GREENPOINT MORTGAGE SECURITIES LLC,
                          as Depositor and Transferor,



                       GREENPOINT MORTGAGE FUNDING, INC.,
                             as Seller and Servicer,



                                       and



                                   [TRUSTEE],
                                   as Trustee





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


                         POOLING AND SERVICING AGREEMENT


                          Dated as of __________, 200_


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




              Revolving Home Equity Loan Asset-Backed Certificates


                                  Series 200_-_


<PAGE>

                                TABLE OF CONTENTS

                                                                            PAGE

                                    ARTICLE I

                                   Definitions

Section 1.01.      Definitions.................................................1
Section 1.02.      Interest Calculations......................................20

                                   ARTICLE II

                          Conveyance of Mortgage Loans;
                       Original Issuance of Certificates;
                                  Tax Treatment

Section 2.01.      Conveyance of Mortgage Loans; Retention of Obligation to
                   Fund Advances Under Credit Line Agreements.................20
Section 2.02.      Acceptance by Trustee; Retransfer of Mortgage Loans........24
Section 2.03.      Representations and Warranties Regarding the Servicer and
                   the Transferor.............................................26
Section 2.04.      Representations and Warranties of the Transferor Regarding
                   the Mortgage Loans; Retransfer of Certain Mortgage Loans...28
Section 2.05.      Covenants of the Depositor and the Transferor..............34
Section 2.06.      Retransfers of Mortgage Loans at Election of Transferor....34
Section 2.07.      Execution and Authentication of Certificates...............36
Section 2.08.      Tax Treatment..............................................36
Section 2.09.      Representations and Warranties of the Depositor............36
Section 2.10.      Conveyance of the Subsequent Mortgage Loans................37

                                   ARTICLE III

                 Administration and Servicing of Mortgage Loans

Section 3.01.      The Servicer...............................................39
Section 3.02.      Collection of Certain Mortgage Loan Payments...............40
Section 3.03.      Withdrawals from the Collection Account....................42
Section 3.04.      Maintenance of Hazard Insurance; Property Protection
                   Expenses...................................................42
Section 3.05.      Assumption and Modification Agreements.....................43
Section 3.06.      Realization Upon Defaulted Mortgage Loans; Repurchase of
                   Certain Mortgage Loans.....................................44
Section 3.07.      Trustee to Cooperate.......................................45
Section 3.08.      Servicing Compensation; Payment of Certain Expenses by
                   Servicer...................................................45
Section 3.09.      Annual Statement as to Compliance..........................46
Section 3.10.      Annual Servicing Report....................................46
Section 3.11.      Annual Opinion of Counsel..................................46

                                       i
<PAGE>

Section 3.12.      Access to Certain Documentation and Information Regarding
                   the Mortgage Loans.........................................46
Section 3.13.      Maintenance of Certain Servicing Insurance Policies........47
Section 3.14.      Reports to the Securities and Exchange Commission..........47
Section 3.15.      Tax Returns................................................47
Section 3.16.      Information Required by the Internal Revenue Service
                   Generally and Reports of Foreclosures and Abandonments
                   of Mortgaged Property......................................48

                                   ARTICLE IV

                              Servicing Certificate

Section 4.01.      Servicing Certificate......................................48
Section 4.02.      Claims upon the Policy.....................................51
Section 4.03.      Spread Account.............................................52
Section 4.04.      Effect of Payments by the Credit Enhancer; Subrogation.....52

                                    ARTICLE V

                             Payments and Statements
               to Certificateholders; Rights of Certificateholders

Section 5.01.      Distributions..............................................53
Section 5.02.      Calculation of the Class A Certificate Rate................56
Section 5.03.      Statements to Certificateholders...........................56
Section 5.04.      Rights of Certificateholders...............................58
Section 5.05.      Funding Account............................................58

                                   ARTICLE VI

                                The Certificates

Section 6.01.      The Certificates...........................................59
Section 6.02.      Registration of Transfer and Exchange of Investor
                   Certificates; Appointment of Registrar.....................60
Section 6.03.      Mutilated, Destroyed, Lost or Stolen Certificates..........62
Section 6.04.      Persons Deemed Owners......................................62
Section 6.05.      Restrictions on Transfer of Transferor Certificates........62
Section 6.06.      Appointment of Paying Agent................................64
Section 6.07.      Acceptance of Obligations..................................65

                                   ARTICLE VII

                 The Servicer, the Transferor and the Depositor

Section 7.01.      Liability of the Transferor, the Servicer and the
                   Depositor..................................................65
Section 7.02.      Merger or Consolidation of, or Assumption of the
                   Obligations of, the Servicer, the Transferor or the
                   Depositor..................................................65
                                       ii
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Section 7.03.      Limitation on Liability of the Servicer and Others.........65
Section 7.04.      Servicer Not to Resign.....................................66
Section 7.05.      Delegation of Duties.......................................66
Section 7.06.      Indemnification of the Trust by the Servicer...............67
Section 7.07.      Indemnification of the Trust by the Transferor.............67
Section 7.08.      Limitation on Liability of the Transferor..................67
Section 7.09.      Limitation on Liability of the Depositor...................68

                                  ARTICLE VIII

                              Servicing Termination

Section 8.01.      Events of Servicing Termination............................68
Section 8.02.      Trustee to Act; Appointment of Successor...................70
Section 8.03.      Notification to Certificateholders.........................71

                                   ARTICLE IX

                                   The Trustee

Section 9.01.      Duties of Trustee..........................................71
Section 9.02.      Certain Matters Affecting the Trustee......................72
Section 9.03.      Trustee Not Liable for Certificates or Mortgage Loans......74
Section 9.04.      Trustee May Own Certificates...............................75
Section 9.05.      Servicer to Pay Trustee's Fees and Expenses; Servicer to
                   Indemnify..................................................75
Section 9.06.      Eligibility Requirements for Trustee.......................75
Section 9.07.      Resignation or Removal of Trustee..........................75
Section 9.08.      Successor Trustee..........................................76
Section 9.09.      Merger or Consolidation of Trustee.........................77
Section 9.10.      Appointment of Co-Trustee or Separate Trustee..............77
Section 9.11.      Limitation of Liability....................................78
Section 9.12.      Trustee May Enforce Claims Without Possession of
                   Certificates...............................................78
Section 9.13.      Suits for Enforcement......................................79

                                    ARTICLE X

                                   Termination

Section 10.01.     Termination................................................79

                                   ARTICLE XI

                            Rapid Amortization Events

Section 11.01.     Rapid Amortization Events..................................81
Section 11.02.     Additional Rights Upon the Occurrence of Certain Events....83

                                      iii
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                                   ARTICLE XII

                            Miscellaneous Provisions

Section 12.01.     Amendment..................................................84
Section 12.02.     Recordation of Agreement...................................86
Section 12.03.     Limitation on Rights of Certificateholders.................86
Section 12.04.     Governing Law..............................................87
Section 12.05.     Notices....................................................87
Section 12.06.     Severability of Provisions.................................88
Section 12.07.     Assignment.................................................88
Section 12.08.     Certificates Nonassessable and Fully Paid..................88
Section 12.09.     Third-Party Beneficiaries..................................88
Section 12.10.     Counterparts...............................................88
Section 12.11.     Effect of Headings and Table of Contents...................88
Section 12.12.     Insurance Agreement........................................88


EXHIBIT

EXHIBIT A - FORM OF CERTIFICATE..............................................A-1
EXHIBIT B - FORM OF TRANSFEROR CERTIFICATE...................................B-1
EXHIBIT C - MORTGAGE LOAN SCHEDULE...........................................C-1
EXHIBIT D - RESERVED.........................................................D-1
EXHIBIT E - ANNUAL OPINION OF COUNSEL........................................E-1
EXHIBIT F - FORM OF CREDIT LINE AGREEMENT....................................F-1
EXHIBIT G - RESERVED.........................................................G-1
EXHIBIT H - RESERVED.........................................................H-1
EXHIBIT I - LETTER OF REPRESENTATIONS........................................I-1
EXHIBIT J - RESERVED.........................................................J-1
EXHIBIT K - FORM OF INVESTMENT LETTER........................................K-1
EXHIBIT L - FORM OF REQUEST FOR RELEASE......................................L-1

                                       iv
<PAGE>



         This Pooling and Servicing  Agreement,  dated as of  __________,  200_,
among GREENPOINT  MORTGAGE  SECURITIES LLC, as Depositor (in such capacity,  the
"DEPOSITOR") and as Transferor (in such capacity, the "TRANSFEROR"),  GREENPOINT
MORTGAGE FUNDING, INC., as Seller and Servicer (in such capacities, the "SELLER"
and the "SERVICER"), and [TRUSTEE], as Trustee (the "TRUSTEE"),

                          W I T N E S S E T H T H A T:

         In consideration of the mutual agreements herein contained, the parties
hereto agree as follows:

                                   ARTICLE I

                                   Definitions

         Section 1.01.  DEFINITIONS.  Except as otherwise  specified herein, the
following terms have the respective meanings set forth in this Article.

         ACCELERATED PRINCIPAL  DISTRIBUTION AMOUNT: With respect to any Payment
Date, the amount, if any,  required to reduce the Class A Certificate  Principal
Balance (after giving effect to the  distribution of all other amounts  actually
distributed  on the  Class A  Certificates  on such  Payment  Date)  so that the
Invested  Amount  (immediately  following such Payment Date) exceeds the Class A
Certificate    Principal    Balance   (as   so   reduced)   by   the    Required
Overcollateralization Amount.

         ADDITIONAL  BALANCE:  As to  any  HELOC  Mortgage  Loan  and  day,  the
aggregate amount of all Draws conveyed to the Trust pursuant to Section 2.01.

         ADJUSTMENT  DATE:  With respect to any HELOC Mortgage Loan and Interest
Period,  the second LIBOR  Business Day preceding the first day of such Interest
Period.

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

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

         ALTERNATIVE  PRINCIPAL PAYMENT:  As to any Payment Date, the greater of
(x) ___% of the Class A Certificate  Principal Balance  immediately prior to the
Payment  Date or (y) the  amount  (but not less than  zero)  equal to  Principal
Collections  for such Payment Date less the  aggregate of Draws under the Credit
Line Agreements during the related Collection Period.

         APPRAISED VALUE: As to any Mortgaged Property, the value established by
a drive by inspection of such  Mortgaged  Property made to establish  compliance
with the


<PAGE>

underwriting  criteria then in effect in connection with the application for the
Mortgage Loan secured by such Mortgaged Property.

         ASSET  BALANCE:  As to any  Mortgage  Loan,  other  than  a  Liquidated
Mortgage  Loan, and day, the related  Cut-Off Date Asset Balance,  PLUS (i) with
respect to each HELOC Mortgage  Loan, any Additional  Balance in respect of such
HELOC  Mortgage  Loan,  MINUS  (ii) with  respect  to each  Mortgage  Loan,  all
collections credited as principal against the Asset Balance of any such Mortgage
Loan in  accordance  with the  related  Loan  Agreement.  For  purposes  of this
definition,  a Liquidated Mortgage Loan shall be deemed to have an Asset Balance
equal to the Asset Balance of the related Mortgage Loan immediately prior to the
final  recovery of related  Liquidation  Proceeds  and an Asset  Balance of zero
thereafter.

         ASSIGNMENT OF MORTGAGE:  With respect to any Mortgage,  an  assignment,
notice of transfer or  equivalent  instrument,  in recordable  form,  sufficient
under the laws of the  jurisdiction in which the related  Mortgaged  Property is
located to reflect the sale of the  Mortgage to the Trustee,  which  assignment,
notice of transfer or  equivalent  instrument  may be in the form of one or more
blanket assignments  covering the Mortgage Loans secured by Mortgaged Properties
located in the same jurisdiction.

         AUTHORIZED NEWSPAPER: A newspaper of general circulation in the Borough
of  Manhattan,  The  City of New  York,  printed  in the  English  language  and
customarily  published  on  each  Business  Day,  whether  or not  published  on
Saturdays, Sundays and holidays.

         BIF: The Bank Insurance Fund, as from time to time constituted, created
under the Financial  Institutions Reform,  Recovery and Enhancement Act of 1989,
or if at any time after the execution of this instrument the Bank Insurance Fund
is not existing and  performing  duties now assigned to it, the body  performing
such duties on such date.

         BILLING CYCLE: With respect to any Mortgage Loan and Collection Period,
the billing  period  specified in the related Loan Agreement and with respect to
which amounts billed are received during such Collection Period.

         BOOK-ENTRY CERTIFICATE: Any Investor Certificate registered in the name
of the  Depository or its nominee,  ownership of which is reflected on the books
of the  Depository or on the books of a Person  maintaining an account with such
Depository  (directly or as an indirect participant in accordance with the rules
of such Depository).

         BUSINESS  DAY: Any day other than a Saturday,  a Sunday or other day on
which banking institutions in the State of New York,  California or the State in
which the Corporate Trust Office is located are required or authorized by law or
executive order to be closed.

         CERTIFICATE:  A  Class  A  Certificate,  a  Class  S  Certificate  or a
Transferor Certificate.

                                       2
<PAGE>

         CERTIFICATE  OWNER:  The  Person  who  is  the  beneficial  owner  of a
Book-Entry Certificate.

         CERTIFICATE REGISTER AND CERTIFICATE REGISTRAR: The register maintained
and the registrar appointed pursuant to Section 6.02.

         CERTIFICATEHOLDER  OR HOLDER: The Person in whose name a Certificate is
registered in the Certificate  Register,  except that, solely for the purpose of
giving any consent, direction, waiver or request pursuant to this Agreement, (x)
any Investor Certificate registered in the name of the Transferor, or any Person
known to a Responsible Officer to be an Affiliate of either the Depositor or the
Transferor and (y) any Investor  Certificate  for which the  Transferor,  or any
Person known to a  Responsible  Officer to be an Affiliate of either such entity
is the  Certificate  Owner shall be deemed not to be outstanding  (unless to the
knowledge of a  Responsible  Officer (i) the  Transferor,  or such  Affiliate is
acting  as  trustee  or  nominee  for a Person  who is not an  Affiliate  of the
Transferor  and who makes the voting  decision  with  respect  to such  Investor
Certificate or (ii) the Transferor,  or such Affiliate is the Certificate  Owner
of all the Investor  Certificates) and the Percentage Interest evidenced thereby
shall not be taken into account in determining  whether the requisite  amount of
Percentage Interests necessary to effect any such consent,  direction, waiver or
request has been obtained.

         CLASS A CERTIFICATE:  Any certificate executed and authenticated by the
Trustee substantially in the form set forth in Exhibit A-1 hereto.

         CLASS A CERTIFICATE CARRY FORWARD INTEREST: As to any Payment Date, the
amount,  if any, by which interest  accrued on the Class A  Certificates  at the
Class A Certificate Rate (without giving effect to the proviso in the definition
thereof) for the related  Interest  Period exceeds the Class A Interest  Payment
Cap.

         CLASS A CERTIFICATE  DISTRIBUTION  AMOUNT:  As to any Payment Date, the
sum of all  amounts to be  distributed  to the  Holders of Class A  Certificates
pursuant to Article V and Article hereof.

         CLASS  A  CERTIFICATE  INTEREST:  With  respect  to any  Payment  Date,
interest for the related  Interest Period at the applicable  Class A Certificate
Rate on the Class A  Certificate  Principal  Balance as of the first day of such
Interest Period (after giving effect to the distributions  made on the first day
of such Interest Period).

         CLASS A  CERTIFICATE  PRINCIPAL  BALANCE:  With  respect to any Payment
Date,  (a) the  Original  Class A  Certificate  Principal  Balance  less (b) the
aggregate  of  amounts  actually   distributed  as  principal  on  the  Class  A
Certificates.

         CLASS A CERTIFICATE  RATE:  With respect to the first Interest  Period,
_____%,  and for any subsequent  Interest Period, the sum of (a) LIBOR as of the
second LIBOR Business Day prior to the first day of such Interest Period and (b)
_____%;  PROVIDED,  HOWEVER, that in no event shall the Class A Certificate Rate
with respect to any Interest  Period  exceed the Maximum Rate for such  Interest
Period.

                                       3
<PAGE>

         CLASS A CERTIFICATEHOLDER: The Holder of a Class A Certificate.

         CLASS A INTEREST  PAYMENT  CAP:  With respect to any Payment  Date,  an
amount equal to accrued  interest on the Class A Certificate  Principal  Balance
for the related Interest Period at the Maximum Rate.

         CLASS S CERTIFICATE:  Any Certificate executed and authenticated by the
Trustee substantially in the form set forth in Exhibit A-2.

         CLASS  S  CERTIFICATE  INTEREST:  With  respect  to any  Payment  Date,
interest for the related  Interest Period at the Class S Certificate Rate on the
Class S  Notional  Amount  as of the first day of such  Interest  Period  (after
giving effect to distributions made on the first day of such Interest Period).

         CLASS S CERTIFICATEHOLDER: The Holder of a Class S Certificate.

         CLASS S NOTIONAL AMOUNT:  With respect to any Payment Date, the Class A
Certificate  Principal  Balance for such Payment Date (before  giving  effect to
distributions made on such Payment Date).

         CLOSED-END  MORTGAGE LOAN: Each Mortgage Loan  originated  under a Loan
Agreement providing for a single advance of funds on the date of origination and
no additional advances during the term of such Mortgage Loan.

         CLOSING DATE:  ___________, 200_.

         CODE:  The Internal  Revenue  Code of 1986,  as the same may be amended
from time to time (or any successor statute thereto).

         COLLECTION  ACCOUNT:  The  custodial  account or  accounts  created and
maintained  for the benefit of the  Investor  Certificateholders  and the Credit
Enhancer  pursuant  to  Section  3.02(b).  The  Collection  Account  shall be an
Eligible Account.

         COLLECTION  PERIOD:  With  respect to any Payment Date and any Mortgage
Loan, the calendar month preceding such Payment Date.

         COMBINED  LOAN-TO-VALUE  RATIO:  (i) With respect to any HELOC Mortgage
Loan as of any date, the percentage  equivalent of a fraction,  the numerator of
which  is the sum of (A) the  Credit  Limit  and (B) the  outstanding  principal
balance as of the date of application  for the related Credit Line Agreement (or
as of any  subsequent  date,  if any,  as of which  such  outstanding  principal
balance may be determined in connection with an increase in the Credit Limit for
such HELOC Mortgage Loan) of any mortgage loan or mortgage loans that are senior
in  priority  to the  HELOC  Mortgage  Loan and which  are  secured  by the same
Mortgaged  Property and the  denominator of which is (C) the Appraised  Value of
the related Mortgaged  Property as set forth in the Mortgage File as of the date
of the  appraisal or on such  subsequent  date,  if any, or (D) in the case of a
Mortgage  Property  purchased  within one year of the date of  execution  of the
related  Credit Line  Agreement,  the lesser of (x) the  Appraised  Value of the
related Mortgaged

                                       4
<PAGE>

Property as set forth in the loan files as of the date of the  appraisal and (y)
the  purchase  price of such  Mortgaged  Property  and (ii) with  respect to any
Closed-End Mortgage Loan Mortgage Loan as of any date, the percentage equivalent
of a fraction,  the numerator of which is the sum of (A) the original  principal
balance  of such  Closed-End  Mortgage  Loan and (B) any  outstanding  principal
balances  senior to such  Closed-End  Mortgage Loan  (calculated  at the rate of
application  for the Closed-End  Mortgage Loan) and the  denominator of which is
(C) the Appraised  Value of the related  Mortgaged  Property as set forth in the
Mortgage  File as of the date of the appraisal or (D) in the case of a Mortgaged
Property  purchased within one year of the origination of the related Closed-End
Mortgage  Loan, the lesser of (x) the Appraised  Value of the related  Mortgaged
Property as set forth in the Mortgage  Files as of the date of the appraisal and
(y) the purchase price of such Mortgaged Property.

         CORPORATE TRUST OFFICE: The principal office of the Trustee at which at
any particular time its corporate  business shall be administered,  which office
on the Closing Date is located at [Address].

         CREDIT ENHANCEMENT DRAW AMOUNT: As to any Payment Date, an amount equal
to the sum of (1) the  amount  by which  (a) the  amount  to be  distributed  to
Investor  Certificateholders  pursuant to Sections  5.01(a)(iii) and 5.01(a)(iv)
exceeds  (b) the sum of (i) the  amount  of  Investor  Interest  Collections  on
deposit in the  Collection  Account on the Business Day  preceding  such Payment
Date  that is  available  to be  applied  therefor,  (ii)  the  amount,  if any,
deposited in the Collection  Account in respect of such Payment Date pursuant to
Section 4.05,  (iii) the amount  transferred to the Collection  Account from the
Funding Account pursuant to Section 5.05(c)(iii) and (iv) any amount transferred
from the Spread Account to the Collection  Account pursuant to Section 4.03, (2)
the Guaranteed  Principal  Distribution  Amount and (3) any Preference Claim for
such Payment Date.

         CREDIT ENHANCER:  [Credit Enhancer], a [State] monoline stock insurance
company,  any successor thereto or any replacement  credit enhancer  substituted
pursuant to Section 4.03.

         CREDIT ENHANCER  DEFAULT:  The failure by the Credit Enhancer to make a
payment required under the Policy in accordance with the terms thereof.

         CREDIT LIMIT:  As to any HELOC Mortgage Loan, the maximum Asset Balance
permitted under the terms of the related Credit Line Agreement.

         CREDIT LIMIT  UTILIZATION  RATE:  As to any HELOC  Mortgage  Loan,  the
percentage  equivalent  of a fraction the numerator of which is the Cut-Off Date
Asset Balance for such Mortgage Loan and the denominator of which is the related
Credit Limit.
         CREDIT LINE  AGREEMENT:  With respect to any HELOC  Mortgage  Loan, the
related home equity line of credit agreement and promissory note executed by the
related Mortgagor and any amendment or modification thereof.

                                       5
<PAGE>

         CUSTODIAL AGREEMENT:  Any Custodial Agreement between any Custodian and
the Trustee,  which is reasonably acceptable in form and substance to the Credit
Enhancer,  relating  to the  custody  of the  Mortgage  Loans  and  the  Related
Documents.

         CUSTODIAN:  Any  custodian  appointed by the Trustee  under a Custodial
Agreement to maintain all or a portion of the Mortgage Files pursuant to Section
2.01(b).

         CUT-OFF DATE: With respect to each Initial  Mortgage Loan,  __________,
200_ and with respect to each  Subsequent  Mortgage Loan, the date on which such
Subsequent Mortgage Loan was transferred to the Trust.

         CUT-OFF DATE ASSET  BALANCE:  With respect to any  Mortgage  Loan,  the
unpaid principal balance thereof as of the Cut-Off Date.

         CUT-OFF DATE POOL  BALANCE:  The Pool Balance  calculated as of the Cut
Off Date.

         DEFECTIVE MORTGAGE LOAN: A Mortgage Loan subject to retransfer pursuant
to Section 2.02, 2.04 or 2.09.

         DEFINITIVE CERTIFICATES: As defined in Section 6.02(c).

         DELIVERY EVENT: As defined in Section 2.01.

         DEPOSITOR:  GreenPoint  Mortgage  Securities  LLC or its  successor  in
interest.

         DEPOSITORY:  The  initial  Depository  shall  be The  Depository  Trust
Company, the nominee of which is Cede & Co., as the registered Holder of Class A
Certificates evidencing $__________ in initial aggregate principal amount of the
Class A  Certificates  and as the  registered  Holder  of  Class S  Certificates
evidencing  $__________  in  initial  aggregate  notional  amount of the Class S
Certificates.  The Depository shall at all times be a "clearing  corporation" as
defined in Section 8-102(3) of the UCC of the State of New York.

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

         DETERMINATION  DATE:  With  respect  to any  Payment  Date,  the  third
Business Day prior to such Payment Date.

         PAYMENT DATE: The  [fifteenth] day of each month, or if such day is not
a Business Day, then the next Business Day,  beginning in the month  immediately
following the month of the initial issuance of the Certificates.

         DRAW:  With  respect  to any HELOC  Mortgage  Loan  Mortgage  Loan,  an
additional  borrowing  by the  Mortgagor  subsequent  to  the  Cut-Off  Date  in
accordance with the related Mortgage Note.

                                       6
<PAGE>

         DUE DATE: As to any Mortgage Loan, the twenty-fifth day of the month.

         ELECTRONIC  LEDGER:  The electronic master record of home equity credit
line  mortgage  loans  maintained  by  the  Servicer  or by the  Transferor,  as
appropriate.

         ELIGIBLE  ACCOUNT:  A segregated  account that is (i) maintained with a
depository  institution  whose  short-term  debt  obligations at the time of any
deposit therein have the highest  short-term debt rating by the Rating Agencies,
(ii)  one or  more  accounts  maintained  with a  depository  institution  whose
long-term unsecured debt rating by the Rating Agencies is at least AA- and whose
accounts are fully insured by either the Savings  Association  Insurance Fund or
the Bank Insurance Fund of the Federal Deposit Insurance Corporation established
by such fund,  (iii) a segregated  trust account  maintained with the Trustee in
its fiduciary  capacity or (iv)  otherwise  acceptable to each Rating Agency and
the Credit  Enhancer as  evidenced  by a letter from each Rating  Agency and the
Credit  Enhancer to the Trustee,  without  reduction or withdrawal of their then
current ratings of the Class A Notes without regard to the Policy.

         ELIGIBLE  INVESTMENTS:  One or more  of the  following  (excluding  any
callable investments purchased at a premium):

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

                  (ii) repurchase  agreements on obligations specified in clause
         (i) maturing  not more than three  months from the date of  acquisition
         thereof, provided that the short-term unsecured debt obligations of the
         party agreeing to repurchase such  obligations are at the time rated by
         each Rating Agency in its highest  short-term rating category (which is
         A-1+ for Standard & Poor's and P-1 for Moody's);

                  (iii)  certificates  of deposit,  time  deposits  and bankers'
         acceptances  (which, if Moody's is a Rating Agency,  shall each have an
         original maturity of not more than 90 days and, in the case of bankers'
         acceptances,  shall in no event have an original  maturity of more than
         365  days)  of  any  U.S.  depository   institution  or  trust  company
         incorporated  under the laws of the United  States or any state thereof
         and subject to  supervision  and  examination  by federal  and/or state
         banking  authorities,  provided  that  the  unsecured  short-term  debt
         obligations of such depository institution or trust company at the date
         of acquisition  thereof have been rated by each of Moody's and Standard
         & Poor's in its highest unsecured short-term debt rating category;

                  (iv) commercial paper (having original  maturities of not more
         than 270 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 Standard & Poor's and Moody's in their highest short-term
         debt rating categories;

                                       7
<PAGE>

                  (v) short-term  investment  funds  ("STIFS")  sponsored by any
         trust company or national banking  association  incorporated  under the
         laws of the  United  States or any state  thereof  which on the date of
         acquisition  has been rated by  Standard & Poor's and  Moody's in their
         respective highest applicable rating category;

                  (vi)  interests  in any money market fund which at the date of
         acquisition  of the interests in such fund and throughout the time such
         interests  are held in such  fund has a rating  of Aaa by  Moody's  and
         either AAAm or AAAm-G by Standard & Poor's or such lower rating as will
         not  result in the  qualification,  downgrading  or  withdrawal  of the
         then-current  rating assigned to the Certificates by each Rating Agency
         without regard to the Policy; and

                  (vii) other  obligations or securities  that are acceptable to
         each Rating  Agency and the Credit  Enhancer as an Eligible  Investment
         hereunder and will not result in a reduction in the then current rating
         of the  Certificates  without  regard to the Policy,  as evidenced by a
         letter to such effect from such Rating  Agency and the Credit  Enhancer
         and with respect to which the Servicer has received  confirmation that,
         for tax purposes,  the investment complies with the last clause of this
         definition;

PROVIDED that no instrument  described hereunder shall evidence either the right
to receive (a) only interest  with respect to the  obligations  underlying  such
instrument or (b) both principal and interest  payments derived from obligations
underlying such instrument and the interest and principal  payments with respect
to such instrument  provided a yield to maturity at par greater than 120% of the
yield to maturity at par of the underlying obligations;  and PROVIDED,  FURTHER,
that (x) no instrument  described  hereunder may be purchased at a price greater
than par if such  instrument  may be  prepaid or called at a price less than its
purchase  price prior to its stated  maturity and (y) all  Eligible  Investments
shall mature no later than the next Payment Date.

         ELIGIBLE  SUBSTITUTE  MORTGAGE LOAN: A Mortgage Loan substituted by the
Depositor,  with the consent of the Credit  Enhancer,  for a Defective  Mortgage
Loan  which  must,  on the date of such  substitution,  (i) have an  outstanding
Principal  Balance (or, in the case of a substitution  of more than one Mortgage
Loan for a Defective Mortgage Loan, an aggregate Principal Balance), equal to or
less  than  the  Principal  Balance  of the  Defective  Mortgage  Loan as of the
applicable  Cut-Off Date;  (ii) except for HELOC  Mortgage  Loans still in their
teaser  period,  have a Loan Rate not less  than the Loan Rate of the  Defective
Mortgage  Loan  and not  more  than  ____% in  excess  of the Loan  Rate of such
Defective HELOC Mortgage Loan; (iii) for HELOC Mortgage Loans,  have a Loan Rate
based on the same Index as the Defective  Mortgage Loan with adjustments to such
Loan Rate made on the same date on which the  Defective  HELOC  Mortgage  Loan's
interest rate adjusts;  (iv) for HELOC Mortgage Loans, have a Margin that is not
less than the Margin of the Defective  HELOC Mortgage Loan and not more than ___
basis points higher than the Margin for the Defective  HELOC  Mortgage Loan; (v)
have a  mortgage  of the same or  higher  level  of  priority  as the  Defective
Mortgage Loan at the time such Mortgage Loan was transferred to the Trust;  (vi)
have a remaining  term to maturity not


                                       8
<PAGE>

more  than ___  months  earlier  and not more  than ___  months  later  than the
remaining  term to maturity of the Defective  Mortgage  Loan;  (vii) comply with
each  representation and warranty as to the Mortgage Loans set forth in the Sale
and  Servicing  Agreement  (deemed  to be made as of the date of  substitution);
(viii) have an original  Combined  Loan-to-Value  Ratio not greater than that of
the Defective  Mortgage Loan; and (ix) have a Credit Score greater than or equal
to the Credit Score of the  Defective  Mortgage  Loan at the time such  Mortgage
Loan was transferred to the Trust; (x) the related Mortgaged  Property is not an
investment  property;  (xi) the related Mortgaged Property is not a second home;
and (xii) the Combined Loan-to-Value Ratio is not greater than ___%.

         ENDORSEMENT:  As defined in the Policy.

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

         EVENT OF SERVICING TERMINATION: As defined in Section 8.01.

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

         FISCAL AGENT:  As defined in the Policy.

         FORECLOSURE  PROFIT:  With respect to a Liquidated  Mortgage  Loan, the
amount,  if any,  by which (i) the  aggregate  of its Net  Liquidation  Proceeds
exceeds (ii) the related Asset Balance (plus accrued and unpaid interest thereon
at the  applicable  Loan Rate from the date  interest  was last paid through the
last day in the related  Collection  Period) of such  Liquidated  Mortgage  Loan
immediately prior to the final recovery of its Liquidation Proceeds.

         FUNDING  ACCOUNT:  The custodial  account or accounts  established  and
maintained  with the Trustee for the benefit of the Investor  Certificateholders
pursuant to Section 5.05. The Funding Account shall be an Eligible Account.

         FUNDING PERIOD: The period commencing on the Closing Date and ending on
the earlier of (i) the close of business on the  __________  200_ Payment  Date,
and (ii) the commencement of the Rapid Amortization Period.

         GROSS  MARGIN:  As to  any  HELOC  Mortgage  Loan  Mortgage  Loan,  the
percentage set forth as the "Gross Margin" for such HELOC Mortgage Loan Mortgage
Loan on Exhibit C hereto.

         GUARANTEED  DISTRIBUTION:  With respect to any Payment Date, the sum of
the (i) the Guaranteed  Principal  Distribution Amount and (ii) the amount to be
distributed  to   Certificateholders   pursuant  to  Sections  5.01(a)(iii)  and
5.01(a)(iv) for such Payment Date.

         GUARANTEED  PRINCIPAL  DISTRIBUTION  AMOUNT:  With  respect  to (i) any
Payment  Date on or after  which the  Transferor  Subordinated  Amount  has been
reduced to zero, other than the Payment Date in __________ 200_, the amount,  if
any, required to reduce the Class A Certificate  Principal Balance (after giving
effect to the  distributions of Interest

                                       9
<PAGE>

Collections  and  Principal  Collections  that are allocable to principal on the
Class A Certificates  on such Payment Date) to the Invested  Amount  immediately
following  such Payment Date and (ii) the Payment Date in __________  200_,  the
amount by which the  outstanding  Class A Certificate  Principal  Balance (after
giving effect to Interest  Collections  allocable and distributable to principal
on the Class A Certificates on such Payment Date) exceeds the sum of the amounts
on deposit in the Collection  Account available to be distributed to the Class A
Certificateholders pursuant to Section 5.01(b) hereof.

         HELOC  MORTGAGE  LOAN  MORTGAGE  LOAN:  Any  Mortgage  Loan  originated
pursuant to a Loan Agreement providing for Draws.

         INDEX:  With respect to each Interest Rate  Adjustment Date for a HELOC
MORTGAGE LOAN MORTGAGE LOAN, the highest "prime rate" as published in the "Money
Rates"  table of THE WALL  STREET  JOURNAL as of the first  business  day of the
calendar month.

         INITIAL  CLOSED-END   MORTGAGE  LOAN:  Each  Closed-End  Mortgage  Loan
transferred and assigned to the Trustee on the Closing Date.

         INITIAL CUT-OFF DATE POOL BALANCE:  $______________.

         INITIAL HELOC  MORTGAGE LOAN MORTGAGE  LOAN:  Each HELOC  MORTGAGE LOAN
MORTGAGE LOAN transferred and assigned to the Trustee on the Closing Date.

         INITIAL  MORTGAGE  LOAN:  Each Initial HELOC  Mortgage Loan and Initial
Closed-End Mortgage Loan.

         INSOLVENCY EVENT:  As defined in Section 11.02.

         INSURANCE AGREEMENT:  The Insurance and Indemnity agreement dated as of
__________,  200_ among the Depositor, the Transferor, the Servicer, the Trustee
and the Credit Enhancer, including any amendments and supplements thereto.

         INSURANCE PROCEEDS: Proceeds paid by any insurer (other than the Credit
Enhancer)  pursuant to any insurance policy covering a Mortgage Loan, or amounts
required to be paid by the  Servicer  pursuant  to the last  sentence of Section
3.04, net of any component  thereof (i) covering any expenses  incurred by or on
behalf of the Servicer in connection with obtaining such proceeds,  (ii) that is
applied to the restoration or repair of the related  Mortgaged  Property,  (iii)
released to the Mortgagor in accordance  with the  Servicer's  normal  servicing
procedures  or (iv)  required  to be paid to any holder of a mortgage  senior to
such Mortgage Loan.

         INTEREST  COLLECTIONS:  With  respect to each Pool and for any  Payment
Date,  the sum of all  payments  by or on  behalf  of  Mortgagors  and any other
amounts constituting interest, including the portion of Net Liquidation Proceeds
and Insurance  Proceeds  allocated to interest on the applicable  Mortgage Loan)
collected  by  the  Servicer  under  the  Mortgage  Loans  (excluding  any  fees
(including annual fees) or late charges or similar  administrative  fees paid by
Mortgagors) during the related Collection Period minus the

                                       10
<PAGE>

Servicing  Fee payable to the Servicer  with  respect to the related  Collection
Period.  The terms of the related Loan Agreement  shall determine the portion of
each  payment in respect of such  Mortgage  Loan that  constitutes  principal or
interest.

         INTEREST PERIOD:  With respect to any Payment Date other than the first
Payment Date, the period  beginning on the preceding  Payment Date and ending on
the day preceding  such Payment Date, and in the case of the first Payment Date,
the period  beginning  on the Closing Date and ending on the day  preceding  the
first Payment Date.

