	
                  By: 

                
	 	
                  
                    

                  

                  Name:

                  
                    

                  

                  Title:      

                  
                    
  

                


        

         

      

      
        
          
            	 	
                    ASSIGNEE:

                  
	 	 
	 	HSBC
                    BANK USA, NATIONAL
	 	 
	 	ASSOCIATION
	 	
                          

                  
	 	
                    By: 

                  
	 	
                    
                      

                    

                    Name:

                    
                      

                    

                    Title:      

                    
                      
  

                  


          

           

          
            
              
                
                  	 	
                          SELLER:

                        
	 	 
	 	
                          PHH
                            MORTGAGE CORPORATION

                        
	 	
                                

                        
	 	
                          By: 

                        
	 	
                          
                            

                          

                          Name:

                          
                            

                          

                          Title:      

                          
                            
  

                        


                

                 

                
                  
                    
                      
                        
                          	 	SELLER:
	 	 
	 	BISHOP’S
                                  GATE RESIDENTIAL 
	 	 
	 	MORTGAGE
                                  TRUST
	 	
                                        

                                
	 	
                                  By: 

                                
	 	
                                  
                                    

                                  

                                  Name:

                                  
                                    

                                  

                                  Title:      

                                  
                                    
  

                                


                        

                         

                        
                          
                            
                              
                                
                                  
                                    	 	SERVICER:
	 	 
	 	PHH
                                            MORTGAGE CORPORATION
	 	
                                                  

                                          
	 	
                                            By: 

                                          
	 	
                                            
                                              

                                            

                                            Name:

                                            
                                              

                                            

                                            Title:      

                                            
                                              
  

                                          


                                  

                                   

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

      
        
          
          

        

        
          88

          
            

          

        

        
          
          

        

      


      EXHIBIT
        I

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      APPENDIX
        A


       

      
        	
                Purchase
                  Price and Terms Letter(s)

              	 	
                Warranty
                  Bill(s) of Sale

              
	 	 	
                1/28/02

              


      

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    APPENDIX
      B

     

    MODIFICATIONS
      TO THE 2006 FLOW PURCHASE AND SERVICING AGREEMENT

     

    1. The
      definition of “Business Day” is hereby revised to read as follows (addition in
      italics):

     

    “
      ‘Business Day’: Any day other than (i) a Saturday or Sunday, (ii)
      a day on which banking or savings associations in the States of Maryland or
      Minnesota are authorized or obligated by law or executive order to be closed,
      or
      (iii)
      a day on
      which the Federal Reserve is closed.”

     

    2. The
      definition of “Collection Account” is hereby revised to read as
      follows:

     

    “‘Collection
      Account’: The separate trust account or accounts created and maintained pursuant
      to Section
      5.04
      which
      shall be entitled 'HSBC Bank USA, National Association, as Trustee on behalf
      of
      the holders of Sequoia Mortgage Trust 2007-2 Mortgage Pass-Through
      Certificates.'”

     

    3. The
      definition of “Cut-off Date” is hereby revised to read as follows:

     

    “‘Cut-off
      Date’: May 1, 2007.” 

     

    4. The
      definition of "Due Period" is hereby revised to read as follows:

     

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

     

    5. The
      definition of “Escrow Account” is hereby revised to read as follows (changes in
      italics):

     

    “
‘Escrow
      Account’: The separate trust account or accounts created and maintained pursuant
      to Section
      5.06
      which shall be entitled “PHH Mortgage Corporation, as servicer and custodian for
      the Purchaser under the Mortgage Loan Flow Purchase, Sale & Servicing
      Agreement, dated as of January
      1, 2006
      (as
      amended), and various mortgagors.”

     

    6. Section
      3.03 is revised to delete the “and” at the end of Section 3.03(48), to replace
      the “.” at the end of Section 3.03(49) with “;”, to replace the “.” at the end
      of Section 3.03(50) with “;” and to add the following representations and
      warranties at the end of such Section:

     

    “(51)
      No
      Mortgage Loan was originated on or after October 1, 2002 and prior to March
      7,
      2003, which is secured by property located in the State of Georgia. No Mortgage
      Loan was originated on or after March 7, 2003 which is a “high cost home loan”
as defined under the Georgia Fair Lending Act, which became effective October
      1,
      2002; 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (52)
      Each
      Mortgage Loan at the time it was made complied in all material respects with
      applicable local, state, and federal laws, including, but not limited to, all
      applicable predatory and abusive lending laws;

     

    (53)
      None
      of the mortgage loans are High Cost as defined by the applicable predatory
      and
      abusive lending laws and no mortgage loan is a “high cost” or “covered” mortgage
      loan, as applicable (as such terms are defined in the then current Standard
      and
      Poor’s LEVELS Glossary which is now Version 5.7, Appendix E); 

     

    (54)
      No
      Mortgage Loan which is secured by property located in the State of New Jersey
      is
      a “High-Cost Home Loan” as defined in the New Jersey Home Ownership Act, which
      became effective November 27, 2003; 

     

    (55)
      No
      Mortgage Loan which is secured by property located in the State of New Mexico
      is
      a “High-Cost Home Loan” as defined in the New Mexico Home Loan Protection Act,
      which became effective January 1, 2004; 

     

    (56)
      No
      Mortgage Loan which is secured by property located in the State of Kentucky
      is a
“High-Cost Home Loan” as defined in the Kentucky House Bill 287, which became
      effective June 24, 2003; 

     

    (57)
      No
      Mortgage Loan which is secured by property located in the Commonwealth of
      Massachusetts is a "High Cost Home Mortgage Loan" as defined in the
      Massachusetts Predatory Home Loan Practices Act (Mass. Ann. Laws ch. 183C)
      which
      became effective November 7, 2004;

    


    (58)
      No
      Mortgage Loan that is secured by property located in the State of Illinois
      is a
      "High-Risk Home Loan" as defined in the Illinois High Risk Home Loan Act
      effective January 1, 2004 (815 Ill. Comp. Stat. 137/1 et seq.); and none of
      the
      Mortgage Loans that are secured by property located in the State of Illinois
      are
      in violation of the provisions of the Illinois Interest Act (815 Ill. Comp.
      Stat. 205/1 et. seq.);

    


    (59)
      No
      Mortgage Loan that is secured by property located in the State of Indiana is
      a
      "High Cost Home Loan" as defined in Indiana’s Home Loan Practices Act (I.C.
      24-9), which became effective January 1, 2005;

    


    (60)
      None
      of the proceeds of any Mortgage Loan were used to finance the purchase of single
      premium credit insurance policies; and

    


    (61)
      No
      Mortgage Loan contains prepayment penalties that extend beyond five years after
      the date of origination.”

    


    7. The
      first
      sentence of Section 5.03 is hereby replaced with the following:

     

    “The
      Servicer shall, within five (5) calendar days following each Record Date,
      deliver to the Purchaser monthly reports (substantially in the form of Exhibit
      1: 12B and 12C attached hereto or in such other format and content mutually
      agreed upon) with respect to all Specially Serviced Mortgage Loans.”


    
       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    8. The
      first
      sentence of Section 6.02 is hereby replaced with the following:

     

    “On
      or
      before the 5th
      calendar
      day (or, if such day is not a Business Day, on the immediately succeeding
      Business Day) of each month during the term hereof, the Servicer shall deliver
      to the Purchaser monthly accounting reports in the form of Exhibit 1: 12A
      attached hereto, or in such other format and content mutually agreed upon,
      with
      respect to the most recently ended Monthly Period.”

     

    9. Section
      10.01 is revised to read as follows:

     

    “(1) any
      failure by the Servicer to remit to the Purchaser any payment required to be
      made under the terms of this Agreement which continues unremedied for a period
      of 3 Business Days;”

     

    10.  Section
      10.01 is revised to add an “or” and the following after 10.01(8):

     

    “(9) any
      failure by the Servicer to comply with Sections 7.04, 7.05 or 7.07 of this
      Agreement.”

     

    11. Exhibit
      11 to the Flow Purchase and Servicing Agreement, the Form of Assessment of
      Compliance, is hereby deleted in its entirety and replaced by Exhibit II
      attached to this Assignment.

