[LOGO OF BEAR STEARNS]

                                            BEAR STEARNS FINANCIAL PRODUCTS INC.
                                                              383 MADISON AVENUE
                                                        NEW YORK, NEW YORK 10179
                                                                    212-272-4009

DATE:                     July 13, 2006

TO:                       Wells Fargo Bank, N.A., not individually, but solely
                          as Securities Administrator on behalf of SG Mortgage
                          Securities Trust 2006-FRE2, Asset-Backed
                          Certificates, Series 2006-FRE2,

ATTENTION:                Client Manager - SGMS 2006-FRE2
TELEPHONE:                410-884-2000
FACSIMILE:                410-715-2380
FROM:                     Derivatives Documentation
TELEPHONE:                212-272-2711
FACSIMILE:                212-272-9857

SUBJECT:                  Fixed Income Derivatives Confirmation and Agreement

REFERENCE NUMBER:         FXNSC8458

The purpose of this letter agreement ("Agreement") is to confirm the terms and
conditions of the current Transaction entered into on the Trade Date specified
below (the "Current Transaction") between Bear Stearns Financial Products Inc.
("BSFP") and Wells Fargo Bank, N.A., not individually, but solely as Securities
Administrator on behalf of SG Mortgage Securities Trust 2006-FRE2, Asset-Backed
Certificates, Series 2006-FRE2 ("Counterparty") under the Pooling and Servicing
Agreement, dated as of July 1, 2006, among Wells Fargo Bank, N.A., as Master
Servicer Securities Administrator and Custodian, SG Mortgage Securities, LLC, as
Depositor and HSBC Bank USA, National Association, as Trustee (the "Pooling and
Servicing Agreement"). This letter agreement constitutes the sole and complete
"Confirmation," as referred to in the "ISDA Form Master Agreement" (as defined
below), as well as a "Schedule" as referred to in the ISDA Form Master
Agreement.

1. This Agreement is subject to the 2000 ISDA Definitions (the "Definitions"),
as published by the International Swaps and Derivatives Association, Inc.
("ISDA"). You and we have agreed to enter into this Agreement in lieu of
negotiating a Schedule to the 1992 ISDA Master Agreement (Multicurrency--Cross
Border) form (the "ISDA Form Master Agreement") but, rather, an ISDA Form Master
Agreement shall be deemed to have been executed by you and us on the date we
entered into the Transaction. In the event of any inconsistency between the
provisions of this Agreement and the Definitions or the ISDA Form Master
Agreement, this Agreement shall prevail for purposes of the Transaction. Terms
capitalized but not defined herein shall have the meanings attributed to them in
the Pooling and Servicing Agreement.

<PAGE>

Reference Number:  FXNSC8458
Wells Fargo Bank, N.A., not individually, but solely as Securities Administrator
on behalf of SG Mortgage Securities Trust 2006-FRE2, Asset-Backed Certificates,
Series 2006-FRE2
July 13, 2006
Page 2 of 19


2.    The terms of the particular Transaction to which this Confirmation relates
      are as follows:

      Notional Amount:        With respect to any Calculation Period, the amount
                              set forth for such period in Schedule I attached
                              hereto.

      Trade Date:             June 26, 2006

      Effective Date:         July 13, 2006

      Termination Date:       July 25, 2011

      Fixed Amount:

           Fixed Rate Payer:  Counterparty

           Fixed Rate Payer
           Period End Dates:  The 25th calendar day of each month during the
                              Term of this Transaction, commencing August 25,
                              2006, and ending on the Termination Date, with No
                              Adjustment.

           Fixed Rate Payer
           Payment Dates:     Early Payment shall be applicable. The Fixed Rate
                              Payer Payment Date shall be two Business Day prior
                              to each Fixed Rate Payer Period End Date.

           Fixed Rate:        With respect to any Calculation Period, the rate
                              set forth for such period in Schedule I attached
                              hereto.

           Fixed Rate Day
           Count Fraction:    30/360

      Floating Amounts:

           Floating Rate
           Payer:             BSFP

           Floating Rate
           Payer
           Period End Dates:  The 25th calendar day of each month during the
                              Term of this Transaction, commencing August 25,
                              2006, and ending on the Termination Date, subject
                              to adjustment in accordance with the Business Day
                              Convention.

           Floating Rate
           Payer
           Payment Dates:     Early Payment shall be applicable. The Floating
                              Rate Payer Payment Date shall be two Business Day
                              prior to each Floating Rate Payer Period End Date.

<PAGE>

Reference Number:  FXNSC8458
Wells Fargo Bank, N.A., not individually, but solely as Securities Administrator
on behalf of SG Mortgage Securities Trust 2006-FRE2, Asset-Backed Certificates,
Series 2006-FRE2
July 13, 2006
Page 3 of 19


           Floating Rate for
           initial
           Calculation
           Period:            5.39013%

           Floating Rate
           Option:            USD-LIBOR-BBA

           Designated
           Maturity:          One month, except for the initial Calculation
                              Period.

           Spread:            None

           Floating Rate Day
           Count Fraction:    Actual/360

           Reset Dates:       The first day of each Calculation Period.

           Compounding:       Inapplicable

      Business Days:          New York and London

      Business Day
      Convention:             Modified Following

      Additional Amount:      In connection with entering into this Transaction
                              USD 3,452,000 is payable by Counterparty to BSFP
                              on July 13, 2006.