         INTEREST  RATE  ADJUSTMENT  DATE:  With respect to each HELOC  Mortgage
Loan, any date on which the Loan Rate is adjusted in accordance with the related
Credit Line Agreement.

         INVESTED  AMOUNT:  With respect to any Payment Date, an amount equal to
the  Original  Invested  Amount  minus (i) the amount of  Principal  Collections
previously   distributed  to  Class  A  Certificateholders   (including  amounts
previously distributed to Class A Certificateholders  from Principal Collections
on deposit in the Funding  Account) and minus (ii) the Investor Loss Amounts for
prior Payment Dates.

         INVESTOR CERTIFICATE: Any Class A Certificate or Class S Certificate.

         INVESTOR CERTIFICATEHOLDER: The Holder of an Investor Certificate.

         INVESTOR FIXED ALLOCATION PERCENTAGE: ____%.

         INVESTOR FLOATING  ALLOCATION  PERCENTAGE:  With respect to any Payment
Date,  the  percentage  equivalent of a fraction,  the numerator of which is the
Invested  Amount at the close of business on the  preceding  Payment Date (or at
the Closing Date in the case of the first Payment Date) and the  denominator  of
which is the sum of (a) the Pool Balance,  calculated as of the beginning of the
related Collection Period and (b) the amount of Principal Collections on deposit
in the  Funding  Account as of the close of business  on the  preceding  Payment
Date.

         INVESTOR INTEREST  COLLECTIONS:  As to any Payment Date, the product of
(i) the Interest  Collections  during the related Collection Period and (ii) the
Investor Floating Allocation Percentage for such Payment Date.

         INVESTOR  LOSS  AMOUNT:  With respect to any Payment  Date,  the amount
equal to the product of (i) the Investor Floating Allocation Percentage for such
Payment  Date and (ii) the  aggregate of the  Liquidation  Loss Amounts for such
Payment Date.

         INVESTOR LOSS REDUCTION  AMOUNT:  With respect to any Payment Date, the
portion, if any, of the Investor Loss Amount for such Payment Date and all prior
Payment Dates that has not been (a) distributed to Class A Certificateholders on
such Payment Date pursuant to Section 5.01(a)(iv) or 5.01(a)(v) or by way of the
Credit  Enhancement  Draw Amount or (b) reallocated to the Transferor  Principal
Balance pursuant to Section 5.01(c).

                                       11
<PAGE>

         LIBOR:  As to any date, the rate for United States dollar  deposits for
one month which appear on the Telerate  Screen LIBOR Page 3750 as of 11:00 A.M.,
London  time.  If such rate does not  appear on such page (or such other page as
may replace that page on that service,  or if such service is no longer offered,
such other service for displaying LIBOR or comparable rates as may be reasonably
selected by the Depositor after consultation with the Trustee), the rate will be
the Reference Bank Rate. If no such  quotations can be obtained and no Reference
Bank Rate is available,  LIBOR will be LIBOR applicable to the preceding Payment
Date.

         LIBOR  BUSINESS  DAY: Any day on which banks in London and New York are
open for conducting transactions in foreign currency and exchange.

         LIEN: Any mortgage, deed of trust, pledge,  conveyance,  hypothecation,
assignment,  participation, deposit arrangement, encumbrance, lien (statutory or
other),  preference,  priority right or interest or other security  agreement or
preferential  arrangement of any kind or nature whatsoever,  including,  without
limitation,  any  conditional  sale or  other  title  retention  agreement,  any
financing  lease having  substantially  the same  economic  effect as any of the
foregoing  and the filing of any financing  statement  under the UCC (other than
any  such  financing  statement  filed  for  informational   purposes  only)  or
comparable law of any  jurisdiction to evidence any of the foregoing;  PROVIDED,
HOWEVER, that any assignment pursuant to Section 7.02 hereof shall not be deemed
to constitute a Lien.

         LIFETIME  RATE CAP:  With  respect  to each  HELOC  Mortgage  Loan with
respect to which the related Mortgage Note provides for a lifetime rate cap, the
maximum Loan Rate  permitted over the life of such HELOC Mortgage Loan under the
terms of the related Credit Line Agreement, as set forth on Exhibit C hereto.

         LIQUIDATED  MORTGAGE LOAN: As to any Payment Date, any Mortgage Loan in
respect of which the Servicer has  determined,  in accordance with the servicing
procedures  specified  herein, as of the end of the related  Collection  Period,
that all  Liquidation  Proceeds  which it expects to recover with respect to the
disposition of such Mortgage Loan or the related REO have been recovered.

         LIQUIDATION  EXPENSES:  Out-of-pocket  expenses (exclusive of overhead)
which are incurred by the Servicer in  connection  with the  liquidation  of any
Mortgage Loan and not recovered under any insurance policy,  including,  without
limitation,  legal fees and expenses,  any unreimbursed amount expended pursuant
to Section 3.06  (including,  without  limitation,  amounts  advanced to correct
defaults on any mortgage  loan which is senior to such Mortgage Loan and amounts
advanced  to keep  current  or pay off a  mortgage  loan  that is senior to such
Mortgage  Loan)  respecting  the  related  Mortgage  Loan  and any  related  and
unreimbursed  expenditures with respect to real estate property taxes,  water or
sewer taxes,  condominium association dues, property restoration or preservation
or insurance against casualty, loss or damage.

         LIQUIDATION  LOSS  AMOUNT:  With  respect to any  Payment  Date and any
Mortgage  Loan that  becomes a  Liquidated  Mortgage  Loan  during  the  related
Collection  Period,  the

                                       12
<PAGE>

unrecovered  Asset Balance thereof at the end of such Collection  Period,  after
giving effect to the Net Liquidation Proceeds applied in reduction of such Asset
Balance.

         LIQUIDATION PROCEEDS:  Proceeds (including Insurance Proceeds) received
in connection with the liquidation of any Mortgage Loan or related REO,  whether
through trustee's sale, foreclosure sale or otherwise.

         LOAN AGREEMENT: Any Credit Line Agreement or Mortgage Note.

         LOAN RATE:  With respect to any HELOC  Mortgage Loan and as of any day,
the per  annum  rate of  interest  applicable  under  the  related  Credit  Line
Agreement to the  calculation  of interest for such day on the Asset  Balance of
such HELOC Mortgage Loan. With respect to any Closed-End Mortgage Loan and as of
any day, the per annum rate of interest  applicable  under the related  Mortgage
Note to the  calculation  of interest for such day on the Asset Balance for such
Closed-End Mortgage Loan.

         LOAN RATE CAP: With respect to each HELOC  Mortgage Loan, the lesser of
(i) the Lifetime Rate Cap, if any, or (ii) the  applicable  state usury ceiling,
if any.

         MANAGED  AMORTIZATION  PERIOD:  The period from the  termination of the
Funding Period to the Rapid Amortization Commencement Date.

         MAXIMUM  PRINCIPAL  PAYMENT:  With  respect to any  Payment  Date,  the
Investor  Fixed  Allocation  Percentage  of the Principal  Collections  for such
Payment Date.

         MAXIMUM RATE: As to any Interest Period,  the Weighted Average Net Loan
Rate  for the  Collection  Period  during  which  such  Interest  Period  begins
(adjusted to an effective rate  reflecting  accrued  interest  calculated on the
basis of the actual number of days in the  Collection  Period  commencing in the
month in which such Interest  Period  commences and a year assumed to consist of
360 days).

         MINIMUM  MONTHLY  PAYMENT:  With respect to any  Mortgage  Loan and any
month,  the minimum amount required to be paid by the related  Mortgagor in that
month.

         MINIMUM TRANSFEROR INTEREST:  With respect to any date, an amount equal
to the  lesser  of (a)  ___%  of the  Pool  Balance  on  such  date  and (b) the
Transferor Principal Balance as of the Closing Date.

         MOODY'S: Moody's Investors Service, Inc. or its successor-in-interest.

         MORTGAGE:  The mortgage,  deed of trust or other instrument  creating a
first or junior  lien on an  estate  in fee  simple  interest  in real  property
securing a Mortgage Note or Credit Line Agreement.

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

                                       13
<PAGE>

         MORTGAGE  LOAN  SCHEDULE:  With  respect to any date,  the  schedule of
Mortgage  Loans  included  in the Trust on such date.  The  schedule  of Initial
Mortgage  Loans as of the Cut-Off  Date is the  schedule set forth in Exhibit C,
which  schedule  sets  forth  as to  each  such  Mortgage  Loan,  to the  extent
applicable, (i) the Cut-Off Date Asset Balance, (ii) the Credit Limit, (iii) the
Gross  Margin,  (iv) the  Lifetime  Rate Cap, (v) the account  number,  (vi) the
current  Loan  Rate,  (vii)  the  Combined  Loan-to-Value  Ratio,  (viii) a code
specifying the property type, (ix) a code specifying  documentation type and (x)
a code specifying lien position. The Mortgage Loan Schedule will be deemed to be
amended from time to time to reflect Additional  Balances,  Eligible  Substitute
Mortgage Loans and Subsequent Mortgage Loans.

         MORTGAGE  LOANS:  Any HELOC  Mortgage  Loans,  including any Additional
Balances with respect thereto,  as well as any Closed-End  Mortgage Loans,  that
are transferred and assigned to the Trustee  pursuant to Section 2.01,  together
with the Related  Documents,  exclusive of Mortgage Loans that are retransferred
to the Depositor,  the Servicer or the Transferor  from time to time pursuant to
Section 2.02,  2.04, 2.05, 2.06, 2.09 or 3.01 as from time to time are held as a
part of the Trust.  The mortgage loans  originally so held are identified in the
Mortgage Loan Schedule  delivered on the Closing Date.  The Mortgage Loans shall
also include any Eligible Substitute Mortgage Loan substituted by the Transferor
for a Defective  Mortgage  Loan  pursuant to  Sections  2.02 and 2.04.  The term
"Mortgage  Loans"  includes the terms  "HELOC  Mortgage  Loans" and  "Closed-End
Mortgage Loans".

         MORTGAGE NOTE: The note or other  evidence of  indebtedness  evidencing
the indebtedness of a Mortgagor under a Closed-End Mortgage Loan.

         MORTGAGED  PROPERTY:  The  underlying  property,   including  any  real
property and improvements thereon, securing a Mortgage Loan.

         MORTGAGOR: The obligor on a Mortgage Note or Credit Line Agreement

         NET LIQUIDATION PROCEEDS: With respect to any Liquidated Mortgage Loan,
Liquidation Proceeds net of Liquidation Expenses.

         NET LOAN RATE: With respect to any Mortgage Loan and as to any day, the
Loan  Rate  (assuming  each  HELOC  Mortgage  Loan is  fully  indexed)  less the
Servicing Fee Rate, the Premium Rate (multiplied by a fraction, the numerator of
which  is the Note  Principal  Balance  of the  related  Class of Notes  and the
denominator of which is the related Pool Balance) and the Trustee Fee Rate.

         OFFICER'S  CERTIFICATE:  A  certificate  signed  by the  President,  an
Executive  Vice  President,  a  Senior  Vice  President,  a Vice  President,  an
Assistant Vice  President,  the Treasurer,  Assistant  Treasurer,  Controller or
Assistant  Controller of the Depositor,  the Servicer or the Transferor,  as the
case may be, and delivered to the Trustee.

         OPINION OF COUNSEL:  One or more opinions of counsel who may, except as
otherwise expressly provided in the Agreement, be employees of or counsel to the
Trust and, if addressed to

                                       14
<PAGE>

the Credit Enhancer,  satisfactory to such party, and if addressed to the Credit
Enhancer,  shall be  satisfactory  to such  party;  PROVIDED,  that any  opinion
relating  to matters of  federal,  state or local  taxation  must be provided by
independent, outside counsel.

         ORIGINAL CLASS A CERTIFICATE PRINCIPAL BALANCE: $__________.

         ORIGINAL  INVESTED  AMOUNT:   $_________  (Same  as  Original  Class  A
Certificate Principal Balance.)

         OVERCOLLATERALIZATION  AMOUNT:  At the time of reference  thereto,  the
amount,  if any, by which the Invested  Amount  exceeds the Class A  Certificate
Principal Balance.

         PAYING AGENT: Any paying agent appointed pursuant to Section 6.06.

         PERCENTAGE  INTEREST:  As to any Investor  Certificate,  the percentage
obtained by dividing the  principal  denomination  (or notional  amount) of such
Investor  Certificate  by the  aggregate  of  the  principal  denominations  (or
notional amounts) of all Investor Certificates of the same class.

         PERSON:  Any  individual,  corporation,   partnership,  joint  venture,
association,   joint-stock  company,  trust,   unincorporated   organization  or
government or any agency or political subdivision thereof.

         POLICY:  The  financial  guaranty  insurance  policy No.  _______  with
respect to the Class A Certificates, dated as of __________, 200_, issued by the
Credit   Enhancer   to  the   Trustee   for   the   benefit   of  the   Investor
Certificateholders.

         POOL  BALANCE:  With  respect to any date,  the  aggregate of the Asset
Balances of all Mortgage Loans, as applicable, as of such date.

         POOL FACTOR:  A seven-digit  decimal  which the Servicer  shall compute
monthly expressing the related Certificate  Principal Balance as of each Payment
Date (after giving effect to any distribution of principal on such Payment Date)
as a proportion of the Original  Class A Certificate  Principal  Balance for the
related  Class.  On the  Closing  Date,  the Pool  Factor  for each Pool will be
1.0000000.  Thereafter,  the Pool Factor shall decline to reflect  reductions in
the related Class A Certificate  Principal Balance resulting from  distributions
of principal to the related Certificates.

         PREFERENCE CLAIM:  As defined in Section 4.02.

         PREMIUM FEE RATE: As described in the Insurance Agreement.

         PRINCIPAL COLLECTIONS:  As to any Payment Date, the sum of all payments
by or on  behalf of  Mortgagors  and any other  amounts  constituting  principal
(including,  but  not  limited  to,  Substitution  Amounts  and any  portion  of
Insurance  Proceeds or Net  Liquidation  Proceeds  allocable to principal of the
applicable   Mortgage  Loan,  and  Transfer  Deposit   Amounts,   but  excluding
Foreclosure  Profits)  collected by the Servicer under the Mortgage Loans during
the related  Collection  Period.  The terms of the related

                                       15
<PAGE>

Loan  Agreement  shall  determine  the  portion of each  payment in respect of a
Mortgage Loan that constitutes principal or interest.

         PURCHASE  AGREEMENT:  The Mortgage  Loan Purchase  Agreement,  dated as
__________,  200_,  between  GreenPoint  Mortgage Funding,  Inc., as seller, and
GreenPoint Mortgage  Securities LLC, as purchaser,  with respect to the Mortgage
Loans.

         RAPID  AMORTIZATION  COMMENCEMENT  DATE:  With respect to each Class of
Certificates, the earlier of (i) the Payment Date in ______________ and (ii) the
Payment Date next succeeding the Collection Period in which a Rapid Amortization
Event is deemed to occur pursuant to Section 11.01.

         RAPID AMORTIZATION EVENT: As defined in Section 11.01.

         RAPID   AMORTIZATION   PERIOD:  The  period  commencing  on  the  Rapid
Amortization  Date and continuing until the termination of the Trust pursuant to
Section 10.01.

         RATING AGENCY: Each of Moody's and Standard & Poor's. If such agency or
a successor is no longer in existence, "Rating Agency" shall be such statistical
credit rating agency,  or other comparable  Person,  designated by the Depositor
and the  Credit  Enhancer,  notice  of which  designation  shall be given to the
Trustee. References in this Agreement to the highest short term unsecured rating
category of a Rating Agency shall means ___ or better in the case of Moody's and
___ or better  in the case of  Standard  & Poor's,  and in the case of any other
Rating Agency shall mean the ratings such other Rating  Agency deems  equivalent
to the foregoing ratings.  References in this Agreement to the highest long-term
rating  category of a Rating  Agency shall mean "___" in the case of Moody's and
"___" in the case of  Standard  & Poor's,  and in the case of any  other  Rating
Agency,  the rating such other Rating  Agency deems  equivalent to the foregoing
ratings.

         RECORD DATE: The Business Day immediately preceding the related Payment
Date;   PROVIDED,   HOWEVER,   that  following  the  date  on  which  Definitive
Certificates  are available  pursuant to Section 6.02(c) the Record Date for the
Certificates  shall be the last Business Day of the calendar month preceding the
month in which the related Payment Date occurs.

         REFERENCE  BANK  RATE:  As to  any  Interest  Period  as  follows:  the
arithmetic mean (rounded upwards, if necessary,  to the nearest one sixteenth of
a percent) of the offered rates for United States dollar  deposits for one month
which are offered by the Reference  Banks as of 11:00 A.M.,  London time, on the
second  LIBOR  Business  Day prior to the first day of such  Interest  Period to
prime banks in the London  interbank market for a period of one month in amounts
approximately  equal to the outstanding Class A Certificate  Principal  Balance;
PROVIDED that at least two such Reference Banks provide such rate. If fewer than
two offered rates appear, the Reference Bank Rate will be the arithmetic mean of
the rates  quoted by one or more major  banks in New York City,  selected by the
Depositor after  consultation with the Trustee,  as of 11:00 A.M., New York City
time,  on such date for loans in U.S.  Dollars to leading  European  Banks for a

                                       16
<PAGE>

period of one month in amounts  approximately  equal to the outstanding  Class A
Certificate  Principal  Balance.  If no such  quotations  can be  obtained,  the
Reference Bank Rate shall be LIBOR applicable to the preceding Interest Period.

         REFERENCE  BANKS:  Three  major  banks  that are  engaged in the London
interbank market, selected by the Depositor after consultation with the Trustee.

         RELATED DOCUMENTS:  As defined in Section 2.01.

         REO: A Mortgaged  Property  acquired by the Trust in  foreclosure or by
deed in lieu of foreclosure in connection with a defaulted Mortgage Loan

         REQUIRED  OVERCOLLATERALIZATION  AMOUNT:  As defined  in the  Insurance
Agreement.

         RESPONSIBLE OFFICER:  With respect to the Trustee or any officer of the
Trustee with direct  responsibility for the administration of this Agreement and
also, with respect to a particular matter, any other officer to whom such matter
is referred  because of such  officer's  knowledge of and  familiarity  with the
particular subject.

         RETRANSFER DATE:  As defined in Section 2.06.

         RETRANSFER NOTICE DATE: As defined in Section 2.06.

         SAIF:  The Savings  Association  Insurance  Fund,  as from time to time
constituted,  created  under the  Financial  Institutions  Reform,  Recovery and
Enhancement  Act  of  1989,  or if at any  time  after  the  execution  of  this
instrument the Savings Association Insurance Fund is not existing and performing
duties now assigned to it, the body performing such duties on such date.

         SCHEDULED PRINCIPAL  COLLECTIONS  DISTRIBUTION  AMOUNT: With respect to
any Payment Date during the Funding  Period or the Managed  Amortization  Period
and the Class A  Certificates,  an amount equal to the lesser of (i) the Maximum
Principal Payment and (ii) the Alternative  Principal  Payment.  With respect to
any  Payment  Date in  respect of the Rapid  Amortization  Period,  the  Maximum
Principal Payment.

         SELLER:  GreenPoint Mortgage Funding,  Inc., a New York corporation and
any successor thereto.

         SERVICER:  GreenPoint  Mortgage Funding,  Inc., a New York corporation,
any successor  thereto and,  after its  termination  as Servicer,  any successor
hereunder.

         SERVICING  CERTIFICATE:  A  certificate  completed  and  executed  by a
Servicing Officer in accordance with Section 4.01.

         SERVICING  FEE:  With respect to any Payment  Date,  the product of (i)
one-twelfth  of the Servicing  Fee Rate and (ii) the aggregate  Asset Balance of
the Mortgage  Loans on the first day of the  Collection  Period  preceding  such
Payment Date (or at the Cut-Off Date with respect to the first Payment Date).

                                       17
<PAGE>

         SERVICING FEE RATE:  ____% per annum.

         SERVICING  OFFICER:  Any  officer  of  the  Servicer  involved  in,  or
responsible  for, the  administration  and servicing of the Mortgage Loans whose
name and specimen  signature appear on a list of servicing officers furnished to
the Trustee (with a copy to the Credit  Enhancer) by the Servicer on the Closing
Date, as such list may be amended from time to time.

         SPREAD  ACCOUNT:  The  account  created  pursuant  to Section  4.03 and
maintained pursuant to the Insurance Agreement.

         SPREAD ACCOUNT MAXIMUM: As defined in the Insurance Agreement.

         STANDARD & POOR'S:  Standard & Poor's,  a division  of The  McGraw-Hill
Companies, Inc., or its successor in interest.

         SUBSEQUENT MORTGAGE LOAN: Each HELOC Mortgage Loan acquired pursuant to
Section  2.10 with funds on deposit in the  Funding  Account  during the Funding
Period on the related Subsequent Transfer Date.

         SUBSEQUENT  TRANSFER DATE:  With respect to Subsequent  Mortgage Loans,
any Payment Date during the Funding Period.

         TELERATE SCREEN LIBOR PAGE 3750: The display designated as page 3750 on
the  Telerate  Service  (or such  other  page as may  replace  page 3750 on that
service for the purpose of displaying London  inter-bank  offered rates of major
banks).

         TRANSFER  DATE:  With respect to each  Subsequent  Mortgage  Loan,  the
Subsequent  Transfer Date, and with respect to each Eligible Substitute Mortgage
Loan, the date on which such Eligible  Substitute  Mortgage Loan shall have been
transferred to the Trust.

         TRANSFER DEFICIENCY:  As defined in Section 2.02.

         TRANSFER DEPOSIT AMOUNT: As defined in Section 2.02.

         TRANSFEROR  OR  TRANSFEROR  CERTIFICATEHOLDERS:   The  Holders  of  the
Transferor  Certificates which shall initially be GreenPoint Mortgage Securities
LLC.

         TRANSFEROR  AVAILABLE  FUNDS:  As  to  any  Payment  Date,   Transferor
Collections  up  to  but  not  exceeding  the  Transferor   Subordinated  Amount
immediately prior to such Payment Date.

         TRANSFEROR CERTIFICATES: The certificates executed and authenticated by
the Trustee substantially in the form set forth in Exhibit B hereto.

         TRANSFEROR  COLLECTIONS:  As to  any  period,  the  sum  of  Transferor
Interest Collections and Transferor Principal Collections for such period.

                                       18
<PAGE>

         TRANSFEROR  INTEREST  COLLECTIONS:  Interest  Collections  that are not
Investor Interest Collections.

         TRANSFEROR  PRINCIPAL  BALANCE:  As of any date of  determination,  the
amount equal to (i) the Pool Balance at the end of the day next  preceding  such
date of determination  less (ii) the Invested Amount as of the close of business
on the preceding Payment Date plus (iii) Principal Collections on deposit in the
Funding Account.

         TRANSFEROR  PRINCIPAL  COLLECTIONS:  On  any  Payment  Date,  Principal
Collections  received during the related  Collection  Period minus the amount of
such   Principal   Collections   required   to  be   distributed   to   Class  A
Certificateholders  pursuant to Section  5.01(b) or required to be  deposited to
the Funding Account pursuant to Section 5.05.

         TRANSFEROR  SUBORDINATED  AMOUNT: At the time of reference thereto, the
lesser  of (a)  $_____________  less  the sum of (i)  the  aggregate  amount  of
Transferor  Collections previously applied pursuant to Section 5.01(c), (ii) the
aggregate  amount of Investor Loss Amounts that have previously been reallocated
to the Transferor  Principal  Balance pursuant to the second sentence of Section
5.01(c) and (iii) the amount by which the  Overcollateralization  Amount exceeds
$_______________  and (b) the  Transferor  Subordinated  Amount on the  previous
Payment Date; PROVIDED that the Transferor Subordinated Amount shall not be less
than zero.

         TRUST:  The  trust  created  by this  Agreement,  the  corpus  of which
consists of the Mortgage Loans,  such other assets as shall from time to time be
identified  as  deposited  in the  Collection  Account in  accordance  with this
Agreement,  property  that secured a Mortgage  Loan and that has become REO, the
interest of the Depositor in certain hazard insurance policies maintained by the
Mortgagors  or the Servicer in respect of the  Mortgage  Loans,  the Policy,  an
assignment of the Transferor's rights under the Purchase Agreement,  such assets
as may be  deposited  from time to time in the Spread  Account  and the  Funding
Account,  and all proceeds of each of the  foregoing  (exclusive  of payments of
accrued  interest on the Mortgage Loans which are due on or prior to the Cut-Off
Date).

         TRUSTEE:  [Trustee] or any  successor  Trustee  appointed in accordance
with this Agreement that has accepted such  appointment in accordance  with this
Agreement.

         TRUSTEE FEE: A fee which is  separately  agreed to between the Servicer
and the Trustee.

         TRUSTEE  FEE RATE:  The per  annum  rate at which  the  Trustee  Fee is
calculated.

         UCC:  Unless the context  otherwise  requires,  the Uniform  Commercial
Code, as in effect in the relevant jurisdiction, as amended from time to time.

         UNPAID CLASS A CERTIFICATE CARRY FORWARD INTEREST AMOUNT:  With respect
to any Payment Date,  the aggregate  amount,  if any, of any Class A Certificate
Carry  Forward  Interest  that was accrued in respect of prior Payment Dates and
which has not been distributed to Class A Certificateholders.

                                       19
<PAGE>

         UNPAID  CLASS A  CERTIFICATE  INTEREST  SHORTFALL:  With respect to any
Payment Date, the aggregate amount, if any, of Class A Certificate Interest that
was accrued in respect of a prior Payment Date and has not been  distributed  to
Class A Certificateholders.

         UNPAID  CLASS S  CERTIFICATE  INTEREST  SHORTFALL:  With respect to any
Payment Date, the aggregate amount, if any, of Class S Certificate Interest that
was accrued in respect of a prior Payment Date and has not been  distributed  to
Class S Certificateholders.

         VALUATION:  With respect to any Mortgaged Property and time referred to
herein, the Appraised Value of the Mortgaged Property.

         VOTING  RIGHTS:  The portion of the aggregate  voting rights of all the
Certificates evidenced by a Class of Certificates.  At all times during the term
of this  Agreement,  ___% of all of the Voting  Rights shall be allocated  among
Holders of the Class A Certificates  and the Holders of the Class S Certificates
shall be entitled to ___% of all of the Voting Rights.  Voting Rights  allocated
to a Class of  Certificates  shall be allocated  among the  Certificates of each
such Class in accordance with their respective Percentage Interests.

         WEIGHTED  AVERAGE  NET LOAN  RATE:  As to any  Collection  Period,  the
average  of the daily Net Loan Rate for each  Mortgage  Loan for each day during
the related  Billing  Cycle,  weighted on the basis of the daily  average of the
related Asset Balances  outstanding  for each day in such Billing Cycle for each
Mortgage Loan as determined  by the Servicer in accordance  with the  Servicer's
normal servicing procedures.

         Section  1.02.  INTEREST  CALCULATIONS.  All  calculations  of interest
hereunder that are made in respect of the Asset Balance of a Mortgage Loan shall
be made on a daily basis using a 365-day year. All  calculations  of interest on
the  Investor  Certificates  shall be made on the basis of the actual  number of
days in an  Interest  Period and a year  assumed  to  consist  of 360 days.  The
calculation  of the  Servicing  Fee shall be made on the basis of a 360-day year
consisting of twelve 30-day  months.  All dollar  amounts  calculated  hereunder
shall be rounded to the nearest  penny with  one-half of one penny being rounded
down.

                                   ARTICLE II

                          Conveyance of Mortgage Loans;
                       Original Issuance of Certificates;
                                  Tax Treatment

         Section 2.01. CONVEYANCE OF MORTGAGE LOANS;  RETENTION OF OBLIGATION TO
FUND  ADVANCES  UNDER  CREDIT LINE  AGREEMENTS.  The  Transferor  hereby  sells,
transfers,  assigns,  sets over and otherwise conveys to the Depositor,  without
recourse  (subject  to  Section  2.02 and  2.04),  all of its  right,  title and
interest in and to (i) each Initial  Mortgage Loan,  including its Asset Balance
and all  collections  in respect  thereof  received on or after the Cut-Off Date
(excluding  payments  in respect of accrued  interest  due prior to the  Cut-Off
Date);  (ii) property that secured an Initial  Mortgage Loan that is acquired by
foreclosure

                                       20
<PAGE>

or deed in lieu of foreclosure; (iii) the Transferor's rights under the Purchase
Agreement  (including all representations and warranties of the Seller contained
therein);  and (iv) the Transferor's rights under the hazard insurance policies.
The Transferor has entered into this Agreement in consideration for the purchase
of the  Mortgage  Loans by the  Depositor  and has  agreed  to take the  actions
specified herein.

         The  Depositor,  concurrently  with the  execution and delivery of this
Agreement, hereby sells, transfers,  assigns, sets over and otherwise conveys to
the Trust,  without  recourse  (subject to Sections  2.02 and 2.04),  all of its
right,  title and interest in and to (i) each Initial  Mortgage Loan,  including
its Asset Balance and all  collections in respect  thereof  received on or after
the Cut-Off Date (excluding payments in respect of accrued interest due prior to
the Cut-off Date);  (ii) property that secured an Initial  Mortgage Loan that is
acquired by foreclosure or deed in lieu of  foreclosure;  (iii) all rights under
the Purchase  Agreement  assigned by the Transferor to the Depositor  (including
all representations  and warranties of the Seller contained  therein);  (iv) the
Depositor's rights under the hazard insurance policies;  (v) the Spread Account;
(vi) the Policy; (vii) the Funding Account; and (viii) all other assets included
or to be included in the Trust for the benefit of Certificateholders;  PROVIDED,
HOWEVER,  neither  the Trustee nor the Trust  assumes the  obligation  under any
Credit Line  Agreement  that provides for the funding of future  advances to the
Mortgagor  thereunder,  and neither the Trust nor the Trustee shall be obligated
or  permitted  to fund any such  future  advances.  With  respect  to the  HELOC
Mortgage Loans,  Additional  Balances shall be part of the related Asset Balance
and are hereby  transferred  to the Trust on the Closing  Date  pursuant to this
Section 2.01, and therefore part of the Trust property. In addition, on or prior
to the Closing Date,  the Depositor  shall cause the Credit  Enhancer to deliver
the Policy to the Trustee for the  benefit of the  Investor  Certificateholders.
The foregoing transfer,  assignment,  set-over and conveyance to the Trust shall
be made to the  Trustee,  on behalf of the  Trust,  and each  reference  in this
Agreement  to such  transfer,  assignment,  set-over  and  conveyance  shall  be
construed accordingly.

         Each of the Transferor and the Depositor  agrees to take or cause to be
taken such actions and execute such documents  (including,  without  limitation,
the filing of all  necessary  continuation  statements  for the UCC-1  financing
statements filed in the States of ( ) and ( ),  respectively,  (which shall have
been filed within 10 days of the Closing Date) describing the Cut-Off Date Asset
Balances and Additional Balances and naming (i) the Transferor as debtor and the
Depositor as secured  party and (ii) the  Depositor as debtor and the Trustee as
secured  party and any  amendments  to UCC-1  financing  statements  required to
reflect a change in the name or  corporate  structure of the  Transferor  or the
Depositor or the filing of any additional UCC-1 financing  statements due to the
change in the  principal  office of the  Depositor  (within 10 days of any event
necessitating  such  filing)  as  are  necessary  to  perfect  and  protect  the
Certificateholders'  and Credit Enhancer's  interests in each Cut-Off Date Asset
Balance and Additional Balances and the proceeds thereof (other than maintaining
possession by the Trustee of the Mortgage Loans and the Mortgage Files).

         In connection  with such transfer and  assignment,  the Servicer  shall
deliver to the Trustee the  following  documents or  instruments  (the  "RELATED
DOCUMENTS")  with respect

                                       21
<PAGE>

to each Initial  Mortgage Loan on the Closing Date and will deliver with respect
to each Subsequent Mortgage Loan on the related Subsequent Transfer Date:

                  (i) the original Mortgage Note endorsed in blank;

                  (ii) an original Assignment of Mortgage in blank in recordable
         form;

                  (iii) the original  recorded  Mortgage  or, if, in  connection
         with any Mortgage Loan, the original recorded Mortgage with evidence of
         recording  thereon  cannot be delivered on or prior to the Closing Date
         because of a delay  caused by the public  recording  office  where such
         original  Mortgage has been  delivered for  recordation or because such
         original  Mortgage has been lost, the  Transferor,  at the direction of
         the Depositor, shall deliver or cause to be delivered to the Custodian,
         as agent for the  Trustee,  a true and correct  copy of such  Mortgage,
         together with (i) in the case of a delay caused by the public recording
         office,  an Officer's  Certificate  of the Depositor  stating that such
         original  Mortgage  has  been  dispatched  to  the  appropriate  public
         recording official or (ii) in the case of an original Mortgage that has
         been lost, a certificate by the  appropriate  county  recording  office
         where such Mortgage is recorded;

                  (iv) if applicable,  the original intervening assignments,  if
         any ("INTERVENING  ASSIGNMENTS"),  with evidence of recording  thereon,
         showing a complete  chain of title to the Mortgage from the  originator
         to the Depositor or, if any such original  Intervening  Assignment  has
         not been  returned  from the  applicable  recording  office or has been
         lost, a true and correct copy thereof, together with (i) in the case of
         a delay caused by the public recording office, an Officer's Certificate
         of the Transferor stating that such original Intervening Assignment has
         been  dispatched  to the  appropriate  public  recording  official  for
         recordation or (ii) in the case of an original  Intervening  Assignment
         that has been lost, a certificate by the appropriate  county  recording
         office where such Mortgage is recorded;

                  (v) either a title policy, a title search or guaranty of title
         with respect to the related Mortgaged Property;

                  (vi) the original of any guaranty  executed in connection with
         the Mortgage Note;

                  (vii)  the   original   of  each   assumption,   modification,
         consolidation  or  substitution  agreement,  if  any,  relating  to the
         Mortgage Loan; and

                  (viii) any security agreement,  chattel mortgage or equivalent
         instrument executed in connection with the Mortgage;

PROVIDED,  HOWEVER,  that as to any  Mortgage  Loan,  if (a) as  evidenced by an
Opinion of Counsel  delivered to and in form and substance  satisfactory  to the
Trustee and the Credit Enhancer, (x) an optical image or other representation of
the  related  documents  specified  in  clauses  (i)  through  (viii)  above are
enforceable in the relevant  jurisdictions to the same

                                       22
<PAGE>

extent as the  original of such  document  and (y) such  optical  image or other
representation  does not impair the ability of an owner of such Mortgage Loan to
transfer  its  interest in such  Mortgage  Loan,  and (b) the  retention of such
documents  in such  format will not result in a  reduction  in the then  current
rating of the Investor Certificates,  without regard to the Policy, such optical
image or other representation may be held by the Servicer,  as custodian for the
Trustee or assignee in lieu of the physical documents specified above.

         The  Transferor  hereby  confirms to the Trustee that it has caused the
portions of the Electronic  Ledgers relating to the Initial Mortgage Loans as of
the Closing Date, and that it will cause such Electronic Ledgers with respect to
each Subsequent  Mortgage Loan as of the related Subsequent Transfer Date, to be
clearly and  unambiguously  marked,  and has made, or will make, the appropriate
entries in its general  accounting  records to indicate that such Mortgage Loans
have been  transferred to the Trust. The Servicer hereby confirms to the Trustee
that it has clearly and  unambiguously  made appropriate  entries in its general
accounting  records  indicating that such Mortgage Loans  constitute part of the
Trust and are serviced by it on behalf of the Trust in accordance with the terms
hereof.  The  Servicer  hereby  confirms to the Trustee that it will clearly and
unambiguously  make  appropriate  entries  in  its  general  accounting  records
indicating that each Subsequent  Mortgage Loan constitutes part of the Trust and
is serviced by it on behalf of the Trust in accordance  with the terms hereof as
of the related Subsequent Transfer Date.