     

    
      
        
        

      

      
        
        

        
          

        

      

       

    


    MODIFICATIONS
      TO THE 2002 ADDITIONAL COLLATERAL AGREEMENT

     

    1. A
      definition of “Collection Account” is added to read as follows:

     

    “‘Collection
      Account’: The separate trust account or accounts created and maintained pursuant
      to Section
      5.04 of
      the Purchase and Servicing Agreement which shall be entitled ‘HSBC Bank USA,
      National Association, as Trustee on behalf of the holders of Sequoia Mortgage
      Trust 2007-2 Mortgage Pass-Through Certificates.’”

     

    2.  Section
      2(d) is hereby revised by deleting the “and” at the end of Section 2(d)(ii),
      deleting the “.” at the end of Section 2(d)(iii) and replacing it with “; and”
and then adding the following at the end of such section:

     

    “(iv)
      The
      Additional Collateral Mortgage Loans are insured under the terms and provisions
      of the Surety Bond subject to the limitations set forth therein. All
      requirements for transferring coverage under the Surety Bond in respect of
      such
      Additional Collateral Mortgage Loans to the Trustee (as defined in the Pooling
      and Servicing Agreement) shall be complied with.”

     

    3.  Section
      7
      is hereby revised by adding the following sentence at the end of the
      paragraph:

     

    "Notwithstanding
      the foregoing, the obligations and responsibilities of the Servicer shall
      terminate upon any Event of Default of the Seller/Servicer enumerated under
      Section 10.01 of the Purchase and Servicing Agreement and the appointed
      successor servicer shall succeed to all rights and assume all of the
      responsibilities, duties and liabilities of the Servicer under this
      Agreement."

     

    
      
        
        

      

      
        
        

        
          

        

      

       

    


    EXHIBIT
      1

     

    
      
        	 	 	
                Standard
                  Loan Level File Layout - Master Servicing

              	 	
                 

              	 	
                 

              	 	
                 

              
	 	 	 	 	
                 

              	 	
                 

              	 	
                 

              
	
                Exhibit
                  12A: 
                  Layout

              	 	 	 	
                 

              	 	
                 

              	 	
                 

              
	
                Column
                  Name

              	 	
                Description

              	 	
                Decimal

              	 	
                Format
                  Comment

              	 	
                Max
                  Size

              
	
                Each
                  file requires the following fields:

              	 	
                 

              	 	
                 

              	 	
                 

              
	
                SER_INVESTOR_NBR

              	 	
                A
                  value assigned by the Servicer to define a group of loans.

              	 	
                 

              	 	
                Text
                  up to 20 digits

              	 	
                20

              
	
                LOAN_NBR

              	 	
                A
                  unique identifier assigned to each loan by the investor.

              	 	
                 

              	 	
                Text
                  up to 10 digits

              	 	
                10

              
	
                SERVICER_LOAN_NBR

              	 	
                A
                  unique number assigned to a loan by the Servicer. This may be different
                  than the LOAN_NBR.

              	 	
                 

              	 	
                Text
                  up to 10 digits

              	 	
                10

              
	
                SCHED_PAY_AMT

              	 	
                Scheduled
                  monthly principal and scheduled interest payment that a borrower
                  is
                  expected to pay, P&I constant.

              	 	
                2

              	 	
                No
                  commas(,) or dollar signs ($)

              	 	
                11

              
	
                NOTE_INT_RATE

              	 	
                The
                  loan interest rate as reported by the Servicer.

              	 	
                4

              	 	
                Max
                  length of 6

              	 	
                6

              
	
                NET_INT_RATE

              	 	
                The
                  loan gross interest rate less the service fee rate as reported
                  by the
                  Servicer.

              	 	
                4

              	 	
                Max
                  length of 6

              	 	
                6

              
	
                SERV_FEE_RATE

              	 	
                The
                  servicer's fee rate for a loan as reported by the Servicer.
                  

              	 	
                4

              	 	
                Max
                  length of 6

              	 	
                6

              
	
                SERV_FEE_AMT

              	 	
                The
                  servicer's fee amount for a loan as reported by the Servicer.
                  

              	 	
                2

              	 	
                No
                  commas(,) or dollar signs ($)

              	 	
                11

              
	
                NEW_PAY_AMT

              	 	
                The
                  new loan payment amount as reported by the Servicer. 

              	 	
                2

              	 	
                No
                  commas(,) or dollar signs ($)

              	 	
                11

              
	
                NEW_LOAN_RATE

              	 	
                The
                  new loan rate as reported by the Servicer. 

              	 	
                4

              	 	
                Max
                  length of 6

              	 	
                6

              
	
                ARM_INDEX_RATE

              	 	
                The
                  index the Servicer is using to calculate a forecasted
                  rate.

              	 	
                4

              	 	
                Max
                  length of 6

              	 	
                6

              
	
                ACTL_BEG_PRIN_BAL

              	 	
                The
                  borrower's actual principal balance at the beginning of the processing
                  cycle.

              	 	
                2

              	 	
                No
                  commas(,) or dollar signs ($)

              	 	
                11

              
	
                ACTL_END_PRIN_BAL

              	 	
                The
                  borrower's actual principal balance at the end of the processing
                  cycle.

              	 	
                2

              	 	
                No
                  commas(,) or dollar signs ($)

              	 	
                11

              
	
                BORR_NEXT_PAY_DUE_DATE

              	 	
                The
                  date at the end of processing cycle that the borrower's next payment
                  is
                  due to the Servicer, as reported by Servicer.

              	 	
                 

              	 	
                MM/DD/YYYY

              	 	
                10

              
	
                SERV_CURT_AMT_1

              	 	
                The
                  first curtailment amount to be applied.

              	 	
                2

              	 	
                No
                  commas(,) or dollar signs ($)

              	 	
                11

              
	
                SERV_CURT_DATE_1

              	 	
                The
                  curtailment date associated with the first curtailment amount.
                  

              	 	
                 

              	 	
                MM/DD/YYYY

              	 	
                10

              
	
                CURT_ADJ_
                  AMT_1

              	 	
                The
                  curtailment interest on the first curtailment amount, if
                  applicable.

              	 	
                2

              	 	
                No
                  commas(,) or dollar signs ($)

              	 	
                11

              
	
                SERV_CURT_AMT_2

              	 	
                The
                  second curtailment amount to be applied.

              	 	
                2

              	 	
                No
                  commas(,) or dollar signs ($)

              	 	
                11

              
	
                SERV_CURT_DATE_2

              	 	
                The
                  curtailment date associated with the second curtailment
                  amount.

              	 	
                 

              	 	
                MM/DD/YYYY

              	 	
                10

              
	
                CURT_ADJ_
                  AMT_2

              	 	
                The
                  curtailment interest on the second curtailment amount, if
                  applicable.

              	 	
                2

              	 	
                No
                  commas(,) or dollar signs ($)

              	 	
                11

              


      

    


    
      
        
        

      

      
        
        

        
          

        

      

       

    

    

      
        	
                Exhibit
                  1: Continued

              	 	
                Standard
                  Loan Level File Layout 

              	 	
                 

              	 	
                 

              	 	
                 

              
	
                Column
                  Name

              	 	
                Description

              	 	
                Decimal

              	 	
                Format
                  Comment

              	 	
                 Max
                  Size

              
	
                SERV_CURT_AMT_3

              	 	
                The
                  third curtailment amount to be applied.

              	 	
                2

              	 	
                No
                  commas(,) or dollar signs ($)

              	 	
                11

              
	
                SERV_CURT_DATE_3

              	 	
                The
                  curtailment date associated with the third curtailment
                  amount.

              	 	
                 

              	 	
                MM/DD/YYYY

              	 	
                10

              
	
                CURT_ADJ_AMT_3

              	 	
                The
                  curtailment interest on the third curtailment amount, if
                  applicable.

              	 	
                2

              	 	
                No
                  commas(,) or dollar signs ($)

              	 	
                11

              
	
                PIF_AMT

              	 	
                The
                  loan "paid in full" amount as reported by the Servicer.

              	 	
                2

              	 	
                No
                  commas(,) or dollar signs ($)

              	 	
                11

              
	
                PIF_DATE

              	 	
                The
                  paid in full date as reported by the Servicer.