3.    Additional Provisions:  Each party hereto is hereby advised and
                              acknowledges that the other party has engaged in
                              (or refrained from engaging in) substantial
                              financial transactions and has taken (or refrained
                              from taking) other material actions in reliance
                              upon the entry by the parties into the Transaction
                              being entered into on the terms and conditions set
                              forth herein and in the Confirmation relating to
                              such Transaction, as applicable. This paragraph
                              shall be deemed repeated on the trade date of each
                              Transaction.

4.    Provisions Deemed Incorporated in a Schedule to the ISDA Form Master
      Agreement:

1) The parties agree that subparagraph (ii) of Section 2(c) of the ISDA Form
Master Agreement will apply to any Transaction.

2) Termination Provisions. For purposes of the ISDA Form Master Agreement:

(a)   "Specified Entity" is not applicable to BSFP or Counterparty for any
      purpose.

(b)   "Breach of Agreement" provision of Section 5(a)(ii) will not apply to BSFP
      or Counterparty.

<PAGE>
Reference Number:  FXNSC8458
Wells Fargo Bank, N.A., not individually, but solely as Securities Administrator
on behalf of SG Mortgage Securities Trust 2006-FRE2, Asset-Backed Certificates,
Series 2006-FRE2
July 13, 2006
Page 4 of 19


(c)   "Credit Support Default" provisions of Section 5(a)(iii) will not apply to
      Counterparty and will not apply to BSFP unless BSFP has obtained a
      guarantee or other agreement pursuant to paragraph 14 below.

(d)   "Misrepresentation" provisions of Section 5(a)(iv) will not apply to BSFP
      or Counterparty.

(e)   "Specified Transaction" is not applicable to BSFP or Counterparty for any
      purpose, and, accordingly, Section 5(a)(v) shall not apply to BSFP or
      Counterparty.

(f)   The "Cross Default" provisions of Section 5(a)(vi) will not apply to BSFP
      or to Counterparty.

(g)   The "Credit Event Upon Merger" provisions of Section 5(b)(iv) will not
      apply to BSFP or Counterparty.

(h)   The "Bankruptcy" provision of Section 5(a)(vii)(2) will be inapplicable to
      Counterparty.

(i)   The "Automatic Early Termination" provision of Section 6(a) will not apply
      to BSFP or to Counterparty.

(j)   Payments on Early Termination. For the purpose of Section 6(e) of the ISDA
      Form Master Agreement:

      (i)   Market Quotation will apply.

      (ii)  The Second Method will apply.

(k)   "Termination Currency" means United States Dollars.

(l)   The "Merger without Assumption" provision of Section 5(a)(viii) will not
      apply to Counterparty.

(m)   The "Tax Event Upon Merger" will apply to BSFP and not apply to
      Counterparty.

3)    Tax Representations.

      (a) Payer Representations. For the purpose of Section 3(e) of the ISDA
      Form Master Agreement, each of BSFP and the Counterparty will make the
      following representations:

      It is not required by any applicable law, as modified by the practice of
      any relevant governmental revenue authority, of any Relevant Jurisdiction
      to make any deduction or withholding for or on account of any Tax from any
      payment (other than interest under

<PAGE>

Reference Number:  FXNSC8458
Wells Fargo Bank, N.A., not individually, but solely as Securities Administrator
on behalf of SG Mortgage Securities Trust 2006-FRE2, Asset-Backed Certificates,
Series 2006-FRE2
July 13, 2006
Page 5 of 19


      Section 2(e), 6(d)(ii) or 6(e) of the ISDA Form Master Agreement) to be
      made by it to the other party under this Agreement. In making this
      representation, it may rely on:

            (i) the accuracy of any representations made by the other party
            pursuant to Section 3(f) of this Agreement;

            (ii) the satisfaction of the agreement contained in Section
            4(a)(iii) of the ISDA Form Master Agreement and the accuracy and
            effectiveness of any document provided by the other party pursuant
            to Section 4(a)(iii) of the ISDA Form Master Agreement; and

            (iii) the satisfaction of the agreement of the other party contained
            in Section 4(d) of this Agreement, provided that it shall not be a
            breach of this representation where reliance is placed on clause
            (ii) and the other party does not deliver a form or document under
            Section 4(a)(iii) by reason of material prejudice to its legal or
            commercial position.

      (b) Payee Representations. For the purpose of Section 3(f) of the ISDA
      Form Master Agreement, each of BSFP and the Counterparty make the
      following representations.

      The following representation will apply to BSFP:

      BSFP is a corporation organized under the laws of the State of Delaware
      and its U.S. taxpayer identification number is 13-3866307.

      The following representation will apply to the Counterparty:

      Counterparty represents that it is the Securities Administrator under the
      Pooling and Servicing Agreement.