         Notwithstanding  the  characterization  of the Class A Certificates  as
debt for Federal, state and local income and franchise tax purposes, the parties
hereto  intend  to treat  the  transfer  of the  Mortgage  Loans to the Trust as
provided herein as a sale, for certain non-tax purposes, of all the Transferor's
and Depositor's right, title and interest in and to the Mortgage Loans,  whether
now existing or hereafter  created,  and the other property  described above and
all proceeds thereof.  In the event such transfer is deemed not to be a sale for
such purposes,  the Transferor  hereby grants to the Depositor and the Depositor
grants to the Trust, a security interest in all of such party's right, title and
interest in, to and under the Mortgage Loans,  whether now existing or hereafter
created,  and the other property  described above and all proceeds thereof;  and
this Agreement shall constitute a security agreement under applicable law.

         Within 90 days following  delivery of the Mortgage Files to the Trustee
pursuant to this  Section,  the Trustee  shall review each such Mortgage File to
ascertain  that all required  documents set forth in this Section 2.01 have been
executed and  received,  and that such  documents  relate to the Mortgage  Loans
identified on the Mortgage Loan Schedule and in so doing the Trustee may rely on
the purported due execution and genuineness of any signature thereon.  If within
such  90-day  period the Trustee  finds any  document  constituting  a part of a
Mortgage  File not to have been  executed or received or to be  unrelated to the
Mortgage Loans identified in said Mortgage Loan Schedule or, if in the course of
its  review,  the  Trustee  determines  that  such  Mortgage  File is  otherwise
defective  in  any  material  respect,  the  Trustee  shall  promptly  upon  the
conclusion  of its review  notify the  Transferor,  the Depositor and the Credit
Enhancer,  and the  Transferor  shall have a period of 90 days after such notice
within which to correct or cure any such defect.

                                       23
<PAGE>

         The Trustee  shall have no  responsibility  for  reviewing any Mortgage
File except as  expressly  provided  in this  Section  2.01.  In  reviewing  any
Mortgage File pursuant to this Section, the Trustee shall have no responsibility
for determining  whether any document is valid and binding,  whether the text of
any  assignment  or  endorsement  is in proper or recordable  form  (except,  if
applicable,  to determine if the Trustee is the assignee or  endorsee),  whether
any  document  has been  recorded in  accordance  with the  requirements  of any
applicable  jurisdiction,  or whether a blanket  assignment  is permitted in any
applicable jurisdiction, whether any Person executing any document is authorized
to do so or whether any signature thereon is genuine, but shall only be required
to determine whether a document has been executed, that it appears to be what it
purports to be, and, where applicable, that it purports to be recorded.

Section 2.02. ACCEPTANCE  BY  TRUSTEE;  RETRANSFER  OF  MORTGAGE  LOANS. (a) The
Trustee hereby  acknowledges  its receipt of the Policy and the Mortgage  Loans,
and declares  that the Trustee holds and will hold such  instrument,  and to the
extent that any documents  are  delivered to it pursuant to Section  2.01,  will
hold such documents, and all amounts received by it thereunder and hereunder, in
trust,  upon the terms herein set forth,  for the use and benefit of all present
and future  Certificateholders  and the Credit Enhancer. If the time to cure any
defect in respect of any  Mortgage  Loan of which the Trustee has  notified  the
Transferor and the Depositor  following the review  pursuant to Section 2.01 has
expired or if at any time any loss is  suffered  by the Trustee on behalf of the
Certificateholders  or the Credit Enhancer, in respect of any Mortgage Loan as a
result of (i) a defect in any document  constituting a part of its Mortgage File
or (ii) an  Assignment  of Mortgage  to the Trustee not having been  recorded as
required by Section  2.01,  then on the next  succeeding  Business  Day upon the
deposit to the Collection  Account of the Transfer  Deposit Amount,  if any, and
upon  satisfaction of the applicable  conditions  described  herein,  all right,
title and interest of the Trust in and to such  Mortgage Loan shall be deemed to
be  retransferred,   reassigned  and  otherwise  reconveyed,  without  recourse,
representation or warranty, to the Transferor on such Business Day and the Asset
Balance of such Mortgage Loan shall be deducted from the Pool Balance; PROVIDED,
HOWEVER, that interest accrued on the Asset Balance of such Mortgage Loan to the
end of the related  Collection  Period shall be the  property of the Trust.  The
Trustee  shall  determine if the  reduction of such Asset  Balance from the Pool
Balance in accordance  with the preceding  sentence  would cause the  Transferor
Principal  Balance to be less than the Minimum  Transferor  Interest  ("TRANSFER
DEFICIENCY"),  in which event the Trustee shall deliver  written  notice of such
deficiency to the  Transferor,  and within five Business Days after the Business
Day of such  retransfer the  Transferor  shall either (i) substitute an Eligible
Substitute  Mortgage Loan or (ii) deposit into the Collection  Account an amount
(the  "TRANSFER  DEPOSIT  AMOUNT") in immediately  available  funds equal to the
Transfer  Deficiency or a combination of both (i) and (ii) above. Such reduction
or substitution and the actual payment of any Transfer  Deposit Amount,  if any,
shall be deemed to be payment in full for such  Mortgage  Loan.  Upon receipt of
any Eligible  Substitute  Mortgage Loan or of written  notification  signed by a
Servicing Officer to the effect that the Transfer Deposit Amount in respect of a
Defective  Mortgage Loan has been deposited  into the Collection  Account or, if
the  Transferor  Principal  Balance is not reduced below the Minimum  Transferor
Interest as a result of the deemed retransfer of a Defective Mortgage Loan, then
as promptly as  practicable  following such deemed

                                       24
<PAGE>

transfer,  the Trustee shall execute such documents and  instruments of transfer
presented by the Transferor,  in each case without  recourse,  representation or
warranty,  and take such other  actions as shall  reasonably be requested by the
Transferor to effect such transfer by the Trust of such Defective  Mortgage Loan
pursuant to this Section. It is understood and agreed that the obligation of the
Transferor  to accept a  transfer  of a  Defective  Mortgage  Loan and to either
convey an Eligible  Substitute Mortgage Loan or to make a deposit of any related
Transfer  Deposit Amount into the Collection  Account shall  constitute the sole
remedy respecting such defect available to  Certificateholders,  the Trustee and
the Credit Enhancer against the Transferor.

         The Servicer,  promptly  following the transfer of a Defective Mortgage
Loan from or to the Trust  pursuant to this  Section,  shall amend the  Mortgage
Loan Schedule and make  appropriate  entries in its general  account  records to
reflect  such  transfer.   The  Servicer  shall,   following  such   retransfer,
appropriately  mark its records to indicate that it is no longer  servicing such
Mortgage Loan on behalf of the Trust.  The Transferor,  promptly  following such
transfer,  shall  appropriately  mark its Electronic Ledger and make appropriate
entries in its general account records to reflect such transfer.

         Notwithstanding  any other provision of this Section, a retransfer of a
Defective  Mortgage Loan to the  Transferor  pursuant to this Section that would
cause the Transferor  Principal  Balance to be less than the Minimum  Transferor
Interest  shall not occur if either the  Transferor  fails to convey an Eligible
Substitute  Mortgage Loan or to deposit into the Collection  Account any related
Transfer Deposit Amount required by this Section with respect to the transfer of
such Defective Mortgage Loan.

As to any Eligible  Substitute  Mortgage  Loan or Loans,  the  Transferor  shall
deliver to the Trustee with respect to such Eligible Substitute Mortgage Loan or
Loans such documents and agreements as are required to be held by the Trustee in
accordance  with  Section  2.01.  For any  Collection  Period  during  which the
Transferor  substitutes  one or more Eligible  Substitute  Mortgage  Loans,  the
Servicer  shall  determine  the  Transfer  Deposit  Amount which amount shall be
deposited  by  the  Transferor  in  the  Collection   Account  at  the  time  of
substitution.  All  amounts  received  in  respect  of the  Eligible  Substitute
Mortgage Loan or Loans during the Collection  Period in which the  circumstances
giving rise to such substitution occur shall not be a part of the Trust Fund and
shall not be deposited by the Servicer in the  Collection  Account.  All amounts
received by the Servicer during the Collection Period in which the circumstances
giving rise to such substitution occur in respect of any Defective Mortgage Loan
so  removed  by the  Trust  Fund  shall  be  deposited  by the  Servicer  in the
Collection  Account.  Upon such substitution,  the Eligible  Substitute Mortgage
Loan or Loans shall be subject to the terms of this  Agreement in all  respects,
and the  Transferor  shall be deemed to have made with respect to such  Eligible
Substitute  Mortgage  Loan  or  Loans,  as of  the  date  of  substitution,  the
covenants,  representations  and  warranties  set  forth in  Section  2.04.  The
procedures  applied by the  Transferor  in selecting  each  Eligible  Substitute
Mortgage Loan shall not be  materially  adverse to the interests of the Trustee,
the Certificateholders and the Credit Enhancer.

                                       25
<PAGE>

         Section 2.03. REPRESENTATIONS AND WARRANTIES REGARDING THE SERVICER AND
THE TRANSFEROR.  (a) The Servicer represents and warrants to the Trustee and the
Credit  Enhancer that as of the Closing Date and as of the  Subsequent  Transfer
Date:

                  (i) The Servicer is a California corporation, validly existing
         and in good standing under the laws of the State of California, and has
         the  corporate  power to own its assets and to transact the business in
         which it is currently  engaged.  The  Servicer is duly  qualified to do
         business  as a  foreign  corporation  and is in good  standing  in each
         jurisdiction in which the character of the business transacted by it or
         any properties owned or leased by it requires such qualification and in
         which the failure so to qualify would have a material adverse effect on
         the business,  properties, assets, or condition (financial or other) of
         the Servicer;

                  (ii)  The  Servicer  has the  power  and  authority  to  make,
         execute, deliver and perform this Agreement and all of the transactions
         contemplated under the Agreement, and has taken all necessary corporate
         action to authorize the  execution,  delivery and  performance  of this
         Agreement.  When executed and delivered, this Agreement will constitute
         the legal, valid and binding obligation of the Servicer  enforceable in
         accordance  with its terms,  except as enforcement of such terms may be
         limited by bankruptcy, insolvency, reorganization,  moratorium or other
         similar laws affecting the enforcement of creditors'  rights  generally
         and by the availability of equitable remedies;

                  (iii) The  Servicer  is not  required to obtain the consent of
         any other party or any  consent,  license,  approval  or  authorization
         from, or registration or declaration with, any governmental  authority,
         bureau  or  agency  in  connection   with  the   execution,   delivery,
         performance,  validity or enforceability of this Agreement,  except for
         such consent,  license,  approval or authorization,  or registration or
         declaration,  as shall have been obtained or filed, as the case may be,
         prior to the Closing Date;

                  (iv) The execution, delivery and performance of this Agreement
         by the Servicer  will not violate any  provision of any existing law or
         regulation  or any  order or  decree  of any  court  applicable  to the
         Servicer or any provision of the Certificate of Incorporation or Bylaws
         of the  Servicer,  or  constitute  a material  breach of any  mortgage,
         indenture, contract or other agreement to which the Servicer is a party
         or by which the Servicer may be bound; and

                  (v) No  litigation or  administrative  proceeding of or before
         any court,  tribunal or governmental body is currently  pending,  or to
         the knowledge of the Servicer  threatened,  against the Servicer or any
         of its properties or with respect to this Agreement or the Certificates
         which in the opinion of the  Servicer has a  reasonable  likelihood  of
         resulting in a material adverse effect on the transactions contemplated
         by this Agreement.

The  representations  and  warranties  set forth in this Section  2.03(a)  shall
survive  the sale and  assignment  of the  Mortgage  Loans  to the  Trust.  Upon
discovery of a breach of any

                                       26
<PAGE>

representations  and  warranties  which  materially  and  adversely  affects the
interests  of  the   Certificateholders  or  the  Credit  Enhancer,  the  person
discovering  such breach shall give prompt  written  notice to the other parties
and to the Credit  Enhancer.  Within 90 days of its  discovery or its receipt of
notice of breach, or, with the prior written consent of a Responsible Officer of
the Trustee,  such longer period  specified in such consent,  the Servicer shall
cure such breach in all material respects.

         (b) The  Transferor  represents  and  warrants  to the  Trustee and the
Credit Enhancer that as of the Closing Date and as of each  Subsequent  Transfer
Date:

                  (i) The Transferor is a Delaware  limited  liability  company,
         validly  existing and in good  standing  under the laws of the State of
         Delaware,  and has the  power to own its  assets  and to  transact  the
         business  in which it is  currently  engaged.  The  Transferor  is duly
         qualified to do business as a foreign  company and is in good  standing
         in each jurisdiction in which the character of the business  transacted
         by  it  or  any  properties   owned  or  leased  by  it  requires  such
         qualification  and in which the  failure  so to  qualify  would  have a
         material  adverse  effect  on  the  business,  properties,  assets,  or
         condition (financial or other) of the Transferor;

                  (ii) The  Transferor  has the  power  and  authority  to make,
         execute, deliver and perform this Agreement and all of the transactions
         contemplated under the Agreement, and has taken all necessary action to
         authorize the execution,  delivery and  performance of this  Agreement.
         When executed and delivered,  this Agreement will constitute the legal,
         valid  and  binding   obligation  of  the  Transferor   enforceable  in
         accordance  with its terms,  except as enforcement of such terms may be
         limited by bankruptcy, insolvency, reorganization,  moratorium or other
         similar laws affecting the enforcement of creditors'  rights  generally
         and by the availability of equitable remedies;

                  (iii) The  Transferor is not required to obtain the consent of
         any other party or any  consent,  license,  approval  or  authorization
         from, or registration or declaration with, any governmental  authority,
         bureau  or  agency  in  connection   with  the   execution,   delivery,
         performance,  validity or enforceability of this Agreement,  except for
         such consent,  license,  approval or authorization,  or registration or
         declaration,  as shall have been obtained or filed, as the case may be,
         prior to the Closing Date;

                  (iv) The execution, delivery and performance of this Agreement
         by the Transferor will not violate any provision of any existing law or
         regulation  or any  order or  decree  of any  court  applicable  to the
         Transferor  or  any  provision  of  the  certificate  of  formation  or
         operating agreement of the Transferor,  or constitute a material breach
         of any mortgage,  indenture,  contract or other  agreement to which the
         Transferor is a party or by which the Transferor may be bound; and

                  (v) No  litigation or  administrative  proceeding of or before
         any court,  tribunal or governmental body is currently  pending,  or to
         the knowledge of the Transferor  threatened,  against the Transferor or
         any  of its  properties  or  with

                                       27
<PAGE>

         respect to this Agreement or the  Certificates  which in the opinion of
         the Transferor  has a reasonable  likelihood of resulting in a material
         adverse effect on the transactions contemplated by this Agreement.

The  representations  and  warranties  set forth in this Section  2.03(b)  shall
survive  the sale and  assignment  of the  Mortgage  Loans  to the  Trust.  Upon
discovery of a breach of any representations and warranties which materially and
adversely  affects  the  interests  of  the  Certificateholders  or  the  Credit
Enhancer, the person discovering such breach shall give prompt written notice to
the other parties and to the Credit Enhancer. Within 90 days of its discovery or
its  receipt  of notice of  breach,  or,  with the prior  written  consent  of a
Responsible  Officer  of the  Trustee,  such  longer  period  specified  in such
consent, the Transferor shall cure such breach in all material respects.

         Section  2.04.   REPRESENTATIONS   AND  WARRANTIES  OF  THE  TRANSFEROR
REGARDING THE MORTGAGE  LOANS;  RETRANSFER OF CERTAIN  MORTGAGE  LOANS.  (a) The
Transferor hereby represents and warrants to the Trustee,  the Depositor and the
Credit  Enhancer that as of the Closing Date with respect to the Mortgage  Loans
and as of the applicable  Transfer Date with respect to any Subsequent  Mortgage
Loan and any Eligible Substitute Mortgage Loan,

                  (i)  As of the  Closing  Date  with  respect  to  the  Initial
         Mortgage  Loans and the  applicable  Transfer  Date with respect to any
         Subsequent Mortgage Loan and any Eligible Substitute Mortgage Loan and,
         with respect to any HELOC  Mortgage Loan, as of the date any Additional
         Balance is created,  the  information  set forth in the  Mortgage  Loan
         Schedule  for such  Mortgage  Loans is true and correct in all material
         respects;

                  (ii) The  applicable  Cut-Off Date Asset  Balance has not been
         assigned or pledged, and the Transferor is the sole owner and holder of
         such  Cut-Off  Date Asset  Balance free and clear of any and all liens,
         claims,  encumbrances,   participation  interests,  equities,  pledges,
         charges or security  interests  of any  nature,  and has full right and
         authority,   under  all  governmental  and  regulatory   bodies  having
         jurisdiction  over the ownership of the  applicable  Mortgage  Loan, to
         sell, assign or transfer the same pursuant to the Purchase Agreement;

                  (iii) As of the  Closing  Date  with  respect  to the  Initial
         Mortgage  Loans and the  applicable  Transfer  Date with respect to any
         Subsequent Mortgage Loan and any Eligible Substitute Mortgage Loan, the
         related  Mortgage  Note and the Mortgage  with respect to each Mortgage
         Loan have not been assigned or pledged,  and the Transferor is the sole
         owner  and  holder of the  Mortgage  Loan free and clear of any and all
         liens,  claims,   encumbrances,   participation  interests,   equities,
         pledges,  charges or security  interests  of any  nature,  and has full
         right and  authority,  under all  governmental  and  regulatory  bodies
         having  jurisdiction  over the  ownership  of the  applicable  Mortgage
         Loans, to sell and assign the same pursuant to the Purchase Agreement;

                                       28
<PAGE>

                  (iv)  As of the  Closing  Date  with  respect  to the  Initial
         Mortgage  Loans and the  applicable  Transfer  Date with respect to any
         Subsequent Mortgage Loan and any Eligible Substitute Mortgage Loan, the
         related Mortgage is a valid and subsisting first or second lien, as set
         forth on the  Mortgage  Loan  Schedule  with  respect  to each  related
         Mortgage  Loan,  on  the  property  therein  described,  and  as of the
         applicable  Cut-Off  Date the  related  Mortgaged  Property is free and
         clear of all  encumbrances  and liens having priority over the first or
         second lien, as applicable,  of such Mortgage  except for liens for (i)
         real estate taxes and special assessments not yet delinquent;  (ii) any
         first mortgage loan secured by such Mortgaged Property and specified on
         the  Mortgage  Loan   Schedule;   (iii)   covenants,   conditions   and
         restrictions,  rights of way,  easements  and other  matters  of public
         record as of the date of  recording  that are  acceptable  to  mortgage
         lending  institutions  generally;  and (iv) other matters to which like
         properties are commonly subject which do not materially  interfere with
         the benefits of the security intended to be provided by such Mortgage;

                  (v)  As of the  Closing  Date  with  respect  to  the  Initial
         Mortgage  Loans and the  applicable  Transfer  Date with respect to any
         Subsequent  Mortgage Loan and any Eligible  Substitute  Mortgage  Loan,
         there is no valid offset,  defense or counterclaim of any obligor under
         any Loan Agreement or Mortgage;

                  (vi)  To  the  best  knowledge  of the  Transferor,  as of the
         Closing  Date  with  respect  to the  Initial  Mortgage  Loans  and the
         applicable  Transfer Date with respect to any Subsequent  Mortgage Loan
         and any  Eligible  Substitute  Mortgage  Loan,  there is no  delinquent
         recording  or other tax or fee or  assessment  lien against any related
         Mortgaged Property;

                  (vii) As of the  Closing  Date  with  respect  to the  Initial
         Mortgage  Loans and the  applicable  Transfer  Date with respect to any
         Subsequent  Mortgage Loan and any Eligible  Substitute  Mortgage  Loan,
         there  is no  proceeding  pending  or,  to the  best  knowledge  of the
         Transferor,  threatened  for the total or partial  condemnation  of the
         related  Mortgaged  Property,  and such  property  is free of  material
         damage;

                  (viii)  To the best  knowledge  of the  Transferor,  as of the
         Closing  Date  with  respect  to the  Initial  Mortgage  Loans  and the
         applicable  Transfer Date with respect to any Subsequent  Mortgage Loan
         and any Eligible  Substitute  Mortgage Loan, there are no mechanics' or
         similar  liens or  claims  which  have been  filed  for work,  labor or
         material affecting the related Mortgaged Property which are, or may be,
         liens prior or equal to the lien of the related Mortgage,  except liens
         which are fully insured against by the title insurance  policy referred
         to in clause (xiv);

                  (ix)  No  Minimum   Monthly  Payment  is  more  than  89  days
         delinquent  (measured on a contractual  basis); and with respect to the
         Mortgage Loans no more than ___% (by Initial Cut-Off Date Pool Balance)
         were 30-59 days  delinquent  (measured on a  contractual  basis) and no
         more than ____% (by Initial

                                       29
<PAGE>

         Cut-Off Date Pool  Balance) were 60-89 days  delinquent  (measured on a
         contractual basis);

                  (x)  As of the  Closing  Date  with  respect  to  the  Initial
         Mortgage  Loans and the  applicable  Transfer  Date with respect to any
         Subsequent Mortgage Loan and any Eligible Substitute Mortgage Loan, for
         each  Mortgage  Loan,  the related  Mortgage  File contains each of the
         documents and instruments specified to be included therein;

                  (xi) The related  Mortgage  Note and the  related  Mortgage at
         origination complied in all material respects with applicable state and
         federal laws, including, without limitation,  usury,  truth-in-lending,
         real estate settlement  procedures,  consumer credit protection,  equal
         credit opportunity or disclosure laws applicable to the Mortgage Loan;

                  (xii) Either a lender's title  insurance  policy or binder was
         issued on the date of  origination  of the Mortgage  Loan and each such
         policy is valid and remains in full force and effect, or a title search
         or  guaranty  of  title  customary  in the  relevant  jurisdiction  was
         obtained with respect to a Mortgage Loan as to which no title insurance
         policy or binder was issued;

                  (xiii) As of the  Closing  Date with  respect  to the  Initial
         Mortgage  Loans and the  applicable  Transfer  Date with respect to any
         Subsequent  Mortgage Loan and any Eligible  Substitute  Mortgage  Loan,
         none of the  Mortgaged  Properties  is a mobile home or a  manufactured
         housing unit that is not  considered  or classified as part of the real
         estate under the laws of the jurisdiction in which it is located;

                  (xiv) As of the Cut-Off Date for the Initial Mortgage Loans no
         more than ____% of such  Mortgage  Loans (by Initial  Cut-Off Date Pool
         Balance),  are secured by  Mortgaged  Properties  located in one United
         States postal zip code;

                  (xv) The Combined  Loan-to-Value  Ratio for each Mortgage Loan
         was not in excess of ___%;

                  (xvi)  No  selection  procedure  reasonably  believed  by  the
         Transferor to be adverse to the interests of the  Certificateholders or
         the Credit Enhancer was utilized in selecting the Mortgage Loans;

                  (xvii) The Transferor has not  transferred  the Mortgage Loans
         to the  Transferor  with any intent to hinder,  delay or defraud any of
         its creditors;

                  (xviii) The Minimum  Monthly Payment with respect to any HELOC
         Mortgage Loan is not less than the interest  accrued at the  applicable
         Loan Rate on the average daily Asset Balance during the interest period
         relating to the date on which such Minimum Monthly Payment is due;

                  (xix)  Within 10 days of the Closing  Date with respect to the
         Initial  Mortgage Loans and, to the extent not already included in such
         filing,  within 10

                                       30
<PAGE>

         days of the  applicable  Transfer  Date with respect to any  Subsequent
         Mortgage Loan and any Eligible Substitute Mortgage Loan, the Transferor
         will file UCC-1  financing  statements  with  respect to such  Mortgage
         Loans;

                  (xx)  As of the  Closing  Date  with  respect  to the  Initial
         Mortgage  Loans and the  applicable  Transfer  Date with respect to any
         Subsequent  Mortgage Loan and any Eligible  Substitute  Mortgage  Loan,
         each Loan Agreement and each Mortgage Loan is an enforceable obligation
         of the related Mortgagor,  except as the enforceability  thereof may be
         limited  by  the  bankruptcy,  insolvency  or  similar  laws  affecting
         creditors' rights generally;

                  (xxi) As of the  Closing  Date  with  respect  to the  Initial
         Mortgage  Loans and the  applicable  Transfer  Date with respect to any
         Subsequent Mortgage Loan and any Eligible Substitute Mortgage Loan, the
         Transferor has not received a notice of default of any senior  mortgage
         loan related to a Mortgaged Property that has not been cured by a party
         other than the Servicer;

                  (xxii) The  definition  of "prime  rate" in each  Credit  Line
         Agreement  relating to a HELOC Mortgage Loan does not differ materially
         from the definition in the form of Credit Line Agreement in Exhibit F;

                  (xxiii) The weighted average remaining term to maturity of the
         Initial Mortgage Loans on a contractual basis as of the Cut-Off Date is
         approximately  ___ months. On each date that the Loan Rates relating to
         HELOC Mortgage Loans have been adjusted,  interest rate  adjustments on
         the HELOC  Mortgage  Loans  were made in  compliance  with the  related
         Mortgages and Mortgage Notes and applicable  law. Over the term of each
         HELOC Mortgage Loan, the Loan Rate may not exceed the related Loan Rate
         Cap, if any. With respect to the Initial HELOC Mortgage Loans, the Loan
         Rate Caps range  between  ____% and ___%.  With  respect to the Initial
         HELOC Mortgage Loans,  the Margins range between ___% and ____% and the
         weighted  average  Margin  is  approximately  ____%  as of the  related
         Cut-Off  Date.  The Loan  Rates on the  Initial  Mortgage  Loans  range
         between  ___%  and  ____%  and  the  weighted   average  Loan  Rate  is
         approximately ___%;

                  (xxiv) As of the  Closing  Date with  respect  to the  Initial
         Mortgage  Loans and the  applicable  Transfer  Date with respect to any
         Subsequent  Mortgage Loan and any Eligible  Substitute  Mortgage  Loan,
         each  Mortgaged  Property  consists of a single parcel of real property
         with a one-to-four unit single family residence erected thereon,  or an
         individual   condominium   unit,   planned  unit  development  unit  or
         townhouse;

                  (xxv)  No more  than  ____%  (by  Initial  Cut-Off  Date  Pool
         Balance) of the  Initial  Mortgage  Loans are secured by real  property
         improved by individual  condominium units,  planned  development units,
         townhouses or two-to-four  family  residences  erected thereon,  and at
         least  ____% (by  Initial  Cut-Off  Date

                                       31
<PAGE>

         Pool  Balance)  of the  Initial  Mortgage  Loans  are  secured  by real
         property with a detached one-family residence erected thereon;

                  (xxvi) The Credit Limits on the Initial HELOC  Mortgage  Loans
         range between $________ and $_________ with an average of $_______.  As
         of  the  applicable  Cut-Off  Date,  no  Initial  Mortgage  Loan  had a
         principal  balance  in excess  of  approximately  $___________  and the
         average  principal  balance of the Initial  Mortgage  Loans is equal to
         approximately $_______;

                  (xxvii)  Approximately  ____% and ___% of the Initial Mortgage
         Loans,  by aggregate  principal  balance as of the  applicable  Cut-Off
         Date, are first and second liens, respectively;

                  (xxviii)  Each  Closed-End  Mortgage  Loan is payable in equal
         monthly   installments   of  principal  and  interest  which  would  be
         sufficient,  in the absence of late  payments,  to fully  amortize such
         loan on the maturity  thereof and bears a fixed  interest  rate for the
         term of such Closed-End Mortgage Loan; and

                  (xxix) Either (A) this Agreement  constitutes a valid transfer
         and assignment to the Depositor of all right, title and interest of the
         Transferor  in and to the Cut-Off Date Asset  Balances  with respect to
         the  applicable  Mortgage  Loans,  all monies due or to become due with
         respect thereto (excluding  payments in respect of accrued interest due
         prior to the Cut-Off Date), and all proceeds of such Cut-Off Date Asset
         Balances with respect to the Mortgage  Loans and such funds as are from
         time  to  time  deposited  in the  Collection  Account  (excluding  any
         investment  earnings  thereon) and all other property  specified in the
         definition of "Trust" as being part of the corpus of the Trust conveyed
         to the  Trust,  and upon  payment  for the  Additional  Balances,  will
         constitute a valid transfer and assignment to the Trustee of all right,
         title and interest of the Transferor in and to the Additional Balances,
         all monies due or to become due with respect thereto,  and all proceeds
         of such  Additional  Balances and all other  property  specified in the
         definition of "Trust"  relating to the Additional  Balances or (B) this
         Agreement constitutes a grant of a security interest (as defined in the
         UCC as in effect in New York) in such property to the Trustee on behalf
         of the Trust.  If this  Agreement  constitutes  the grant of a security
         interest to the Trust in such property,  and if the Trustee obtains and
         maintains  possession of the Mortgage File for each Mortgage  Loan, the
         Trust shall have a first priority  perfected  security interest in such
         property,  subject  to the  effect  of  Section  9-306  of the UCC with
         respect to  collections on the Mortgage Loans that are deposited in the
         Collection  Account in  accordance  with the next to last  paragraph of
         Section 3.02(b).

         With respect to the  representations  and  warranties set forth in this
Section  2.04 that are made to the best of the  Transferor's  knowledge or as to
which the  Transferor has no knowledge,  if it is discovered by the  Transferor,
the  Depositor,  the Servicer or a  Responsible  Officer of the Trustee that the
substance of such  representation and warranty is inaccurate and such inaccuracy
materially  and adversely  affects the value of the related  Mortgage Loan then,
notwithstanding the Transferor's lack of knowledge with respect to

                                       32
<PAGE>

the substance of such  representation  and warranty being inaccurate at the time
the  representation  or warranty  was made,  such  inaccuracy  shall be deemed a
breach of the applicable representation or warranty.

         (b) It is understood and agreed that the representations and warranties
set forth in this Section 2.04 shall survive delivery of the respective Mortgage
Files to the Trustee  pursuant to Section 2.01 and the termination of the rights
and obligations of the Servicer pursuant to Section 7.04 or 8.02. Upon discovery
by the  Transferor,  the  Depositor,  the  Servicer,  the Credit  Enhancer  or a
Responsible  Officer  of the  Trustee  of a  breach  of  any  of  the  foregoing
representations  and  warranties,  without  regard to any  limitation  set forth
therein  concerning  the  knowledge  of the  Transferor  as to the facts  stated
therein,  which  materially and adversely  affects the interests of the Trust or
the Investor  Certificateholders  or the Credit Enhancer in the related Mortgage
Loan, the party  discovering such breach shall give prompt written notice to the
other  parties and the Credit  Enhancer.  Within 90 days of its discovery or its
receipt  of notice  of such  breach,  the  Transferor  shall use all  reasonable
efforts to cure such breach in all  material  respects or shall,  not later than
the Business Day next  preceding  the Payment  Date in the month  following  the
Collection Period in which any such cure period expired (or such later date that
is  acceptable  to the Trustee and the Credit  Enhancer  as  evidenced  by their
written  consents),  either (a) accept a transfer of such Mortgage Loan from the
Trust or (b) substitute an Eligible  Substitute Mortgage Loan in the same manner
and  subject  to the same  conditions  as set forth in Section  2.02;  PROVIDED,
HOWEVER,  that the cure for any breach of a representation and warranty relating
to the  characteristics  of the  Mortgage  Loans  in the  aggregate  shall  be a
repurchase of or  substitution  for only the Mortgage  Loans  necessary to cause
such  characteristics  to be in compliance with the related  representation  and
warranty.  Upon accepting such transfer and making any required deposit into the
Collection Account or substitution of an Eligible  Substitute  Mortgage Loan, as
the case may be, the  Transferor  shall be entitled to receive an  instrument of
assignment  or  transfer  from the  Trustee  to the same  extent as set forth in
Section 2.02 with respect to the transfer of Mortgage Loans under that Section.

         It is understood  and agreed that the  obligation of the  Transferor to
accept a retransfer  of a Mortgage Loan as to which a breach has occurred and is
continuing  and to make any  required  deposit in the  Collection  Account or to
substitute  an Eligible  Substitute  Mortgage  Loan,  as the case may be,  shall
constitute  the sole  remedy  against  the  Transferor  respecting  such  breach
available  to  Investor  Certificateholders,  the  Trustee on behalf of Investor
Certificateholders  and  the  Credit  Enhancer;   PROVIDED,  HOWEVER,  that  the
Transferor  shall defend and indemnify the Trustee,  the Credit Enhancer and the
Investor  Certificateholders  against all reasonable costs and expenses, and all
losses, damages, claims and liabilities,  including reasonable fees and expenses
of counsel and the amount of any settlement entered into with the consent of the
Transferor (such consent not to be unreasonably withheld), which may be asserted
against or incurred by any of them as a result of any third-party action arising
out of any breach of any such  representation and warranty.  Notwithstanding the
foregoing,  with regard to any breach of the  representation  and  warranty  set
forth in Section  2.04(a)(iv),  the sale and assignment of the affected Mortgage
Loans to the Trust  shall be  deemed  void and the  Transferor  shall pay to the
Trust the sum of (i) the  amount of the  related  Asset  Balances,  plus  unpaid

                                       33
<PAGE>

accrued  interest on each such Asset Balance at the applicable  Loan Rate to the
date of payment and (ii) the amount of any loss  suffered by  Certificateholders
or the Credit Enhancer with respect to the affected Mortgage Loans.

         Section 2.05.  COVENANTS OF THE DEPOSITOR AND THE  TRANSFEROR.  Each of
the Depositor and the Transferor hereby covenants that:

         (a) SECURITY INTERESTS. Except for the transfer hereunder,  neither the
Depositor nor the Transferor will sell, pledge,  assign or transfer to any other
Person,  or  grant,  create,  incur,  assume  or suffer to exist any Lien on any
Mortgage  Loan,  whether now  existing or  hereafter  created,  or any  interest
therein; each of the Depositor and the Transferor will notify the Trustee of the
existence of any Lien on any Mortgage Loan immediately  upon discovery  thereof;
and each of the Depositor and the  Transferor  will defend the right,  title and
interest of the Trust in, to and under the Mortgage Loans,  whether now existing
or hereafter  created,  against all claims of third parties  claiming through or
under the Depositor or the Transferor,  respectively;  PROVIDED,  HOWEVER,  that
nothing in this  Section  2.05(a)  shall  prevent or be deemed to  prohibit  the
Depositor  or the  Transferor  from  suffering to exist upon any of the Mortgage
Loans  any Liens  for  municipal  or other  local  taxes and other  governmental
charges if such taxes or  governmental  charges shall not at the time be due and
payable or if the Depositor or the Transferor  shall currently be contesting the
validity  thereof in good faith by  appropriate  proceedings  and shall have set
aside on its books adequate reserves with respect thereto.

         (b) NEGATIVE  PLEDGE.  The  Transferor  hereby  agrees not to transfer,
assign, exchange, pledge, finance, hypothecate,  grant a security interest in or
otherwise convey the Transferor  Certificates except in accordance with Sections
6.05 and 7.02.

         (c)  DOWNGRADING.  Neither the Depositor nor the Transferor will engage
in  any  activity   which  would  result  in  a  downgrading   of  the  Investor
Certificates.

         (d)  AMENDMENT  TO  CERTIFICATE  OF  INCORPORATION  OR  CERTIFICATE  OF
FORMATION.  The Servicer will not amend its certificate of incorporation without
prior  written  notice to the Rating  Agencies  and the Credit  Enhancer and the
Depositor  will not amend its  certificate  of formation  without  prior written
notice to the Rating Agencies and the Credit Enhancer.

         (e) PRINCIPAL  PLACE OF BUSINESS.  The  Depositor's  principal place of
business is in California and the Transferor's  principal  place of business  is
(        ), and neither such party will change its  principal  place of business
without prior written notice to the Rating Agencies.