              	 	
                 

              	 	
                MM/DD/YYYY

              	 	
                10

              
	
                 

                ACTION_CODE

              	 	
                 

                The
                  standard FNMA numeric code used to indicate the default/delinquent
                  status
                  of a particular loan.

              	 	
                 

              	 	
                Action
                  Code Key: 15=Bankruptcy, 30=Foreclosure, , 60=PIF, 63=Substitution,
                  65=Repurchase,70=REO 

              	 	
                2

              
	
                INT_ADJ_AMT

              	 	
                The
                  amount of the interest adjustment as reported by the
                  Servicer.

              	 	
                2

              	 	
                No
                  commas(,) or dollar signs ($)

              	 	
                11

              
	
                SOLDIER_SAILOR_ADJ_AMT

              	 	
                The
                  Soldier and Sailor Adjustment amount, if applicable.

              	 	
                2

              	 	
                No
                  commas(,) or dollar signs ($)

              	 	
                11

              
	
                NON_ADV_LOAN_AMT

              	 	
                The
                  Non Recoverable Loan Amount, if applicable.

              	 	
                2

              	 	
                No
                  commas(,) or dollar signs ($)

              	 	
                11

              
	
                LOAN_LOSS_AMT

              	 	
                The
                  amount the Servicer is passing as a loss, if applicable.

              	 	
                2

              	 	
                No
                  commas(,) or dollar signs ($)

              	 	
                11

              
	
                Plus
                  the following applicable fields:

              	 	
                 

              	 	
                 

              	 	
                 

              
	
                SCHED_BEG_PRIN_BAL

              	 	
                The
                  scheduled outstanding principal amount due at the beginning of
                  the cycle
                  date to be passed through to investors.

              	 	
                2

              	 	
                No
                  commas(,) or dollar signs ($)

              	 	
                11

              
	
                SCHED_END_PRIN_BAL

              	 	
                The
                  scheduled principal balance due to investors at the end of a processing
                  cycle.

              	 	
                2

              	 	
                No
                  commas(,) or dollar signs ($)

              	 	
                11

              
	
                SCHED_PRIN_AMT

              	 	
                The
                  scheduled principal amount as reported by the Servicer for the
                  current
                  cycle -- only applicable for Scheduled/Scheduled Loans.

              	 	
                2

              	 	
                No
                  commas(,) or dollar signs ($)

              	 	
                11

              
	
                SCHED_NET_INT

              	 	
                The
                  scheduled gross interest amount less the service fee amount for
                  the
                  current cycle as reported by the Servicer -- only applicable for
                  Scheduled/Scheduled Loans.

              	 	
                2

              	 	
                No
                  commas(,) or dollar signs ($)

              	 	
                11

              
	
                ACTL_PRIN_AMT

              	 	
                The
                  actual principal amount collected by the Servicer for the current
                  reporting cycle -- only applicable for Actual/Actual
                  Loans.

              	 	
                2

              	 	
                No
                  commas(,) or dollar signs ($)

              	 	
                11

              
	
                ACTL_NET_INT

              	 	
                The
                  actual gross interest amount less the service fee amount for the
                  current
                  reporting cycle as reported by the Servicer -- only applicable
                  for
                  Actual/Actual Loans.

              	 	
                2

              	 	
                No
                  commas(,) or dollar signs ($)

              	 	
                11

              
	
                PREPAY_PENALTY_
                  AMT

              	 	
                The
                  penalty amount received when a borrower prepays on his loan as
                  reported by
                  the Servicer. 

              	 	
                2

              	 	
                No
                  commas(,) or dollar signs ($)

              	 	
                11

              
	
                PREPAY_PENALTY_
                  WAIVED

              	 	
                The
                  prepayment penalty amount for the loan waived by the
                  servicer.

              	 	
                2

              	 	
                No
                  commas(,) or dollar signs ($)

              	 	
                11

              


      

    


    
      
        
        

      

      
        
        

        
          

        

      

       

    

    

      
        	
                Exhibit
                  1: Continued

              	 	
                Standard
                  Loan Level File Layout 

              	 	
                 

              	 	
                 

              	 	
                 

              
	
                Column
                  Name

              	 	
                Description

              	 	
                Decimal

              	 	
                Format
                  Comment

              	 	
                Max
                  Size

              
	
                MOD_DATE

              	 	
                The
                  Effective Payment Date of the Modification for the loan.

              	 	
                 

              	 	
                MM/DD/YYYY

              	 	
                10

              
	
                MOD_TYPE

              	 	
                The
                  Modification Type.

              	 	
                 

              	 	
                Varchar
                  - value can be alpha or numeric

              	 	
                30

              
	
                DELINQ_P&I_ADVANCE_AMT

              	 	
                The
                  current outstanding principal and interest advances made by
                  Servicer.

              	 	
                2

              	 	
                No
                  commas(,) or dollar signs ($)

              	 	
                11

              
	
                 

                BREACH_FLAG

              	 	
                Flag
                  to indicate if the repurchase of a loan is due to a breach of
                  Representations and Warranties

              	 	 	 	
                Y=Breach

                N=NO
                  Breach

                Let
                  blank if N/A

              	 	
                1

              


      

    


    
      
        
        

      

      
        
        

        
          

        

      

       

    


    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    


    
      
        
        

      

      
        
        

        
          

        

      

       

    

    


    Exhibit
      12B : Standard
      File Layout - Delinquency Reporting

    


      *The
      column/header names in bold
      are
      the minimum fields Wells Fargo must receive from every
      Servicer

    
      

        
          	
                  Column/Header
                    Name

                	 	
                  Description

                	 	
                  Decimal

                	 	
                  Format
                    Comment

                
	
                  SERVICER_LOAN_NBR

                	 	
                  A
                    unique number assigned to a loan by the Servicer. This may be
                    different
                    than the LOAN_NBR

                	 	 	 	
                   

                
	
                  LOAN_NBR

                	 	
                  A
                    unique identifier assigned to each loan by the originator.

                	 	 	 	
                   

                
	
                  CLIENT_NBR

                	 	
                  Servicer
                    Client Number

                	 	 	 	 
	
                  SERV_INVESTOR_NBR

                	 	
                  Contains
                    a unique number as assigned by an external servicer to identify
                    a group of
                    loans in their system.

                	 	 	 	
                   

                
	
                  BORROWER_FIRST_NAME

                	 	
                  First
                    Name of the Borrower.

                	 	 	 	 
	
                  BORROWER_LAST_NAME

                	 	
                  Last
                    name of the borrower.

                	 	 	 	 
	
                  PROP_ADDRESS

                	 	
                  Street
                    Name and Number of Property

                	 	 	 	
                   

                
	
                  PROP_STATE

                	 	
                  The
                    state where the property located.

                	 	 	 	
                   

                
	
                  PROP_ZIP

                	 	
                  Zip
                    code where the property is located.

                	 	 	 	
                   

                
	
                  BORR_NEXT_PAY_DUE_DATE

                	 	
                  The
                    date that the borrower's next payment is due to the servicer
                    at the end of
                    processing cycle, as reported by Servicer.

                	 	 	 	
                  MM/DD/YYYY

                
	
                  LOAN_TYPE

                	 	
                  Loan
                    Type (i.e. FHA, VA, Conv)

                	 	 	 	
                   

                
	
                  BANKRUPTCY_FILED_DATE

                	 	
                  The
                    date a particular bankruptcy claim was filed.

                	 	 	 	
                  MM/DD/YYYY

                
	
                  BANKRUPTCY_CHAPTER_CODE

                	 	
                  The
                    chapter under which the bankruptcy was filed.

                	 	 	 	
                   

                
	
                  BANKRUPTCY_CASE_NBR

                	 	
                  The
                    case number assigned by the court to the bankruptcy
                    filing.

                	 	 	 	
                   

                
	
                  POST_PETITION_DUE_DATE

                	 	
                  The
                    payment due date once the bankruptcy has been approved by the
                    courts

                	 	 	 	
                  MM/DD/YYYY

                
	
                  BANKRUPTCY_DCHRG_DISM_DATE

                	 	
                  The
                    Date The Loan Is Removed From Bankruptcy. Either by Dismissal,
                    Discharged
                    and/or a Motion For Relief Was Granted. 