4) [Reserved]

5) Documents to be Delivered. For the purpose of Section 4(a):

(1) Tax forms, documents, or certificates to be delivered are:

<PAGE>

Reference Number:  FXNSC8458
Wells Fargo Bank, N.A., not individually, but solely as Securities Administrator
on behalf of SG Mortgage Securities Trust 2006-FRE2, Asset-Backed Certificates,
Series 2006-FRE2
July 13, 2006
Page 6 of 19


Party required to       Form/Document/         Date by which to
deliver                 Certificate            be delivered
document


BSFP and                Any document required  Promptly after the earlier of
the Counterparty        or reasonably          (i) reasonable demand by either
                        requested to allow     party or (ii) learning that such
                        the other party to     form or document is required
                        make payments under
                        this Agreement
                        without any deduction
                        or withholding for or
                        on the account of any
                        Tax or with such
                        deduction or
                        withholding at a
                        reduced rate

(2)   Other documents to be delivered are:

Party required      Form/Document/     Date by which to   Covered by Section
to deliver          Certificate        be delivered       3(d) Representation
document

BSFP and            Any documents      Upon the           Yes
the Counterparty    required by the    execution and
                    receiving party    delivery of this
                    to evidence the    Agreement and
                    authority of the   such Confirmation
                    delivering party
                    or its Credit
                    Support Provider,
                    if any, for it to
                    execute and
                    deliver this
                    Agreement, any
                    Confirmation, and
                    any Credit
                    Support Documents
                    to which it is a
                    party, and to
                    evidence the
                    authority of the
                    delivering party
                    or its Credit
                    Support Provider
                    to perform its
                    obligations under

<PAGE>
Reference Number:  FXNSC8458
Wells Fargo Bank, N.A., not individually, but solely as Securities Administrator
on behalf of SG Mortgage Securities Trust 2006-FRE2, Asset-Backed Certificates,
Series 2006-FRE2
July 13, 2006
Page 7 of 19


Party required      Form/Document/     Date by which to   Covered by Section
to deliver          Certificate        be delivered       3(d) Representation
document

                    this Agreement,
                    such Confirmation
                    and/or Credit
                    Support Document,
                    as the case may be

BSFP and            A certificate of   Upon the           Yes
the Counterparty    an authorized      execution and
                    officer of the     delivery of this
                    party, as to the   Agreement and
                    incumbency and     such Confirmation
                    authority of the
                    respective
                    officers of the
                    party signing
                    this Agreement,
                    any relevant
                    Credit Support
                    Document, or any
                    Confirmation, as
                    the case may be

BSFP                Legal opinion(s)   Upon the           No
                    with respect to    execution and
                    such party and     delivery of this
                    its Credit         Agreement and any
                    Support Provider,  Confirmation
                    if any, for it
                    reasonably
                    satisfactory in
                    form and
                    substance to the
                    other party
                    relating to the
                    enforceability of
                    the party's
                    obligations under
                    this Agreement

Counterparty        An executed copy   Within 30 days     No
                    of the Pooling     after the date of
                    and Servicing      this Agreement
                    Agreement

<PAGE>
Reference Number:  FXNSC8458
Wells Fargo Bank, N.A., not individually, but solely as Securities Administrator
on behalf of SG Mortgage Securities Trust 2006-FRE2, Asset-Backed Certificates,
Series 2006-FRE2
July 13, 2006
Page 8 of 19


6)    Miscellaneous.

(a)   Address for Notices: For the purposes of Section 12(a) of the ISDA Form
      Master Agreement:

      Address for notices or communications to BSFP:

            Address:    383 Madison Avenue, New York, New York 10179
            Attention:  DPC Manager
            Facsimile:  (212) 272-5823

      with a copy to:

            Address:    One Metrotech Center North, Brooklyn, New York 11201
            Attention:  Derivative Operations - 7th Floor
            Facsimile:  (212) 272-1634

            (For all purposes)

      Address for notices or communications to the Counterparty:

            Address:    Wells Fargo Bank, N.A.
                        9062 Old Annapolis Road
                        Columbia, Maryland 21045
            Attention:  Client Manager -SGMS 2006-FRE2
            Facsimile:  410-715-2380
            Phone:      410-884-2000

            (For all purposes)

(b)   Process Agent. For the purpose of Section 13(c):

                  BSFP appoints as its
                  Process Agent:                Not Applicable

                  The Counterparty appoints as its
                  Process Agent:                Not Applicable

(c)   Offices. The provisions of Section 10(a) will not apply to this Agreement;
      neither BSFP nor the Counterparty have any Offices other than as set forth
      in the Notices Section and BSFP agrees that, for purposes of Section 6(b)
      of the ISDA Form Master Agreement, it shall not in future have any Office
      other than one in the United States.

<PAGE>
Reference Number:  FXNSC8458
Wells Fargo Bank, N.A., not individually, but solely as Securities Administrator
on behalf of SG Mortgage Securities Trust 2006-FRE2, Asset-Backed Certificates,
Series 2006-FRE2
July 13, 2006
Page 9 of 19


(d)   Multibranch Party. For the purpose of Section 10(c) of the ISDA Form
      Master Agreement:

      BSFP is not a Multibranch Party.

      The Counterparty is not a Multibranch Party.

(e)   Calculation Agent. The Calculation Agent is BSFP provider, however if an
      Event of Default has occurred and is continuing with respect to BSFP, then
      the Counterparty or a Reference Market-maker designated by Counterparty
      shall be Calculation Agent.

(f)   Credit Support Document.

      BSFP: Not applicable, unless BSFP has obtained a guarantee or other
      agreement pursuant to paragraph 14 below.

      The Counterparty:  Not Applicable

(g) Credit Support Provider.