         Section 2.06.  RETRANSFERS OF MORTGAGE LOANS AT ELECTION OF TRANSFEROR.
Subject to the conditions set forth below,  the Transferor may, but shall not be
obligated to,  require the  retransfer  of Mortgage  Loans from the Trust to the
Transferor  as of the close of business on a Payment Date (each,  a  "RETRANSFER
DATE").  On the fifth Business Day (the  "RETRANSFER  NOTICE DATE") prior to the
Retransfer Date designated in such notice, the Transferor shall give the Trustee
and the Servicer a notice of the proposed retransfer that

                                       34
<PAGE>

contains a list of the Mortgage Loans to be  retransferred.  Such retransfers of
Mortgage Loans shall be permitted upon satisfaction of the following conditions:

                  (i) The Rapid Amortization Period shall not have commenced;

                  (ii) On the  Transfer  Notice  Date the  Transferor  Principal
         Balance  (after  giving  effect  to the  removal  from the Trust of the
         Mortgage Loans proposed to be  retransferred)  is at least equal to the
         Minimum Transferor Interest;

                  (iii) The  transfer of any  Mortgage  Loans on any  Retransfer
         Date  during  the  Managed   Amortization  Period  shall  not,  in  the
         reasonable belief of the Transferor,  cause a Rapid  Amortization Event
         to occur or an event  which with  notice or lapse of time or both would
         constitute a Rapid Amortization Event;

                  (iv) On or before the Retransfer  Date,  the Transferor  shall
         have  delivered  to the  Trustee  a  revised  Mortgage  Loan  Schedule,
         reflecting  the proposed  transfer  and the  Retransfer  Date,  and the
         Servicer  shall  have  marked  the  Electronic  Ledger to show that the
         Mortgages Loans  retransferred to the Transferor are no longer owned by
         the Trust;

                  (v)  The  Transferor  shall  represent  and  warrant  that  no
         selection  procedures  reasonably  believed  by  the  Transferor  to be
         adverse to the  interests  of the  Investor  Certificateholders  or the
         Credit  Enhancer were  utilized in selecting  the Mortgage  Loans to be
         removed from the Trust;

                  (vi) In connection with each such retransfer of Mortgage Loans
         pursuant to this Section,  each Rating Agency shall have received on or
         prior to the related  Retransfer  Notice  Date notice of such  proposed
         retransfer of Mortgage Loans and, prior to the Retransfer  Date,  shall
         have  notified the Trustee in writing that such  retransfer of Mortgage
         Loans would not result in a reduction or withdrawal of its then current
         rating of the Investor Certificates without regard to the Policy; and

                  (vii) The  Transferor  shall have delivered to the Trustee and
         the Credit Enhancer an Officer's Certificate  certifying that the items
         set forth in  subparagraphs  (i)  through  (vi),  inclusive,  have been
         performed or are true and correct,  as the case may be. The Trustee may
         conclusively rely on such Officer's Certificate,  shall have no duty to
         make  inquiries  with regard to the matters set forth therein and shall
         incur no liability in so relying.

Upon receiving the requisite information from the Transferor, the Servicer shall
perform in a timely manner those acts required of it, as specified  above.  Upon
satisfaction of the above  conditions,  on the Retransfer Date the Trustee shall
deliver, or cause to be delivered,  to the Transferor the Mortgage File for each
Mortgage Loan being so transferred, and the Trustee shall execute and deliver to
the  Transferor  such other  documents  prepared by the  Transferor  as shall be
reasonably necessary to transfer such Mortgage Loans to the Transferor. Any such
retransfer  of the Trust's  right,  title and

                                       35
<PAGE>

interest in and to Mortgage Loans shall be without  recourse,  representation or
warranty by or of the Trustee or the Trust to the Transferor.

         Section  2.07.  EXECUTION  AND  AUTHENTICATION  OF  CERTIFICATES.   The
Trustee,  on behalf of the Trust, has caused to be executed,  authenticated  and
delivered  to or upon the order of the  Depositor,  in  exchange  for the Trust,
concurrently  with the sale,  assignment  and  conveyance  to the Trustee of the
Trust,  Investor  Certificates  in authorized  denominations  and the Transferor
Certificates, together evidencing the ownership of the entire Trust.

         Section 2.08. TAX TREATMENT. It is the intention of the Depositor,  the
Transferor and the Class A Certificateholders that the Class A Certificates will
be  indebtedness  of the  Transferor  for  federal,  state and local  income and
franchise  tax purposes and for purposes of any other tax imposed on or measured
by  income.  The  Transferor,  the  Depositor,  the  Trustee  and  each  Class A
Certificateholder   (or  Certificate   Owner)  by  acceptance  of  its  Class  A
Certificate  (or,  in the  case  of a  Certificate  Owner,  by  virtue  of  such
Certificate  Owner's  acquisition of a beneficial  interest  therein)  agrees to
treat the Class A Certificates (or beneficial interest therein), for purposes of
federal,  state and local income or franchise taxes and any other tax imposed on
or measured by income,  as indebtedness of the Transferor  secured by the assets
of the Trust and to report the  transactions  contemplated  by this Agreement on
all  applicable tax returns in a manner  consistent  with such  treatment.  Each
Class A  Certificateholder  agrees  that it will  cause  any  Certificate  Owner
acquiring an interest in an Class A  Certificate  through it to comply with this
Agreement  as to  treatment  of the Class A  Certificates  as  indebtedness  for
federal,  state and local income and  franchise tax purposes and for purposes of
any other tax  imposed on or measured by income.  The Trustee  will  prepare and
file all tax reports required hereunder.

         Section 2.09.  REPRESENTATIONS  AND  WARRANTIES OF THE  DEPOSITOR.  The
Depositor   represents   and   warrants   to  the   Trustee  on  behalf  of  the
Certificateholders and the Credit Enhancer as follows:

                  (i) This  Agreement  constitutes  a legal,  valid and  binding
         obligation  of the  Depositor,  enforceable  against the  Depositor  in
         accordance with its terms,  except as enforceability  may be limited by
         applicable bankruptcy, insolvency, reorganization,  moratorium or other
         similar laws now or hereafter in effect  affecting the  enforcement  of
         creditors' rights in general and except as such  enforceability  may be
         limited  by  general  principles  of equity  (whether  considered  in a
         proceeding at law or in equity);

                  (ii)  Immediately  prior  to the sale  and  assignment  by the
         Depositor to the Trustee of each Mortgage  Loan,  the Depositor was the
         sole beneficial  owner of each Mortgage Loan (insofar as such title was
         conveyed  to it by the  Transferor)  subject to no prior  lien,  claim,
         participation interest,  mortgage, security interest, pledge, charge or
         other encumbrance or other interest of any nature;

                                       36
<PAGE>

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

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

         Section 2.10.  CONVEYANCE OF THE SUBSEQUENT MORTGAGE LOANS. (a) Subject
to the  satisfaction  of the  conditions set forth in Section 2.01 and paragraph
(b) below, in consideration of the Trustee's  delivery on a Subsequent  Transfer
Date to or upon the order of the Transferor of all or a portion of the amount in
respect of Principal Collections in the Funding Account the Transferor shall, to
the extent of the availability  thereof, on the related Subsequent Transfer Date
transfer,  assign,  set over and otherwise  convey to the Trust without recourse
(subject to Sections 2.02 and 2.04) all of its right,  title and interest in and
to the  Asset  Balances  of the  Subsequent  Mortgage  Loans  and  all  Interest
Collections  and Principal  Collections  in respect  thereof  received after the
Cut-Off  Date  for  the  Subsequent  Mortgage  Loans  or,  with  respect  to any
Additional  Balances with respect  thereto,  on or after the date of transfer to
the Trust.  Future advances made to a Mortgagor under a Loan Agreement  relating
to a Subsequent  Mortgage  Loan shall be part of the related  Asset  Balance and
transferred to the Trust pursuant to this Section 2.10, and, therefore,  part of
the Trust  property upon the sale thereof to the  Transferor  under the Purchase
Agreement.

         On each Subsequent  Transfer Date, the Trustee shall  acknowledge  that
the  Transferor  has  conveyed  its  right,  title and  interest  in and to each
Subsequent Mortgage Loan and to the corresponding  Related Documents and certain
other rights to the Trustee  pursuant to this  Agreement,  and the Trustee shall
hold such documents hereunder for the benefit of the Certificateholders.

         (b) The  obligation  of the  Trustee  to  accept  the  transfer  of the
Subsequent  Mortgage  Loans and the other  property and rights  related  thereto
described in paragraph (a) above is subject to the  satisfaction  of each of the
following conditions on or prior to the Subsequent Transfer Date:

                  (i) the Trustee  shall have been  provided  with a letter from
         the Credit  Enhancer  consenting  to such  transfer  of the  Subsequent
         Mortgage  Loans (which  consent shall not be  unreasonably  withheld or
         delayed);

                  (ii) the  Trustee  shall  have  been  provided  with a revised
         Mortgage Loan Schedule, listing the Subsequent Mortgage Loans;

                  (iii) the  Transferor  shall have  deposited in the Collection
         Account all Principal  Collections and Interest  Collections in respect
         of such  Subsequent  Mortgage Loans received after the Cut-Off Date for
         the Subsequent Mortgage Loans;

                  (iv) the  representations  and warranties of the Transferor in
         Section 2.04 hereof, to the extent such  representations and warranties
         do not pertain

                                       37
<PAGE>

         exclusively to the Initial  Mortgage  Loans,  are true and correct with
         respect to the Subsequent  Mortgage Loans as of the related  Subsequent
         Transfer Date;

                  (v) the Trustee  shall have been  provided  with a letter from
         each Rating  Agency  confirming  that the  transfer  of the  Subsequent
         Mortgage  Loans shall not result in a reduction  or  withdrawal  of its
         then-current rating of the Investor Certificates;

                  (vi) the  Servicer  shall  acknowledge  in writing that it has
         delivered the related  Mortgage  Files to the Trustee and complied with
         all other  requirements  with respect to the  assignment of the related
         Mortgages specified therein;

                  (vii)  the  Servicer  shall  represent  and  warrant  that  no
         selection procedures  reasonably believed by the Servicer to be adverse
         to the  interests  of the  Investor  Certificateholders  or the  Credit
         Enhancer were utilized in selecting the Subsequent Mortgage Loans; and

                  (viii) the  Transferor  shall have delivered to the Trustee an
         Officer's  Certificate  confirming the  satisfaction  of each condition
         precedent specified in this paragraph (b).

The  obligation  of the Trust to purchase  any  Subsequent  Mortgage  Loans on a
Subsequent Transfer Date is subject to the following requirements: (i) each such
Subsequent  Mortgage Loan is a HELOC  Mortgage  Loan and the  remaining  term to
maturity of each such Subsequent  Mortgage Loan may not exceed ___ months;  (ii)
the weighted  average  Margin of the  Subsequent  Mortgage  Loans (by  aggregate
Cut-Off Date Asset Balance with respect to such Subsequent  Mortgage Loans) plus
any Subsequent  Mortgage Loans  previously  transferred to the Trust is at least
____%; (iii) the weighted average Combined Loan-to-Value Ratio of the Subsequent
Mortgage  Loans (by  aggregate  Cut-Off Date Asset  Balance with respect to such
Subsequent  Mortgage  Loans)  plus  any  Subsequent  Mortgage  Loans  previously
transferred to the Trust is not more than ___%; (iv) no such Subsequent Mortgage
Loan will have a Cut-Off Date Asset Balance in excess of $________;  (v) no less
than ___% of the Subsequent  Mortgage  Loans plus any Subsequent  Mortgage Loans
previously  transferred  to the Trust (by  aggregate  Cut-Off Date Asset Balance
with respect to such  Subsequent  Mortgage  Loans) are in a first lien position;
(vi) at  least  ___% of such  Subsequent  Mortgage  Loans  plus  any  Subsequent
Mortgage Loans  previously  transferred to the Trust (by aggregate  Cut-Off Date
Asset Balance with respect to such Subsequent  Mortgage Loans) are not more than
30 days delinquent (on a contractual  basis) in the payment of a Minimum Monthly
Payment as of the Cut-Off Date for such Subsequent Mortgage Loans; and (vii) any
Subsequent HELOC Mortgage Loan more than 30 days delinquent that is so purchased
by the Trust shall not have had its Credit Limit  terminated or suspended  prior
to the Subsequent  Transfer Date with respect to such Mortgage Loan. On the last
Payment  Date of the Funding  Period,  the  Transferor  shall have  provided the
Trustee,  the Rating Agencies and the Credit Enhancer with an opinion of counsel
to the effect that such transfer constitutes a sale of the Trust Balances of the
Subsequent Mortgage Loans to the Transferor and a sale of or grant of a security
interest in the  Subsequent  Mortgage Loans to the Trustee;

                                       38
<PAGE>

PROVIDED,  HOWEVER,  that in the event of a change  of law  during  the  Funding
Period that materially affects the method of perfecting the security interest in
the  Subsequent  Mortgage  Loans,  the  Transferor  shall either (i) provide the
Trustee,  the Rating Agencies and the Credit Enhancer with an opinion of counsel
to the effect that such transfer constitutes a sale of the Asset Balances of the
Subsequent Mortgage Loans to the Transferor and a sale of or grant of a security
interest in the  Subsequent  Mortgage  Loans to the  Trustee,  or (ii) take such
action as is necessary to perfect the  interests of the Trust in the  Subsequent
Mortgage Loans.

                                  ARTICLE III

                 Administration and Servicing of Mortgage Loans

         Section  3.01.  THE  SERVICER.  (a)  The  Servicer  shall  service  and
administer  the  Mortgage  Loans in a manner  consistent  with the terms of this
Agreement  and with  general  industry  practice  and shall  have full power and
authority,  acting alone or through a  subservicer,  to do any and all things in
connection with such servicing and administration which it may deem necessary or
desirable,  it being understood,  however,  that the Servicer shall at all times
remain  responsible  to the  Trustee,  the  Certificateholders  and  the  Credit
Enhancer  for  the  performance  of its  duties  and  obligations  hereunder  in
accordance  with the terms hereof.  Any amounts  received by any  subservicer in
respect of a Mortgage Loan shall be deemed to have been received by the Servicer
whether or not actually  received by it. Without  limiting the generality of the
foregoing,  the Servicer shall continue,  and is hereby authorized and empowered
by  the   Trustee,   to  execute  and   deliver,   on  behalf  of  itself,   the
Certificateholders  and the Trustee,  or any of them, any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge and all
other  comparable  instruments,  with  respect  to the  Mortgage  Loans and with
respect to the Mortgaged Properties. The Trustee shall, upon the written request
of a Servicing  Officer,  furnish the  Servicer  with any powers of attorney and
other documents necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties hereunder. The Servicer in such capacity may
also  consent to the  placing of a lien  senior to that of any  Mortgage  on the
related Mortgaged Property, provided that:

                  (x) such Mortgage succeeded to a first lien position after the
         related  Mortgage  Loan was  conveyed  to the  Trust  and,  immediately
         following  the  placement  of such senior lien,  such  Mortgage is in a
         second  lien  position  and the  outstanding  principal  amount  of the
         mortgage loan secured by such subsequent senior lien is no greater than
         the outstanding principal amount of the senior mortgage loan secured by
         the  Mortgaged  Property as of the date the related  Mortgage  Loan was
         originated; or

                  (y) the  Mortgage  relating  to such  Mortgage  Loan  was in a
         second lien  position  as of the  Cut-Off  Date and the new senior lien
         secures a mortgage loan that refinances an existing first mortgage loan
         and the outstanding  principal amount of the replacement first mortgage
         loan  immediately  following  such

                                       39
<PAGE>

         refinancing  is not greater than the  outstanding  principal  amount of
         such existing  first  mortgage loan at the date of  origination of such
         Mortgage Loan;

PROVIDED,  FURTHER,  that such senior lien does not secure a note that  provides
for negative amortization.

         The Servicer may also,  without prior approval from the Rating Agencies
or the Credit  Enhancer,  increase  the Credit  Limits on HELOC  Mortgage  Loans
provided  that (i) new  appraisals  are obtained and the Combined  Loan-to-Value
Ratios of the Mortgage  Loans after giving effect to such increase are less than
or equal to the Combined  Loan-to-Value  Ratios or the Mortgage  Loans as of the
Cut-Off  Date  and (ii)  such  increases  are  consistent  with  the  Servicer's
underwriting policies.

         In  addition,  the  Servicer  may  agree to  changes  in the terms of a
Mortgage Loan at the request of the Mortgagor; PROVIDED that such changes (i) do
not materially and adversely affect the interests of  Certificateholders  or the
Credit  Enhancer and (ii) are  consistent  with prudent and  customary  business
practice as evidenced by a certificate  signed by a Servicing  Officer delivered
to the Trustee and the Credit Enhancer.

         In addition to the  foregoing,  the Servicer may solicit  Mortgagors to
change any other terms of the related Mortgage Loans, provided that such changes
(i) do not materially and adversely affect the interest of Certificateholders or
the Credit Enhancer and (ii) are consistent with prudent and customary  business
practice as evidenced by a certificate  signed by a Servicing  Officer delivered
to the Trustee and the Credit Enhancer.  Nothing herein shall limit the right of
the Servicer to solicit Mortgagors with respect to new loans (including mortgage
loans) that are not Mortgage Loans.

         The  relationship of the Servicer (and of any successor to the Servicer
as  servicer  under this  Agreement)  to the  Trustee  under this  Agreement  is
intended by the parties to be that of an independent  contractor and not that of
a joint venturer, partner or agent.

         (b) In the  event  that  the  rights,  duties  and  obligations  of the
Servicer are  terminated  hereunder,  any  successor to the Servicer in its sole
discretion  may,  to the extent  permitted  by  applicable  law,  terminate  the
existing subservicer  arrangements with any subservicer or assume the terminated
Servicer's  rights under such  subservicing  arrangements  which  termination or
assumption will not violate the terms of such arrangements.

         Section 3.02.  COLLECTION OF CERTAIN  MORTGAGE LOAN  PAYMENTS.  (a) The
Servicer shall make reasonable  efforts to collect all payments called for under
the terms and provisions of the Mortgage  Loans,  and shall,  to the extent such
procedures  shall be  consistent  with this  Agreement,  follow such  collection
procedures  as it  follows  with  respect  to  mortgage  loans in its  servicing
portfolio comparable to the Mortgage Loans.  Consistent with the foregoing,  and
without  limiting  the  generality  of the  foregoing,  the  Servicer may in its
discretion  (i) waive any late payment  charge or any  assumption  fees or other
fees which may be collected in the ordinary  course of servicing  such  Mortgage
Loan and (ii)  arrange  with a Mortgagor a schedule  for the payment of interest
due and

                                       40
<PAGE>

unpaid;  PROVIDED  that  such  arrangement  is  consistent  with the  Servicer's
policies  with  respect to the  mortgage  loans it owns or  services;  PROVIDED,
FURTHER,  that  notwithstanding  such  arrangement  such Mortgage  Loans will be
included in the information regarding delinquent Mortgage Loans set forth in the
Servicing  Certificate and monthly statement to  Certificateholders  pursuant to
Section 5.03.

         (b) The Servicer  shall  establish  and  maintain a trust  account (the
"COLLECTION ACCOUNT") titled "[Trustee], as Trustee, in trust for the registered
holders of Home Equity  Loan  Asset-Backed  Certificates,  Series  200_-_."  The
Collection  Account  shall be an Eligible  Account.  The  Servicer  shall on the
Closing Date deposit any amounts  representing  payments on, and any collections
in respect of, the Initial Mortgage Loans received after the applicable  Cut-Off
Date and prior to the Closing Date  (exclusive of payments in respect of accrued
interest due on or prior to such Cut-Off Date), and thereafter the Servicer,  or
the  Transferor,  as the case may be, shall  deposit  within two  Business  Days
following  receipt thereof the following  payments and  collections  received or
made by it (without duplication):

                  (i) all collections on and in respect of the Mortgage Loans;

                  (ii) the amounts,  if any, deposited to the Collection Account
         pursuant to Section 4.05;

                  (iii) Net Liquidation  Proceeds net of any related Foreclosure
         Profit;

                  (iv)  Insurance  Proceeds  (including,  for this purpose,  any
         amount  required to be credited  by the  Servicer  pursuant to the last
         sentence of Section 3.04 and  excluding  the portion  thereof,  if any,
         that has been  applied  to the  restoration  or repair  of the  related
         Mortgaged  Property or released to the related  Mortgagor in accordance
         with the normal servicing procedures of the Servicer); and

                  (v) any amounts  required to be deposited  therein pursuant to
         Section 10.01;

PROVIDED,  HOWEVER,  that with respect to each Collection  Period,  the Servicer
shall be  permitted  to retain  from  payments  in  respect of  interest  on the
Mortgage  Loans,  the Servicing Fee for such  Collection  Period.  The foregoing
requirements  respecting  deposits to the Collection  Account are exclusive,  it
being  understood that,  without  limiting the generality of the foregoing,  the
Servicer  need  not  deposit  in the  Collection  Account  amounts  representing
Foreclosure  Profits,  fees  (including  annual  fees) or late charge  penalties
payable by Mortgagors,  or amounts  received by the Servicer for the accounts of
Mortgagors for  application  towards the payment of taxes,  insurance  premiums,
assessments,  excess pay off amounts and similar items. The Servicer shall remit
all Foreclosure Profits to the Transferor.

         The Trustee shall hold amounts  deposited in the Collection  Account as
trustee for the Certificateholders and for the Credit Enhancer. In addition, the
Servicer  shall  notify the Trustee  and the Credit  Enhancer in writing on each
Determination  Date of the amount

                                       41
<PAGE>

of payments and  collections  in the  Collection  Account  allocable to Interest
Collections and Principal  Collections  for the related Payment Date.  Following
such  notification,  the  Servicer  shall  be  entitled  to  withdraw  from  the
Collection  Account  and  retain any  amounts  that  constitute  income and gain
realized from the investment of such payments and collections.

         All  income  and  gain  realized   from  any   investment  in  Eligible
Investments of funds in the  Collection  Account shall be for the benefit of the
Servicer and shall be subject to its withdrawal from time to time. The amount of
any losses incurred in respect of the principal  amount of any such  investments
shall be  deposited  in the  Collection  Account by the  Servicer out of its own
funds immediately as realized.

         Section 3.03.  WITHDRAWALS  FROM THE COLLECTION  ACCOUNT.  From time to
time,  withdrawals  may be made from the Collection  Account by the Servicer for
the following purposes:

                  (i) To the Servicer as payment for its  Servicing Fee pursuant
         to Section 3.08;

                  (ii)  To  pay  to  the  Servicer  amounts  on  deposit  in the
         Collection Account that are not to be included in the distributions and
         payments  pursuant to Section 5.01 to the extent provided by the second
         to the last and the last paragraph of Section 3.02(b);

                  (iii)  To  make  or  to  permit  the  Paying   Agent  to  make
         distributions and payments pursuant to Section 5.01;

                  (iv)  Prior  to the  Collection  Period  preceding  the  Rapid
         Amortization Commencement Date, to pay to the Transferor, the amount of
         any  Additional  Balances  as  and  when  created  during  the  related
         Collection Period;  PROVIDED,  that the aggregate amount so paid to the
         Transferor  in respect of  Additional  Balances  at any time during any
         Collection Period shall not exceed the amount of Principal  Collections
         theretofore  received  for such  Collection  Period  minus  the  amount
         determined  pursuant to clause (x) of the  definition  of  "ALTERNATIVE
         PRINCIPAL PAYMENT"; and

                  (v) To  make  deposits  to the  Funding  Account  pursuant  to
         Section 5.05 hereof.

         If the  Servicer  deposits  in the  Collection  Account  any amount not
required  to be  deposited  therein  or any amount in  respect  of  payments  by
Mortgagors made by checks subsequently  returned for insufficient funds or other
reason  for  non-payment  it may at any  time  withdraw  such  amount  from  the
Collection Account, and any such amounts shall not be included in the amounts to
be  deposited  in the  Collection  Account  pursuant  to  Section  3.02(b),  any
provision herein to the contrary notwithstanding.

         Section 3.04.  MAINTENANCE  OF HAZARD  INSURANCE;  PROPERTY  PROTECTION
EXPENSES.  The Servicer  shall cause to be  maintained  for each  Mortgage  Loan
hazard  insurance

                                       42
<PAGE>

naming  the  Servicer  or the  related  subservicer  as  loss  payee  thereunder
providing  extended  coverage in an amount which is at least equal to the lesser
of (i) the maximum  insurable value of the  improvements  securing such Mortgage
Loan  from time to time or (ii) the  combined  principal  balance  owing on such
Mortgage  Loan and any mortgage  loan senior to such  Mortgage Loan from time to
time. The Servicer shall also maintain on property acquired upon foreclosure, or
by deed in lieu of foreclosure,  hazard  insurance with extended  coverage in an
amount which is at least equal to the lesser of (i) the maximum  insurable value
from time to time of the improvements  which are a part of such property or (ii)
the combined principal balance owing on such Mortgage Loan and any mortgage loan
senior to such Mortgage Loan at the time of such  foreclosure or deed in lieu of
foreclosure plus accrued interest and the good-faith estimate of the Servicer of
related  Liquidation  Expenses to be incurred in connection  therewith.  Amounts
collected  by the  Servicer  under any such  policies  shall be deposited in the
Collection  Account to the extent  called for by Section 3.02. In cases in which
any  Mortgaged  Property is located in a federally  designated  flood area,  the
hazard  insurance to be maintained  for the related  Mortgage Loan shall include
flood  insurance.  All such  flood  insurance  shall be in such  amounts  as are
required  under  applicable  guidelines of the Federal Flood  Emergency Act. The
Servicer  shall be under no obligation  to require that any  Mortgagor  maintain
earthquake or other additional insurance and shall be under no obligation itself
to maintain any such additional  insurance on property  acquired in respect of a
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. If
the Servicer shall obtain and maintain a blanket policy  consistent with prudent
industry  standards  insuring against hazard losses on all of the Mortgage Loans
in an aggregate amount prudent under industry  standards,  it shall conclusively
be deemed to have  satisfied its  obligations as set forth in the first sentence
of this  Section  3.04 and there  shall have been a loss  which  would have been
covered by such policy,  deposit in the Collection  Account, as the case may be,
the  amount not  otherwise  payable  under the  blanket  policy  because of such
deductible clause.

         Section 3.05.  ASSUMPTION AND MODIFICATION  AGREEMENTS.  In any case in
which a Mortgaged Property has been or is about to be conveyed by the Mortgagor,
the  Servicer  shall  exercise  its right to  accelerate  the  maturity  of such
Mortgage  Loan  consistent  with the then  current  practice of the Servicer and
without regard to the inclusion of such Mortgage Loan in the Trust. If it elects
not to enforce its right to  accelerate  or if it is prevented  from doing so by
applicable  law,  the  Servicer  (so  long  as such  action  conforms  with  the
underwriting  standards generally acceptable in the industry at the time for new
origination) is authorized to take or enter into an assumption and  modification
agreement from or with the Person to whom such Mortgaged Property has been or is
about to be  conveyed,  pursuant to which such Person  becomes  liable under the
Loan  Agreement  and, to the extent  permitted by applicable  law, the Mortgagor
remains  liable  thereon.  The  Servicer  shall  notify  the  Trustee  that  any
assumption  and  modification  agreement has been completed by delivering to the
Trustee an Officer's Certificate certifying that such agreement is in compliance
with this Section 3.05 and by forwarding to the applicable  Custodian,  as agent
for  the  Trustee,  the  original  copy  of  such  assumption  and  modification
agreement.  Any  such  assumption  and  modification  agreement  shall,  for all
purposes,  be considered a part of the related  Mortgage File to the same extent
as all other

                                       43
<PAGE>

documents and instruments constituting a part thereof. No change in the terms of
the related Loan  Agreement may be made by the Servicer in  connection  with any
such assumption to the extent that such change would not be permitted to be made
in respect of the original Loan  Agreement  pursuant to the fourth  paragraph of
Section  3.01(a).  Any fee  collected by the Servicer for entering into any such
agreement will be retained by the Servicer as additional servicing compensation.

         Section 3.06. REALIZATION UPON DEFAULTED MORTGAGE LOANS;  REPURCHASE OF
CERTAIN   MORTGAGE  LOANS.  The  Servicer  shall  foreclose  upon  or  otherwise
comparably  convert  to  ownership  Mortgaged  Properties  securing  such of the
Mortgage  Loans as come into and continue in default when, in the opinion of the
Servicer  based upon the practices and  procedures  referred to in the following
sentence, no satisfactory  arrangements can be made for collection of delinquent
payments  pursuant to Section  3.02;  PROVIDED  that if the  Servicer has actual
knowledge or  reasonably  believes  that any  Mortgaged  Property is affected by
hazardous  or toxic  wastes  or  substances  and that  the  acquisition  of such
Mortgaged Property would not be commercially reasonable,  then the Servicer will
not cause the Trust to acquire title to such Mortgaged Property in a foreclosure
or similar proceeding.  In connection with such foreclosure or other conversion,
the Servicer shall follow such practices (including,  in the case of any default
on a related  senior  mortgage  loan,  the  advancing  of funds to correct  such
default) and  procedures as it shall deem necessary or advisable and as shall be
normal and usual in its general mortgage servicing activities.  The foregoing is
subject to the proviso that the Servicer shall not be required to expend its own
funds in  connection  with any  foreclosure  or towards  the  correction  of any
default on a related senior  mortgage loan or restoration of any property unless
it shall determine that such expenditure will increase Net Liquidation Proceeds.

         In the event  that  title to any  Mortgaged  Property  is  acquired  in
foreclosure or by deed in lieu of  foreclosure,  the deed or certificate of sale
shall  be   issued   to  the   Trustee,   or  to  its   nominee   on  behalf  of
Certificateholders.

         The Servicer, in its sole discretion,  shall have the right to purchase
for its own account  from the Trust any  Mortgage  Loan which is 91 days or more
delinquent at a price equal to the purchase price described below. The price for
any Mortgage  Loan  purchased  hereunder  (which shall be calculated in the same
manner set forth in Section 2.02) shall be deposited in the  Collection  Account
and the Trustee,  upon receipt of a certificate from the Servicer in the form of
Exhibit L hereto,  shall  release or cause to be  released to the  Servicer  the
related Mortgage File and shall execute and deliver such instruments of transfer
or assignment prepared by the Servicer,  in each case without recourse, as shall
be necessary to vest in the  purchaser of such  Mortgage  Loan any Mortgage Loan
released  pursuant  hereto and the Servicer  shall  succeed to all the Trustee's
right,  title and  interest in and to such  Mortgage  Loan and all  security and
documents related thereto.  Such assignment shall be an assignment  outright and
not for security.  The Servicer shall  thereupon own such Mortgage Loan, and all
security and  documents,  free of any further  obligation  to the  Trustee,  the
Credit Enhancer or the Certificateholders with respect thereto.

                                       44
<PAGE>

         Section 3.07. TRUSTEE TO COOPERATE. On or before each Payment Date, the
Servicer  will notify the Trustee of the payment in full of the Asset Balance of
any Mortgage Loan during the preceding  Collection  Period,  which  notification
shall be by a certification  (which  certification  shall include a statement to
the effect that all amounts  received in connection  with such payment which are
required to be deposited in the Collection Account pursuant to Section 3.02 have
been so deposited or credited) of a Servicing Officer.  Upon any such payment in
full,  the  Servicer is  authorized  to execute,  pursuant to the  authorization
contained in Section 3.01, if the  assignments of Mortgage have been recorded as
required  hereunder,   an  instrument  of  satisfaction  regarding  the  related
Mortgage,  which instrument of satisfaction shall be recorded by the Servicer if
required by applicable law and be delivered to the Person entitled  thereto.  It
is  understood  and agreed that no expenses  incurred  in  connection  with such
instrument  of  satisfaction  or  transfer  shall  be  reimbursed  from  amounts
deposited  in the  Collection  Account.  If the Trustee is holding the  Mortgage
Files,  from time to time and as appropriate for the servicing or foreclosure of
any  Mortgage  Loan,  or in  connection  with the  payment  in full of the Asset
Balance of any Mortgage Loan,  the Trustee  shall,  upon request of the Servicer
and delivery to the Trustee of a Request for Release  substantially  in the form
attached hereto as Exhibit J signed by a Servicing Officer,  release the related
Mortgage File to the Servicer and the Trustee shall execute such  documents,  in
the forms provided by the Servicer,  as shall be necessary to the prosecution of
any such  proceedings  or the  taking of other  servicing  actions.  Such  trust
receipt  shall  obligate the Servicer to return the Mortgage File to the Trustee
when the need  therefor by the Servicer no longer unless the Mortgage Loan shall
be  liquidated,  in which case,  upon  receipt of a  certificate  of a Servicing
Officer  similar  to that  hereinabove  specified,  the trust  receipt  shall be
released by the Trustee or such Custodian to the Servicer.

         In order to facilitate  the  foreclosure  of the Mortgage  securing any
Mortgage Loan that is in default  following  recordation  of the  assignments of
Mortgage in accordance  with the provisions  hereof,  the Trustee  shall,  if so
requested in writing by the Servicer,  execute an appropriate  assignment in the
form  provided to the Trustee by the Servicer to assign such  Mortgage  Loan for
the purpose of  collection  to the Servicer or to the related  subservicer  (any
such  assignment  shall  unambiguously  indicate that the  assignment is for the
purpose of  collection  only),  and,  upon such  assignment,  the Servicer  will
thereupon bring all required  actions in its own name and otherwise  enforce the
terms of the Mortgage Loan and deposit the Net Liquidation  Proceeds,  exclusive
of Foreclosure Profits, received with respect thereto in the Collection Account.
In the event that all  delinquent  payments due under any such Mortgage Loan are
paid by the Mortgagor and any other defaults are cured,  then the Servicer shall
promptly  reassign  such  Mortgage  Loan to the  Trustee  and return the related
Mortgage File to the place where it was being maintained.

         Section 3.08.  SERVICING  COMPENSATION;  PAYMENT OF CERTAIN EXPENSES BY
SERVICER.  The Servicer  shall be entitled to receive the Servicing Fee pursuant
to Section 3.03 as  compensation  for its services in connection  with servicing
the Mortgage Loans.  Moreover,  additional servicing compensation in the form of
late  payment  charges or other  receipts  not  required to be  deposited in the
Collection  Account  (other than  Foreclosure  Profits) shall be retained by the
Servicer.  The Servicer shall be required to

                                       45
<PAGE>

pay all expenses  incurred by it in  connection  with its  activities  hereunder
(including payment of all other fees and expenses not expressly stated hereunder
to be for the  account of the  Certificateholders)  and shall not be entitled to
reimbursement  therefor  except as  specifically  provided  herein.  Liquidation
Expenses  are  reimbursable  to the  Servicer  solely from  related  Liquidation
Proceeds.

         (a) The Servicer shall deliver to the Trustee,  the Credit Enhancer and
each of the Rating Agencies,  promptly after having obtained  knowledge thereof,
but in no event later than five  Business  Days  thereafter,  written  notice by
means of an Officer's  Certificate  of any event which with the giving of notice
or the lapse of time or both, would become an Event of Servicing Termination.

         Section 3.09. ANNUAL STATEMENT AS TO COMPLIANCE.  (a) The Servicer will
deliver to the  Trustee,  the Credit  Enhancer  and the Rating  Agencies,  on or
before __________ of each year, beginning 200_, an Officer's Certificate stating
that (i) a review of the activities of the Servicer during the preceding  fiscal
year (or such shorter  period as is  applicable in the case of the first report)
and of its  performance  under this Agreement has been made under such officer's
supervision  and (ii) to the  best of such  officer's  knowledge,  based on such
review,  the Servicer has fulfilled all of its material  obligations  under this
Agreement  throughout  such fiscal year,  or, if there has been a default in the
fulfillment of any such  obligation,  specifying each such default known to such
officer and the nature and status thereof.

         Section 3.10.  ANNUAL SERVICING REPORT. On or before __________ of each
year,  beginning  200_,  the  Servicer,  at its  expense,  shall cause a firm of
nationally recognized  independent public accountants (who may also render other
services  to the  Servicer)  to  furnish a report  to the  Trustee,  the  Credit
Enhancer  and each  Rating  Agency to the  effect  that  such firm has  examined
certain documents and records relating to the servicing of mortgage loans during
the most recent fiscal year then ended under  pooling and  servicing  agreements
(substantially  similar to this  Agreement,  including this Agreement) that such
examination,  was conducted substantially in compliance with the audit guide for
audits of  non-supervised  mortgagees  approved by the Department of Housing and
Urban Development for use by independent  public accountants (to the extent that
the procedures in such audit guide are  applicable to the servicing  obligations
set forth in such  agreements) and that such  examination has disclosed no items
of noncompliance  with the provisions of this Agreement which, in the opinion of
such firm, are material,  except for such items of noncompliance as shall be set
forth in such report.