                	 	 	 	
                  MM/DD/YYYY

                
	
                  LOSS_MIT_APPR_DATE

                	 	
                  The
                    Date The Loss Mitigation Was Approved By The Servicer

                	 	 	 	
                  MM/DD/YYYY

                
	
                  LOSS_MIT_TYPE

                	 	
                  The
                    Type Of Loss Mitigation Approved For A Loan Such As;

                	 	 	 	 
	
                  LOSS_MIT_EST_COMP_DATE

                	 	
                  The
                    Date The Loss Mitigation /Plan Is Scheduled To End/Close

                	 	 	 	
                  MM/DD/YYYY

                
	
                  LOSS_MIT_ACT_COMP_DATE

                	 	
                  The
                    Date The Loss Mitigation Is Actually Completed

                	 	 	 	
                  MM/DD/YYYY

                
	
                  FRCLSR_APPROVED_DATE

                	 	
                  The
                    date DA Admin sends a letter to the servicer with instructions
                    to begin
                    foreclosure proceedings.

                	 	 	 	
                  MM/DD/YYYY

                
	
                  ATTORNEY_REFERRAL_DATE

                	 	
                  Date
                    File Was Referred To Attorney to Pursue Foreclosure

                	 	 	 	
                  MM/DD/YYYY

                
	
                  FIRST_LEGAL_DATE

                	 	
                  Notice
                    of 1st legal filed by an Attorney in a Foreclosure Action

                	 	 	 	
                  MM/DD/YYYY

                
	
                  FRCLSR_SALE_EXPECTED_DATE

                	 	
                  The
                    date by which a foreclosure sale is expected to occur.

                	 	 	 	
                  MM/DD/YYYY

                
	
                  FRCLSR_SALE_DATE

                	 	
                  The
                    actual date of the foreclosure sale.

                	 	 	 	
                  MM/DD/YYYY

                
	
                  FRCLSR_SALE_AMT

                	 	
                  The
                    amount a property sold for at the foreclosure sale.

                	 	
                  2

                	 	
                  No
                    commas(,) or dollar signs ($)

                
	
                  EVICTION_START_DATE

                	 	
                  The
                    date the servicer initiates eviction of the borrower.

                	 	 	 	
                  MM/DD/YYYY

                
	
                  EVICTION_COMPLETED_DATE

                	 	
                  The
                    date the court revokes legal possession of the property from
                    the
                    borrower.

                	 	 	 	
                  MM/DD/YYYY

                
	
                  LIST_PRICE

                	 	
                  The
                    price at which an REO property is marketed.

                	 	
                  2

                	 	
                  No
                    commas(,) or dollar signs ($)

                
	
                  LIST_DATE

                	 	
                  The
                    date an REO property is listed at a particular price.

                	 	 	 	
                  MM/DD/YYYY

                
	
                  OFFER_AMT

                	 	
                  The
                    dollar value of an offer for an REO property.

                	 	
                  2

                	 	
                  No
                    commas(,) or dollar signs ($)

                
	
                  OFFER_DATE_TIME

                	 	
                  The
                    date an offer is received by DA Admin or by the Servicer.

                	 	 	 	
                  MM/DD/YYYY

                
	
                  REO_CLOSING_DATE

                	 	
                  The
                    date the REO sale of the property is scheduled to close.

                	 	 	 	
                  MM/DD/YYYY

                
	
                  REO_ACTUAL_CLOSING_DATE

                	 	
                  Actual
                    Date Of REO Sale

                	 	 	 	
                  MM/DD/YYYY

                
	
                  OCCUPANT_CODE

                	 	
                  Classification
                    of how the property is occupied.

                	 	 	 	
                   

                
	
                  PROP_CONDITION_CODE

                	 	
                  A
                    code that indicates the condition of the property.

                	 	 	 	
                   

                
	
                  PROP_INSPECTION_DATE

                	 	
                  The
                    date a property inspection is performed.

                	 	 	 	
                  MM/DD/YYYY

                


        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          	
                  APPRAISAL_DATE

                	 	
                  The
                    date the appraisal was done.

                	 	 	 	
                  MM/DD/YYYY

                
	
                  CURR_PROP_VAL

                	 	
                   The
                    current "as is" value of the property based on brokers price
                    opinion or
                    appraisal.

                	 	
                  2

                	 	
                   

                
	
                  REPAIRED_PROP_VAL

                	 	
                  The
                    amount the property would be worth if repairs are completed pursuant
                    to a
                    broker's price opinion or appraisal.

                	 	
                  2

                	 	
                   

                
	
                  If
                    applicable:

                	 	
                   

                	 	 	 	
                   

                
	
                  DELINQ_STATUS_CODE

                	 	
                  FNMA
                    Code Describing Status of Loan

                	 	 	 	 
	
                  DELINQ_REASON_CODE

                	 	
                  The
                    circumstances which caused a borrower to stop paying on a loan.
                    Code
                    indicates the reason why the loan is in default for this
                    cycle.

                	 	 	 	 
	
                  MI_CLAIM_FILED_DATE

                	 	
                  Date
                    Mortgage Insurance Claim Was Filed With Mortgage Insurance
                    Company.

                	 	 	 	
                  MM/DD/YYYY

                
	
                  MI_CLAIM_AMT

                	 	
                  Amount
                    of Mortgage Insurance Claim Filed

                	 	 	 	
                  No
                    commas(,) or dollar signs ($)

                
	
                  MI_CLAIM_PAID_DATE

                	 	
                  Date
                    Mortgage Insurance Company Disbursed Claim Payment

                	 	 	 	
                  MM/DD/YYYY

                
	
                  MI_CLAIM_AMT_PAID

                	 	
                  Amount
                    Mortgage Insurance Company Paid On Claim

                	 	
                  2

                	 	
                  No
                    commas(,) or dollar signs ($)

                
	
                  POOL_CLAIM_FILED_DATE

                	 	
                  Date
                    Claim Was Filed With Pool Insurance Company

                	 	 	 	
                  MM/DD/YYYY

                
	
                  POOL_CLAIM_AMT

                	 	
                  Amount
                    of Claim Filed With Pool Insurance Company

                	 	
                  2

                	 	
                  No
                    commas(,) or dollar signs ($)

                
	
                  POOL_CLAIM_PAID_DATE

                	 	
                  Date
                    Claim Was Settled and The Check Was Issued By The Pool
                    Insurer

                	 	 	 	
                  MM/DD/YYYY

                
	
                  POOL_CLAIM_AMT_PAID

                	 	
                  Amount
                    Paid On Claim By Pool Insurance Company

                	 	
                  2

                	 	
                  No
                    commas(,) or dollar signs ($)

                
	
                  FHA_PART_A_CLAIM_FILED_DATE

                	 	
                   Date
                    FHA Part A Claim Was Filed With HUD

                	 	 	 	
                  MM/DD/YYYY

                
	
                  FHA_PART_A_CLAIM_AMT

                	 	
                   Amount
                    of FHA Part A Claim Filed

                	 	
                  2

                	 	
                  No
                    commas(,) or dollar signs ($)

                
	
                  FHA_PART_A_CLAIM_PAID_DATE

                	 	
                   Date
                    HUD Disbursed Part A Claim Payment

                	 	 	 	
                  MM/DD/YYYY

                
	
                  FHA_PART_A_CLAIM_PAID_AMT

                	 	
                   Amount
                    HUD Paid on Part A Claim

                	 	
                  2

                	 	
                  No
                    commas(,) or dollar signs ($)

                
	
                  FHA_PART_B_CLAIM_FILED_DATE

                	 	
                    Date
                    FHA Part B Claim Was Filed With HUD

                	 	 	 	
                  MM/DD/YYYY

                
	
                  FHA_PART_B_CLAIM_AMT

                	 	
                    Amount
                    of FHA Part B Claim Filed

                	 	
                  2

                	 	
                  No
                    commas(,) or dollar signs ($)

                
	