      BSFP: Not Applicable unless BSFP has obtained a guarantee pursuant to
            paragraph 14 below.

      The Counterparty: Not Applicable

(h) Governing Law. The parties to this Agreement hereby agree that the law of
the State of New York shall govern their rights and duties in whole without
regard to the conflict of law provisions thereof other than New York General
Obligations Law Sections 5-1401 and 5-1402.

(i) Severability. If any term, provision, covenant, or condition of this
Agreement, or the application thereof to any party or circumstance, shall be
held to be invalid or unenforceable (in whole or in part) for any reason, the
remaining terms, provisions, covenants, and conditions hereof shall continue in
full force and effect as if this Agreement had been executed with the invalid or
unenforceable portion eliminated, so long as this Agreement as so modified
continues to express, without material change, the original intentions of the
parties as to the subject matter of this Agreement and the deletion of such
portion of this Agreement will not substantially impair the respective benefits
or expectations of the parties.

The parties shall endeavor to engage in good faith negotiations to replace any
invalid or unenforceable term, provision, covenant or condition with a valid or
enforceable term, provision, covenant or condition, the economic effect of which
comes as close as possible to that of the invalid or unenforceable term,
provision, covenant or condition.

<PAGE>
Reference Number:  FXNSC8458
Wells Fargo Bank, N.A., not individually, but solely as Securities Administrator
on behalf of SG Mortgage Securities Trust 2006-FRE2, Asset-Backed Certificates,
Series 2006-FRE2
July 13, 2006
Page 10 of 19


(j) Consent to Recording. Each party hereto consents to the monitoring or
recording, at any time and from time to time, by the other party of any and all
communications between officers or employees of the parties, waives any further
notice of such monitoring or recording, and agrees to notify its officers and
employees of such monitoring or recording.

(k) Waiver of Jury Trial. Each party waives any right it may have to a trial by
jury in respect of any Proceedings relating to this Agreement or any Credit
Support Document.

(l) BSFP is a U.S. entity and no withholding tax is payable. In the event that
BSFP is no longer a U.S. entity or its obligations or this Agreement is
transferred to a non-U.S. entity then the following provisions will apply and
the Termination Events in Sections 5(b)(ii) and 5(b)(iii) will no longer be
exercisable by BSFP:

      a) Section 2(d)(i)(4) of the ISDA Form Master Agreement is amended by (i)
      deleting the words "However, X will not be required to pay any additional
      amount to Y to the extent that it would not be required to be paid but
      for:"; and (ii) deleting subsections (A) and (B).

      (b) Section 2(d)(ii) of the ISDA Form Master Agreement will not apply to
      Counterparty.

      (c) Section 4(e) of the ISDA Form Master Agreement will not apply to the
      Counterparty.

      (d) The definition of "Indemnifiable Tax" contained in Section 14 of the
      ISDA Form Master Agreement is deleted and is replaced with the following:
      "`Indemnifiable Tax' means any and all withholding tax."

7) "Affiliate". Each of BSFP and Counterparty shall be deemed to not have any
Affiliates for purposes of this Agreement, including for purposes of Section
6(b)(ii).

8) Section 3 of the ISDA Form Master Agreement is hereby amended by adding at
the end thereof the following subsection (g):

      "(g) Relationship Between Parties.

            Each party represents to the other party on each date when it enters
            into a Transaction that:--

      (1) Nonreliance. It is not relying on any statement or representation of
      the other party regarding the Transaction (whether written or oral), other
      than the representations expressly made in this Agreement or the
      Confirmation in respect of that Transaction.

<PAGE>
Reference Number:  FXNSC8458
Wells Fargo Bank, N.A., not individually, but solely as Securities Administrator
on behalf of SG Mortgage Securities Trust 2006-FRE2, Asset-Backed Certificates,
Series 2006-FRE2
July 13, 2006
Page 11 of 19


      (2) Evaluation and Understanding.

         (i) BSFP is acting for its own account and Wells Fargo Bank, N.A., is
            acting as Securities Administrator on behalf of the Counterparty
            under the Pooling and Servicing Agreement, and not for its own
            account. Each Party has made its own independent decisions to enter
            into this Transaction and as to whether this Transaction is
            appropriate or proper for it based upon its own judgment and upon
            advice from such advisors as it has deemed necessary. It is not
            relying on any communication (written or oral) of the other party as
            investment advice or as a recommendation to enter into this
            Transaction; it being understood that information and explanations
            related to the terms and conditions of this Transaction shall not be
            considered investment advice or a recommendation to enter into this
            Transaction. It has not received from the other party any assurance
            or guarantee as to the expected results of this Transaction.

         (ii) It is capable of evaluating and understanding (on its own behalf
            or through independent professional advice), and understands and
            accepts, the terms, conditions and risks of this Transaction. It is
            also capable of assuming, and assumes, the financial and other risks
            of this Transaction.

         (iii) The other party is not acting as an agent or fiduciary or an
            advisor for it in respect of this Transaction.

      (3) Purpose. It is an "eligible swap participant" as such term is defined
      in Section 35.1(b)(2) of the regulations (17 C.F.R 35) promulgated under,
      and an "eligible contract participant" as defined in Section 1(a)(12) of,
      the Commodity Exchange Act, as amended, and it is entering into the
      Transaction for the purposes of managing its borrowings or investments,
      hedging its underlying assets or liabilities or in connection with a line
      of business."