         Section 3.11.  ANNUAL  OPINION OF COUNSEL.  On or before  __________ of
each year,  beginning  200_,  each of the Transferor  and the Depositor,  at its
expense,  shall  deliver to the Trustee and the Credit  Enhancer the  applicable
Opinion of Counsel specified in Exhibit E hereto.

         Section 3.12. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING
THE MORTGAGE  LOANS.  (a) The Servicer shall provide to the Trustee,  the Credit
Enhancer, any Investor Certificateholders that are federally insured savings and
loan associations,  the Office of Thrift  Supervision,  successor to the Federal
Home Loan Bank Board, the FDIC

                                       46
<PAGE>

and the  supervisory  agents and  examiners of the Office of Thrift  Supervision
access to the documentation  regarding the Mortgage Loans required by applicable
regulations of the Office of Thrift Supervision and the FDIC (acting as operator
of the SAIF or the BIF), such access being afforded without charge but only upon
reasonable  request  and  during  normal  business  hours at the  offices of the
Servicer. Nothing in this Section 3.12 shall derogate from the obligation of the
Servicer to observe any  applicable  law  prohibiting  disclosure of information
regarding the  Mortgagors  and the failure of the Servicer to provide  access as
provided  in  this  Section  3.12  as a  result  of such  obligation  shall  not
constitute a breach of this Section 3.12.

         (b) The Servicer  shall supply  information in such form as the Trustee
shall  reasonably  request to the Trustee and the Paying Agent, on or before the
start of the  Determination  Date  preceding  the related  Payment  Date,  as is
required in the Trustee's  reasonable judgment to enable the Paying Agent or the
Trustee,  as the case may be, to make required  distributions and to furnish the
required reports to Certificateholders and to make any claim under the Policy.

         Section 3.13.  MAINTENANCE OF CERTAIN SERVICING INSURANCE POLICIES. The
Servicer shall during the term of its service as servicer  maintain in force (i)
a  policy  or  policies  of  insurance  covering  errors  and  omissions  in the
performance of its obligations as master servicer  hereunder and (ii) a fidelity
bond in respect  of its  officers,  employees  or  agents.  Each such  policy or
policies and bond together shall comply with the requirements  from time to time
of the Federal National Mortgage  Association for persons  performing  servicing
for mortgage loans purchased by such Association.

         Section 3.14.  REPORTS TO THE SECURITIES AND EXCHANGE  COMMISSION.  The
Trustee shall, on behalf of the Trust, cause to be filed with the Securities and
Exchange  Commission  any  periodic  reports  required  to be  filed  under  the
provisions of the Securities Exchange Act of 1934, as amended, and the rules and
regulations  of the  Securities  and Exchange  Commission  thereunder.  Upon the
request of the Trustee,  each of the Servicer,  the Depositor and the Transferor
shall cooperate with the Trustee in the preparation of any such report and shall
provide to the Trustee in a timely manner all such  information or documentation
as the Trustee may reasonably  request in connection with the performance of its
duties and obligations under this Section.

         Section 3.15. TAX RETURNS.  In accordance with Section 2.08 hereof, the
Trustee shall prepare and file any Federal,  state or local income and franchise
tax return for the Trust as well as any other applicable  return and apply for a
taxpayer  identification  number on behalf of the Trust.  The  Transferor  shall
treat the Mortgage  Loans as its  property  for all Federal,  state or local tax
purposes and shall report all income earned thereon  (including  amounts payable
as fees to the Servicer) as its income for income tax purposes. In the event the
Trust shall be required  pursuant to an audit or  administrative  proceeding  or
change in applicable  regulations  to file Federal,  state or local tax returns,
the Trustee  shall  prepare and file or shall cause to be prepared and filed any
tax returns  required to be filed by the Trust;  the Trustee shall promptly sign
such returns and deliver such returns  after  signature to the Servicer and such
returns shall be filed by the Servicer.  The Trustee shall also prepare or shall
cause to be prepared all tax information required

                                       47
<PAGE>

by law to be distributed to Investor  Certificateholders.  In no event shall the
Trustee or the Servicer be liable for any liabilities,  costs or expenses of the
Trust, the Investor Certificateholders, the Transferor Certificateholders or the
Certificate  Owners arising under any tax law,  including,  without  limitation,
Federal,  state or local  income and  franchise or excise taxes or any other tax
imposed on or  measured  by income (or any  interest  or  penalty  with  respect
thereto or arising from a failure to comply therewith).

         Section  3.16.  INFORMATION  REQUIRED BY THE INTERNAL  REVENUE  SERVICE
GENERALLY AND REPORTS OF FORECLOSURES  AND  ABANDONMENTS OF MORTGAGED  PROPERTY.
The Servicer shall prepare and deliver all federal and state information reports
when and as required by all  applicable  state and federal  income tax laws.  In
particular,  with respect to the requirement  under Section 6050J of the Code to
the effect that the Servicer shall make reports of foreclosures and abandonments
of any mortgaged  property for each year  beginning in 200_,  the Servicer shall
file reports relating to each instance  occurring  during the previous  calendar
year in which the Servicer (i) on behalf of the Trustee  acquires an interest in
any Mortgaged  Property through  foreclosure or other  comparable  conversion in
full or partial  satisfaction of a Mortgage Loan, or (ii) knows or has reason to
know that any  Mortgaged  Property  has been  abandoned.  The  reports  from the
Servicer  shall  be in form  and  substance  sufficient  to meet  the  reporting
requirements imposed by Section 6050J.

                                   ARTICLE IV

                              Servicing Certificate

         Section 4.01. SERVICING CERTIFICATE.  Not later than each Determination
Date,  the  Servicer  shall  deliver  (a)  to  the  Trustee,  the  Statement  to
Certificateholders  required to be prepared  pursuant to Section 5.03 and (b) to
the  Trustee,  the  Transferor,  the  Depositor,  the Paying  Agent,  the Credit
Enhancer and each Rating Agency a Servicing  Certificate (in written form or the
form of  computer  readable  media or such other form as may be agreed to by the
Trustee and the Servicer),  together with an Officer's Certificate to the effect
that such Servicing  Certificate  is true and correct in all material  respects,
stating the related  Collection  Period,  Payment Date, the series number of the
Certificates, the date of this Agreement, and:

                  (i)  the  aggregate  amount  of  collections  received  on the
         Mortgage Loans on or prior to the Determination Date in respect of such
         Collection Period;

                  (ii) the aggregate amount of (a) Interest  Collections and (b)
         Principal Collections for such Collection Period;

                  (iii) the  Investor  Floating  Allocation  Percentage  and the
         Investor Fixed Allocation Percentage for such Collection Period;

                  (iv)  the  Investor   Interest   Collections   and   Principal
         Collections  allocated to the Investor Certificates for such Collection
         Period;

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<PAGE>

                  (v)  the  Transferor   Interest   Collections  and  Transferor
         Principal Collections for such Collection Period;

                  (vi) Class A  Certificate  Interest,  the Class A  Certificate
         Rate and the Class S  Certificate  Interest  for the  related  Interest
         Period;

                  (vii) the amount, if any, of such Class A Certificate Interest
         or Class S  Certificate  Interest  that is not  payable  on  account of
         insufficient Investor Interest Collections;

                  (viii) the portion of the Unpaid Class A Certificate  Interest
         Shortfall  and the portion of the Unpaid Class S  Certificate  Interest
         Shortfall,  if any,  the amount of  interest on such  shortfall  at the
         Certificate Rate applicable from time to time (separately stated) to be
         distributed on such Payment Date;

                  (ix) the Unpaid Class A Certificate Interest Shortfall and the
         Unpaid Class S Certificate Interest Shortfall,  if any, to remain after
         the distribution on such Payment Date;

                  (x) the  Accelerated  Principal  Distribution  Amount  and the
         portion   thereof  that  will  be   distributed   pursuant  to  Section
         5.01(a)(viii);

                  (xi) the Scheduled Principal Collections  Distribution Amount,
         separately stating the components thereof;

                  (xii) the amount of any  Transfer  Deposit  Amount paid by the
         Transferor or the Depositor pursuant to Section 2.02 or 2.04;

                  (xiii) any  accrued  and unpaid  Servicing  Fees for  previous
         Collection Periods and the Servicing Fee for such Collection Period;

                  (xiv) the Investor Loss Amount for such Collection Period;

                  (xv) the aggregate  amount, if any, of Investor Loss Reduction
         Amounts  for  previous  Payment  Dates  that  have not been  previously
         reimbursed to Class A Certificateholders pursuant to 5.01(a)(vi);

                  (xvi)  the  Pool  Balance  as of  the  end  of  the  preceding
         Collection Period and as of the end of the second preceding  Collection
         Period;

                  (xvii)  the  Invested  Amount  as of the end of the  preceding
         Collection Period;

                  (xviii) the Class A Certificate Principal Balance, the Class S
         Notional Amount and Pool Factor after giving effect to the distribution
         on such  Payment  Date and to any  reduction on account of the Investor
         Loss Amount;

                                       49
<PAGE>

                  (xix) the Transferor  Principal Balance after giving effect to
         the distribution on such Payment Date;

                  (xx) the  aggregate  amount  of  Additional  Balances  created
         during the previous Collection Period;

                  (xxi) the number and  aggregate  Asset  Balances  of  Mortgage
         Loans (x) as to which the Minimum  Monthly  Payment is  delinquent  for
         30-59 days,  60-89 days and 90 or more days,  respectively and (y) that
         have become REO, in each case as of the end of the preceding Collection
         Period;

                  (xxii) whether a Rapid  Amortization  Event has occurred since
         the prior Determination  Date,  specifying each such Rapid Amortization
         Event if one has occurred;

                  (xxiii) whether an Event of Servicing Termination has occurred
         since the  prior  Determination  Date,  specifying  each such  Event of
         Servicing Termination if one has occurred;

                  (xxiv) the  amount to be  distributed  to the Credit  Enhancer
         pursuant to Section  5.01(a)(vii) and Section  5.01(a)(ix)(ii),  stated
         separately;

                  (xxv)  the  amount to be  distributed  to the  Spread  Account
         pursuant to Section 5.01(a)(ix)(i);

                  (xxvi) the Guaranteed  Principal  Distribution Amount for such
         Payment Date;

                  (xxvii) the Credit  Enhancement Draw Amount,  if any, for such
         Payment Date;

                  (xxviii)  the  amount  to be  distributed  to  the  Transferor
         pursuant to Section 5.01(a)(xi);

                  (xxix)  the  amount  to be paid to the  Servicer  pursuant  to
         Section 5.01(a)(x);

                  (xxx) the Maximum Rate for the related  Collection  Period and
         the Weighted Average Net Loan Rate;

                  (xxxi)  the total  amount of funds on  deposit  in the  Spread
         Account and the applicable Spread Account Maximum;

                  (xxxii) the  Overcollateralization  Amount after giving effect
         to the distribution to be made on such Distribution;

                  (xxxiii)  the number and  principal  balances of any  Mortgage
         Loans retransferred to the Transferor pursuant to Section 2.06;

                                       50
<PAGE>

                  (xxxiv) the amount of Principal Collections to be deposited in
         the Funding Account in respect of such Payment Date;

                  (xxxv) the amount on deposit in the Funding Account as of such
         Payment Date; and

                  (xxxvi) the aggregate of the Asset  Balances of the Subsequent
         Mortgage Loans purchased on the related Subsequent Transfer Dates.

The  Trustee  shall  conclusively  rely  upon  the  information  contained  in a
Servicing  Certificate for purposes of making distributions  pursuant to Section
5.01,  shall have no duty to  inquire  into such  information  and shall have no
liability in so relying. The format and content of the Servicing Certificate may
be modified by the mutual agreement of the Servicer,  the Trustee and the Credit
Enhancer.  The  Servicer  shall  give  notice of any such  change to the  Rating
Agencies.

         Section 4.02. CLAIMS UPON THE POLICY.  (a) If, by the close of business
on the third  Business Day prior to a Payment Date, the sum of the funds then on
deposit in the Collection  Account for the related  Collection  Period which are
payable to the Investor Certificateholders pursuant to Sections 5.01(a), (b) and
(g)  (after  giving  effect  to the  distribution  of the  Trustee  Fee  and the
Premium), the amounts on deposit in the Spread Account, amounts transferred from
the Funding Account to the Collection  Account pursuant to Sections  5.05(c)(ii)
and  5.05(c)(iii)(B)  and the  amount,  if any,  deposited  into the  Collection
Account  pursuant  to  Section  4.05  are  insufficient  to pay  the  Guaranteed
Distribution  on such Payment  Date,  then the Trustee  shall give notice to the
Credit  Enhancer by  telephone  or  telecopy  of the amount  equal to the Credit
Enhancement  Draw Amount.  Such notice of such sum shall be confirmed in writing
to the Credit  Enhancer  at or before  10:00  a.m.,  New York City time,  on the
second Business Day prior to such Payment Date.  Following receipt by the Credit
Enhancer of such notice in such form,  the Credit  Enhancer  will pay any amount
payable under the Policy on the later to occur of (i) 12:00 noon,  New York City
time, on the Business Day following  such receipt and (ii) 12:00 noon,  New York
City time, on the Payment Date to which such deficiency relates.

         (b) The Trustee shall keep a complete and accurate record of the amount
of interest  and  principal  paid in respect of any  Investor  Certificate  from
moneys  received under the Policy.  The Credit  Enhancer shall have the right to
inspect such records at reasonable  times during normal  business hours upon one
Business Day's prior notice to the Trustee.

         (c) The  Trustee  shall  promptly  notify  the Credit  Enhancer  of any
proceeding or the institution of any action,  of which a Responsible  Officer of
the  Trustee  has actual  knowledge,  seeking the  avoidance  as a  preferential
transfer under applicable bankruptcy, insolvency, receivership or similar law (a
"PREFERENCE  CLAIM")  of any  distribution  made with  respect  to the  Investor
Certificates.   Each  Investor   Certificateholder   by  its  purchase  of  such
Certificates,  the  Servicer  and the  Trustee  hereby  agree  that,  the Credit
Enhancer (so long as no Credit  Enhancer  Default exists) may at any time during
the  continuation  of any proceeding  relating to a Preference  Claim direct all
matters relating to such

                                       51
<PAGE>

         Preference Claim, including,  without limitation,  (i) the direction of
any appeal of any order relating to such  Preference  Claim and (ii) the posting
of any surety,  supersedeas  or  performance  bond pending any such  appeal.  In
addition and without  limitation of the foregoing,  the Credit Enhancer shall be
subrogated  to  the  rights  of  the  Servicer,   the  Trustee,   each  Investor
Certificateholder  in the  conduct  of any  such  Preference  Claim,  including,
without  limitation,  all rights of any party to an adversary  proceeding action
with respect to any court order issued in  connection  with any such  Preference
Claim.

         Section  4.03.  SPREAD  ACCOUNT.  (a) The Trustee  shall  establish and
maintain a separate trust account (the "SPREAD ACCOUNT") titled  "[Trustee],  as
Trustee,  in trust for the  registered  holders of Home Equity Loan Asset Backed
Certificates,  Series 200_-_." The Spread Account shall be an Eligible  Account.
Amounts  on  deposit  in  the  Spread  Account  will,  at the  direction  of the
Transferor,  be invested in Eligible  Investments maturing no later than the day
before the next Payment Date.

         All income and gain realized from any investment of funds in the Spread
Account shall be for the benefit of the  Transferor  and shall be subject to its
withdrawal  from time to time.  The amount of any losses  incurred in respect of
the principal  amount of any such  investments  shall be deposited in the Spread
Account by the Transferor out of its own funds immediately as realized.

         (b) On each  Determination  Date the Trustee  shall  determine  (i) the
extent to which Investor Interest Collections and the amounts, if any, deposited
into the  Collection  Account  pursuant  to  Section  4.05  applied in the order
specified in Section 5.01(a) are insufficient to make  distributions as provided
in  clauses  (iii),  (iv) and (v) of  Section  5.01(a)  and (ii) the  Guaranteed
Principal Distribution Amount for the related Payment Date. On each Payment Date
the  Trustee  shall  withdraw  from the  Spread  Account  and  deposit  into the
Collection Account the lesser of the amount on deposit in the Spread Account and
an amount equal to the sum of the amounts, if any, determined in clauses (i) and
(ii) of the preceding sentence.

         (c) Following the termination of the Trust pursuant to Section 10.01 or
11.02  hereof,  the Trustee  shall  withdraw  all amounts then on deposit in the
Spread Account and distribute such amounts first to any amounts due and owing to
the Credit  Enhancer  and then to the  Transferor.  If on any  Payment  Date the
amount on deposit in the Spread Account exceeds the Spread Account Maximum,  the
Trustee shall withdraw such excess and distribute it to the Transferor.

         Section 4.04.  EFFECT OF PAYMENTS BY THE CREDIT ENHANCER;  SUBROGATION.
Anything  herein to the  contrary  notwithstanding,  any payment with respect to
principal of or interest on any of the Investor  Certificates which is made with
moneys  received  pursuant  to the terms of the Policy  shall not be  considered
payment of such Investor Certificates from the Trust and shall not result in the
payment of or the  provision  for the payment of the principal of or interest on
such Investor  Certificates  within the meaning of Section 5.01.  The Depositor,
the Servicer and the Trustee  acknowledge,  and each Holder by its acceptance of
an Investor  Certificate agrees, that without the need for any further action on
the part of the Credit Enhancer, the Depositor, the Servicer, the Trustee or the

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<PAGE>

Certificate  Registrar  (a) to the extent the Credit  Enhancer  makes  payments,
directly or  indirectly,  on account of principal of or interest on any Investor
Certificates  to the Holders of such  Certificates,  the Credit Enhancer will be
fully  subrogated  to the rights of such Holders to receive such  principal  and
interest from the Trust and (b) the Credit Enhancer shall be paid such principal
and interest but only from the sources and in the manner provided herein for the
payment of such principal and interest.

         The Trustee and the Servicer  shall  cooperate in all respects with any
reasonable  request by the Credit Enhancer for action to preserve or enforce the
Credit  Enhancer's rights or interests under this Agreement without limiting the
rights or affecting the interests of the Holders as otherwise set forth herein.

                                   ARTICLE V

                             Payments and Statements
               to Certificateholders; Rights of Certificateholders

         Section 5.01.  DISTRIBUTIONS.  (a)  DISTRIBUTIONS OF INVESTOR  INTEREST
COLLECTIONS  AND  INVESTMENT  PROCEEDS.  Subject  to Section  11.02(b),  on each
Payment  Date,  the  Trustee  or the  Paying  Agent,  as the case may be,  shall
distribute out of the Collection  Account to the extent of (x) Investor Interest
Collections  collected  during the related  Collection  Period,  (y) the amounts
transferred from the Funding Account pursuant to Section  5.05(c)(i) and (z) the
amounts  transferred  from the Spread Account as determined  pursuant to Section
4.03(b),  the following  amounts and in the  following  order of priority to the
following  Persons  (based  on  the  information  set  forth  in  the  Servicing
Certificate):

                  (i) the Trustee Fee for such Payment Date to the Trustee;

                  (ii) the premium  pursuant to the  Insurance  Agreement to the
         Credit Enhancer;

                  (iii) the Class A  Certificate  Interest for such Payment Date
         to the Class A  Certificateholders  and the Unpaid Class A  Certificate
         Interest  Shortfall,  if any,  for  such  Payment  Date to the  Class A
         Certificateholders  plus, to the extent legally  permissible,  interest
         thereon at the Class A Certificate Rate;

                  (iv) the Class S Certificate Interest for such Payment Date to
         the  Class S  Certificateholders  and the  Unpaid  Class S  Certificate
         Interest  Shortfall,  if any, for such Payment Date plus, to the extent
         legally permissible, interest thereon at the Class S Certificate Rate;

                  (v) the Investor Loss Amount for such Collection Period to the
         Class A  Certificateholders  as  principal  in reduction of the Class A
         Certificate Principal Balance;

                  (vi) to Class A  Certificateholders  as principal in reduction
         of the Class A Certificate  Principal  Balance the aggregate  amount of
         the Investor Loss

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<PAGE>

         Reduction  Amounts,  if any, for previous  Payment  Dates that have not
         been previously  reimbursed to Class A  Certificateholders  pursuant to
         this clause (vi);

                  (vii)  to  reimburse  the  Credit   Enhancer  for   previously
         unreimbursed  Credit  Enhancement  Draw Amounts  together with interest
         thereon at the applicable rate set forth in the Insurance Agreement;

                  (viii) the Accelerated Principal  Distribution Amount, if any,
         to the Class A Certificateholders;

                  (ix) (i) to the Trustee to deposit to the Spread Account up to
         the Spread  Account  Maximum  and (ii) to the Credit  Enhancer  for any
         amounts  owed  to  the  Credit  Enhancer   pursuant  to  the  Insurance
         Agreement;

                  (x) the  amount,  if any,  of any Unpaid  Class A  Certificate
         Carry Forward Interest Amount to the Class A Certificates;

                  (xi) any amount  required to be paid to the Servicer  pursuant
         to Section 7.03 which has not been previously paid to the Servicer; and

                  (xii) any remaining amount to the Transferor.

         (b) DISTRIBUTION OF PRINCIPAL COLLECTIONS.  On each Payment Date during
the Funding Period,  the Scheduled  Principal  Collections  Distribution  Amount
shall be deposited into the Funding  Account and shall not be distributed to the
Class A  Certificateholders.  On each Payment Date following the  termination of
the Funding Period, the Trustee shall, subject to Section 11.02(b) and except on
the Payment Date in __________ 200_, distribute out of the Collection Account to
the Class a Certificateholders the Scheduled Principal Collections  Distribution
Amount  (together with amounts  transferred  to the Collection  Account from the
Spread Account  pursuant to Section 4.03(b)  relating to principal up to but not
in excess of the Class A  Certificate  Principal  Balance.  In addition,  on the
first Payment Date  following the end of the Funding  Period,  the Trustee shall
distribute  out  of  the  Collection  Account  the  amount  required  to  be  so
distributed  pursuant  to  Section  5.05(c)(iii)(C).  On  the  Payment  Date  in
__________  200_,  the Trustee shall  distribute  to Class A  Certificateholders
Principal Collections up to the Class A Certificate Principal Balance.

         (c) APPLICATION OF TRANSFEROR  SUBORDINATED  AMOUNT. If, after applying
Class a Interest  Collections as provided in Section 5.01(a) above,  any amounts
specified in clauses (i) through (vi) remain unpaid, the Trustee shall, based on
information set forth in the Servicing  Certificate for such Payment Date, apply
Transferor Available Funds to make such payments and the Transferor Subordinated
Amount shall be reduced in accordance with clause (i) of the definition  thereof
to the extent of such application.  If Transferor Available Funds applied in the
order  specified  in Section  5.01(a) are  insufficient  to cover the  aggregate
Investor  Loss  Amount  for such  Payment  Date,  then the  remaining  aggregate
Investor  Loss  Amount  (but  only to the  extent  of the  remaining  Transferor
Subordinated  Amount) shall be reallocated to the Transferor  Principal  Balance
(after  giving effect to the  Transferor's  portion of the Investor Loss Amount)
and  shall  not

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<PAGE>

be allocated to the Class A Certificates and the Transferor  Subordinated Amount
shall be reduced,  as described in clause (ii) of the definition thereof, by the
amount so reallocated.

         (d) DISTRIBUTION OF THE CREDIT ENHANCEMENT DRAW AMOUNT. With respect to
any Payment Date, to the extent that Investor  Interest  Collections and amounts
transferred  from the Spread  Account on the related  Payment Date in respect of
the amount determined  pursuant to Section  4.03(b)(i) and any amounts,  if any,
deposited  to the  Collection  Account  pursuant to Section  4.05 applied in the
order specified in Section 5.01(a) are  insufficient  to make  distributions  as
provided in clauses (iii) and (iv) of Section  5.01(a)  above,  the Trustee will
make such  payments  (the  "DEFICIENCY  AMOUNT") from the amount drawn under the
Policy for such Payment Date pursuant to Section  4.02.  For any Payment Date as
to which there is a Guaranteed Principal  Distribution Amount, the Trustee shall
distribute the Guaranteed  Principal  Distribution Amount to  Certificateholders
from the amount drawn under the Policy for such Payment Date pursuant to Section
4.02.

         The  aggregate   amount  of  principal   distributed  to  the  Class  A
Certificateholders  under this  Agreement  shall not exceed the Original Class A
Certificate Principal Balance.

         (e) METHOD OF  DISTRIBUTION.  The Trustee shall make  distributions  in
respect of a Payment Date to each  Investor  Certificateholder  of record on the
related  Record Date (other than as  provided in Section  10.01  respecting  the
final   distribution)   by  check  or  money  order  mailed  to  such   Investor
Certificateholder at the address appearing in the Certificate  Register, or upon
written  request by an Investor  Certificateholder  delivered  to the Trustee at
least five  Business  Days prior to such Record Date, by wire transfer (but only
if such  Certificateholder is the Depository or such  Certificateholder  owns of
record  one  or  more  Investor  Certificates  having  principal   denominations
aggregating  at least  $1,000,000),  or by such  other  means of payment as such
Investor  Certificateholder  and the Trustee  shall agree.  Distributions  among
Investor  Certificateholders  shall  be made  in  proportion  to the  Percentage
Interests  evidenced  by  the  Investor   Certificates  held  by  such  Investor
Certificateholders.

         (f)  DISTRIBUTIONS ON BOOK-ENTRY  CERTIFICATES.  Each distribution with
respect to a Book-Entry Certificate shall be paid to the Depository, which shall
credit  the  amount  of such  distribution  to the  accounts  of its  Depository
Participants  in  accordance  with  its  normal   procedures.   Each  Depository
Participant  shall  be  responsible  for  disbursing  such  distribution  to the
Certificate  Owners  that  it  represents  and to  each  indirect  participating
brokerage firm (a "BROKERAGE FIRM" or "INDIRECT  PARTICIPATING  FIRM") for which
it acts as agent.  Each brokerage firm shall be responsible for disbursing funds
to the Certificate Owners that it represents. All such credits and disbursements
with respect to a Book-Entry  Certificate  are to be made by the  Depository and
the Depository  Participants  in accordance  with the provisions of the Investor
Certificates.  None of the Trustee, the Paying Agent, the Certificate Registrar,
the Depositor, the Credit Enhancer or the Servicer shall have any responsibility
therefor except as otherwise provided by applicable law.

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<PAGE>

         (g)  DISTRIBUTIONS  TO  HOLDERS  OF  TRANSFEROR  CERTIFICATES.  On each
Payment Date, the Trustee  shall,  based upon the  information  set forth in the
Servicing  Certificate  for such Payment Date,  distribute to the Transferor (i)
the Transferor  Interest  Collections for the related Collection Period and (ii)
the  portion,  if any,  of  Transferor  Principal  Collections  for the  related
Collection  Period  in  excess  of  Additional   Balances  created  during  such
Collection  Period to the extent such amounts are not required to be distributed
to the Class A  Certificateholders  pursuant to Section  5.01(c);  PROVIDED that
collections allocable to the Transferor  Certificates will be distributed to the
Transferor only to the extent that such  distribution will not reduce the amount
of the  Transferor  Principal  Balance as of the related  Payment Date below the
Minimum Transferor  Interest.  Amounts not distributed to the Transferor because
of such  limitations  will be  retained  in the  Collection  Account  until  the
Transferor Principal Balance exceeds the Minimum Transferor  Interest,  at which
time such excess  shall be released to the  Transferor.  If any such amounts are
still  retained in the  Collection  Account upon the  commencement  of the Rapid
Amortization Period, such amounts will be paid to the Class A Certificateholders
as a reduction of the Class A Certificate Principal Balance.

         Section  5.02.  CALCULATION  OF THE CLASS A  CERTIFICATE  RATE.  On the
second LIBOR Business Day  immediately  preceding each Payment Date, the Trustee
shall determine  LIBOR for the Interest  Period  commencing on such Payment Date
and  inform  the  Servicer  (at the  facsimile  number  given to the  Trustee in
writing) of such rates. On each Determination  Date, the Trustee shall determine
the applicable Class A Certificate Rate for the related Payment Date.

         Section 5.03. STATEMENTS TO CERTIFICATEHOLDERS.  Concurrently with each
distribution to Investor  Certificateholders,  the Trustee shall forward to each
Investor  Certificateholder,  the  Servicer  and each Rating  Agency a statement
prepared  by the  Servicer  pursuant  to  Section  4.01  with  respect  to  such
distribution setting forth:

                  (i)  the  Investor  Floating  Allocation  Percentage  for  the
         preceding Collection Period;

                  (ii) the Class A Certificate Distribution Amount;

                  (iii)  the  amount  of Class A  Certificate  Interest  in such
         distribution,  the  related  Class A  Certificate  Rate and the Class S
         Certificate Interest;

                  (iv) the  amount,  if any, of any Unpaid  Class A  Certificate
         Interest Shortfall or any Unpaid Class S Certificate Interest Shortfall
         in such distribution;

                  (v)  the  amount,  if any,  of the  remaining  Unpaid  Class A
         Certificate   Interest   Shortfall   after   giving   effect   to  such
         distribution;

                  (vi) the amount,  if any, of principal  in such  distribution,
         separately stating the components thereof;

                  (vii) the  amount,  if any, of the  reimbursement  of previous
         Investor Loss Reduction Amounts in such distribution;

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<PAGE>

                  (viii) the amount,  if any, of the  aggregate of  unreimbursed
         Investor   Loss   Reduction   Amounts   after  giving  effect  to  such
         distribution;

                  (ix) the Servicing Fee for such Payment Date;

                  (x) the Invested  Amount,  the Class A  Certificate  Principal
         Balance  and  the  Pool  Factor,  each  after  giving  effect  to  such
         distribution;

                  (xi)  the  Pool  Balance  as  of  the  end  of  the  preceding
         Collection  Period  and the  aggregate  of the  Asset  Balances  of the
         Mortgage  Loans at the close of business on the last day of the related
         Collection Period;

                  (xii) the Credit Enhancement Draw Amount, if any;

                  (xiii) the number and  aggregate  Asset  Balances  of Mortgage
         Loans as to which the Minimum  Monthly  Payment is delinquent for 30-59
         days,  60-89 days and 90 or more days,  respectively,  as of the end of
         the preceding Collection Period;

                  (xiv) the book value (within the meaning of 12 C.F.R.  Section
         571.13 or  comparable  provision) of any real estate  acquired  through
         foreclosure or grant of a deed in lieu of foreclosure;

                  (xv)  the  Class  A   Certificate   Rate   applicable  to  the
         distribution on the following Payment Date;

                  (xvi) the number and principal  balances of any Mortgage Loans
         retransferred  to the  Transferor  pursuant to (a) Section 2.04 and (b)
         Section 2.06;

                  (xvii)  the  amount of  Transferor  Available  Funds,  if any,
         included in such distribution; and

                  (xviii) the Transferor  Subordinated  Amount for the following
         Payment Date.

         In the case of information furnished pursuant to clauses (ii), (iii) in
respect of Class A  Certificate  Interest,  (iv) and (viii)  above,  the amounts
shall be expressed as a dollar  amount per  Investor  Certificate  with a $1,000
denomination.

         Within 60 days after the end of each calendar  year, the Servicer shall
prepare or cause to be prepared and shall forward to the Trustee the information
set forth in clauses (iii) and (vi) above  aggregated  for such  calendar  year.
Such  obligation of the Servicer  shall be deemed to have been  satisfied to the
extent  that  substantially  comparable  information  shall be  provided  by the
Servicer or a Paying Agent pursuant to any requirements of the Code.

         The  Trustee  shall  prepare  or  cause  to be  prepared  (in a  manner
consistent with the treatment of the Class A Certificates as indebtedness of the
Transferor,  or as may be

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<PAGE>

otherwise  required by Section 3.15) Internal  Revenue Service Form 1099 (or any
successor  form) and any other tax forms  required to be filed or  furnished  to
Certificateholders  in respect of  distributions  by the  Trustee (or the Paying
Agent) on the Class A Certificates  and shall file and distribute  such forms as
required by law.

         Section 5.04. RIGHTS OF  CERTIFICATEHOLDERS.  The Investor Certificates
shall  represent  fractional  undivided  interests in the Trust,  including  the
benefits of the Collection  Account and the right to receive  Investor  Interest
Collections,  Principal Collections,  if any, and other amounts at the times and
in the amounts specified in this Agreement;  the Transferor  Certificates  shall
represent  the remaining  interest in the Trust (other than the Spread  Account,
the Policy and the Funding Account).

         Section 5.05.  FUNDING  ACCOUNT.  (a) The Trustee  shall  establish and
maintain with itself a separate trust account (the "FUNDING  ACCOUNT")  entitled
"[Trustee] as Trustee,  in trust for the registered  holders of Home Equity Loan
Asset Backed  Certificates,  Series 200_-_ Funding Account." The Funding Account
shall be an Eligible  Account.  On each Payment Date during the Funding  Period,
the  Trustee  shall  withdraw  from the  Collection  Account  and deposit to the
Funding Account the Scheduled Principal Collections Distribution Amount for such
Payment Date.

         (b) The  Servicer  may cause the  institution  maintaining  the Funding
Account to invest any funds in the Funding Account in Eligible Investments which
shall  mature or  otherwise  be  available  not later than the Business Day next
preceding the Payment Date or, with the approval of the Credit  Enhancer and the
Rating Agencies,  on the Payment Date next following the date of such investment
(except that any investment in an obligation of the  institution  with which the
Funding Account is maintained may mature on or before 12:00 noon, New York time,
on such  Payment  Date)  and  shall  not be sold or  disposed  of  prior  to its
maturity.  At any time when the Trustee is maintaining the Funding Account,  any
request by the Servicer to invest funds on deposit in the Funding  Account shall
be in writing,  shall be delivered  to the Trustee at or before 10:30 a.m.,  New
York time, if such  investment is to be made on such day, and shall certify that
the requested  investment is an Eligible Investment which matures at or prior to
the time required hereby. Any such investment shall be registered in the name of
the  Trustee  as trustee  hereunder  or in the name of its  nominee,  and to the
extent  such  investments  are  certificated  they  shall be  maintained  in the
possession of the Trustee in the state of its Corporate Trust Office. All income
and gain  realized  from any such  investment  shall be for the  benefit  of the
Investor  Certificateholders  and shall be subject to  withdrawal by the Trustee
for  distribution to the Investor  Certificateholders  as provided in subsection
(c)(i)  below.  The amount of any losses  incurred  in respect of the  principal
amount of any such  investment  shall be deposited in the Funding Account by the
Servicer out of its own funds immediately as realized.  Any investment  earnings
on the Funding  Account shall be treated as owned by the  Transferor for federal
and state income tax purposes.

         (c)  From  time to time  withdrawals  shall be made  from  the  Funding
Account by the Trustee as follows:

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<PAGE>

                  (i) on each Payment Date during the Funding Period, to deposit
         to the Collection Account all income realized from Eligible Investments
         during the related Interest Period on Principal  Collections on deposit
         in  the  Funding  Account  for   distribution   as  Investor   Interest
         Collections in accordance with Section 5.01(a);

                  (ii) on each  Payment  Date  prior  to the last  Payment  Date
         during  the  Funding  Period,  any  amounts  in  respect  of  Principal
         Collections  on deposit in the Funding  Account  shall be withdrawn and
         applied to purchase the Subsequent Mortgage Loans, if any,  transferred
         to the Trust pursuant to Section 2.10; and

                  (iii) on the last  Payment  Date of the  Funding  Period,  any
         amounts in respect of Principal  Collections  on deposit in the Funding
         Account shall be withdrawn and applied in the following order:

                           (A) to purchase the  Subsequent  Mortgage  Loans,  if
                  any, transferred to the Trust pursuant to Section 2.10;

                           (B) to the  Transferor,  in  payment  for  Additional
                  Balances,  in a maximum amount equal to the excess, if any, of
                  the  aggregate of Draws during the related  Collection  Period
                  over Principal  Collections  received  during such  Collection
                  Period; and

                           (C) to the Collection Account,  any remaining amounts
                  on deposit  in the  Funding  Account  in respect of  Principal
                  Collections,    for    distribution    to    the    Class    A
                  Certificateholders pursuant to Section 5.01(b).