                  FHA_PART_B_CLAIM_PAID_DATE

                	 	
                     Date
                    HUD Disbursed Part B Claim Payment

                	 	 	 	
                  MM/DD/YYYY

                
	
                  FHA_PART_B_CLAIM_PAID_AMT

                	 	
                   Amount
                    HUD Paid on Part B Claim

                	 	
                  2

                	 	
                  No
                    commas(,) or dollar signs ($)

                
	
                  VA_CLAIM_FILED_DATE

                	 	
                   Date
                    VA Claim Was Filed With the Veterans Admin

                	 	 	 	
                  MM/DD/YYYY

                
	
                  VA_CLAIM_PAID_DATE

                	 	
                   Date
                    Veterans Admin. Disbursed VA Claim Payment

                	 	 	 	
                  MM/DD/YYYY

                
	
                  VA_CLAIM_PAID_AMT

                	 	
                   Amount
                    Veterans Admin. Paid on VA Claim

                	 	
                  2

                	 	
                  No
                    commas(,) or dollar signs ($)

                
	
                  MOTION_FOR_RELIEF_DATE

                	 	
                  The
                    date the Motion for Relief was filed

                	 	
                  10

                	 	
                  MM/DD/YYYY

                
	
                  FRCLSR_BID_AMT

                	 	
                  The
                    foreclosure sale bid amount

                	 	
                  11

                	 	
                  No
                    commas(,) or dollar signs ($)

                
	
                  FRCLSR_SALE_TYPE

                	 	
                  The
                    foreclosure sales results: REO, Third Party, Conveyance to
                    HUD/VA

                	 	
                   

                	 	
                   

                
	
                  REO_PROCEEDS

                	 	
                  The
                    net proceeds from the sale of the REO property. 

                	 	
                   

                	 	
                  No
                    commas(,) or dollar signs ($)

                
	
                  BPO_DATE

                	 	
                  The
                    date the BPO was done.

                	 	
                   

                	 	
                   

                
	
                  CURRENT_FICO

                	 	
                  The
                    current FICO score

                	 	
                   

                	 	
                   

                
	
                  HAZARD_CLAIM_FILED_DATE

                	 	
                  The
                    date the Hazard Claim was filed with the Hazard Insurance
                    Company.

                	 	
                  10

                	 	
                  MM/DD/YYYY

                
	
                  HAZARD_CLAIM_AMT

                	 	
                  The
                    amount of the Hazard Insurance Claim filed.

                	 	
                  11

                	 	
                  No
                    commas(,) or dollar signs ($)

                


        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          	
                  HAZARD_CLAIM_PAID_DATE

                	 	
                  The
                    date the Hazard Insurance Company disbursed the claim
                    payment.

                	 	
                  10

                	 	
                  MM/DD/YYYY

                
	
                  HAZARD_CLAIM_PAID_AMT

                	 	
                  The
                    amount the Hazard Insurance Company paid on the claim.

                	 	
                  11

                	 	
                  No
                    commas(,) or dollar signs ($)

                
	
                  ACTION_CODE

                	 	
                  Indicates
                    loan status

                	 	 	 	
                  Number

                
	
                  NOD_DATE

                	 	
                   

                	 	
                   

                	 	
                  MM/DD/YYYY

                
	
                  NOI_DATE

                	 	
                   

                	 	
                   

                	 	
                  MM/DD/YYYY

                
	
                  ACTUAL_PAYMENT_PLAN_START_DATE

                	 	
                   

                	 	
                   

                	 	
                  MM/DD/YYYY

                
	
                  ACTUAL_PAYMENT_
                    PLAN_END_DATE

                	 	
                   

                	 	
                   

                	 	
                   

                
	
                  ACTUAL_REO_START_DATE

                	 	
                   

                	 	
                   

                	 	
                  MM/DD/YYYY

                
	
                  REO_SALES_PRICE

                	 	
                   

                	 	
                   

                	 	
                  Number

                
	
                  REALIZED_LOSS/GAIN

                	 	
                  As
                    defined in the Servicing Agreement

                	 	
                   

                	 	
                  Number

                


        

      

    

     

    Exhibit
      2: Standard
      File Codes - Delinquency Reporting

     

    The
      Loss
      Mit Type
      field
      should show the approved Loss Mitigation Code as follows: 

    

      
        	 	
                ·

              	 	
                ASUM-

              	
                Approved
                  Assumption

              
	 	
                ·

              	 	
                BAP-

              	
                Borrower
                  Assistance Program

              
	 	
                ·

              	 	
                CO-

              	
                Charge
                  Off

              
	 	
                ·

              	 	
                DIL-

              	
                Deed-in-Lieu

              
	 	
                ·

              	 	
                FFA-

              	
                Formal
                  Forbearance Agreement

              
	 	
                ·

              	 	
                MOD-

              	
                Loan
                  Modification

              
	 	
                ·

              	 	
                PRE-

              	
                Pre-Sale

              
	 	
                ·

              	 	
                SS-

              	
                Short
                  Sale

              
	 	
                ·

              	 	
                MISC-

              	
                Anything
                  else approved by the PMI or Pool
                  Insurer

              


      

    

     

    NOTE:
      Wells
      Fargo Bank will accept alternative Loss Mitigation Types to those above,
      provided that they are consistent with industry standards. If Loss Mitigation
      Types other than those above are used, the Servicer must supply Wells Fargo
      Bank
      with a description of each of the Loss Mitigation Types prior to sending the
      file.

     

    The
      Occupant
      Code
      field
      should show the current status of the property code as follows:

     

    
      	
            	·	
              Mortgagor

            


    

     

    
      	
            	·	
              Tenant

            


    

     

    
      	
            	·	
              Unknown
                

            


    

     

    
      	
            	·	
              Vacant

            


    

     

    The
      Property
      Condition
      field
      should show the last reported condition of the property as follows:


     

    
      	
            	·	
              Damaged

            


    

     

    
      	
            	·	
              
                Excellent

              

            


    

     

    
      	
            	·	
              Fair

            


    

     

    
      	
            	·	Gone



      
        	
              	·	
                Good

              


      
  

    
      	
            	·	
              Poor

            


    

     

    
      	
            	·	
              Special
                Hazard

            


    

     

    
      	
            	·	
              
                Unknown

              

            


    


    
      
        
        

      

      
        
        

        
          

        

      

       

    


    Exhibit
      2: Standard
      File Codes - Delinquency Reporting, Continued

     

    The
      FNMA
      Delinquent Reason Code
      field
      should show the Reason for Delinquency as follows: 

     

    
      
        	
                Delinquency
                  Code

              	 	
                Delinquency
                  Description

              
	
                001

              	 	
                FNMA-Death
                  of principal mortgagor

              
	
                002

              	 	
                FNMA-Illness
                  of principal mortgagor

              
	
                003

              	 	
                FNMA-Illness
                  of mortgagor’s family member

              
	
                004

              	 	
                FNMA-Death
                  of mortgagor’s family member

              
	
                005

              	 	
                FNMA-Marital
                  difficulties

              
	
                006

              	 	
                FNMA-Curtailment
                  of income

              
	
                007

              	 	
                FNMA-Excessive
                  Obligation

              
	
                008

              	 	
                FNMA-Abandonment
                  of property

              
	
                009

              	 	
                FNMA-Distant
                  employee transfer

              
	
                011

              	 	
                FNMA-Property
                  problem

              
	
                012

              	 	
                FNMA-Inability
                  to sell property

              
	
                013

              	 	
                FNMA-Inability
                  to rent property

              
	
                014

              	 	
                FNMA-Military
                  Service

              
	
                015

              	 	
                FNMA-Other

              
	
                016

              	 	
                FNMA-Unemployment

              
	
                017

              	 	
                FNMA-Business
                  failure

              
	
                019

              	 	
                FNMA-Casualty
                  loss

              
	
                022

              	 	
                FNMA-Energy
                  environment costs

              
	
                023

              	 	
                FNMA-Servicing
                  problems

              
	
                026

              	 	
                FNMA-Payment
                  adjustment

              
	
                027

              	 	
                FNMA-Payment
                  dispute

              
	
                029

              	 	
                FNMA-Transfer
                  of ownership pending

              
	