9) Securities Administrator Liability Limitations. It is expressly understood
and agreed by the parties hereto that (a) this Agreement is executed and
delivered by Wells Fargo Bank, N.A. ("Wells"), not individually or personally
but solely as Securities Administrator on behalf of SG Mortgage Securities
Trust, Series 2006-FRE2, (b) each of the representations, undertakings and
agreements herein made on the part of the Counterparty is made and intended not
as a personal representation, undertaking or agreement of Wells but is made and
intended for the purpose of binding only the Counterparty, (c) nothing herein
contained shall be construed as imposing any liability upon Wells, individually
or personally, to perform any covenant either expressed or implied contained
herein, all such liability, if any, being expressly waived by the parties hereto
and by any Person claiming by, through or under the parties hereto; provided
that nothing in this paragraph shall relieve Wells from performing its duties
and obligations under the Pooling and Servicing Agreement in accordance with the
standard of care set forth therein, (d) under no circumstances shall Wells be
personally liable for the payment of any indebtedness or expenses

<PAGE>
Reference Number:  FXNSC8458
Wells Fargo Bank, N.A., not individually, but solely as Securities Administrator
on behalf of SG Mortgage Securities Trust 2006-FRE2, Asset-Backed Certificates,
Series 2006-FRE2
July 13, 2006
Page 12 of 19


of the Counterparty or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the Counterparty
under this Agreement or any other related documents, other than due to its gross
negligence or willful misconduct in performing the obligations of the Securities
Administrator under the Pooling and Servicing Agreement, (e) any resignation or
removal of Wells as Securities Administrator on behalf of SG Mortgage Securities
Trust, Series 2006-FRE2 shall require the assignment of this agreement to
Wells's replacement, and (f) Wells has been directed, pursuant to the Pooling
and Servicing Agreement, to enter into this Agreement and to perform its
obligations hereunder.

10) Proceedings. BSFP shall not institute against or cause any other person to
institute against, or join any other person in instituting against, SG Mortgage
Securities, LLC, or SG Mortgage Securities Trust 2006-FRE2, Asset-Backed
Certificates, Series 2006-FRE2, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under any federal or
state bankruptcy, dissolution or similar law, for a period of one year and one
day (or, if longer, the applicable preference period) following indefeasible
payment in full of the SG Mortgage Securities Trust 2006-FRE2, Asset-Backed
Certificates, Series 2006-FRE2. The provisions of this paragraph shall survive
the termination of this Agreement.

11) Set-off. Notwithstanding any provision of this Agreement or any other
existing or future agreement, each party irrevocably waives any and all rights
it may have to set off, net, recoup or otherwise withhold or suspend or
condition payment or performance of any obligation between it and the other
party hereunder against any obligation between it and the other party under any
other agreements. The provisions for Set-off set forth in Section 6(e) of the
Agreement shall not apply for purposes of this Transaction.

12) Third party Beneficiary. Not Applicable.

13) Additional Termination Events. The following Additional Termination Events
will apply:

(i) If a Rating Agency Downgrade has occurred and BSFP has not complied with
Section 14 below, then an Additional Termination Event shall have occurred with
respect to BSFP and BSFP shall be the sole Affected Party with respect to such
an Additional Termination Event.

(ii) If the Trust is unable to pay its Class A Certificates or fails or admits
in writing its inability to pay its Class A Certificates as they become due,
then an Additional Termination Event shall have occurred with respect to
Counterparty and Counterparty shall be the sole Affected Party with respect to
such Additional Termination Event.

(iii) The deposit by the Servicer of the Estimated Termination Price pursuant to
Section 10.01 of the Pooling and Servicing Agreement shall constitute an
Additional Termination Event pursuant to which Counterparty shall be the sole
Affected Party; provided that the amount due by Counterparty, if any, in respect
of the related Early Termination Date shall be the lesser of (i) the

<PAGE>
Reference Number:  FXNSC8458
Wells Fargo Bank, N.A., not individually, but solely as Securities Administrator
on behalf of SG Mortgage Securities Trust 2006-FRE2, Asset-Backed Certificates,
Series 2006-FRE2
July 13, 2006
Page 13 of 19


amount calculated pursuant to Section 6(e) of the ISDA Form Master Agreement and
(ii) the Estimated Swap Termination Payment.

"Estimated Swap Termination Payment" shall mean, an amount determined by BSFP in
its sole discretion as the maximum payment that could be owed by Counterparty
with respect to such Early Termination Date pursuant to Section 6(e) of the ISDA
Form Master Agreement taking into account then current market conditions.

Within one Business Day after the request by the Securities Administrator, BSFP
agrees to provide to the Securities Administrator the Estimated Termination
Payment.

(iv) If, upon the occurrence of a Swap Disclosure Event (as defined in Section
15 below) BSFP has not, within ten (10) days after such Swap Disclosure Event
complied with any of the provisions set forth in Section 15(iii) below, then an
Additional Termination Event shall have occurred with respect to BSFP and BSFP
shall be the sole Affected Party with respect to such Additional Termination
Event.