                                   ARTICLE VI

                                The Certificates

         Section 6.01. THE CERTIFICATES.  The Class A Certificates,  Class S and
Transferor  Certificates  shall  be  substantially  in the  forms  set  forth in
Exhibits  A-1,  A-2 and B,  respectively,  and  shall,  on  original  issue,  be
executed, authenticated and delivered by the Trustee to or upon the order of the
Depositor concurrently with the sale and assignment to the Trustee of the Trust.
The  Class  A  Certificates  shall  be  initially   evidenced  by  one  or  more
certificates  representing  the entire  Original  Class A Certificate  Principal
Balance  and  shall  be held in  minimum  dollar  denominations  of  $1,000  and
multiples of one dollar in excess  thereof,  except that one Class A Certificate
may  be  in a  denomination  of  less  than  $1,000  so  that  the  sum  of  the
denominations of all outstanding  Class A Certificates  shall equal the Original
Class A  Certificate  Principal  Balance.  The  Class S  Certificates  shall  be
initially evidenced by one or more certificates representing the entire original
Class S Notional Amount and shall be held in minimum  notional amounts of $1,000
and  multiples  of one  dollar  in  excess  thereof,  except  that  one  Class S
Certificate  may be in a notional  amount of less than $1,000 so that the sum of
the denominations of all outstanding Class S Certificates  shall equal the Class
S Notional  Amount on the Closing Date.  The  Transferor  Certificates  shall be
issuable as one or more  certificates

                                       59
<PAGE>

representing  the entire  interest  in the  assets of the Trust  other than that
represented by the Investor  Certificates  and shall  initially be issued to the
Transferor.

         The Certificates shall be executed by manual or facsimile  signature on
behalf of the Trustee by an authorized officer under its seal imprinted thereon.
Certificates bearing the manual or facsimile signatures of individuals who were,
at the time when such signatures  were affixed,  authorized to sign on behalf of
the Trustee shall bind the Trust,  notwithstanding  that such individuals or any
of them have ceased to be so authorized prior to the authentication and delivery
of such Transferor Certificates or did not hold such offices at the date of such
Transferor  Certificate.  No Certificate  shall be entitled to any benefit under
this Agreement,  or be valid for any purpose, unless such Certificate shall have
been manually  authenticated  by the Trustee  substantially in the form provided
for herein,  and such  authentication  upon any Certificate  shall be conclusive
evidence,   and  the  only  evidence,   that  such  Certificate  has  been  duly
authenticated and delivered hereunder.  All Certificates shall be dated the date
of their  authentication.  Subject to Section 6.02(c), the Investor Certificates
shall be  Book-Entry  Certificates.  The  Transferor  Certificates  shall not be
Book-Entry Certificates.

         Section  6.02.  REGISTRATION  OF  TRANSFER  AND  EXCHANGE  OF  INVESTOR
CERTIFICATES;  APPOINTMENT OF REGISTRAR.  (a) The  Certificate  Registrar  shall
cause to be kept at the Corporate Trust Office a Certificate  Register in which,
subject to such  reasonable  regulations  as it may prescribe,  the  Certificate
Registrar  shall provide for the  registration of Investor  Certificates  and of
transfers and exchanges of Investor Certificates as herein provided. The Trustee
shall  initially  serve as Certificate  Registrar for the purpose of registering
Investor  Certificates  and transfers and exchanges of Investor  Certificates as
herein provided.

         Upon surrender for registration of transfer of any Investor Certificate
at any office or agency of the Certificate Registrar maintained for such purpose
pursuant to the  foregoing  paragraph,  the Trustee on behalf of the Trust shall
execute,  authenticate and deliver, in the name of the designated  transferee or
transferees,  one or  more  new  Investor  Certificates  of the  same  aggregate
Percentage Interest.

         At the option of the Investor Certificateholders, Investor Certificates
may be exchanged for other Investor Certificates in authorized denominations and
the  same  aggregate  Percentage  Interests,  upon  surrender  of  the  Investor
Certificates to be exchanged at any such office or agency. Whenever any Investor
Certificates  are so  surrendered  for  exchange,  the Trustee shall execute and
authenticate   and  deliver  the  Investor   Certificates   which  the  Investor
Certificateholder  making the  exchange is entitled to receive.  Every  Investor
Certificate  presented  or  surrendered  for  transfer or exchange  shall (if so
required by the Trustee or the Certificate Registrar) be duly endorsed by, or be
accompanied  by a written  instrument  of transfer in form  satisfactory  to the
Trustee and the  Certificate  Registrar  duly executed by, the Holder thereof or
his attorney duly authorized in writing.

         (b)  Except  as  provided  in  paragraph  (c)  below,   the  Book-Entry
Certificates  shall at all times remain registered in the name of the Depository
or its nominee and at all

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<PAGE>

times: (i)  registration of the Investor  Certificates may not be transferred by
the Trustee except to another  Depository;  (ii) the  Depository  shall maintain
book-entry  records with respect to the  Certificate  Owners and with respect to
ownership  and  transfers of such  Investor  Certificates;  (iii)  ownership and
transfers  of  registration  of the  Investor  Certificates  on the books of the
Depository shall be governed by applicable rules  established by the Depository;
(iv) the  Depository  may  collect  its usual and  customary  fees,  charges and
expenses from its Depository  Participants;  (v) the Trustee shall deal with the
Depository  as  representative  of  the  Certificate   Owners  of  the  Investor
Certificates  for  purposes  of  exercising  the  rights of  Holders  under this
Agreement,  and requests  and  directions  for and votes of such  representative
shall  not be  deemed  to be  inconsistent  if they are  made  with  respect  to
different  Certificate  Owners; and (vi) the Trustee may rely and shall be fully
protected in relying upon  information  furnished by the Depository with respect
to its Depository Participants and furnished by the Depository Participants with
respect to indirect  participating  firms and Persons shown on the books of such
indirect participating firms as direct or indirect Certificate Owners.

         All transfers by Certificate Owners of Book-Entry Certificates shall be
made in accordance with the procedures established by the Depository Participant
or  brokerage  firm  representing  such  Certificate   Owners.  Each  Depository
Participant shall only transfer  Book-Entry  Certificates of Certificate  Owners
that it  represents  or of  brokerage  firms  for  which  it acts  as  agent  in
accordance  with the  Depository's  normal  procedures.  The parties  hereto are
hereby authorized to execute a Letter of Representations  with the Depository or
take such other action as may be necessary or desirable to register a Book-Entry
Certificate to the Depository. In the event of any conflict between the terms of
any such Letter of Representation and this Agreement the terms of this Agreement
shall control.

         (c) If (i)(x) the  Depository or the  Depositor  advises the Trustee in
writing that the Depository is no longer  willing or able to discharge  properly
its  responsibilities  as  Depository,  and (y) the Trustee or the  Depositor is
unable to locate a qualified successor,  (ii) the Depositor, at its sole option,
with the consent of the  Trustee,  elects to  terminate  the  book-entry  system
through the  Depository  or (iii) after the  occurrence of an Event of Servicing
Termination, the Depository, at the direction of Certificate Owners representing
Percentage  Interests  aggregating  not less than 51%  advises  the  Trustee  in
writing that the  continuation of a book-entry  system through the Depository to
the  exclusion  of  definitive,  fully  registered  Investor  Certificates  (the
"DEFINITIVE  CERTIFICATES")  to  Certificate  Owners  is no  longer  in the best
interests of the Certificate Owners. Upon surrender to the Certificate Registrar
of the Investor  Certificates  by the  Depository,  accompanied by  registration
instructions from the Depository for registration, the Trustee shall execute and
authenticate the Definitive Certificates.  Neither the Depositor nor the Trustee
shall  be  liable  for  any  delay  in  delivery  of such  instructions  and may
conclusively  rely on, and shall be protected in relying on, such  instructions.
Upon  the  issuance  of  Definitive  Certificates,   all  references  herein  to
obligations imposed upon or to be performed by the Depository shall be deemed to
be imposed  upon and  performed by the Trustee,  to the extent  applicable  with
respect  to such  Definitive  Certificates,  and the  Trustee,  the  Certificate
Registrar,  the Servicer and the

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Depositor  shall  recognize  the  Holders  of  the  Definitive  Certificates  as
Certificateholders hereunder.

         No service  charge  shall be made for any  registration  of transfer or
exchange of Investor  Certificates,  but the  Certificate  Registrar may require
payment of a sum sufficient to cover any tax or governmental  charge that may be
imposed in connection with any transfer or exchange of Certificates.

         All Investor  Certificates  surrendered for registration of transfer or
exchange  shall be  cancelled  by the  Certificate  Registrar  and  disposed  of
pursuant to its standard procedures.

         Section 6.03. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. If (i)
any mutilated  Certificate is surrendered  to the  Certificate  Registrar or the
Certificate  Registrar receives evidence to its satisfaction of the destruction,
loss or theft of any  Certificate,  and (ii) there is  delivered to the Trustee,
the Depositor and the Certificate Registrar such security or indemnity as may be
required by them to save each of them  harmless,  then, in the absence of notice
to the  Trustee or the  Certificate  Registrar  that such  Certificate  has been
acquired by a bona fide purchaser,  the Trustee shall execute,  authenticate and
deliver,  in exchange for or in lieu of any such mutilated,  destroyed,  lost or
stolen  Certificate,  a new  Certificate of like tenor and Percentage  Interest.
Upon the issuance of any new Certificate under this Section 6.03, the Trustee or
the  Certificate  Registrar may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto and
any other  expenses  (including  the fees and  expenses  of the  Trustee and the
Certificate  Registrar)  connected therewith.  Any duplicate  Certificate issued
pursuant to this  Section  6.03,  shall  constitute  complete  and  indefeasible
evidence of ownership in the Trust, as if originally issued,  whether or not the
lost, stolen or destroyed Certificate shall be found at any time.

         Section 6.04.  PERSONS DEEMED OWNERS.  Prior to due  presentation  of a
Certificate  for  registration  of transfer,  the Servicer,  the Depositor,  the
Trustee,  the  Certificate  Registrar,  any  Paying  Agent  and any agent of the
Servicer,  the  Depositor,  the  Trustee,  any Paying  Agent or the  Certificate
Registrar  may treat the  Person,  including  a  Depository,  in whose  name any
Certificate  is registered as the owner of such  Certificate  for the purpose of
receiving  distributions  pursuant  to Section  5.01 and for all other  purposes
whatsoever,   and  none  of  the  Servicer,  the  Depositor,  the  Trustee,  the
Certificate  Registrar,  any  Paying  Agent or any agent of any of them shall be
affected by notice to the contrary.

         Section 6.05. RESTRICTIONS ON TRANSFER OF TRANSFEROR CERTIFICATES.  (a)
The Transferor Certificates shall be assigned, transferred,  exchanged, pledged,
financed, hypothecated or otherwise conveyed (collectively, for purposes of this
Section 6.05 and any other  Section  referring to the  Transferor  Certificates,
"transferred" or a "transfer") only in accordance with this Section 6.05.

         (b) No transfer of a Transferor  Certificate  shall be made unless such
transfer is exempt from the  registration  requirements of the Securities Act of
1933,  as  amended,

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and any applicable  state securities laws or is made in accordance with said Act
and laws.  Except for the initial issuance of the Transferor  Certificate to the
Transferor,  the  Trustee  shall  require  (i)  the  transferee  to  execute  an
investment  letter  acceptable to and in form and substance  satisfactory to the
Trustee  certifying to the Trustee the facts  surrounding  such transfer,  which
investment  letter  shall  not be an  expense  of the  Trustee  or  (ii)  if the
investment letter is not delivered,  a written Opinion of Counsel  acceptable to
and in form and substance  satisfactory  to the Trustee and the  Depositor  that
such transfer may be made pursuant to an exemption,  describing  the  applicable
exemption  and the basis  therefor,  from said Act or is being made  pursuant to
said Act, which Opinion of Counsel shall not be an expense of the Trustee or the
Depositor.  The  Holder of a  Transferor  Certificate  desiring  to effect  such
transfer shall, and does hereby agree to,  indemnify the Transferor  against any
liability  that may  result if the  transfer  is not so exempt or is not made in
accordance with such federal and state laws.

         (c) The Transferor  Certificates  and any interest therein shall not be
transferred except upon satisfaction of the following conditions precedent:  (i)
the Person that  acquires a Transferor  Certificate  shall (A) be organized  and
existing  under the laws of the  United  States of  America  or any state or the
District of Columbia thereof, (B) expressly assume, by an agreement supplemental
hereto, executed and delivered to the Trustee, the performance of every covenant
and obligation of the Transferor hereunder and (C) as part of its acquisition of
a Transferor Certificate, acquire all rights of the Transferor or any transferee
under  this  Section  6.05(c)  to amounts  payable  to such  Transferor  or such
transferee  under  Sections  5.01(a)(xii)  and  5.01(g);  (ii) the Holder of the
Transferor  Certificates  shall deliver to the Trustee an Officer's  Certificate
stating that such  transfer  and such  supplemental  agreement  comply with this
Section  6.05(c) and that all conditions  precedent  provided by this subsection
6.05(c)  have been  complied  with and an Opinion of  Counsel  stating  that all
conditions  precedent  provided by this  subsection  6.05(c) have been  complied
with, and the Trustee may conclusively rely on such Officer's Certificate, shall
have no duty to make  inquiries with regard to the matters set forth therein and
shall  incur no  liability  in so  relying;  (iii) the Holder of the  Transferor
Certificates  shall  deliver to the  Trustee a letter  from each  Rating  Agency
confirming that its rating of the Investor Certificates,  after giving effect to
such  transfer,  will not be reduced or withdrawn  without regard to the Policy;
(iv) the transferee of the Transferor  Certificates shall deliver to the Trustee
an Opinion of Counsel to the effect that (a) such  transfer  will not  adversely
affect the  treatment of the Investor  Certificates  after such transfer as debt
for federal and applicable state income tax purposes, (b) such transfer will not
result in the Trust  being  subject  to tax at the entity  level for  federal or
applicable  state tax  purposes,  (c) such  transfer  will not have any material
adverse impact on the federal or applicable state income taxation of an Investor
Certificateholder or any Certificate Owner and (d) such transfer will not result
in the  arrangement  created by this  Agreement  or any  "portion" of the Trust,
being treated as a taxable  mortgage  pool as defined in Section  7701(i) of the
Code; (v) all filings and other actions  necessary to continue the perfection of
the interest of the Trust in the Mortgage Loans and the other property  conveyed
hereunder  shall  have been  taken or made and (vi) the  transferee  shall  have
assumed the  obligations  of the  Transferor  pursuant to Section  7.07  hereof.
Notwithstanding the foregoing,  the requirement set forth in subclause (i)(A) of
this  Section  6.05(c)  shall  not apply in the event  the  Trustee  shall  have
received a letter  from each  Rating  Agency  confirming  that its

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rating of the Investor Certificates,  after giving effect to a proposed transfer
to a Person that does not meet the  requirement  set forth in subclause  (i)(A),
shall  not  be  reduced  or  withdrawn.   Notwithstanding  the  foregoing,   the
requirements  set forth in this  paragraph  (c)  shall not apply to the  initial
issuance of the Transferor Certificates to the Transferor.

         (d) Except for the initial  issuance of the  Transferor  Certificate to
the Transferor, no transfer of a Transferor Certificate shall be made unless the
Trustee  shall  have  received  either  (i) a  representation  letter  from  the
transferee  of  such  Certificate,  acceptable  to and  in  form  and  substance
satisfactory  to the  Trustee,  to the  effect  that such  transferee  is not an
employee  benefit plan subject to Section 406 of ERISA,  nor a Person  acting on
behalf of any such plan, which representation  letter shall not be an expense of
the Trustee,  (ii) if the purchaser is an insurance  company,  a  representation
that the purchaser is an insurance company which is purchasing such Certificates
with funds contained in an "insurance  company general account" (as such term is
defined in Section V(e) of Prohibited  Transaction  Class Exemption 95-60 ("PTCE
95-60"))  and that the  purchase  and holding of such  Certificates  are covered
under PTCE 95-60, or (iii) in the case of any Transferor  Certificate  presented
for  registration in the name of an employee  benefit plan subject to ERISA, and
Section  4975  of  the  Code  (or   comparable   provisions  of  any  subsequent
enactments),  or a trustee of any such plan, an Opinion of Counsel to the effect
that the purchase or holding of such  Certificate  will not result in the assets
of the Trust being  deemed to be "plan  assets"  and  subject to the  prohibited
transaction provisions of ERISA and the Code and will not subject the Trustee to
any obligation in addition to those undertaken in this Agreement,  which Opinion
of Counsel shall not be an expense of the Trustee or the Depositor.

         Section 6.06.  APPOINTMENT OF PAYING AGENT.  (a) The Paying Agent shall
make  distributions to Investor  Certificateholders  from the Collection Account
pursuant to Section 5.01 and shall report the amounts of such  distributions  to
the Trustee.  The duties of the Paying Agent may include the  obligation  (i) to
withdraw funds from the Collection  Account pursuant to Section 3.03 and for the
purpose of making the  distributions  referred  to above and (ii) to  distribute
statements and provide information to  Certificateholders as required hereunder.
The Paying Agent hereunder shall at all times be a corporation duly incorporated
and validly existing under the laws of the United States of America or any state
thereof,  authorized  under such laws to  exercise  corporate  trust  powers and
subject to  supervision  or  examination  by federal or state  authorities.  The
Paying Agent shall initially be the Trustee. The Trustee may appoint a successor
to act as Paying Agent,  which appointment  shall be reasonably  satisfactory to
the Depositor.

         (b) The  Trustee  shall  cause the  Paying  Agent  (if  other  than the
Trustee)  to execute  and  deliver to the  Trustee an  instrument  in which such
Paying  Agent shall agree with the Trustee that such Paying Agent shall hold all
sums, if any, held by it for payment to the Investor Certificateholders in trust
for the benefit of the Investor  Certificateholders  entitled thereto until such
sums  shall be paid to such  Certificateholders  and shall  agree  that it shall
comply with all  requirements  of the Code regarding the withholding of payments
in respect of Federal  income taxes due from  Certificate  Owners and  otherwise
comply with the provisions of this Agreement applicable to it.

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<PAGE>

         Section  6.07.  ACCEPTANCE  OF  OBLIGATIONS.  The  Transferor,  by  its
acceptance of the Transferor Certificates,  agrees to be bound by and to perform
all the duties of the Transferor set forth in this Agreement.

                                  ARTICLE VII

                 The Servicer, the Transferor and the Depositor

         Section  7.01.  LIABILITY  OF THE  TRANSFEROR,  THE  SERVICER  AND  THE
DEPOSITOR.  The  Transferor  and the  Servicer  shall be  liable  in  accordance
herewith  only to the extent of the  obligations  specifically  imposed upon and
undertaken  by the  Transferor  or  Servicer,  as the case may be,  herein.  The
Depositor  shall be  liable in  accordance  herewith  only to the  extent of the
obligations specifically imposed upon and undertaken by the Depositor.

         Section  7.02.  MERGER  OR  CONSOLIDATION  OF,  OR  ASSUMPTION  OF  THE
OBLIGATIONS OF, THE SERVICER,  THE TRANSFEROR OR THE DEPOSITOR.  Any entity into
which  the  Servicer,   the  Transferor  or  the  Depositor  may  be  merged  or
consolidated,   or  any  entity   resulting  from  any  merger,   conversion  or
consolidation to which the Servicer,  the Transferor or the Depositor shall be a
party, or any entity succeeding to the business of the Servicer,  the Transferor
or the Depositor,  shall be the successor of the Servicer, the Transferor or the
Depositor, as the case may be, hereunder, without the execution or filing of any
paper or any  further  act on the part of any of the  parties  hereto,  anything
herein to the contrary notwithstanding.

         Section  7.03.  LIMITATION  ON  LIABILITY  OF THE  SERVICER AND OTHERS.
Neither the Servicer nor any of the directors or officers or employees or agents
of  the   Servicer   shall  be  under  any   liability   to  the  Trust  or  the
Certificateholders for any action taken or for refraining from the taking of any
action by the Servicer in good faith pursuant to this  Agreement,  or for errors
in  judgment;  PROVIDED,  HOWEVER,  that this  provision  shall not  protect the
Servicer  or any such Person  against any  liability  which would  otherwise  be
imposed by reason of willful  misfeasance,  bad faith or gross negligence in the
performance  of duties of the  Servicer  or by reason of reckless  disregard  of
obligations and duties of the Servicer hereunder.  The Servicer and any director
or officer or  employee or agent of the  Servicer  may rely in good faith on any
document of any kind PRIMA FACIE  properly  executed and submitted by any Person
respecting  any matters  arising  hereunder.  The  Servicer  and any director or
officer or employee or agent of the Servicer  shall be  indemnified by the Trust
and held harmless against any loss,  liability or expense incurred in connection
with any legal action relating to this Agreement or the Certificates, other than
any loss, liability or expense related to any specific Mortgage Loan or Mortgage
Loans  (except  as any such  loss,  liability  or  expense  shall  be  otherwise
reimbursable  pursuant to this  Agreement)  and any loss,  liability  or expense
incurred by reason of its willful misfeasance,  bad faith or gross negligence in
the  performance of duties  hereunder or by reason of its reckless  disregard of
obligations and duties hereunder. The Servicer shall not be under any obligation
to appear in,  prosecute or defend any legal action which is not  incidental  to
duties to service the Mortgage  Loans in  accordance  with this  Agreement,  and
which in its  opinion  may  involve it in any  expense or  liability;  PROVIDED,
HOWEVER,  that the Servicer may in its sole discretion undertake any

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such  action  which  it may deem  necessary  or  desirable  in  respect  of this
Agreement,  and the rights and duties of the parties hereto and the interests of
the Certificateholders  hereunder.  In such event, the reasonable legal expenses
and  costs  of such  action  and any  liability  resulting  therefrom  shall  be
expenses,  costs and  liabilities  of the Trust and the  Servicer  shall only be
entitled  to  be  reimbursed  therefor  pursuant  to  Section  5.01(a)(xi).  The
Servicer's  right to  indemnity or  reimbursement  pursuant to this Section 7.03
shall survive any resignation or termination of the Servicer pursuant to Section
7.04 or 8.01 with respect to any losses,  expenses, costs or liabilities arising
prior to such  resignation or termination  (or arising from events that occurred
prior to such resignation or termination).

         Section  7.04.  SERVICER NOT TO RESIGN.  Subject to the  provisions  of
Section  7.02,  the Servicer  shall not resign from the  obligations  and duties
hereby imposed on it except (i) upon  determination  that the performance of its
obligations or duties hereunder are no longer  permissible  under applicable law
or are in  material  conflict  by  reason  of  applicable  law  with  any  other
activities  carried  on by it or  its  subsidiaries  or  Affiliates,  the  other
activities of the Servicer so causing such a conflict being of a type and nature
carried on by the Servicer or its subsidiaries or Affiliates at the date of this
Agreement  or  (ii)  upon  satisfaction  of the  following  conditions:  (a) the
Servicer  has  proposed a successor  servicer to the Trustee in writing and such
proposed  successor servicer is reasonably  acceptable to the Trustee;  (b) each
Rating  Agency  shall  have  delivered  a  letter  to the  Trustee  prior to the
appointment of the successor  servicer stating that the proposed  appointment of
such successor  servicer as Servicer  hereunder will not result in the reduction
or withdrawal of the then current  rating of the Investor  Certificates  without
regard to the Policy;  and (c) such  proposed  successor  servicer is reasonably
acceptable  to the Credit  Enhancer,  as  evidenced  by a letter to the Trustee;
PROVIDED,  HOWEVER,  that no  such  resignation  by the  Servicer  shall  become
effective until the Trustee or successor servicer  designated by the Servicer as
provided   above  shall  have  assumed  the  Servicer's   responsibilities   and
obligations  hereunder or the Trustee shall have designated a successor servicer
in accordance  with Section  8.02.  Any such  resignation  shall not relieve the
Servicer of responsibility for any of the obligations specified in Sections 8.01
and 8.02 as  obligations  that survive the  resignation  or  termination  of the
Servicer.  Any such  determination  permitting  the  resignation of the Servicer
pursuant to clause (i) above shall be evidenced by an Opinion of Counsel to such
effect delivered to the Trustee and the Credit Enhancer. The Servicer shall have
no claim  (whether by  subrogation  or  otherwise)  or other action  against any
Certificateholder for any amounts paid by the Servicer pursuant to any provision
of this Agreement.

         Section 7.05. DELEGATION OF DUTIES. In the ordinary course of business,
the Servicer at any time may delegate any of its duties hereunder to any Person,
including any of its Affiliates, or any subservicer referred to in Section 3.01,
who agrees to conduct such duties in  accordance  with  standards  comparable to
those with which the Servicer complies pursuant to Section 3.01. Such delegation
shall not relieve the  Servicer of its  liabilities  and  responsibilities  with
respect to such duties and shall not constitute a resignation within the meaning
of Section 7.04.

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         Section  7.06.  INDEMNIFICATION  OF  THE  TRUST  BY THE  SERVICER.  The
Servicer  shall  indemnify  and hold harmless the Trust and the Trustee from and
against any loss, liability,  expense, damage or injury suffered or sustained by
reason of the Servicer's  activities or omissions in servicing or  administering
the Mortgage Loans that are not in accordance  with this  Agreement,  including,
but not limited to, any judgment, award, settlement,  reasonable attorneys' fees
and other  costs or  expenses  incurred  in  connection  with the defense of any
actual or threatened action, proceeding or claim. Any such indemnification shall
not be payable from the assets of the Trust.  The  provisions of this  indemnity
shall run  directly to and be  enforceable  by an injured  party  subject to the
limitations   hereof.   The  provisions  of  this  Section  7.06  shall  survive
termination of this Agreement.

         Section  7.07.   INDEMNIFICATION   OF  THE  TRUST  BY  THE  TRANSFEROR.
Notwithstanding  anything to the contrary  contained herein,  the Transferor (i)
agrees to be liable  directly to the injured  party for the entire amount of any
losses, claims, damages, liabilities and expenses of the Trust (other than those
attributable to an Investor  Certificateholder in the capacity as an investor in
the Investor  Certificates as a result of defaults on the Mortgage Loans) to the
extent that the Transferor would be liable if the Trust were a partnership under
the Delaware Revised Uniform Limited Partnership Act in which the Transferor was
a general  partner and (ii) shall  indemnify and hold harmless the Trust and the
Trustee from and against any loss, liability,  expense,  damage, claim or injury
(other than those attributable to an Investor  Certificateholder in the capacity
as an  investor  in the  Investor  Certificates  as a result of  defaults on the
Mortgage Loans) arising out of or based on this Agreement by reason of any acts,
omissions,  or alleged acts or omissions  arising out of activities of the Trust
or the Trustee, or the actions of the Servicer,  including,  but not limited to,
amounts payable to the Servicer  pursuant to Section 7.03, any judgment,  award,
settlement,  reasonable  attorneys' fees and other costs or expenses incurred in
connection  with the defense of any actual or threatened  action,  proceeding or
claim;  PROVIDED that the Transferor  shall not indemnify the Trustee (but shall
indemnify any other injured party) if such loss, liability,  expense,  damage or
injury  is due  to  the  Trustee's  willful  malfeasance,  bad  faith  or  gross
negligence or by reason of the Trustee's  reckless  disregard of its obligations
hereunder.  The  provisions  of this  indemnity  shall  run  directly  to and be
enforceable by an injured party subject to the limitations hereof.

         Section 7.08.  LIMITATION ON LIABILITY OF THE  TRANSFEROR.  None of the
directors or officers or employees  or agents of the  Transferor  shall be under
any  liability  to the Trust,  the Trustee or the  Certificateholders,  it being
expressly understood that all such liability is expressly waived and released as
a condition of, and as  consideration  for, the execution of this  Agreement and
the issuance of the Certificates;  PROVIDED,  HOWEVER, that this provision shall
not protect  any such Person  against any  liability  which would  otherwise  be
imposed by reason of willful  misfeasance,  bad faith or gross negligence in the
performance  of the duties  hereunder.  Except as provided in Section 7.07,  the
Transferor  shall not be under any  liability  to the Trust,  the Trustee or the
Certificateholders for any action taken or for refraining from the taking of any
action in its capacity as Transferor  pursuant to this Agreement whether arising
from express or implied duties under this  Agreement;  PROVIDED,  HOWEVER,  that
this  provision  shall not protect the  Transferor  against any liability  which
would otherwise be imposed by reason of willful misfeasance,  bad

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faith or gross  negligence  in the  performance  of its  duties  or by reason of
reckless  disregard of its obligations and duties hereunder.  The Transferor and
any director or officer or employee or agent of the  Transferor may rely in good
faith on any document of any kind PRIMA FACIE properly executed and submitted by
any Person respecting any matters arising hereunder.

         Section  7.09.  LIMITATION ON LIABILITY OF THE  DEPOSITOR.  None of the
directors or officers or employees or agents of the Depositor shall be under any
liability  to the  Trust,  the  Trustee  or  the  Certificateholders,  it  being
expressly understood that all such liability is expressly waived and released as
a condition of, and as  consideration  for, the execution of this  Agreement and
the issuance of the Certificates;  PROVIDED,  HOWEVER, that this provision shall
not protect  any such Person  against any  liability  which would  otherwise  be
imposed by reason of willful  misfeasance,  bad faith or gross negligence in the
performance of the duties hereunder.  The Transferor and any director or officer
or employee or agent of the Transferor may rely in good faith on any document of
any kind PRIMA FACIE  properly  executed and submitted by any Person  respecting
any matters arising hereunder.

                                  ARTICLE VIII

                              Servicing Termination

         Section  8.01.  EVENTS  OF  SERVICING  TERMINATION.  If any  one of the
following  events  ("EVENTS  OF  SERVICING  TERMINATION")  shall  occur  and  be
continuing:

                  (i) Any failure by the  Servicer to deposit in the  Collection
         Account  any  deposit  required  to be made  under  the  terms  of this
         Agreement which continues unremedied for a period of five Business Days
         after the date upon which  written  notice of such  failure  shall have
         been given to the  Servicer by the Trustee or to the  Servicer  and the
         Trustee by the Credit  Enhancer  or  Holders of  Investor  Certificates
         evidencing Percentage Interests aggregating not less than 25%; or

                  (ii)  Failure on the part of the  Servicer  duly to observe or
         perform in any material  respect any other  covenants or  agreements of
         the Servicer set forth in the Certificates or in this Agreement,  which
         failure continues  unremedied for a period of 60 days after the date on
         which  written  notice  of  such  failure,  requiring  the  same  to be
         remedied,  and  stating  that  such  notice is a  "Notice  of  Default"
         hereunder,  shall have been given to the  Servicer by the Trustee or to
         the Servicer  and the Trustee by the Credit  Enhancer or the Holders of
         Investor  Certificates  evidencing Percentage Interests aggregating not
         less than 25%; or

                  (iii) The entry against the Servicer of a decree or order by a
         court or agency or supervisory  authority  having  jurisdiction  in the
         premises for the  appointment  of a trustee,  conservator,  receiver or
         liquidator   in   any   insolvency,   conservatorship,    receivership,
         readjustment of debt,  marshalling of assets and liabilities or similar
         proceedings,  or for the winding up or liquidation of its affairs,

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         and the  continuance of any such decree or order unstayed and in effect
         for a period of 60 consecutive days; or

                  (iv) The  consent  by the  Servicer  to the  appointment  of a
         trustee,  conservator,   receiver  or  liquidator  in  any  insolvency,
         conservatorship,  receivership,  readjustment  of debt,  marshalling of
         assets and  liabilities  or similar  proceedings  of or relating to the
         Servicer or of or relating to substantially all of its property; or the
         Servicer  shall  admit  in  writing  its  inability  to pay  its  debts
         generally as they become due, file a petition to take  advantage of any
         applicable insolvency or reorganization statute, make an assignment for
         the benefit of its  creditors,  or voluntarily  suspend  payment of its
         obligations;

then,  and in each  and  every  such  case,  so long as an  Event  of  Servicing
Termination  shall not have been  remedied by the  Servicer,  with respect to an
Event of  Servicing  Termination  specified  in (i) - (iv),  above,  either  the
Trustee, the Credit Enhancer or the Holders of Investor Certificates  evidencing
Voting Rights  aggregating not less than 51%, by notice then given in writing to
the Servicer (and to the Trustee if given by the Credit  Enhancer or the Holders
of Investor Certificates) may terminate all of the rights and obligations of the
Servicer as servicer under this Agreement. Any such notice to the Servicer shall
also be given to each  Rating  Agency and the Credit  Enhancer.  On or after the
receipt by the Servicer of such written  notice,  all authority and power of the
Servicer under this Agreement,  whether with respect to the  Certificates or the
Mortgage Loans or otherwise, shall pass to and be vested in the Trustee pursuant
to and under this Section 8.01; and , without limitation,  the Trustee is hereby
authorized and empowered to execute and deliver,  on behalf of the Servicer,  as
attorney-in-fact or otherwise, any and all documents and other instruments,  and
to do or accomplish all other acts or things  necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer and
endorsement  of each Mortgage  Loan and related  documents,  or  otherwise.  The
Servicer  agrees to cooperate  with the Trustee in effecting the  termination of
the  responsibilities and rights of the Servicer hereunder,  including,  without
limitation, the transfer to the Trustee for the administration by it of all cash
amounts that shall at the time be held by the Servicer and to be deposited by it
in the  Collection  Account,  or that have been deposited by the Servicer in the
Collection  Account or  thereafter  received by the Servicer with respect to the
Mortgage Loans.  All reasonable costs and expenses  (including  attorneys' fees)
incurred in connection  with  transferring  the Mortgage  Files to the successor
Servicer and amending  this  Agreement  to reflect such  succession  as Servicer
pursuant to this Section 8.01 shall be paid by the  predecessor  Servicer (or if
the predecessor Servicer is the Trustee, the initial Servicer) upon presentation
of reasonable documentation of such costs and expenses.

         Notwithstanding  the  foregoing,  a delay in or failure of  performance
under  Section  8.01(i)  for a period  of ten  Business  Days or  under  Section
8.01(ii)  for a period of 60 Business  Days,  shall not  constitute  an Event of
Servicing  Termination  if such delay or failure  could not be  prevented by the
exercise of  reasonable  diligence by the Servicer and such delay or failure was
caused by an act of God or the public enemy, acts of declared or undeclared war,
public disorder, rebellion or sabotage, epidemics, landslides,  lightning, fire,
hurricanes,  earthquakes, floods or similar causes. The preceding sentence shall
not

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relieve  the  Servicer  from using its best  efforts to perform  its  respective
obligations  in a timely manner in accordance  with the terms of this  Agreement
and the Servicer shall provide the Trustee, the Transferor,  the Credit Enhancer
and the Investor  Certificateholders with an Officers' Certificate giving prompt
notice  of such  failure  or delay by it,  together  with a  description  of its
efforts to so perform its obligations. The Servicer shall immediately notify the
Trustee in writing of any Events of Servicing Termination.