                030

              	 	
                FNMA-Fraud

              
	
                031

              	 	
                FNMA-Unable
                  to contact borrower

              
	
                INC

              	 	
                FNMA-Incarceration

              


      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

       

    

    


    Exhibit
      2: Standard
      File Codes - Delinquency Reporting, Continued

     

    The
      FNMA
      Delinquent Status Code
      field
      should show the Status of Default as follows: 

     

    
      
        	
                Status
                  Code

              	 	
                Status
                  Description

              
	
                09

              	 	
                Forbearance

              
	
                17

              	 	
                Pre-foreclosure
                  Sale Closing Plan Accepted

              
	
                24

              	 	
                Government
                  Seizure

              
	
                26

              	 	
                Refinance

              
	
                27

              	 	
                Assumption

              
	
                28

              	 	
                Modification

              
	
                29

              	 	
                Charge-Off

              
	
                30

              	 	
                Third
                  Party Sale

              
	
                31

              	 	
                Probate

              
	
                32

              	 	
                Military
                  Indulgence

              
	
                43

              	 	
                Foreclosure
                  Started

              
	
                44

              	 	
                Deed-in-Lieu
                  Started

              
	
                49

              	 	
                Assignment
                  Completed

              
	
                61

              	 	
                Second
                  Lien Considerations

              
	
                62

              	 	
                Veteran’s
                  Affairs-No Bid

              
	
                63

              	 	
                Veteran’s
                  Affairs-Refund

              
	
                64

              	 	
                Veteran’s
                  Affairs-Buydown

              
	
                65

              	 	
                Chapter
                  7 Bankruptcy

              
	
                66

              	 	
                Chapter
                  11 Bankruptcy

              
	
                67

              	 	
                Chapter
                  13 Bankruptcy

              


      

    


    
      
        
        

      

      
        
        

        
          

        

      

       

    

     

    
      
        Exhibit
          12C: Calculation
          of Realized Loss/Gain Form 332- Instruction Sheet

      

       

    

    NOTE:
      Do not net or combine items. Show all expenses individually and all credits
      as
      separate line items. Claim packages are due on the remittance report date.
      Late
      submissions may result in claims not being passed until the following month.
      The
      Servicer is responsible to remit all funds pending loss approval and /or
      resolution of any disputed items. 

     

    The
      numbers on the 332 form correspond with the numbers listed
      below.

     

    Liquidation
      and Acquisition Expenses:

     

    
      	
            	1.	
              The
                Actual Unpaid Principal Balance of the Mortgage Loan. For documentation,
                an Amortization Schedule from date of default through liquidation
                breaking
                out the net interest and servicing fees advanced is
                required.

            


    

     

    
      	
            	2.	
              The
                Total Interest Due less the aggregate amount of servicing fee that
                would
                have been earned if all delinquent payments had been made as agreed.
                For
                documentation, an Amortization Schedule from date of default through
                liquidation breaking out the net interest and servicing fees advanced
                is
                required.

            


    

     

    
      	
            	3.	
              Accrued
                Servicing Fees based upon the Scheduled Principal Balance of the
                Mortgage
                Loan as calculated on a monthly basis. For documentation, an Amortization
                Schedule from date of default through liquidation breaking out the
                net
                interest and servicing fees advanced is
                required.

            


    

     

    
      	
            	4-12.	
              Complete
                as applicable. Required
                documentation:

            


    

     

    
      	
            	*	
              For
                taxes and insurance advances - see page 2 of 332 form - breakdown
                required
                showing period

            


    

     

    of
      coverage, base tax, interest, penalty. Advances prior to default require
      evidence of servicer efforts to recover advances.

     

    
      	
            	*	
              For
                escrow advances - complete payment history


            


    

     

    (to
      calculate advances from last positive escrow balance forward)

     

    
      	
            	*	
              Other
                expenses -  copies of corporate advance history showing all payments
                

            


    

     

    
      	
            	*	
              REO
                repairs > $1500 require
                explanation

            


    

     

    
      	
            	*	
              REO
                repairs >$3000 require evidence of at least 2
                bids.

            


    

     

    
      	
            	*	
              Short
                Sale or Charge Off require P&L supporting the decision and
                WFB’s approved Officer Certificate 

            


    

     

    
      	
            	*	
              Unusual
                or extraordinary items may require further documentation.
                

            


    

     

    
      	
            	13.	
              The
                total of lines 1 through 12.

            


    

     

    Credits:
      

     

    
      	
            	14-21.	
              Complete
                as applicable. Required
                documentation:

            


    

     

    
      	
            	*	
              Copy
                of the HUD 1 from the REO sale. If a 3rd
                Party Sale, bid instructions and Escrow
                Agent / Attorney

            


    

     

    Letter
      of
      Proceeds
      Breakdown.

     

    
      	
            	*	
              Copy
                of EOB for any MI or gov't guarantee


            


    

     

    
      	
            	*	
              All
                other credits need to be clearly defined on the 332
                form      
                     

            


    

     

    
      	 	
              22.

            	
              The
                total of lines 14 through 21.

            


    

     

    
      	
            	Please
              Note:	
               For
                HUD/VA loans, use line (18a) for Part A/Initial proceeds and line
                (18b)
                for Part B/Supplemental proceeds.

            


    

     

    Total
      Realized Loss (or Amount of Any Gain)

     

    
      	
            	23.	
              The
                total derived from subtracting line 22 from 13. If the amount represents
                a
                realized gain, show the amount in parenthesis ( ).
                

            


    


    
      
        
        

      

      
        
        

        
          

        

      

       

    

     

    Exhibit
      3A: Calculation
      of Realized Loss/Gain Form 332

     

    
      	
              Prepared
                by: ________________________

            	 	
              Date:
                ________________________

            
	 	 	 
	
              Phone: ________________________

            	 	Email Address:
              ________________________


    

     

    
      
        	 	 	 	 	 
	
                Servicer
                  Loan No.

              	 	
                Servicer
                  Name

              	 	
                Servicer
                  Address 

                 

              


      

    

     

    WELLS
      FARGO BANK, N.A. Loan No._____________________________

     

    Borrower's
      Name: _________________________________________________________

     

    Property
      Address: _________________________________________________________

    

      
        	
                Liquidation
                  Type: REO Sale                               3rd
                  Party Sale

              	 	
                Short
                  Sale 

              	 	
                Charge
                  Off 

              
	 	 	 	 	 
	
                Was
                  this loan granted a Bankruptcy deficiency or
                  cramdown

              	 	
                Yes

              	 	
                No

              
	 	 	 	 	 
	 If
                “Yes”, provide deficiency or cramdown amount
                _________________________	 	 	 	 
	 	 	 	 	 
	
                Liquidation
                  and Acquisition Expenses:

              	 	 	 	 
	 	 	 	 	 
	
                (1)
                  Actual
                  Unpaid Principal Balance of Mortgage Loan

              	 	
                $
                  ______________

              	 	
                (1)

              
	
                (2)
                  Interest
                  accrued at Net Rate

              	 	
                ________________

              	 	
                (2)

              
	
                (3)
                  Accrued
                  Servicing Fees

              	 	
                ________________

              	 	
                (3)

              
	
                (4)
                  Attorney's
                  Fees

              	 	
                ________________

              	 	
                (4)

              
	
                (5)
                  Taxes
                  (see page 2)

              	 	
                ________________

              	 	
                (5)

              
	
                (6)
                  Property
                  Maintenance

              	 	
                ________________

              	 	
                (6)

              
	
                (7)
                  MI/Hazard
                  Insurance Premiums (see page 2)

              	 	
                ________________

              	 	
                (7)

              
	
                (8)
                  Utility
                  Expenses

              	 	
                ________________

              	 	
                (8)

              
	
                (9)
                  Appraisal/BPO

              	 	
                ________________

              	 	
                (9)

              
	
                (10)
                  Property
                  Inspections

              	 	
                ________________

              	 	
                (10)

              
	
                (11)
                  FC
                  Costs/Other Legal Expenses

              	 	
                ________________

              	 	
                (11)

              
	
                (12) Other
                  (itemize)

              	 	
                ________________

              	 	
                (12)

              
	