(v) Amendments to Pooling and Servicing Agreement. Without the prior written
consent of BSFP, Counterparty shall not consent to any amendment or supplemental
agreement to the Pooling and Servicing Agreement if such amendment or
supplemental agreement could reasonably be expected to have a material adverse
effect on the interests of BSFP, if such consent is required under the Pooling
and Servicing Agreement. Counterparty will furnish to BSFP a copy of each
proposed and each executed amendment or supplemental agreement and copies of any
related Rating Agency confirmation therewith, if any, if required pursuant to
the Pooling and Servicing Agreement. The failure by Counterparty to comply with
the above shall constitute an Additional Termination Event hereunder, upon which
Counterparty shall be the sole Affected Party and all Transactions hereunder
shall be Affected Transactions.

14) Rating Agency Downgrade. In the event that BSFP's long-term unsecured and
unsubordinated debt rating is reduced below "AA-" by S&P or its long-term
unsecured and unsubordinated debt rating is withdrawn or reduced below "Aa3" by
Moody's (and together with S&P, the "Swap Rating Agencies", and such rating
thresholds, "Approved Rating Thresholds"), then within 30 days after such rating
withdrawal or downgrade (unless, within 30 days after such withdrawal or
downgrade, each such Swap Rating Agency, as applicable, has reconfirmed the
rating of the Certificates, which was in effect immediately prior to such
withdrawal or downgrade), BSFP shall, at its own expense, subject to the Rating
Agency Condition, either (i) seek another entity to replace BSFP as party to
this Agreement that meets or exceeds the Approved Rating Thresholds on terms
substantially similar to this Agreement, (ii) obtain a guaranty of, or other
agreement of another person with the Approved Rating Thresholds, to honor,
BSFP's obligations under this Agreement or (iii) take any other action that
satisfies the Rating Agency Condition. BSFP's failure to do any of the foregoing
shall, at the Counterparty's option, constitute an Additional Termination Event
with BSFP as the Affected Party. In the event that BSFP's long-term unsecured
and unsubordinated debt rating is withdrawn or reduced

<PAGE>
Reference Number:  FXNSC8458
Wells Fargo Bank, N.A., not individually, but solely as Securities Administrator
on behalf of SG Mortgage Securities Trust 2006-FRE2, Asset-Backed Certificates,
Series 2006-FRE2
July 13, 2006
Page 14 of 19


below "BBB-" by S&P, then within 10 Business Days after such rating withdrawal
or downgrade, BSFP shall, subject to the Rating Agency Condition and at its own
expense, either (i) secure another entity to replace BSFP as party to this
Agreement that meets or exceeds the Approved Rating Thresholds on terms
substantially similar to this Agreement, (ii) obtain a guaranty of, or other
agreement of another person with the Approved Rating Thresholds, to honor,
BSFP's obligations under this Agreement or (iii) take any other action that
satisfies the Rating Agency Condition. For purposes of this provision, "Rating
Agency Condition" means, with respect to any particular proposed act or omission
to act hereunder that the party acting or failing to act must consult with each
of the Swap Rating Agencies then providing a rating of the Certificates and
receive from each of the Swap Rating Agencies a prior written confirmation that
the proposed action or inaction would not cause a downgrade or withdrawal of the
then-current rating of the Certificates.

15) Compliance with Regulation AB.

(i) BSFP agrees and acknowledges that SG Mortgage Securities, LLC, ("SGMS") and
SG Mortgage Finance Corp. ("SGMFC") are required under Regulation AB under the
Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as
amended (the "Exchange Act") ("Regulation AB"), to disclose certain financial
information regarding BSFP or its group of affiliated entities, if applicable,
depending on the aggregate "significance percentage" of this Agreement and any
other derivative contracts between BSFP or its group of affiliated entities, if
applicable, and Counterparty, as calculated from time to time in accordance with
Item 1115 of Regulation AB.

(ii) It shall be a swap disclosure event ("Swap Disclosure Event") if, on any
Business Day after the date hereof, SGMS or SGMFC requests from BSFP the
applicable financial information described in Item 1115 of Regulation AB (such
request to be based on a reasonable determination by SGMS, in good faith, that
such information is required under Regulation AB) (the "Swap Financial
Disclosure").

(iii) Upon the occurrence of a Swap Disclosure Event, BSFP, at its own expense,
shall (a) provide to SGMS or SGMFC the Swap Financial Disclosure within (5)
Business Days of such Swap Disclosure Event or (b) secure another entity to
replace BSFP as party to this Agreement on terms substantially similar to this
Agreement and subject to prior notification to the Swap Rating Agencies, which
entity meets or exceeds the Approved Rating Thresholds or which otherwise
satisfies the Rating Agency Condition and which entity is able to comply with
the requirements of Item 1115 of Regulation AB (any such entity, a "Regulation
AB approved entity) within (5) Business Days. If permitted by Regulation AB, any
required Swap Financial Disclosure may be provided by incorporation by reference
from reports filed pursuant to the Exchange Act.

(iv) BSFP agrees that, in the event that BSFP provides Swap Financial Disclosure
to SGMS or SGMFC in accordance with clause (iii)(a) of paragraph 17 it will
indemnify and hold harmless

<PAGE>
Reference Number:  FXNSC8458
Wells Fargo Bank, N.A., not individually, but solely as Securities Administrator
on behalf of SG Mortgage Securities Trust 2006-FRE2, Asset-Backed Certificates,
Series 2006-FRE2
July 13, 2006
Page 15 of 19


SGMS and SGMFC, their respective directors or officers and any person
controlling SGMS or SGMFC, from and against any and all losses, claims, damages
and liabilities caused by any untrue statement or alleged untrue statement of a
material fact contained in such Swap Financial Disclosure or caused by any
omission or alleged omission to state in such Swap Financial Disclosure a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.

