EXECUTION COPY

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                      RESIDENTIAL ASSET FUNDING CORPORATION

                                  as Purchaser

                                       and

               CREDIT-BASED ASSET SERVICING AND SECURITIZATION LLC

                                    as Seller

                        MORTGAGE LOAN PURCHASE AGREEMENT

                  Fixed Rate and Adjustable Rate Mortgage Loans

                                 2000-CB4 Trust,
         C-BASS Mortgage Loan Asset-Backed Certificates, Series 2000-CB4





                          Dated as of November 1, 2000




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                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----
Article I         DEFINITIONS..................................................1

   Section 1.01   Definitions..................................................1

Article II        SALE OF MORTGAGE LOANS; PAYMENT Of
                  PURCHASE PRICE...............................................2

   Section 2.01   Sale of Mortgage Loans.......................................2
   Section 2.02   Obligations of Seller Upon Sale..............................2
   Section 2.03   Payment of Purchase Price for the Mortgage Loans.............5

Article III       REPRESENTATIONS AND WARRANTIES; REMEDIES
                  FOR BREACH...................................................5

   Section 3.01   Seller Representations and Warranties Relating to the
                  Mortgage Loans...............................................5
   Section 3.02   Seller Representations and Warranties.......................13

Article IV        SELLER'S COVENANTS..........................................17

   Section 4.01   Covenants of the Seller.....................................17

Article V         [RESERVED]..................................................17

Article VI        TERMINATION.................................................17

   Section 6.01   Termination.................................................17

Article VII       MISCELLANEOUS PROVISIONS....................................18

   Section 7.01   Amendment...................................................18
   Section 7.02   Governing Law...............................................18
   Section 7.03   Notices.....................................................18
   Section 7.04   Severability of Provisions..................................18
   Section 7.05   Counterparts................................................18
   Section 7.06   Further Agreements..........................................19
   Section 7.07   Intention of the Parties....................................19
   Section 7.08   Successors and Assigns; Assignment of this Agreement........19
   Section 7.09   Survival....................................................20

Schedule I      - Mortgage Loan Schedule


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          MORTGAGE  LOAN PURCHASE  AGREEMENT,  dated as of November 1, 2000 (the
"Agreement"),  between  CREDIT-BASED  ASSET  SERVICING  AND  SECURITIZATION  LLC
("C-BASS" or the  "Seller")  and  RESIDENTIAL  ASSET  FUNDING  CORPORATION  (the
"Purchaser").

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

          WHEREAS, the Seller is the owner of either the notes or other evidence
of  indebtedness  (the  "Mortgage  Notes") or other  evidence  of  ownership  so
indicated  on  Schedule  I  hereto,  and  the  other  documents  or  instruments
constituting the Mortgage File (collectively, the "Mortgage Loans"); and

          WHEREAS,  the Seller,  as of the date hereof,  owns the mortgages (the
"Mortgages")  on the  properties  (the  "Mortgaged  Properties")  securing  such
Mortgage Loans,  including rights (a) to any property acquired by foreclosure or
deed  in lieu of  foreclosure  or  otherwise,  and  (b) to the  proceeds  of any
insurance  policies  covering the Mortgage Loans or the Mortgaged  Properties or
the obligors on the Mortgage Loans; and

          WHEREAS,  the parties  hereto desire that the Seller sell the Mortgage
Loans to the Purchaser and the  Purchaser  purchase the Mortgage  Loans from the
Seller pursuant to the terms of this Agreement; and

          WHEREAS,  pursuant to the terms of a Pooling and Servicing  Agreement,
dated as of November 1, 2000 (the "Pooling and Servicing Agreement"),  among the
Purchaser,  as depositor,  the Seller,  Litton Loan Servicing LP ("Litton"),  as
servicer,  and The  Chase  Manhattan  Bank,  as  trustee  (the  "Trustee"),  the
Purchaser will convey the Mortgage Loans to 2000-CB4 Trust.

          NOW,  THEREFORE,  in  consideration  of the  mutual  covenants  herein
contained, the parties hereto agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

          Section 1.01  Definitions.  All capitalized terms used but not defined
herein and below  shall have the  meanings  assigned  thereto in the Pooling and
Servicing Agreement.

          "Custodian":  A custodian acceptable to the Trustee,  which may be the
Trustee and which shall not be the Seller or any  affiliate  of the Seller.  The
initial Custodian shall be Bank One Trust Company, N.A.

          "Insurance  Agreement":  With  respect to any FHA Mortgage  Loan,  the
insurance  contract issued by the FHA and, with respect to any VA Mortgage Loan,
the guarantee issued by the Department of Veteran's Affairs.