                Cash
                  for Keys__________________________

              	 	
                ________________

              	 	
                (12)

              
	
                HOA/Condo
                  Fees_______________________

              	 	
                ________________

              	 	
                (12)

              
	
                ______________________________________

              	 	
                ________________

              	 	
                (12)

              
	
              	 	 	 	 
	
                Total
                  Expenses

              	 	
                $
                  _______________

              	 	
                (13)

              
	
                Credits:

              	 	 	 	 
	
                (14)
                  Escrow
                  Balance

              	 	
                $
                  _______________

              	 	
                (14)

              
	
                (15)
                  HIP
                  Refund

              	 	
                ________________

              	 	
                (15)

              
	
                (16)
                  Rental
                  Receipts

              	 	
                ________________

              	 	
                (16)

              
	
                (17)
                  Hazard
                  Loss Proceeds

              	 	
                ________________

              	 	
                (17)

              
	
                (18)
                  Primary
                  Mortgage Insurance / Gov’t Insurance

              	 	
                ________________

              	 	
                (18a)
                  HUD Part A

              
	 	 	
                ________________

              	 	
                (18b)
                  HUD Part B

              
	
                (19)
                  Pool
                  Insurance Proceeds

              	 	
                ________________

              	 	
                (19)

              
	
                (20)
                  Proceeds
                  from Sale of Acquired Property

              	 	
                ________________

              	 	
                (20)

              
	
                (21)
                  Other
                  (itemize)

              	 	
                ________________

              	 	
                (21)

              
	
                _________________________________________

              	 	
                ________________

              	 	
                (21)

              
	 	 	 	 	 
	
                Total
                  Credits

              	 	
                $________________

              	 	
                (22)

              
	Total
                Realized Loss (or Amount of Gain)	 	
                $________________

              	 	
                (23)

              


      

    

     

    
      
        
        

      

      
        1

        
          

        

      

       

    


    Escrow
      Disbursement Detail

     

    
      
        	
                Type

                (Tax
                  /Ins.)

              	 	
                Date
                  Paid

              	 	
                Period
                  of Coverage

              	 	
                Total
                  Paid

              	 	
                Base
                  Amount

              	 	
                Penalties

              	 	
                Interest

              
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 


      

    

     

    
      
        
        

      

      
        2

        
          

        

      

       

    


    EXHIBIT
      II

     

    FORM
      OF
      ASSESSMENT OF COMPLIANCE 

     

    
      	
            	Re:	
              The
                [  ]
                agreement dated as of [       ],
                200[ ] (the “Agreement”), among [IDENTIFY
                PARTIES]

            


    

     

    I,
      ________________________________, the _____________________ of PHH Mortgage
      Corporation, certify to [the Purchaser], [the Depositor], and the [Master
      Servicer] [Securities Administrator] [Trustee], and their officers, with the
      knowledge and intent that they will rely upon this certification, that:


     

    (1)
       I
      have
      reviewed the servicer compliance statement of the Company provided in accordance
      with Item 1123 of Regulation AB (the “Compliance Statement”), the report on
      assessment of the Company’s compliance with the servicing criteria set forth in
      Item 1122(d) of Regulation AB and identified as the responsibility of the
      Company on Exhibit A hereto (the “Servicing Criteria”), provided in accordance
      with Rules 13a-18 and 15d-18 under Securities Exchange Act of 1934, as amended
      (the “Exchange Act”) and Item 1122 of Regulation AB (the “Servicing
      Assessment”), the registered public accounting firm’s attestation report
      provided in accordance with Rules 13a-18 and 15d-18 under the Exchange Act
      and
      Section 1122(b) of Regulation AB (the “Attestation Report”), and all servicing
      reports, officer’s certificates and other information relating to the servicing
      of the Mortgage Loans by the Company during 200[ ] that were delivered by the
      Company to the [Depositor] [Master Servicer] [Securities Administrator]
      [Trustee] pursuant to the Agreement (collectively, the “Company Servicing
      Information”); 

     

    (2)
       Based
      on
      my knowledge, the Company Servicing Information, 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 the light of the circumstances under
      which such statements were made, not misleading with respect to the period
      of
      time covered by the Company Servicing Information; 

     

    (3)
       Based
      on
      my knowledge, all of the Company Servicing Information required to be provided
      by the Company under the Agreement has been provided to the [Depositor] [Master
      Servicer] [Securities Administrator] [Trustee]; 

     

    (4)
       I
      am
      responsible for reviewing the activities performed by the Company as servicer
      under the Agreement, and based on my knowledge and the compliance review
      conducted in preparing the Compliance Statement and except as disclosed in
      the
      Compliance Statement, the Servicing Assessment or the Attestation Report, the
      Company has fulfilled its obligations under the Agreement in all material
      respects; and 

     

    (5)
       The
      Compliance Statement required to be delivered by the Company pursuant to the
      Agreement, and the Servicing Assessment and Attestation Report required to
      be
      provided by the Company and by any Subservicer or Subcontractor pursuant to
      the
      Agreement, have been provided to the [Depositor] [Master Servicer]. Any material
      instances of noncompliance described in such reports have been disclosed to
      the
      [Depositor] [Master Servicer]. Any material instance of noncompliance with
      the
      Servicing Criteria has been disclosed in such reports. 

     

    
      	 	 	 
	 	Date:
              ______________________________
	 	 
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              
Name:

	 	Title: 


    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    


    EXHIBIT
      A

     

    SERVICING
      CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE

     

    The
      assessment of compliance to be delivered by [the Company] [Name of Subservicer]
      shall address, at a minimum, the criteria identified as below as “Applicable
      Servicing Criteria”;
      

     

    
      	
              Servicing
                Criteria

            	 	
              Applicable
                

              Servicing
                

            
	
              Reference
                

            	 	
              Criteria
                

            	 	
              Criteria
                

            
	 	 	
              General
                Servicing Considerations 

            	 	 
	
              1122(d)(1)(i)
                

            	 	
              Policies
                and procedures are instituted to monitor any performance or other
                triggers
                and events of default in accordance with the transaction agreements.
                

            	 	
              x

            
	
              1122(d)(1)(ii)
                

            	 	
              If
                any material servicing activities are outsourced to third parties,
                policies and procedures are instituted to monitor the third party’s
                performance and compliance with such servicing activities.


            	 	
              x

            
	
              1122(d)(1)(iii)
                

            	 	
              Any
                requirements in the transaction agreements to maintain a back-up
                servicer
                for the mortgage loans are maintained. 

            	 	 
	
              1122(d)(1)(iv)
                

            	 	
              A
                fidelity bond and errors and omissions policy is in effect on the
                party
                participating in the servicing function throughout the reporting
                period in
                the amount of coverage required by and otherwise in accordance with
                the
                terms of the transaction agreements. 

            	 	
              x

            
	 	 	
              Cash
                Collection and Administration 

            	 	 
	
              1122(d)(2)(i)
                

            	 	
              Payments
                on mortgage loans are deposited into the appropriate custodial bank
                accounts and related bank clearing accounts no more than two business
                days
                following receipt, or such other number of days specified in the
                transaction agreements. 

            	 	
              x

            
	
              1122(d)(2)(ii)
                

            	 	
              Disbursements
                made via wire transfer on behalf of an obligor or to an investor
                are made
                only by authorized personnel. 

            	 	
              x

            
	
              1122(d)(2)(iii)
                

            	 	
              Advances
                of funds or guarantees regarding collections, cash flows or distributions,
                and any interest or other fees charged for such advances, are made,
                reviewed and approved as specified in the transaction agreements.
                

            	 	
              x

            
	
              1122(d)(2)(iv)
                

            	 	
              The
                related accounts for the transaction, such as cash reserve accounts
                or
                accounts established as a form of overcollateralization, are separately
                maintained (e.g., with respect to commingling of cash) as set forth
                in the
                transaction agreements. 

            	 	
              x

            


    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      	
              Servicing
                Criteria

            	 	
              Applicable
                

              Servicing
                

            
	
              Reference
                

            	 	
              Criteria
                

            	 	
              Criteria
                

            
	
              1122(d)(2)(v)
                

            	 	
              Each
                custodial account is maintained at a federally insured depository
                institution as set forth in the transaction agreements. For purposes
                of
                this criterion, “federally insured depository institution” with respect to
                a foreign financial institution means a foreign financial institution
                

              that
                meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange
                Act.
                