16) Transfer, Amendment and Assignment. No transfer, amendment, waiver,
supplement, assignment or other modification of this Transaction shall be
permitted by either party unless each of S&P and Moody's has been provided
notice of the same and each of S&P and Moody's confirms in writing (including by
facsimile transmission) that it will not downgrade, qualify, withdraw or
otherwise modify its then-current rating of the Certificates.

17) Non-Recourse. Notwithstanding any provision herein or in the ISDA Form
Master Agreement to the contrary, the obligations of Counterparty hereunder are
limited recourse obligations of Counterparty, payable solely from the Swap
Account and the proceeds thereof, in accordance with the terms of the Pooling
and Servicing Agreement. In the event that the Swap Account and proceeds thereof
should be insufficient to satisfy all claims outstanding and following the
realization of the Swap Account and the proceeds thereof, any claims against or
obligations of Counterparty under the ISDA Form Master Agreement or any other
confirmation thereunder still outstanding shall be extinguished and thereafter
not revive. The Securities Administrator shall not have liability for any
failure or delay in making a payment hereunder to BSFP due to any failure or
delay in receiving amounts in the Swap Account from the Trust created pursuant
to the Pooling and Servicing Agreement. The provisions of this paragraph shall
survive the termination of the Agreement.

      NEITHER THE BEAR STEARNS COMPANIES INC. NOR ANY SUBSIDIARY OR AFFILIATE OF
      THE BEAR STEARNS COMPANIES INC. OTHER THAN BSFP IS AN OBLIGOR OR A CREDIT
      SUPPORT PROVIDER ON THIS AGREEMENT UNLESS BSFP HAS OBTAINED A GUARANTEE OR
      OTHER AGREEMENT PURSUANT TO PARAGRAPH 14.

5.    Account Details and
      Settlement Information: Payments to BSFP:
                              Citibank, N.A., New York
                              ABA Number: 021-0000-89, for the account of
                              Bear, Stearns Securities Corp.
                              Account Number: 0925-3186, for further credit to
                              Bear Stearns Financial Products Inc.
                              Sub-account Number:  102-04654-1-3
                              Attention: Derivatives Department

<PAGE>
Reference Number:  FXNSC8458
Wells Fargo Bank, N.A., not individually, but solely as Securities Administrator
on behalf of SG Mortgage Securities Trust 2006-FRE2, Asset-Backed Certificates,
Series 2006-FRE2
July 13, 2006
Page 16 of 19


                              Payments to Counterparty:
                              Wells Fargo Bank, N.A.
                              San Francisco, California
                              ABA#: 121-000-248
                              Account#: 3970771416
                              Account Name: SAS Clearing
                              FFC: 50931102

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

Counterparty hereby agrees to check this Confirmation and to confirm that the
foregoing correctly sets forth the terms of the Transaction by signing in the
space provided below and returning to BSFP a facsimile of the fully-executed
Confirmation to 212-272-9857. For inquiries regarding U.S. Transactions, please
contact Susan Donlon by telephone at 212-272-2364. For all other inquiries
please contact Derivatives Documentation by telephone at 353-1-402-6233.
Originals will be provided for your execution upon your request.

We are very pleased to have executed this Transaction with you and we look
forward to completing other transactions with you in the near future.

Very truly yours,

BEAR STEARNS FINANCIAL PRODUCTS INC.



By:  /s/ ANNIE MANEVITZ
   ------------------------------------
   Name:  ANNIE MANEVITZ
   Title: AUTHORIZED SIGNATORY

Counterparty, acting through its duly authorized signatory, hereby agrees to,
accepts and confirms the terms of the foregoing as of the Trade Date.

<PAGE>
Reference Number:  FXNSC8458
Wells Fargo Bank, N.A., not individually, but solely as Securities Administrator
on behalf of SG Mortgage Securities Trust 2006-FRE2, Asset-Backed Certificates,
Series 2006-FRE2
July 13, 2006
Page 17 of 19


WELLS FARGO BANK, N.A., NOT INDIVIDUALLY, BUT SOLELY AS SECURITIES ADMINISTRATOR
ON BEHALF OF SG MORTGAGE SECURITIES TRUST 2006-FRE2, ASSET-BACKED CERTIFICATES,
SERIES 2006-FRE2



By:  /s/ Peter A. Gobell
   ------------------------------------
   Name:  Peter A. Gobell
   Title: Vice President


am

<PAGE>
Reference Number:  FXNSC8458
Wells Fargo Bank, N.A., not individually, but solely as Securities Administrator
on behalf of SG Mortgage Securities Trust 2006-FRE2, Asset-Backed Certificates,
Series 2006-FRE2
July 13, 2006
Page 18 of 19


                                   SCHEDULE I

(For the purposes of (i) determining Floating Amounts, all such dates subject to
 adjustment in accordance with the Business Day Convention and (ii) determining
             Fixed Amounts, all such dates subject to No Adjustment)