         Section 8.02.  TRUSTEE TO ACT;  APPOINTMENT  OF  SUCCESSOR.  (a) On and
after the time the Servicer receives a notice of termination pursuant to Section
8.01 or 7.04, the Trustee shall be the successor in all respects to the Servicer
in its capacity as servicer under this Agreement and the  transactions set forth
or provided for herein and shall be subject to all the responsibilities,  duties
and  liabilities  relating  thereto  placed  on the  Servicer  by the  terms and
provisions  hereof.  Notwithstanding  the  above,  if the  Trustee  becomes  the
Servicer  hereunder,  it  shall  have no  responsibility  or  obligation  (i) of
repurchase or substitution  with respect to any Mortgage Loan, (ii) with respect
to any  representation  or  warranty of the  Servicer,  and (iii) for any act or
omission of either a predecessor  or successor  Servicer other than the Trustee.
As compensation  therefor, the Trustee shall be entitled to such compensation as
the  Servicer  would  have  been  entitled  to  hereunder  if no such  notice of
termination  had been  given.  In  addition,  the  Trustee  will be  entitled to
compensation  with  respect to its expenses in  connection  with  conversion  of
certain  information,  documents  and record  keeping,  as  provided  in Section
7.04(b).  Notwithstanding  the above,  (i) if the Trustee is unwilling to act as
successor  Servicer,  or (ii) if the  Trustee is legally  unable so to act,  the
Trustee  may (in the  situation  described  in  clause  (i))  or  shall  (in the
situation  described  in clause  (ii))  appoint or petition a court of competent
jurisdiction to appoint,  any established housing and home finance  institution,
bank or other  mortgage loan or home equity loan servicer  having a net worth of
not less than  $15,000,000  as the  successor to the  Servicer  hereunder in the
assumption of all or any part of the responsibilities,  duties or liabilities of
the Servicer  hereunder;  PROVIDED  that any such  successor  Servicer  shall be
acceptable to the Credit Enhancer,  as evidenced by the Credit  Enhancer's prior
written consent, which consent shall not be unreasonably withheld; and PROVIDED,
FURTHER,  that the appointment of any such successor Servicer will not result in
the  qualification,  reduction  or  withdrawal  of the  ratings  assigned to the
Certificates  by the  Rating  Agencies  without  regard to the  Policy.  Pending
appointment  of a successor  to the  Servicer  hereunder,  unless the Trustee is
prohibited  by law from so acting,  the  Trustee  shall act in such  capacity as
hereinabove  provided.  In connection with such appointment and assumption,  the
successor shall be entitled to receive  compensation out of payments on Mortgage
Loans in an amount equal to the compensation  which the Servicer would otherwise
have  received  pursuant  to Section  3.08 (or such lesser  compensation  as the
Trustee and such successor  shall agree).  The Trustee and such successor  shall
take such  action,  consistent  with this  Agreement,  as shall be  necessary to
effectuate any such succession.

         (b) Any successor,  including the Trustee,  to the Servicer as servicer
shall  during the term of its  service as servicer  (i)  continue to service and
administer  the  Mortgage  Loans for the benefit of  Certificateholders  and the
Credit  Enhancer  and (ii)  maintain in force a policy or policies of  insurance
covering  errors and omissions in the

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performance  of its  obligations  as Servicer  hereunder  and a fidelity bond in
respect of its officers, employees and agents to the same extent as the Servicer
is so required pursuant to Section 3.12. The appointment of a successor Servicer
shall not affect any liability of the predecessor Servicer which may have arisen
under this Agreement  prior to its termination as Servicer  (including,  without
limitation,  any deductible under an insurance policy pursuant to Section 3.04),
nor shall any  successor  Servicer  be liable for any acts or  omissions  of the
predecessor  Servicer  or for  any  breach  by  such  Servicer  of any of  their
representations or warranties contained herein.

         Section 8.03. NOTIFICATION TO CERTIFICATEHOLDERS.  Upon any termination
or appointment  of a successor to the Servicer  pursuant to this Article VIII or
Section  7.04,  the Trustee  shall give  prompt  written  notice  thereof to the
Certificateholders  at their respective  addresses  appearing in the Certificate
Register, the Credit Enhancer and each Rating Agency.

                                   ARTICLE IX

                                   The Trustee

         Section 9.01. DUTIES OF TRUSTEE.  The Trustee,  prior to the occurrence
of an Event of  Servicing  Termination  and  after  the  curing or waiver of all
Events of Servicing  Termination which may have occurred,  undertakes to perform
such  duties  and  only  such  duties  as are  specifically  set  forth  in this
Agreement. If an Event of Servicing Termination has occurred (which has not been
cured or waived) of which a Responsible Officer has knowledge, the Trustee shall
exercise such of the rights and powers vested in it by this  Agreement,  and use
the same  degree of care and  skill in their  exercise,  as a prudent  man would
exercise  or use under the  circumstances  in the  conduct  of his own  affairs;
PROVIDED,  HOWEVER,  that if the  Trustee is acting as Servicer it shall use the
same  degree  of care and  skill  as is  required  of the  Servicer  under  this
Agreement.

         The Trustee, upon receipt of all resolutions, certificates, statements,
opinions,  reports,  documents,  orders or other  instruments  furnished  to the
Trustee  which  are  specifically  required  to be  furnished  pursuant  to  any
provision  of this  Agreement,  shall  examine  them to  determine  whether they
conform to the requirements of this Agreement.

         No  provision  of this  Agreement  shall be  construed  to relieve  the
Trustee from liability for its own negligent  action,  its own negligent failure
to act or its own willful misconduct; PROVIDED, HOWEVER, that:

                  (i)  prior  to  the   occurrence  of  an  Event  of  Servicing
         Termination  of  which  a  Responsible   Officer  of  the  Trustee  has
         knowledge,  and  after  the  curing  or  waiver  of all such  Events of
         Servicing   Termination  which  may  have  occurred,   the  duties  and
         obligations  of the Trustee shall be  determined  solely by the express
         provisions  of this  Agreement,  the Trustee shall not be liable except
         for the performance of such duties and obligations as are  specifically
         set forth in this Agreement,  no implied covenants or obligations shall
         be read into this Agreement  against the Trustee and, in the absence of
         bad faith on the part of the  Trustee,  the

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<PAGE>

         Trustee may  conclusively  rely, as to the truth of the  statements and
         the   correctness  of  the  opinions   expressed   therein,   upon  any
         certificates or opinions furnished to the Trustee and conforming to the
         requirements of this Agreement;

                  (ii) the Trustee shall not be  personally  liable for an error
         of judgment made in good faith by a Responsible Officer of the Trustee,
         unless  it  shall  be  proved  that  the  Trustee  was   negligent   in
         ascertaining or investigating the facts related thereto;

                  (iii) the Trustee shall not be personally  liable with respect
         to any  action  taken,  suffered  or  omitted to be taken by it in good
         faith in  accordance  with  the  consent  or  direction  of the  Credit
         Enhancer or in accordance with the direction of the Holders of Investor
         Certificates  evidencing  Voting Rights  aggregating  not less than 51%
         relating to the time, method and place of conducting any proceeding for
         any remedy  available to the Trustee,  or exercising any trust or power
         conferred upon the Trustee, under this Agreement; and

                  (iv) the Trustee  shall not be charged  with  knowledge of any
         failure by the Servicer to comply with the  obligations of the Servicer
         referred  to in  clauses  (i)  and  (ii)  of  Section  8.01  or of  the
         occurrence of a Rapid Amortization  Event unless a Responsible  Officer
         of the Trustee at the Corporate  Trust Office obtains actual  knowledge
         of such failure or the Trustee  receives written notice of such failure
         from the  Servicer,  the Credit  Enhancer  or the  Holders of  Investor
         Certificates evidencing Voting Rights aggregating not less than 51%.

         The  Trustee  shall not be  required to expend or risk its own funds or
otherwise  incur  financial  liability in the  performance  of any of its duties
hereunder,  or in the  exercise  of any of its  rights  or  powers,  if there is
reasonable  ground for  believing  that the  repayment of such funds or adequate
indemnity  against such risk or liability is not reasonably  assured to it. None
of the  provisions  contained in this  Agreement  shall in any event require the
Trustee to perform,  or be responsible  for the manner of performance of, any of
the obligations of the Servicer under this  Agreement,  except during such time,
if any, as the Trustee shall be the successor to, and be vested with the rights,
duties,  powers and privileges of, the Servicer in accordance  with the terms of
this  Agreement  and in no event  shall it be  required  to  perform  or  accept
responsibility for the obligations of the Depositor or the Transferor.

         Section  9.02.  CERTAIN  MATTERS  AFFECTING  THE  TRUSTEE.   Except  as
otherwise provided in Section 9.01:

                  (i) the  Trustee  may  request  and rely  upon,  and  shall be
         protected in acting or  refraining  from acting upon,  any  resolution,
         Officer's   Certificate,   certificate   of   auditors   or  any  other
         certificate,  statement,  instrument, opinion, report, notice, request,
         consent, order,  appraisal,  bond or other paper or document reasonably
         believed by it to be genuine and to have been  signed or  presented  by
         the proper party or parties;

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<PAGE>

                  (ii) the  Trustee  may  consult  with  counsel and any written
         advice of such  counsel or any  Opinion  of  Counsel  shall be full and
         complete authorization and protection in respect of any action taken or
         suffered  or omitted by it  hereunder  in good faith and in  accordance
         with such advice or Opinion of Counsel;

                  (iii) the Trustee shall be under no obligation to exercise any
         of  the  rights  or  powers  vested  in it  by  this  Agreement,  or to
         institute,  conduct or defend any  litigation  hereunder or in relation
         hereto,   at  the   request,   order  or   direction   of  any  of  the
         Certificateholders  or the Credit Enhancer,  pursuant to the provisions
         of  this  Agreement,  unless  such  Certificateholders  or  the  Credit
         Enhancer  shall have  offered to the  Trustee  reasonable  security  or
         indemnity  against the costs,  expenses  and  liabilities  which may be
         incurred  therein or  thereby;  the right of the Trustee to perform any
         discretionary  act enumerated in this Agreement  shall not be construed
         as a duty,  and the Trustee shall not be answerable  for other than its
         negligence or willful  misconduct in the  performance  of any such act;
         nothing  contained  herein shall,  however,  relieve the Trustee of the
         obligations,  upon the occurrence of an Event of Servicing  Termination
         (which has not been cured or waived) of which a Responsible Officer has
         knowledge,  to exercise  such of the rights and powers  vested in it by
         this  Agreement,  and to use the same degree of care and skill in their
         exercise as a prudent man would exercise or use under the circumstances
         in the conduct of his own affairs, unless it is acting as Servicer;

                  (iv) the Trustee shall not be personally liable for any action
         taken, suffered or omitted by it in good faith and believed by it to be
         authorized or within the discretion or rights or powers  conferred upon
         it by this Agreement;

                  (v)  prior  to  the   occurrence  of  an  Event  of  Servicing
         Termination  and after the curing or waiver of all Events of  Servicing
         Termination which may have occurred,  the Trustee shall not be bound to
         make  any  investigation  into  the  facts  or  matters  stated  in any
         resolution,   certificate,   statement,  instrument,  opinion,  report,
         notice,  request,  consent,  order,  approval,  bond or other  paper or
         documents,  unless requested in writing to do so by Holders of Investor
         Certificates  evidencing  Voting Rights  aggregating not less than 51%;
         PROVIDED,  HOWEVER, that if the payment within a reasonable time to the
         Trustee of the costs,  expenses or liabilities likely to be incurred by
         it in the  making  of such  investigation  is,  in the  opinion  of the
         Trustee, not reasonably assured to the Trustee by the security afforded
         to it  by  the  terms  of  this  Agreement,  the  Trustee  may  require
         reasonable  indemnity  against  such cost,  expense or  liability  as a
         condition  to such  proceeding.  The  reasonable  expense of every such
         examination  shall be paid by the  Servicer or, if paid by the Trustee,
         shall be reimbursed by the Servicer upon demand. Nothing in this clause
         (v) shall  derogate from the  obligation of the Servicer to observe any
         applicable  law  prohibiting  disclosure of  information  regarding the
         Mortgagors;

                  (vi) the  Trustee  shall  not be  accountable,  shall  have no
         liability  and  makes no  representation  as to any  acts or  omissions
         hereunder  of the  Servicer

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<PAGE>

         until  such time as the  Trustee  may be  required  to act as  Servicer
         pursuant to Section 8.02; and

                  (vii) the  Trustee  may  execute  any of the  trusts or powers
         hereunder  or perform  any duties  hereunder  either  directly or by or
         through an Affiliate, agents or attorneys or a custodian.

         Section 9.03.  TRUSTEE NOT LIABLE FOR  CERTIFICATES  OR MORTGAGE LOANS.
The  recitals  contained  herein  and  in  the  Certificates   (other  than  the
authentication  of the  Trustee  on the  Certificates)  shall  be  taken  as the
statements of the Depositor,  and the Trustee assumes no responsibility  for the
correctness of the same. The Trustee makes no representations as to the validity
or  sufficiency  of  this  Agreement  or of the  Certificates  (other  than  the
signature  and  authentication  of the  Trustee on the  Certificates)  or of any
Mortgage Loan or Related Document.  The Trustee shall not be accountable for the
use or  application  by the  Depositor  of  any  of the  Certificates  or of the
proceeds of such  Certificates,  or for the use or application of any funds paid
to the  Depositor or the Servicer in respect of the Mortgage  Loans or deposited
in or withdrawn from the Collection  Account by the Servicer.  The Trustee shall
at no time have any  responsibility  or  liability  for or with  respect  to the
legality,  validity and  enforceability of any Mortgage or any Mortgage Loan, or
the  perfection  and  priority of any  Mortgage or the  maintenance  of any such
perfection and priority,  or for or with respect to the sufficiency of the Trust
or its ability to generate the payments to be distributed to  Certificateholders
under this Agreement,  including,  without limitation: the existence,  condition
and ownership of any Mortgaged Property; the existence and enforceability of any
hazard  insurance  thereon (other than if the Trustee shall assume the duties of
the Servicer  pursuant to Section  8.02);  the validity of the assignment of any
Mortgage Loan to the Trustee or of any intervening assignment;  the completeness
of any Mortgage Loan; the performance or enforcement of any Mortgage Loan (other
than if the Trustee shall assume the duties of the Servicer  pursuant to Section
8.02); the compliance by the Depositor,  the Transferor or the Servicer with any
warranty or representation  made under this Agreement or in any related document
or the accuracy of any such  warranty or  representation  prior to the Trustee's
receipt of notice or other  discovery  of any  non-compliance  therewith  or any
breach thereof;  any investment of monies by or at the direction of the Servicer
or any loss  resulting  therefrom,  it being  understood  that the Trustee shall
remain  responsible  for any Trust  property that it may hold in its  individual
capacity;  the acts or omissions of any of the  Depositor,  the Servicer  (other
than if the Trustee shall assume the duties of the Servicer  pursuant to Section
8.02), any subservicer or any Mortgagor;  any action of the Servicer (other than
if the  Trustee  shall  assume the duties of the  Servicer  pursuant  to Section
8.02), or any subservicer  taken in the name of the Trustee;  the failure of the
Servicer or any subservicer to act or perform any duties required of it as agent
of the Trustee hereunder;  or any action by the Trustee taken at the instruction
of the  Servicer  (other  than if the  Trustee  shall  assume  the duties of the
Servicer pursuant to Section 8.02); PROVIDED,  HOWEVER, that the foregoing shall
not  relieve  the Trustee of its  obligation  to perform  its duties  under this
Agreement.  The Trustee shall have no responsibility for filing any financing or
continuation  statement in any public office at any time or to otherwise perfect
or maintain  the  perfection  of any  security  interest  or lien  granted to it
hereunder  (unless the Trustee shall have become the  successor  Servicer) or to
prepare or

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file any  Securities and Exchange  Commission  filing for the Trust or to record
this Agreement.

         Section  9.04.  TRUSTEE  MAY  OWN  CERTIFICATES.  The  Trustee  in  its
individual or any other capacity may become the owner or pledgee of Certificates
with the same rights as it would have if it were not  Trustee  and may  transact
any banking and trust  business with the  Transferor,  the Servicer,  the Credit
Enhancer or the Depositor.

         Section 9.05. SERVICER TO PAY TRUSTEE'S FEES AND EXPENSES;  SERVICER TO
INDEMNIFY.  The Servicer covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, reasonable compensation (which shall
not be  limited  by any  provision  of law in  regard to the  compensation  of a
trustee of an express trust) for all services rendered by it in the execution of
the trusts  hereby  created and in the  exercise and  performance  of any of the
powers  and  duties  hereunder  of the  Trustee,  and the  Servicer  will pay or
reimburse   the  Trustee   upon  its  request  for  all   reasonable   expenses,
disbursements  and advances  incurred or made by the Trustee in accordance  with
any of the provisions of this Agreement  (including the reasonable  compensation
and the  expenses  and  disbursements  of its  counsel  and of all  Persons  not
regularly in its employ) except any such expense, disbursement or advance as may
arise  from its  negligence  or bad  faith or  which  is the  responsibility  of
Certificateholders hereunder. The Servicer covenants and agrees to indemnify the
Trustee from,  and hold it harmless  against,  any and all losses,  liabilities,
damages,  claims or expenses  other than those  resulting from the negligence or
bad  faith of the  Trustee.  This  section  shall  survive  termination  of this
Agreement or the resignation or removal of any Trustee hereunder.

         Section  9.06.  ELIGIBILITY   REQUIREMENTS  FOR  TRUSTEE.  The  Trustee
hereunder  shall at all times be a  corporation  duly  incorporated  and validly
existing  under the laws of the United  States of America or any state  thereof,
authorized under such laws to exercise corporate trust powers, having a combined
capital  and  surplus  of  at  least  $50,000,000,  subject  to  supervision  or
examination by federal or state authority. If such corporation publishes reports
of condition at least  annually,  pursuant to law or to the  requirements of the
aforesaid  supervising  or  examining  authority,  then for the purposes of this
Section  9.06,  the combined  capital and surplus of such  corporation  shall be
deemed to be its  combined  capital  and surplus as set forth in its most recent
report of condition so  published.  The principal  office of the Trustee  (other
than the initial  Trustee)  shall be in a state with respect to which an Opinion
of  Counsel  has been  delivered  to such  Trustee  at the time such  Trustee is
appointed  Trustee  to the effect  that the Trust  will not be a taxable  entity
under the laws of such state.  In case at any time the Trustee shall cease to be
eligible in accordance  with the  provisions  of this Section 9.06,  the Trustee
shall resign  immediately in the manner and with the effect specified in Section
9.07.

         Section 9.07. RESIGNATION OR REMOVAL OF TRUSTEE. The Trustee may at any
time resign and be discharged  from the trusts hereby  created by giving written
notice  thereof to the  Transferor,  the  Depositor,  the  Servicer,  the Credit
Enhancer and each Rating Agency. Upon receiving such notice of resignation,  the
Transferor  shall promptly appoint a successor  Trustee  (approved in writing by
the Credit Enhancer,  so long as such approval is not unreasonably  withheld) by
written  instrument,  in  duplicate,  one  copy of

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which instrument shall be delivered to the resigning  Trustee (who shall deliver
a copy  to the  Servicer)  and  one  copy to the  successor  Trustee;  PROVIDED,
HOWEVER,  that any such successor  Trustee shall be subject to the prior written
approval of the Transferor. If no successor Trustee shall have been so appointed
and have accepted  appointment within 30 days after the giving of such notice of
resignation,   the  resigning  Trustee  may  petition  any  court  of  competent
jurisdiction for the appointment of a successor Trustee.

         If at any time the Trustee  shall  cease to be  eligible in  accordance
with the  provisions  of  Section  9.06 and shall fail to resign  after  written
request therefor by the Transferor or the Credit Enhancer, or if at any time the
Trustee  shall be legally  unable to act,  or shall be  adjudged  a bankrupt  or
insolvent,  or a receiver of the Trustee or of its property  shall be appointed,
or any  public  officer  shall take  charge or control of the  Trustee or of its
property  or  affairs  for  the  purpose  of  rehabilitation,   conservation  or
liquidation, or if a tax is imposed or threatened with respect to the Trust Fund
by any state in which the Trustee or the Trust Fund is located (which tax cannot
be vacated by the  appointment of a co-Trustee or separate  trustee  pursuant to
Section  9.10),  then the  Transferor  or the  Credit  Enhancer  may  remove the
Trustee.  If the Transferor or the Credit Enhancer removes the Trustee under the
authority of the immediately  preceding sentence,  the Transferor shall promptly
appoint a successor Trustee  (approved in writing by the Credit Enhancer,  which
approval  shall  not  be  unreasonably  withheld)  by  written  instrument,   in
duplicate,  one copy of which  instrument  shall be  delivered to the Trustee so
removed and one copy to the successor trustee.

         The Holders of Investor  Certificates  evidencing  Percentage Interests
aggregating  over 50% of all  Investor  Certificates  may at any time remove the
Trustee by written  instrument or  instruments  delivered to the  Servicer,  the
Transferor and the Trustee;  the Transferor shall thereupon use its best efforts
to appoint a successor trustee in accordance with this Section.

         Any  resignation  or  removal  of  the  Trustee  and  appointment  of a
successor  Trustee  pursuant to any of the provisions of this Section 9.07 shall
not become effective until acceptance of appointment by the successor Trustee as
provided in Section 9.08.

         Section 9.08.  SUCCESSOR  TRUSTEE.  Any successor  Trustee appointed as
provided  in  Section  9.07  shall  execute,  acknowledge  and  deliver  to  the
Transferor,  the  Depositor,  the  Servicer,  the  Credit  Enhancer  and  to its
predecessor  Trustee an instrument  accepting such  appointment  hereunder,  and
thereupon the  resignation  or removal of the  predecessor  Trustee shall become
effective  and  such  successor  Trustee,  without  any  further  act,  deed  or
conveyance,  shall become fully vested with all the rights,  powers,  duties and
obligations  of its  predecessor  hereunder,  with like effect as if  originally
named  as  Trustee.  The  Transferor,   the  Depositor,  the  Servicer  and  the
predecessor Trustee shall execute and deliver such instruments and do such other
things  as may  reasonably  be  required  for fully and  certainly  vesting  and
confirming  in the  successor  Trustee  all  such  rights,  powers,  duties  and
obligations.

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         No  successor  Trustee  shall  accept  appointment  as provided in this
Section 9.08 unless at the time of such acceptance such successor  Trustee shall
be eligible under the provisions of Section 9.06.

         Upon  acceptance of appointment  by a successor  Trustee as provided in
this Section 9.08, the successor  Trustee shall mail notice of the succession of
such Trustee  hereunder  to all Holders of  Certificates  at their  addresses as
shown in the  Certificate  Register and to each Rating  Agency.  If the Servicer
fails to mail such notice within 30 days after  acceptance of appointment by the
successor Trustee, the successor Trustee shall cause such notice to be mailed at
the expense of the Servicer.

         Section 9.09. MERGER OR CONSOLIDATION OF TRUSTEE. Any Person into which
the Trustee may be merged or converted or with which it may be consolidated,  or
any Person  resulting from any merger,  conversion or consolidation to which the
Trustee shall be a party, or any Person  succeeding to all or substantially  all
of the business of the Trustee, shall be the successor of the Trustee hereunder,
provided  such Person shall be eligible  under the  provisions  of Section 9.06,
without the  execution  or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding.

         Section  9.10.   APPOINTMENT   OF   CO-TRUSTEE  OR  SEPARATE   TRUSTEE.
Notwithstanding  any other  provisions of this  Agreement,  at any time, for the
purpose of meeting any legal  requirements of any jurisdiction in which any part
of the  Trust  or  any  Mortgaged  Property  may at the  time  be  located,  the
Transferor and the Trustee acting jointly shall have the power and shall execute
and deliver all instruments necessary to appoint one or more Persons approved by
the Credit  Enhancer  to act as  co-trustee  or  co-trustees,  jointly  with the
Trustee,  or separate  trustee or separate  trustees,  of all or any part of the
Trust,  and to vest in such  Person or  Persons,  in such  capacity  and for the
benefit of the Certificateholders, such title to the Trust, or any part thereof,
and, subject to the other provisions of this Section 9.10, such powers,  duties,
obligations,  rights and trusts as the  Transferor  and the Trustee may consider
necessary or desirable. Any such co-trustee or separate trustee shall be subject
to the written approval of the Servicer. If the Transferor shall not have joined
in such  appointment  within 15 days after the  receipt by it of a request so to
do, or in the case an Event of Servicing  Termination shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment.  No
co-trustee or separate trustee  hereunder shall be required to meet the terms of
eligibility  as a  successor  trustee  under  Section  9.06  and  no  notice  to
Certificateholders  of the  appointment  of any  co-trustee or separate  trustee
shall be required under Section 9.08. The Servicer shall be responsible  for the
fees of any co-trustee or separate trustee appointed hereunder.

         Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:

                  (i) all rights,  powers,  duties and obligations  conferred or
         imposed  upon  the  Trustee  shall be  conferred  or  imposed  upon and
         exercised  or  performed  by the Trustee and such  separate  trustee or
         co-trustee  jointly (it being  understood

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<PAGE>

         that such  separate  trustee or  co-trustee  is not  authorized  to act
         separately  without  the  Trustee  joining in such act),  except to the
         extent that under any law of any  jurisdiction  in which any particular
         act or acts are to be  performed  (whether as Trustee  hereunder  or as
         successor to the Servicer hereunder),  the Trustee shall be incompetent
         or unqualified to perform such act or acts, in which event such rights,
         powers,  duties and obligations  (including the holding of title to the
         Trust  or any  portion  thereof  in any  such  jurisdiction)  shall  be
         exercised and performed  singly by such separate trustee or co-trustee,
         but solely at the direction of the Trustee;

                  (ii) no trustee  hereunder shall be held personally  liable by
         reason of any act or omission of any other trustee hereunder; and

                  (iii) the Servicer and the Trustee  acting  jointly may at any
         time  accept  the  resignation  of or remove  any  separate  trustee or
         co-trustee  except  that  following  the  occurrence  of  an  Event  of
         Servicing  Termination,   the  Trustee  acting  alone  may  accept  the
         resignation or remove any separate trustee or co-trustee.

         Any notice,  request or other  writing  given to the  Trustee  shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as  effectively  as if given to each of them.  Every  instrument  appointing any
separate  trustee or co-trustee shall refer to this Agreement and the conditions
of this Article IX. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred,  shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be  provided  therein,  subject  to all the  provisions  of this  Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording  protection to, the Trustee.  Every
such instrument  shall be filed with the Trustee and a copy thereof given to the
Transferor and the Servicer.

         Any separate  trustee or co-trustee  may, at any time,  constitute  the
Trustee,  its agent or attorney-in-fact,  with full power and authority,  to the
extent not  prohibited  by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name.  If any separate  trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties,  rights,  remedies  and trusts shall vest in and be exercised by the
Trustee,  to the extent  permitted by law,  without the  appointment of a new or
successor Trustee.

         Section 9.11. LIMITATION OF LIABILITY. The Certificates are executed by
the Trustee,  not in its individual capacity but solely as Trustee of the Trust,
in the exercise of the powers and  authority  conferred  and vested in it by the
Trust Agreement. Each of the undertakings and agreements made on the part of the
Trustee in the  Certificates is made and intended not as a personal  undertaking
or  agreement by the Trustee but is made and intended for the purpose of binding
only the Trust.

         Section  9.12.   TRUSTEE  MAY  ENFORCE  CLAIMS  WITHOUT  POSSESSION  OF
CERTIFICATES.  All  rights of action  and claims  under  this  Agreement  or the
Certificates  may  be  prosecuted  and  enforced  by  the  Trustee  without  the
possession  of  any  of  the  Certificates

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or  the  production  thereof  in  any  proceeding  relating  thereto,  and  such
proceeding  instituted by the Trustee shall be brought in its own name or in its
capacity as Trustee.  Any recovery of judgment  shall,  after  provision for the
payment of the reasonable compensation,  expenses,  disbursement and advances of
the  Trustee,  its  agents  and  counsel,  be for  the  ratable  benefit  or the
Certificateholders in respect of which such judgment has been recovered.

         Section  9.13.  SUITS FOR  ENFORCEMENT.  In case an Event of  Servicing
Termination or other default by the Servicer,  the Transferor,  the Depositor or
the  Transferor  hereunder  shall occur and be continuing,  the Trustee,  in its
discretion,  may proceed to protect and enforce its rights and the rights of the
Investor Certificateholders under this Agreement by a suit, action or proceeding
in equity or at law or otherwise,  whether for the specific  performance  of any
covenant or agreement  contained in this Agreement or in aid of the execution of
any power granted in this  Agreement or for the  enforcement of any other legal,
equitable or other remedy, as the Trustee,  being advised by counsel, shall deem
most  effectual  to protect and enforce any of the rights of the Trustee and the
Certificateholders.

                                   ARTICLE X

                                   Termination

         Section  10.01.   TERMINATION.   (a)  The  respective  obligations  and
responsibilities of the Servicer, the Depositor,  the Transferor and the Trustee
created  hereby  (other  than the  obligation  of the  Trustee  to make  certain
payments to  Certificateholders  after the final Payment Date and the obligation
of the  Servicer  to send  certain  notices  as  hereinafter  set  forth)  shall
terminate upon the last action  required to be taken by the Trustee on the final
Payment Date  pursuant to this  Article X following  the later of (A) payment in
full of all amounts owing to the Credit Enhancer and (B) the earliest of (i) the
transfer,  under the conditions specified in Section 10.01(b), to the Transferor
of the  Investor  Certificateholders'  interest  in each  Mortgage  Loan and all
property  acquired in respect of any Mortgage Loan remaining in the Trust for an
amount equal to the sum of (w) the Class A Certificate  Principal  Balance,  (x)
the  sum of  accrued  and  unpaid  Class  A  Certificate  Interest  and  Class S
Certificate  Interest  through the day preceding the final Payment Date, and (y)
interest accrued on any Unpaid Class A Certificate Interest Shortfall or Class S
Certificate Interest Shortfall, to the extent legally permissible,  (ii) the day
following  the  Payment  Date  on  which  the  distribution   made  to  Class  A
Certificateholders  has reduced  the Class A  Certificate  Principal  Balance to
zero,  (iii) the final  payment or other  liquidation  of the last Mortgage Loan
remaining in the Trust (including,  without  limitation,  the disposition of the
Mortgage  Loans  pursuant to Section  10.02) or the  disposition of all property
acquired upon  foreclosure  or deed in lieu of  foreclosure of any Mortgage Loan
(iv) the Payment Date in __________ 200_;  PROVIDED,  HOWEVER,  that in no event
shall the trust created hereby  continue  beyond the expiration of 21 years from
the date of the  last  survivor  descendants  of  Joseph  P.  Kennedy,  the late
ambassador of the United  States to the Court of St.  James,  living on the date
hereof.  Upon  termination in accordance with clause (i) or (ii) of this Section
10.01,  the Trustee shall execute such  documents  and  instruments  of transfer
presented by the Transferor, in

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each case without  recourse,  representation  or  warranty,  and take such other
actions as the Transferor  may reasonably  request to effect the transfer of the
Mortgage Loans to the Transferor.

         (b) The  Transferor  shall  have the right to  exercise  the  option to
effect the transfer to the  Transferor of each Mortgage Loan pursuant to Section
10.01(a)  above on any  Payment  Date on or after the Payment  Date  immediately
prior to which  the  Class A  Certificate  Principal  Balance  is less  than ten
percent  (10%) of the Original  Class A  Certificate  Principal  Balance and all
amounts  due  and  owing  to  the  Credit   Enhancer  for  unpaid  premiums  and
unreimbursed  draws on the  Policy  and all other  amounts  due and owing to the
Credit  Enhancer  pursuant to the  Insurance  Agreement,  together with interest
thereon as provided under the Insurance Agreement, have been paid.

         (c) Notice of any termination, specifying the Payment Date (which shall
be a date that  would  otherwise  be a Payment  Date)  upon  which the  Investor
Certificateholders  may surrender their Investor Certificates to the Trustee for
payment of the final  distribution and cancellation,  shall be given promptly by
the Trustee  (upon receipt of written  directions  from the  Transferor,  if the
Transferor is exercising its right to transfer of the Mortgage Loans,  given not
later  than the  first  day of the  month  preceding  the  month  of such  final
distribution)  to the Credit  Enhancer and to the Servicer by letter to Investor
Certificateholders  mailed not earlier  than the 15th day and not later than the
25th day of the  month  next  preceding  the  month of such  final  distribution
specifying  (i) the Payment Date upon which final  distribution  of the Investor
Certificates   will  be  made  upon   presentation  and  surrender  of  Investor
Certificates at the office or agency of the Trustee therein designated, (ii) the
amount of any such final  distribution  and (iii) that the Record Date otherwise
applicable to such Payment Date is not applicable, distributions being made only
upon  presentation  and surrender of the Investor  Certificates at the office or
agency of the Trustee  therein  specified.  In the event written  directions are
delivered  by the  Transferor  to the  Trustee  as  described  in the  preceding
sentence,  the Transferor  shall deposit in the Collection  Account on or before
the Payment Date for such final  distribution in immediately  available funds an
amount which, when added to the funds on deposit in the Collection  Account that
are payable to the Investor Certificateholders,  will be equal to the retransfer
amount for the Mortgage  Loans  computed as above  provided,  together  with all
amounts  due  and  owing  to  the  Credit   Enhancer  for  unpaid  premiums  and
unreimbursed  draws on the  Policy  and all other  amounts  due and owing to the
Credit  Enhancer  pursuant to the  Insurance  Agreement,  together with interest
thereon as provided under the Insurance Agreement.

         (d) Upon presentation and surrender of the Investor  Certificates,  the
Trustee shall cause to be distributed to the Holders of Investor Certificates on
the Payment Date for such final  distribution,  in proportion to the  Percentage
Interests of their respective Investor Certificates and to the extent that funds
are  available  for  such  purpose,  an  amount  equal  to  (i)  if  such  final
distribution  is not being  made  pursuant  to the  transfer  to the  Transferor
pursuant  to Section  10.01(a)(i),  the amount  required  to be  distributed  to
Investor  Certificateholders  pursuant to Section 5.01 for such Payment Date and
(ii) if such final  distribution is being made pursuant to such retransfer,  the
amount specified in Section 10.01(a)(i).  The distribution on such final Payment
Date pursuant to a retransfer

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<PAGE>

pursuant to Section  10.01(a)(i) shall be in lieu of the distribution  otherwise
required to be made on such Payment Date in respect of the Certificates.  On the
final Payment Date prior to having made the distributions  called for above, the
Trustee shall, based upon the information set forth in the Servicing Certificate
for such Payment  Date,  withdraw from the  Collection  Account and remit to the
Credit Enhancer the lesser of (x) the amount  available for distribution on such
final  Payment  Date,  net of any portion  thereof  necessary to pay the amounts
described  in clauses  (d)(i) and (ii) above and (y) the unpaid  amounts due and
owing to the Credit Enhancer for unpaid premiums and  unreimbursed  draws on the
Policy and all other  amounts due and owing to the Credit  Enhancer  pursuant to
the Insurance  Agreement,  together with interest  thereon as provided under the
Insurance Agreement.

         (e) In the event that all of the Investor  Certificateholders shall not
surrender their Investor  Certificates  for final payment and cancellation on or
before such final Payment  Date,  the Trustee shall on such date cause all funds
in the  Collection  Account not  distributed in final  distribution  to Investor
Certificateholders  to be  withdrawn  therefrom  and  credited to the  remaining
Investor  Certificateholders  by  depositing  such  funds in a  separate  escrow
account for the benefit of such Investor  Certificateholders  and the Transferor
(if the  Transferor  has exercised its right to transfer the Mortgage  Loans) or
the  Trustee  (in any other  case)  shall  give a second  written  notice to the
remaining Investor  Certificateholders  to surrender their Investor Certificates
for cancellation  and receive the final  distribution  with respect thereto.  If
within one year after the second notice all the Investor  Certificates shall not
have been surrendered for cancellation,  the Trustee may take appropriate steps,
or may appoint an agent to take  appropriate  steps,  to contact  the  remaining
Investor Certificateholders concerning surrender of their Investor Certificates,
and the cost  thereof  shall be paid out of the funds on deposit in such  escrow
account.