            	 	
              x

            
	
              1122(d)(2)(vi)
                

            	 	
              Unissued
                checks are safeguarded so as to prevent unauthorized access.
                

            	 	 
	
              1122(d)(2)(vii)
                

            	 	
              Reconciliations
                are prepared on a monthly basis for all asset-backed securities related
                bank accounts, including custodial accounts and related bank clearing
                accounts. These reconciliations are (A) mathematically accurate;
                (B)
                prepared within 30 calendar days after the bank statement cutoff
                date, or
                such other number of days specified in the transaction 

              agreements;
                (C) reviewed and approved by someone other than the person who prepared
                the reconciliation; and (D) contain explanations for reconciling
                items.
                These reconciling items are resolved within 90 calendar days of their
                original identification, or such other number of 

              days
                specified in the transaction agreements. 

            	 	
              x

            
	 	 	
              Investor
                Remittances and Reporting 

            	 	 
	
              1122(d)(3)(i)
                

            	 	
              Reports
                to investors, including those to be filed with the Commission, are
                maintained in accordance with the transaction agreements and applicable
                Commission requirements. Specifically, such reports (A) are prepared
                in
                accordance with timeframes and other terms set forth in the transaction
                agreements; (B) provide information calculated in accordance with
                the
                terms specified in the transaction agreements; (C) are filed with
                the
                Commission as required by its rules and regulations; and (D) agree
                with
                investors’ or the trustee’s records as to the total unpaid principal
                balance and number of mortgage loans serviced by the Servicer.
                

            	 	
              x

            
	
              1122(d)(3)(ii)
                

            	 	
              Amounts
                due to investors are allocated and remitted in accordance with timeframes,
                distribution priority and other terms set forth in the transaction
                agreements. 

            	 	
              x

            
	
              1122(d)(3)(iii)
                

            	 	
              Disbursements
                made to an investor are posted within two business days to the Servicer’s
                investor records, or such other number of days specified in the
                transaction agreements. 

            	 	
              x

            
	
              1122(d)(3)(iv)
                

            	 	
              Amounts
                remitted to investors per the investor reports agree with cancelled
                checks, or other form of payment, or custodial bank statements.
                

            	 	
              x

            
	 	 	
              Pool
                Asset Administration 

            	 	 
	
              1122(d)(4)(i)
                

            	 	
              Collateral
                or security on mortgage loans is maintained as required by the transaction
                agreements or related mortgage loan documents. 

            	 	
              x

            


    

      

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	
              Servicing
                Criteria

            	 	
              Applicable
                

              Servicing
                

            
	
              Reference
                

            	 	
              Criteria
                

            	 	
              Criteria
                

            
	
              1122(d)(4)(ii)
                

            	 	
              Mortgage
                loan and related documents are safeguarded as required by the transaction
                agreements 

            	 	
              x

            
	
              1122(d)(4)(iii)
                

            	 	
              Any
                additions, removals or substitutions to the asset pool are made,
                reviewed
                and approved in accordance with any conditions or requirements in
                the
                transaction agreements. 

            	 	
              x

            
	
              1122(d)(4)(iv)
                

            	 	
              Payments
                on mortgage loans, including any payoffs, made in accordance with
                the
                related mortgage loan documents are posted to the Servicer’s obligor
                records maintained no more than two business days after receipt,
                or such
                other number of days specified in the transaction agreements, and
                allocated to principal, interest or other items (e.g., escrow) in
                

              accordance
                with the related mortgage loan documents. 

            	 	
              x

            
	
              1122(d)(4)(v)
                

            	 	
              The
                Servicer’s records regarding the mortgage loans agree with the Servicer’s
                records with respect to an obligor’s unpaid principal balance.
                

            	 	
              x

            
	
              1122(d)(4)(vi)
                

            	 	
              Changes
                with respect to the terms or status of an obligor’s mortgage loans (e.g.,
                loan modifications or re-agings) are made, reviewed and approved
                by
                authorized personnel in accordance with the transaction agreements
                and
                related pool asset documents. 

            	 	
              x

            
	
              1122(d)(4)(vii)
                

            	 	
              Loss
                mitigation or recovery actions (e.g., forbearance plans, modifications
                and
                deeds in lieu of foreclosure, foreclosures and repossessions, as
                applicable) are initiated, conducted and concluded in accordance
                with the
                timeframes or other requirements established by the transaction
                agreements. 

            	 	
              x

            
	
              1122(d)(4)(viii)
                

            	 	
              Records
                documenting collection efforts are maintained during the period a
                mortgage
                loan is delinquent in accordance with the transaction agreements.
                Such
                records are maintained on at least a monthly basis, or such other
                period
                specified in the transaction agreements, and describe the entity’s
                activities in monitoring delinquent mortgage loans including, for
                example,
                phone calls, letters and payment rescheduling plans in cases where
                delinquency is deemed temporary (e.g., illness or unemployment).
                

            	 	
              x

            
	
              1122(d)(4)(ix)
                

            	 	
              Adjustments
                to interest rates or rates of return for mortgage loans with variable
                rates are computed based on the related mortgage loan documents.
                

            	 	
              x

            


    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    
       

      
        	
                Servicing
                  Criteria

              	 	
                Applicable
                  

                Servicing
                  

              
	
                Reference
                  

              	 	
                Criteria
                  

              	 	
                Criteria
                  

              
	
                1122(d)(4)(x)
                  

              	 	
                Regarding
                  any funds held in trust for an obligor (such as escrow accounts):
                  (A) such
                  funds are analyzed, in accordance with the obligor’s mortgage loan
                  documents, on at least an annual basis, or such other period specified
                  in
                  the transaction agreements; (B) interest on such funds is paid,
                  or
                  credited, to obligors in accordance with applicable mortgage loan
                  documents and state laws; and (C) such funds are returned to the
                  obligor
                  within 30 calendar days of full repayment of the Mortgage Loans,
                  or such
                  other number of days specified in the transaction agreements.
                  

              	 	
                x

              
	
                1122(d)(4)(xi)
                  

              	 	
                Payments
                  made on behalf of an obligor (such as tax or insurance payments)
                  are made
                  on or before the related penalty or expiration dates, as indicated
                  on the
                  appropriate bills or notices for such payments, provided that such
                  support
                  has been received by the servicer at least 30 calendar days prior
                  to these
                  dates, or such other number of days specified in the transaction
                  agreements. 

              	 	
                x

              
	
                1122(d)(4)(xii)
                  

              	 	
                Any
                  late payment penalties in connection with any payment to be made
                  on behalf
                  of an obligor are paid from the servicer’s funds and not charged to the
                  obligor, unless the late payment was due to the obligor’s error or
                  omission. 

              	 	
                x

              
	
                1122(d)(4)(xiii)
                  

              	 	
                Disbursements
                  made on behalf of an obligor are posted within two business days
                  to the
                  obligor’s records maintained by the servicer, or such other number of days
                  specified in the transaction agreements. 

              	 	
                x

              
	
                1122(d)(4)(xiv)
                  

              	 	
                Delinquencies,
                  charge-offs and uncollectible accounts are recognized and recorded
                  in
                  accordance with the transaction agreements. 

              	 	
                x

              
	
                1122(d)(4)(xv)
                  

              	 	
                Any
                  external enhancement or other support, identified in Item 1114(a)(1)
                  through (3) or Item 1115 of Regulation AB, is maintained as set
                  forth in
                  the transaction agreements. 

              	 	 


      

       

      
        	 	 	 
	 	
                
                

                [PHH
                  MORTGAGE CORPORATION]

                 

                [NAME
                  OF SUBSERVICER]

              
	 
 	 
 	 
 
	
              	Date:   
                	 
	 	
                

              


      

    

    
       

      
        	 	 	 
	 
 	 
 	 
 
	
              	By:  
                	 
	 	
                

                Name:
                  

                 

                Title:
                  

              


      

       

      
        
          
          

        

        
          7