 From and including   To but excluding   Notional Amount (USD)     Fixed Rate
 ------------------   ----------------   ---------------------   --------------
     25-Aug-06            25-Aug-06         1,776,458,000.00        5.3500%
     25-Sep-06            25-Sep-06         1,760,006,643.84        5.6000%
     25-Oct-06            25-Oct-06         1,750,946,077.95        5.6000%
     25-Nov-06            25-Nov-06         1,744,913,946.73        5.6000%
     25-Dec-06            25-Dec-06         1,718,677,124.78        5.6000%
     25-Jan-07            25-Jan-07         1,689,604,141.72        5.6000%
     25-Feb-07            25-Feb-07         1,657,701,561.88        5.6000%
     25-Mar-07            25-Mar-07         1,621,248,861.42        5.6000%
     25-Apr-07            25-Apr-07         1,582,211,157.25        5.6000%
     25-May-07            25-May-07         1,535,804,145.69        5.6000%
     25-Jun-07            25-Jun-07         1,486,588,080.95        5.6000%
     25-Jul-07            25-Jul-07         1,436,965,685.50        5.6000%
     25-Aug-07            25-Aug-07         1,388,354,070.01        5.6000%
     25-Sep-07            25-Sep-07         1,340,369,635.29        5.6000%
     25-Oct-07            25-Oct-07         1,293,848,910.86        5.6000%
     25-Nov-07            25-Nov-07         1,250,108,970.24        5.6000%
     25-Dec-07            25-Dec-07         1,203,473,143.32        5.6000%
     25-Jan-08            25-Jan-08         1,155,211,328.98        5.6000%
     25-Feb-08            25-Feb-08         1,086,817,200.23        5.6000%
     25-Mar-08            25-Mar-08         1,022,652,186.11        5.6000%
     25-Apr-08            25-Apr-08          962,459,123.44         5.6000%
     25-May-08            25-May-08          905,973,035.45         5.6000%
     25-Jun-08            25-Jun-08          852,933,042.75         5.6000%
     25-Jul-08            25-Jul-08          803,203,916.10         5.6000%
     25-Aug-08            25-Aug-08          453,917,305.59         5.6000%
     25-Sep-08            25-Sep-08          427,629,086.18         5.6000%
     25-Oct-08            25-Oct-08          402,949,541.45         5.6000%
     25-Nov-08            25-Nov-08          379,753,147.03         5.6000%
     25-Dec-08            25-Dec-08          357,889,459.48         5.6000%
     25-Jan-09            25-Jan-09          345,522,433.47         5.6000%
     25-Feb-09            25-Feb-09          333,593,841.50         5.6000%
     25-Mar-09            25-Mar-09          322,082,794.74         5.6000%
     25-Apr-09            25-Apr-09          310,974,355.83         5.6000%
     25-May-09            25-May-09          300,254,140.30         5.6000%
     25-Jun-09            25-Jun-09          289,908,376.41         5.6000%

<PAGE>
Reference Number:  FXNSC8458
Wells Fargo Bank, N.A., not individually, but solely as Securities Administrator
on behalf of SG Mortgage Securities Trust 2006-FRE2, Asset-Backed Certificates,
Series 2006-FRE2
July 13, 2006
Page 19 of 19


 From and including   To but excluding   Notional Amount (USD)     Fixed Rate
 ------------------   ----------------   ---------------------   --------------
     25-Jul-09            25-Jul-09          279,924,235.92         5.6000%
     25-Aug-09            25-Aug-09          270,288,203.53         5.6000%
     25-Sep-09            25-Sep-09          260,987,905.07         5.6000%
     25-Oct-09            25-Oct-09          252,026,328.29         5.6000%
     25-Nov-09            25-Nov-09          243,434,072.86         5.6000%
     25-Dec-09            25-Dec-09          235,135,853.39         5.6000%
     25-Jan-10            25-Jan-10          227,121,909.53         5.6000%
     25-Feb-10            25-Feb-10          219,382,098.54         5.6000%
     25-Mar-10            25-Mar-10          211,907,005.75         5.6000%
     25-Apr-10            25-Apr-10          204,687,541.28         5.6000%
     25-May-10            25-May-10          197,714,928.56         5.6000%
     25-Jun-10            25-Jun-10          190,980,693.70         5.6000%
     25-Jul-10            25-Jul-10          184,476,847.50         5.6000%
     25-Aug-10            25-Aug-10          178,195,284.59         5.6000%
     25-Sep-10            25-Sep-10          172,128,377.42         5.6000%
     25-Oct-10            25-Oct-10          166,268,761.48         5.6000%
     25-Nov-10            25-Nov-10          160,609,325.89         5.6000%
     25-Dec-10            25-Dec-10          155,143,205.04         5.6000%
     25-Jan-11            25-Jan-11          149,863,903.32         5.6000%
     25-Feb-11            25-Feb-11          144,764,876.49         5.6000%
     25-Mar-11            25-Mar-11          139,839,943.98         5.6000%
     25-Apr-11            25-Apr-11          135,083,138.04         5.6000%
     25-May-11            25-May-11          130,488,696.32         5.6000%
     25-Jun-11            25-Jun-11          126,050,987.49         5.6000%
     25-Jul-11        Termination Date       121,759,382.31         5.6000%