                                   ARTICLE XI

                            Rapid Amortization Events

         Section 11.01. RAPID  AMORTIZATION  EVENTS. If any one of the following
events shall occur during the Managed Amortization Period:

         (a)  failure on the part of the  Transferor  (i) to make any payment or
deposit required by the terms of this Agreement, on or before the date occurring
three  Business  Days after the date such  payment or deposit is  required to be
made  herein,  or (ii) duly to observe or perform in any  material  respect  the
covenants  of the  Transferor  set forth in  Section  2.04(a)  or (iii)  duly to
observe or perform in any material  respect any other covenants or agreements of
the  Transferor  set  forth in this  Agreement,  which  failure,  in each  case,
materially and adversely affects the interests of the  Certificateholders or the
Credit Enhancer and which, in the case of clause (iii), continues unremedied and
continues   to  affect   materially   and   adversely   the   interests  of  the
Certificateholders  for a period  of 60 days  after  the  date on which  written
notice of such failure, requiring the same to be remedied, shall have been given
to the  Transferor by the Trustee, or to the

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<PAGE>

Transferor  and the Trustee by the Holders of Investor  Certificates  evidencing
Voting Rights aggregating not less than 51%;

         (b)  any  representation  or  warranty  made by the  Transferor  or the
Depositor in this  Agreement  shall prove to have been incorrect in any material
respect  when  made,  as a  result  of  which  the  interests  of  the  Investor
Certificateholders  or the Credit Enhancer are materially and adversely affected
and which  continues to be incorrect  in any material  respect and  continues to
affect materially and adversely the interests of the  Certificateholders  or the
Credit  Enhancer for a period of 60 days after the date on which written  notice
of such failure, requiring the same to be remedied, shall have been given to the
Transferor  or the  Depositor,  as the case may be,  by the  Trustee,  or to the
Transferor,  the Depositor and the Trustee by either the Credit  Enhancer or the
Holders of Investor  Certificates  evidencing Voting Rights aggregating not less
than 51%;  PROVIDED,  HOWEVER,  that a Rapid Amortization Event pursuant to this
subparagraph  (b)  shall  not  be  deemed  to  have  occurred  hereunder  if the
Transferor  has accepted  retransfer  of the related  Mortgage  Loan or Mortgage
Loans during such period (or such longer  period (not to exceed an additional 60
days) as the Trustee may specify) in accordance with the provisions hereof;

         (c)  the  Transferor  or  the  Depositor  shall   voluntarily  go  into
liquidation,  consent  to  the  appointment  of a  conservator  or  receiver  or
liquidator  or  similar  person  in  any   insolvency,   readjustment  of  debt,
marshalling of assets and  liabilities or similar  proceedings of or relating to
the Transferor or the Depositor,  or of or relating to all or substantially  all
of such  Person's  property,  or a  decree  or order  of a court  or  agency  or
supervisory authority having jurisdiction in the premises for the appointment of
a  conservator,  receiver,  liquidator  or  similar  person  in any  insolvency,
readjustment  of  debt,   marshalling  of  assets  and  liabilities  or  similar
proceedings,  or for the winding-up or  liquidation  of its affairs,  shall have
been entered  against the  Transferor  or the Depositor and such decree or order
shall have remained in force  undischarged  or unstayed for a period of 30 days;
or the  Transferor or the Depositor  shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take advantage of any
applicable  insolvency or  reorganization  statute,  make an assignment  for the
benefit of its creditors or voluntarily suspend payment of its obligations;

         (d) the Trust shall become  subject to  registration  as an "investment
company" under the Investment Company Act of 1940, as amended; or

         (e) the  aggregate  of all draws  under the Policy  exceeds  __% of the
Initial Cut-Off Date Pool Balance;

then, in the case of any event  described in  subparagraph  (a) or (b) after the
applicable  grace period,  if any, set forth in such  subparagraphs,  either the
Trustee, the Credit Enhancer or the Holders of Investor Certificates  evidencing
Voting  Rights  aggregating  more than 51%,  by notice  given in  writing to the
Transferor,  the  Depositor  and the  Servicer  (and to the  Trustee if given by
either the Credit Enhancer or the Investor  Certificateholders) may declare that
an early  amortization event (a "RAPID  AMORTIZATION  EVENT") has occurred as of
the date of such notice,  and in the case of any event described in subparagraph
(c), (d) or (e), a Rapid  Amortization  Event shall occur without any notice

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or other action on the part of the Trustee,  the Credit Enhancer or the Investor
Certificateholders, immediately upon the occurrence of such event.

         Section 11.02. ADDITIONAL RIGHTS UPON THE OCCURRENCE OF CERTAIN EVENTS.
(a) If the  Transferor  voluntarily  goes into  liquidation  or  consents to the
appointment  of a conservator or receiver or liquidator or similar person in any
insolvency,  readjustment  of debt,  marshalling  of assets and  liabilities  or
similar proceedings of or relating to the Transferor or of or relating to all or
substantially  all its  property,  or a decree  or order of a court or agency or
supervisory authority having jurisdiction in the premises for the appointment of
a conservator  or receiver or liquidator  or similar  person in any  insolvency,
readjustment  of  debt,   marshalling  of  assets  and  liabilities  or  similar
proceedings,  or for the winding-up or  liquidation  of its affairs,  shall have
been entered against the Transferor and such decree shall have remained in force
undischarged or unstayed for a period of 30 days; or the Transferor  shall admit
in writing its  inability to pay its debts  generally as they become due, file a
petition  to take  advantage  of any  applicable  insolvency  or  reorganization
statute,  make an  assignment  for the benefit of its  creditors or  voluntarily
suspend payment of its obligations  (such  voluntary  liquidation,  appointment,
entering of such decree,  admission,  filing, making, suspension or violation or
other event described above, an "INSOLVENCY EVENT"), the Transferor shall on the
day of  such  appointment,  voluntary  liquidation,  entering  of  such  decree,
admission,  filing,  making,  suspension or  inability,  as the case may be (the
"APPOINTMENT  DAY"),  promptly give notice to the Trustee,  the Servicer and the
Credit Enhancer of such Insolvency  Event.  Within 15 days of the receipt by the
Trustee of the Transferor's notice of an Insolvency Event, the Trustee shall (i)
publish a notice in Authorized  Newspapers that an Insolvency Event has occurred
and that the  Trustee  intends to direct  the  Servicer  to sell,  dispose of or
otherwise  liquidate the Mortgage Loans in a commercially  reasonable manner and
(ii) send  written  notice to the  Investor  Certificateholders  describing  the
provisions  of  this  Section   11.02,   which  notice  shall  inform   Investor
Certificateholders  that unless  (Holders of  Investor  Certificates  evidencing
Voting Rights  aggregating not less than 51%) advise the Trustee in writing that
they wish the  Trustee  to  instruct  the  Servicer  not to sell,  dispose of or
otherwise  liquidate  the  Mortgage  Loans  within 90 days  from the day  notice
pursuant to clause (i) above is first published (the  "PUBLICATION  DATE"),  the
Trustee shall instruct the Servicer to proceed to sell, dispose of, or otherwise
liquidate  the  Mortgage  Loans  in a  commercially  reasonable  manner  and  on
commercially   reasonable  terms,   which  shall  include  the  solicitation  of
competitive  bids,  and shall proceed to  consummate  the sale,  liquidation  or
disposition  of the Mortgage Loans as provided above with the highest bidder for
the Mortgage  Loans.  The Transferor  shall be permitted to bid for the Mortgage
Loans.  The Trustee may obtain a prior  determination  from such  conservator or
receiver  that the  terms  and  manner  of any  proposed  sale,  disposition  or
liquidation are  commercially  reasonable.  The provisions of Sections 11.01 and
11.02 shall not be deemed to be mutually exclusive.

         (b) The  proceeds  from the sale,  disposition  or  liquidation  of the
Mortgage  Loans  pursuant  to  Section   11.02(a)  above  shall  be  treated  as
collections on the Mortgage Loans received during the Rapid Amortization Period;
PROVIDED,  HOWEVER,  that such  proceeds  will,  based on amounts  specified  in
writing by the Servicer to the Trustee,  first be paid to the Credit Enhancer to
reimburse the Credit  Enhancer for previously

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<PAGE>

unreimbursed  Credit  Enhancement Draw Amounts and other amounts owing under the
Insurance Agreement;  and PROVIDED,  FURTHER, that the Investor Fixed Allocation
Percentage   of  such   remaining   proceeds   shall   be   paid   to   Investor
Certificateholders in the following amounts and order of priority:

                  (i) all accrued and unpaid interest on the Class A Certificate
         Principal Balance through the Interest Period immediately preceding the
         Payment  Date on which such  proceeds are  distributed  to the Investor
         Certificateholders;

                  (ii) all accrued  and unpaid  interest on the Class S Notional
         Amount through the Interest  Period  immediately  preceding the Payment
         Date  on  which  such   proceeds  are   distributed   to  the  Investor
         Certificateholders; and

                  (iii) an amount  of  principal  up to the Class A  Certificate
         Principal Balance.

The Policy shall cover any shortfall in the event such proceeds are insufficient
to make the  distributions  to Investor  Certificateholders  pursuant to Section
11.02(b).  On the day  following  the Payment  Date on which such  proceeds  are
distributed to the Investor Certificateholders, the Trust shall terminate.

                                  ARTICLE XII

                            Miscellaneous Provisions

         Section  12.01.  AMENDMENT.  This Agreement may be amended from time to
time by the  Transferor,  the Servicer,  the Depositor and the Trustee,  in each
case  without  the consent of any of the  Certificateholders,  but only with the
consent  of the  Credit  Enhancer  (which  consent  shall  not  be  unreasonably
withheld),  (i) to cure any ambiguity,  (ii) to correct any defective provisions
or to correct or supplement any provisions  herein that may be inconsistent with
any other provisions herein, (iii) to add to the duties of the Transferor or the
Servicer,  (iv) to add any other provisions with respect to matters or questions
arising under this Agreement or the Policy,  as the case may be, which shall not
be inconsistent  with the provisions of this Agreement,  (v) to add or amend any
provisions  of this  Agreement  as  required  by any Rating  Agency or any other
nationally  recognized  statistical rating  organization in order to maintain or
improve any rating of the Investor Certificates (it being understood that, after
obtaining  the ratings in effect on the Closing Date,  neither the Trustee,  the
Transferor,  the Depositor nor the Servicer is obligated to obtain,  maintain or
improve any such rating),  (vi) to add or amend any provisions of this Agreement
to  correct  or cure any  defective  provision  or  ambiguity  as a result  of a
transfer of the  Transferor  Certificates  pursuant to Section  6.05 or (vii) to
comply with any requirement imposed by the Code;  PROVIDED,  HOWEVER,  that such
action  shall  not,  as  evidenced  by an  Opinion of  Counsel,  materially  and
adversely affect the interests of any  Certificateholder or the Credit Enhancer;
and  PROVIDED,  FURTHER,  that the  amendment  shall not be deemed to  adversely
affect in any material  respect the interests of the  Certificateholders  and no
opinion  referred to in the preceding  proviso shall be required to be delivered
if the Person  requesting the amendment obtains a letter from each Rating

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Agency  stating  that the  amendment  would  not  result in the  downgrading  or
withdrawal of the respective ratings then assigned to the Investor  Certificates
without  regard to the Policy.  Notwithstanding  the  foregoing,  any  amendment
pursuant to clause  (viii)  above shall be  permissible  only upon  receipt of a
letter from each Rating Agency  stating that the  amendment  would not result in
the  downgrading  or withdrawal of the  respective  ratings then assigned to the
Investor Certificateholders without regard to the Policy.

         This  Agreement  also may be amended from time to time by the Servicer,
the Transferor,  the Depositor and the Trustee,  and the Servicer and the Credit
Enhancer,  may from time to time consent to the amendment of the Policy with the
consent of the Holders of the Investor  Certificates  evidencing  Voting  Rights
aggregating  not  less  than  51%,  and in the  case  of an  amendment  to  this
Agreement, with the consent of the Credit Enhancer for the purpose of adding any
provisions to or changing in any manner or eliminating  any of the provisions of
this   Agreement   or  of   modifying   in  any   manner   the   rights  of  the
Certificateholders;  PROVIDED,  HOWEVER, that no such amendment shall (i) reduce
in  any  manner  the  amount  of,  or  delay  the  timing  of,  payments  on the
Certificates or distributions or payments under the Policy which are required to
be made on any Certificate without the consent of the Holder of such Certificate
or (ii)  reduce  the  aforesaid  percentage  required  to  consent  to any  such
amendment,  without  the  consent  of  the  Holders  of  all  Certificates  then
outstanding or (iii) adversely  effect in any material  respect the interests of
the Credit Enhancer.

         Notwithstanding the foregoing, the Agreement may not be amended unless,
in  connection  with such  amendment,  an Opinion of Counsel is furnished to the
Trustee  that such  amendment  will not (i)  adversely  affect the status of the
Investor  Certificates  as debt;  (ii) result in the Trust being  taxable at the
entity  level;  or (iii)  result  in the  Trust  being  classified  as a taxable
mortgage pool (as defined in Section 7701(i) of the Code).

         Following the execution and delivery of any such amendment hereto or to
the Policy to which the Credit  Enhancer  was  required to  consent,  either the
Transferor,  if the Transferor requested the amendment,  or the Servicer, if the
Servicer  requested the amendment,  shall  reimburse the Credit Enhancer for the
reasonable  out-of-pocket  costs and expenses incurred by the Credit Enhancer in
connection with such amendment.

         Prior  to the  execution  of  any  such  amendment,  the  party  hereto
requesting  any  such  amendment  shall  furnish  written  notification  of  the
substance of such amendment to each Rating Agency.  In addition,  promptly after
the  execution  of any such  amendment  made with the  consent  of the  Investor
Certificateholders,  the  Trustee  shall  furnish  written  notification  of the
substance  of  such  amendment  to each  Investor  Certificateholder  and  fully
executed  original  counterparts of the instruments  effecting such amendment to
the Credit Enhancer.

         It   shall   not   be   necessary   for   the   consent   of   Investor
Certificateholders  under this Section 12.01 to approve the  particular  form of
any proposed  amendment or consent,  but it shall be  sufficient if such consent
shall approve the substance  thereof.  The manner of obtaining such consents and
of evidencing the authorization of the execution  thereof by

                                       85
<PAGE>

Certificateholders  shall be  subject  to such  reasonable  requirements  as the
Trustee may prescribe.

         In executing any amendment permitted by this Section 12.01, the Trustee
shall be entitled to receive,  and shall be fully  protected in relying upon, an
Opinion of Counsel stating that such amendment is authorized or permitted hereby
and  that  all  conditions  precedent  to the  execution  and  delivery  of such
amendment have been  satisfied.  The Trustee may, but shall not be obligated to,
enter into any such amendment which affects the Trustee's own rights,  duties or
immunities under this Agreement or otherwise.

         Section 12.02.  RECORDATION OF AGREEMENT.  This Agreement is subject to
recordation in all appropriate  public offices for real property  records in all
the  counties  or other  comparable  jurisdictions  in  which  any or all of the
properties  subject to the Mortgages are situated,  and in any other appropriate
public  recording  office or elsewhere,  such  recordation to be effected by the
Trustee, but only upon direction of Investor  Certificateholders  accompanied by
an  Opinion  of  Counsel to the  effect  that such  recordation  materially  and
beneficially affects the interests of Investor Certificateholders.  The Investor
Certificateholders requesting such recordation shall bear all costs and expenses
of such  recordation.  The Trustee shall have no obligation to ascertain whether
such recordation so affects the interests of the Certificateholders.

         For the purpose of  facilitating  the  recordation of this Agreement as
herein  provided  and  for  other  purposes,  this  Agreement  may  be  executed
simultaneously in any number of counterparts,  each of which  counterparts shall
be deemed to be an original,  and such counterparts shall constitute but one and
the same instrument.

         Section 12.03. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS. The death or
incapacity of any Investor Certificateholder shall not operate to terminate this
Agreement or the Trust,  nor entitle  such  Investor  Certificateholder's  legal
representatives  or  heirs  to claim an  accounting  or to take  any  action  or
commence any proceeding in any court for a partition or winding up of the Trust,
nor otherwise  affect the rights,  obligations  and  liabilities  of the parties
hereto or any of them.

         No  Certificateholder  shall have any right to vote (except as provided
in  Sections  8.01,  9.01,  9.02,  11.01 and 12.01) or in any  manner  otherwise
control the operation and  management of the Trust,  or the  obligations  of the
parties  hereto,  nor shall anything herein set forth, or contained in the terms
of the  Certificates,  be construed so as to constitute  the  Certificateholders
from  time to time as  partners  or  members  of an  association;  nor shall any
Investor  Certificateholder be under any liability to any third person by reason
of any action taken by the parties to this  Agreement  pursuant to any provision
hereof.

         No  Certificateholder  shall  have any right by  virtue or by  availing
itself of any  provisions  of this  Agreement to institute  any suit,  action or
proceeding in equity or at law upon or under or with respect to this  Agreement,
unless such Holder  previously  shall have given to the Trustee a written notice
of default and of the continuance thereof, as hereinbefore  provided, and unless
also the Holders of Investor  Certificates  evidencing

                                       86
<PAGE>

Voting Rights aggregating not less than 51% shall have made written request upon
the Trustee to institute  such  action,  suit or  proceeding  in its own name as
Trustee  hereunder  and  shall  have  offered  to the  Trustee  such  reasonable
indemnity as it may require  against the costs,  expenses and  liabilities to be
incurred therein or thereby,  and the Trustee,  for 60 days after its receipt of
such notice, request and offer of indemnity,  shall have neglected or refused to
institute any such action, suit or proceeding; it being understood and intended,
and being  expressly  covenanted  by each  Certificateholder  with  every  other
Certificateholder  and the Trustee,  that no one or more Holders of Certificates
shall have any right in any manner  whatever by virtue or by availing  itself or
themselves of any provisions of this  Agreement to affect,  disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain  priority over or  preference to any other such Holder,  or to enforce
any right under this Agreement, except in the manner herein provided and for the
equal, ratable and common benefit of all Certificateholders.  For the protection
and  enforcement  of the  provisions  of this  Section  12.03,  each  and  every
Certificateholder  and the  Trustee  shall be  entitled to such relief as can be
given either at law or in equity.

         By accepting its Investor Certificate,  each Investor Certificateholder
agrees that unless a Credit Enhancer  Default exists,  the Credit Enhancer shall
have the right to exercise all rights of the Investor  Certificateholders  under
this Agreement without any further consent of the Investor Certificateholders.

         Section  12.04.  GOVERNING  LAW. THIS  AGREEMENT  SHALL BE CONSTRUED IN
ACCORDANCE  WITH THE LAWS OF THE STATE OF NEW YORK AND THE  OBLIGATIONS,  RIGHTS
AND REMEDIES OF THE PARTIES  HEREUNDER  SHALL BE DETERMINED  IN ACCORDANCE  WITH
SUCH LAWS.

         Section  12.05.  NOTICES.  All  demands,   notices  and  communications
hereunder  shall be in  writing  and shall be deemed to have been duly  given if
personally  delivered at or mailed by certified mail, return receipt  requested,
to  (a)  in the  case  of  the  Depositor  or  Transferor,  GreenPoint  Mortgage
Securities LLC, 1100 Larkspur  Circle,  Larkspur,  California  94939, (b) in the
case of the Servicer,  GreenPoint Mortgage Funding,  Inc., 1100 Larkspur Circle,
Larkspur,  California  94939,  (c) in the case of the Trustee,  at the Corporate
Trust  Office,  (d) in the  case  of the  Credit  Enhancer,  [Credit  Enhancer],
[Address], (e) in the case of Moody's, [Address of First Rating Agency], and (f)
in the case of Standard & Poor's,  [Address of Second Rating Agency],  or, as to
each  party,  at such other  address as shall be  designated  by such party in a
written  notice to each other  party.  Any notice  required or  permitted  to be
mailed  to a  Certificateholder  shall be given by  first  class  mail,  postage
prepaid, at the address of such Holder as shown in the Certificate Register. Any
notice  so  mailed  within  the  time  prescribed  in this  Agreement  shall  be
conclusively   presumed   to  have  been  duly   given,   whether   or  not  the
Certificateholder receives such notice. Any notice or other document required to
be delivered  or mailed by the Trustee to any Rating  Agency shall be given on a
best efforts  basis and only as a matter of courtesy and  accommodation  and the
Trustee  shall have no liability  for failure to deliver such notice or document
to any Rating Agency.

                                       87
<PAGE>

         Section 12.06.  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, then such covenants,  agreements,  provisions or
terms  shall be  deemed  severable  from the  remaining  covenants,  agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability  of the other provisions of this Agreement or of the Certificates
or the rights of the Holders thereof.

         Section  12.07.  ASSIGNMENT.  Notwithstanding  anything to the contrary
contained  herein,  except as  provided in Sections  6.05,  7.02 and 7.04,  this
Agreement may not be assigned by the Depositor or the Servicer without the prior
written consent of the Credit Enhancer and Holders of the Investor  Certificates
evidencing Percentage Interests aggregating not less than 66%.

         Section 12.08.  CERTIFICATES  NONASSESSABLE AND FULLY PAID. The parties
agree that the Investor  Certificateholders  shall not be personally  liable for
obligations of the Trust, that the beneficial ownership interests represented by
the Certificates  shall be nonassessable for any losses or expenses of the Trust
or for  any  reason  whatsoever,  and  that  the  Certificates  upon  execution,
authentication  and delivery  thereof by the Trustee pursuant to Section 2.08 or
6.02 are and shall be deemed fully paid.

         Section 12.09. THIRD-PARTY BENEFICIARIES.  This Agreement will inure to
the benefit of and be binding upon the parties hereto,  the  Certificateholders,
the Certificate Owners, the Credit Enhancer and their respective  successors and
permitted  assigns.  Except as otherwise  provided in this  Agreement,  no other
Person will have any right or obligation hereunder.

         Section  12.10.  COUNTERPARTS.  This  instrument may be executed in any
number  of  counterparts,  each of which so  executed  shall be  deemed to be an
original,  but all such counterparts  shall together  constitute but one and the
same instrument.

         Section  12.11.  EFFECT OF HEADINGS AND TABLE OF CONTENTS.  The Article
and Section  headings herein and the Table of Contents are for convenience  only
and shall not affect the construction hereof.

         Section  12.12.  INSURANCE  AGREEMENT.  The Trustee is  authorized  and
directed  to execute  and deliver  the  Insurance  Agreement  and to perform the
obligations of the Trustee thereunder.

                                       88
<PAGE>

         IN WITNESS  WHEREOF,  the Depositor,  the Transferor,  the Seller,  the
Servicer and the Trustee have caused this Agreement to be duly executed by their
respective officers all as of the day and year first above written.

                                            GREENPOINT MORTGAGE SECURITIES LLC,
                                             as Depositor and Transferor



                                            By:
                                                 -------------------------------
                                                           Title:



                                            GREENPOINT MORTGAGE FUNDING, INC.,
                                             as Seller and Servicer



                                            By:
                                                 -------------------------------
                                                           Title:



                                            [Trustee], as Trustee



                                            By:
                                                 -------------------------------
                                                           Title:

                                       89
<PAGE>



State of                            )
         ---------------------------
                                    )  ss.:
County of                           )
          --------------------------

         On the ____ day of ________, 200_ before me, a notary public in and for
the State of ________,  personally appeared _________________,  known to me who,
being   by  me  duly   sworn,   did   depose   and  say  that  he   resides   at
______________________;  that  he is  the  _____________________  of  GreenPoint
Mortgage  Securities  LLC,  a Delaware  limited  liability  company,  one of the
parties that executed the foregoing  instrument;  that he knows the seal of said
company;  that the seal affixed to said  instrument is such seal; that it was so
affixed  by order of the  members of said  company;  and that he signed his name
thereto by like order.


                                  ----------------------------------------------
                                  Notary Public


(Notarial Seal)


State of                            )
         ---------------------------
                                    )  ss.:
County of                           )
          --------------------------

         On the ____ day of  __________,  200_ before me, a notary public in and
for the State of ________, personally appeared  _____________________,  known to
me  who,  being  by me duly  sworn,  did  depose  and say  that  he  resides  at
_________________,  ____________,  ________ _____; that he is the ______________
of GreenPoint Mortgage Funding, Inc., a New York corporation, one of the parties
that  executed  the  foregoing  instrument;  that  he  knows  the  seal  of said
corporation;  that the seal affixed to said  instrument is such corporate  seal;
that it was so affixed by order of the Board of Directors  of said  corporation;
and that he signed his name thereto by like order.


                                  ----------------------------------------------
                                  Notary Public


(Notarial Seal)



                                       90
<PAGE>



State of                            )
         ---------------------------
                                    )  ss.:
County of                           )
          --------------------------

         On the ____ day of  ______________,  200_ before me, a notary public in
and for the State of ________,  personally appeared _________________,  known to
me  who,  being  by me duly  sworn,  did  depose  and say  that  he  resides  at
_______________,   _______________  _____;  that  he  is  the  _____________  of
[Trustee],  a  __________,  one of  the  parties  that  executed  the  foregoing
instrument;  and that he  signed  his  name  thereto  by  order of the  Board of
Directors of said corporation.


                                  ----------------------------------------------
                                  Notary Public


(Notarial Seal)



                                       91
<PAGE>


                                                                       EXHIBIT A

UNLESS THIS  CERTIFICATE  IS PRESENTED BY AN  AUTHORIZED  REPRESENTATIVE  OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION  ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER,  EXCHANGE,  OR PAYMENT,  AND ANY CERTIFICATE
ISSUED  IS  REGISTERED  IN THE NAME OF CEDE & CO.  OR IN SUCH  OTHER  NAME AS IS
REQUESTED  BY AN  AUTHORIZED  REPRESENTATIVE  OF DTC (AND ANY PAYMENT IS MADE TO
CEDE  &  CO.  OR  TO  SUCH  OTHER  ENTITY  AS  IS  REQUESTED  BY  AN  AUTHORIZED
REPRESENTATIVE  OF DTC), ANY TRANSFER,  PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE  BY OR TO ANY PERSON IS  WRONGFUL  INASMUCH  AS THE  REGISTERED  OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

SOLELY FOR U.S.  FEDERAL  INCOME TAX PURPOSES,  THIS  CERTIFICATE  IS A "REGULAR
INTEREST" IN A "REAL  ESTATE  MORTGAGE  INVESTMENT  CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").

Certificate No.                         :

Cut-Off Date                            :

First Payment Date                      :

Initial Class Principal Balance
of this Certificate
("DENOMINATION")                        :   $
  ------------

Initial Class Principal
Balance                                 :   $

Pass-Through Rate                       :   %

CUSIP                                   :

Class                                   :   [A-_]/[S]




                                      A-1
<PAGE>



                    GREENPOINT HOME EQUITY LOAN TRUST 200_-_
            Home Equity Loan Asset-Backed Certificates, Series 200_-_
                                 Class [A-_]/[S]

         evidencing a percentage interest in the distributions  allocable to the
         Certificates of the above-referenced Class with respect to a trust (the
         "TRUST")  consisting of (closed-end  fixed) and (adjustable  rate) home
         equity loans (the "MORTGAGE LOANS")

                GREENPOINT MORTGAGE SECURITIES LLC, as Depositor

         Principal in respect of this  Certificate is  distributable  monthly as
set  forth  herein.  Accordingly,  the Class  Principal  Balance  of this  Class
[A-_]/[S]Certificate  at any time may be less than the Initial  Class  Principal
Balance set forth on the face hereof, as described herein.  This Class [A-_]/[S]
Certificate  does not evidence an  obligation  of, or an interest in, and is not
guaranteed  by the  Seller  or the  Trustee  referred  to  below or any of their
respective affiliates.  Neither this Class [A-_]/[S]Certificate nor the Mortgage
Loans are guaranteed or insured by any governmental agency or instrumentality.

         This  certifies  that  ____________  is  the  registered  owner  of the
Percentage  Interest evidenced by this Class (A-_) (S) Certificate  (obtained by
dividing  the  Denomination  of this Class  (A-_) (S)  Certificate  by the Class
Principal  Balance) in certain  monthly  distributions  with  respect to a Trust
consisting  primarily  of the  Mortgage  Loans  sold to the Trust by  GreenPoint
Mortgage  Funding,  Inc.  (the  "SELLER").  The Trust was created  pursuant to a
Pooling and Servicing  Agreement  dated as of the Cut-Off Date  specified  above
(the "AGREEMENT") between the Depositor,  GreenPoint Mortgage Funding,  Inc., as
seller  and  servicer  (in such  capacities,  the  "Seller"  or the  "SERVICER,"
respectively),   GreenPoint   Mortgage   Securities   LLC,  as  transferor  (the
"TRANSFEROR")  and  [Trustee],  as trustee  (the  "TRUSTEE").  To the extent not
defined herein,  the capitalized terms used herein have the meanings assigned in
the Agreement. This Class [A-_]/[S]Certificate is issued under and is subject to
the terms,  provisions and conditions of the Agreement,  to which  Agreement the
Holder of this Class  [A-_]/[S]  Certificate by virtue of the acceptance  hereof
assents and by which such Holder is bound.

         Reference  is  hereby  made to the  further  provisions  of this  Class
[A-_]/[S]  Certificate set forth on the reverse hereof, which further provisions
shall for all purposes have the same effect as if set forth at this place.

         This Class [A-_]/[S]  Certificate  shall not be entitled to any benefit
under the Agreement or be valid for any purpose unless manually countersigned by
an authorized signatory of the Trustee.

                                      * * *


                                      A-2
<PAGE>



         IN WITNESS WHEREOF,  the Trustee has caused this Certificate to be duly
executed.

         Dated:  __________, 200_

                                              [Trustee], as Trustee




                                              By:
                                                   -----------------------------


This is one of the Class [A-_]/[S] Certificates
referenced in the within-mentioned Agreement

By:
     --------------------------------------
       Authorized Signatory






                                      A-3
<PAGE>

                    GREENPOINT HOME EQUITY LOAN TRUST 200_-_
                   Home Equity Loan Asset-Backed Certificates,
                                  Series 200_-_

         This  Certificate  is one of a duly  authorized  issue of  Certificates
designated  as  GreenPoint  Home  Equity  Loan Trust  200_-_,  Home  Equity Loan
Asset-Backed  Certificates,   Series  200_-_  (herein  collectively  called  the
"CERTIFICATES"),  and representing a beneficial  ownership interest in the Trust
created by the Agreement.

         The  Certificateholder,  by its acceptance of this Certificate,  agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment  hereunder and that the Trustee is not liable to the  Certificateholders
for any amount  payable  under this  Certificate  or the Agreement or, except as
expressly  provided  in the  Agreement,  subject  to  any  liability  under  the
Agreement.

         This   Certificate   will  have  the  benefit  of  an  irrevocable  and
unconditional  certificate guaranty insurance policy issued by [Credit Enhancer]
(the "CREDIT ENHANCER").

         This  Certificate  does not  purport to  summarize  the  Agreement  and
reference is made to the Agreement for the interests,  rights and limitations of
rights,  benefits,  obligations and duties  evidenced  thereby,  and the rights,
duties and immunities of the Trustee.

         Pursuant to the terms of the Agreement,  a distribution will be made on
the __th day of each month or, if such __th day is not a  Business  Day then the
first Business Day following such Payment Date (the "PAYMENT DATE"),  commencing
on the first Payment Date  specified on the face hereof,  to the Person in whose
name this  Certificate  is registered at the close of business on the applicable
Record  Date in an  amount  equal  to the  product  of the  Percentage  Interest
evidenced  by this  Certificate  and the amount  required to be  distributed  to
Holders of Certificates of the Class to which this  Certificate  belongs on such
Payment  Date  pursuant to the  Agreement.  The Record Date  applicable  to each
Payment Date is the last  Business Day of the month  preceding the month of such
Payment Date.

         Distributions on this Certificate shall be made by check or money order
mailed to the  address  of the  person  entitled  thereto  as it  appears on the
Certificate  Register  or,  upon  the  request  of  a  Certificateholder  owning
Certificates  having  the  requisite   aggregate   denominations  or  Percentage
Interests  specified in the  Agreement,  by wire transfer or  otherwise,  as set
forth in the Agreement.  The final distribution on each Certificate will be made
in like manner,  but only upon  presentment and surrender of such Certificate at
the   office  or   agency   of  the   Trustee   specified   in  the   notice  to
Certificateholders of such final distribution.

         The Agreement permits,  with certain  exceptions therein provided,  the
amendment  thereof and the  modification  of the rights and  obligations  of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Seller and the  Trustee  with the consent of the Credit  Enhancer  and of
Holders of the requisite percentage of the

                                      A-4
<PAGE>

Percentage  Interests of each Class of Certificates  affected by such amendment,
as  specified  in the  Agreement.  Any  such  consent  by  the  Holder  of  this
Certificate  shall be conclusive  and binding on such Holder and upon all future
Holders of this  Certificate  and of any  Certificate  issued upon the  transfer
hereof or in exchange therefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate.  The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates.

         As provided in the Agreement and subject to certain limitations therein
set forth,  the transfer of this  Certificate is registrable in the  Certificate
Register of the Trustee upon surrender of this  Certificate for  registration of
transfer  at the office or agency  maintained  by the  Trustee in New York,  New
York,  accompanied by a written  instrument of transfer in form  satisfactory to
the Trustee and the Certificate  Registrar duly executed by the holder hereof or
such holder's attorney duly authorized in writing, and thereupon one or more new
Certificates  of the same Class in authorized  denominations  and evidencing the
same aggregate Percentage Interest in the Trust will be issued to the designated
transferee or transferees.

         The Certificates are issuable only as registered  Certificates  without
coupons  in  denominations  specified  in  the  Agreement.  As  provided  in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized  denominations
and  evidencing  the same  aggregate  Percentage  Interest,  as requested by the
Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange,  but the Trustee may require  payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

         The Seller and the  Trustee  and any agent of the Seller or the Trustee
may treat the Person in whose name this  Certificate  is registered as the owner
hereof for all purposes,  and neither the Seller, the Trustee nor any such agent
shall be affected by any notice to the contrary.

         On any Payment Date on which the Pool Principal  Balance is less than (
)% of the Cut-Off Date Pool Principal  Balance,  the Seller will have the option
to repurchase,  in whole,  from the Trust the Mortgage Loans at a purchase price
determined  as provided  in the  Agreement.  In the event that no such  optional
termination  occurs,  the  obligations  and  responsibilities   created  by  the
Agreement  will  terminate  upon the later of (A) payment in full of all amounts
owing to the Credit Enhancer unless the Credit Enhancer shall otherwise  consent
and (B) the  earliest of (i) the day  following  the  Payment  Date on which the
Aggregate  Class A Principal  Balance has been  reduced to zero,  (ii) the final
payment or other  liquidation  of the last  Mortgage Loan in the Trust and (iii)
the  Payment  Date in  __________  200_.  In no event,  however,  will the trust
created by the  Agreement  continue  beyond the  expiration of 21 years from the
death  of the  last  survivor  of the  descendants  living  at the  date  of the
Agreement of a certain person named in the Agreement.

                                      A-5
<PAGE>

         Capitalized  terms used herein that are defined in the Agreement  shall
have the meanings ascribed to them in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.




                                      A-6
<PAGE>



                                   ASSIGNMENT

         FOR VALUE  RECEIVED,  the  undersigned  hereby  sell(s),  assign(s) and
transfer(s) unto
                 ---------------------------------------------------------------

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

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

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

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

(Please  print  or  typewrite  name and  address  including  postal  zip code of
assignee)

the  Percentage   Interest  evidenced  by  the  within  Certificate  and  hereby
authorizes the transfer of registration of such Percentage  Interest to assignee
on the Certificate Register of the Trust.

         I (We) further direct the Trustee to issue a new  Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
                          ------------------------------------------------------
Dated:

                                     -------------------------------------------
                                     Signature by or on behalf of assignor



                                      A-7
<PAGE>



                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions  shall  be  made,  by  wire  transfer  or  otherwise,  in
immediately available funds to
                               -------------------------------------------------

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

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

--------------------------------------------------------------------------------
for the account of
                   ------------------------------------------------------------,
account number
               -------------------------------------, or, if mailed by check, to

-------------------------------------------------------------------.  Applicable

statements should be mailed to
                               -------------------------------------------------

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

-------------------------------------------------------------------------------.

         This information is provided by
                                         --------------------------------------,
the assignee named above, or
                             --------------------------------------------------,
as its agent.




                                      A-8
<PAGE>


                        EXHIBITS B THROUGH L ARE RESERVED