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                                   ARTICLE II

                SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE

          Section 2.01 Sale of Mortgage  Loans.  The Seller does hereby agree to
and does hereby sell,  assign,  set over, and otherwise convey to the Purchaser,
without recourse,  on the Closing Date (i) all of its right,  title and interest
in and to each  Mortgage  Loan and the related  Cut-off Date  Principal  Balance
thereof, including any Related Documents, (ii) all payments on or collections in
respect of the  Mortgage  Loans  received  after the Cut-off  Date  (except with
respect to any Arrearages);  (iii) property which secured such Mortgage Loan and
which has been acquired by foreclosure or deed in lieu of foreclosure;  (iv) its
interest in any insurance policies in respect of the Mortgage Loans; and (v) all
proceeds of any of the foregoing.

          Section 2.02 Obligations of Seller Upon Sale.

          (a) In connection  with any transfer  pursuant to Section 2.01 hereof,
the Seller further agrees, at its own expense,  on or prior to the Closing Date,
(x) to indicate in its books and records that the Mortgage  Loans have been sold
to the Purchaser  pursuant to this Agreement and (y) to deliver to the Purchaser
and the Trustee a computer  file  containing a true and complete list of all the
Mortgage Loans specifying, among other things, for each Mortgage Loan, as of the
Cut-off Date, its account number and Cut-off Date Principal  Balance.  Such file
(the "Mortgage Loan Schedule") which is included as Exhibit D to the Pooling and
Servicing Agreement, shall also be marked as Schedule I to this Agreement and is
hereby incorporated into and made a part of this Agreement.

          In connection with such transfer and assignment of the Mortgage Loans,
the Seller shall,  on behalf of the Purchaser,  deliver to and deposit with, the
Custodian,  as the agent of the Trustee,  the following documents or instruments
(with  respect to each  Mortgage  Loan, a "Mortgage  File") with respect to each
Mortgage Loan so transferred and assigned:

              (i) the original  Mortgage Note,  endorsed  either (A) in blank or
     (B) in the following  form:  "Pay to the order of The Chase Manhattan Bank,
     as Trustee under the Pooling and Servicing Agreement,  dated as of November
     1,  2000,  among  Credit-Based  Asset  Servicing  and  Securitization  LLC,
     Residential  Asset Funding  Corporation,  Litton Loan  Servicing LP and The
     Chase  Manhattan  Bank,  C-BASS  Mortgage Loan  Asset-Backed  Certificates,
     Series 2000-CB4,  without  recourse",  or with respect to any lost Mortgage
     Note, an original lost note  affidavit  stating that the original  mortgage
     note was lost, misplaced or destroyed,  together with a copy of the related
     mortgage note;

          (ii) the original Mortgage with evidence of recording thereon, and the
     original recorded power of attorney,  if the Mortgage was executed pursuant
     to a power of  attorney,  with  evidence of  recording  thereon or, if such
     Mortgage or power of attorney has been  submitted for recording but has not
     been returned from the applicable public recording office, has been lost or
     is not otherwise


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     available,  a copy of such  Mortgage or power of attorney,  as the case may
     be, certified to be a true and complete copy of the original  submitted for
     recording;

              (iii) an original  Assignment  of Mortgage,  in form and substance
     acceptable  for  recording.  The Mortgage  shall be assigned  either (A) in
     blank or (B) to "The Chase Manhattan Bank, as Trustee under the Pooling and
     Servicing Agreement, dated as of November 1, 2000, among Credit-Based Asset
     Servicing and Securitization  LLC,  Residential Asset Funding  Corporation,
     Litton Loan Servicing LP and The Chase Manhattan Bank, C-BASS Mortgage Loan
     Asset-Backed Certificates, Series 2000-CB4, without recourse";

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

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

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

              (vii)  for  each  FHA   Loan,  the  original   mortgage  insurance
     certificate;

              (viii) for each VA Loan,  the original loan guaranty  certificate;
     and

              (ix)   with respect to each  Mortgage  Loan that is subject to the
     provisions of the  Homeownership  and Equity  Protection Act of 1994 or any
     comparable  state  law,  a copy of a  notice  to  each  entity  that  was a
     purchaser or assignee of such Mortgage  Loan,  satisfying the provisions of
     such Act or law and the regulations issued  thereunder,  to the effect that
     the Mortgage Loan is subject to special truth in lending rules.

         If any of the documents referred to in Section 2.02(ii),  (iii) or (iv)
above has as of the Closing Date been submitted for recording but either (x) has
not been returned from the applicable  public  recording  office or (y) has been
lost or such public recording office has retained the original of such document,
the  obligations of the Seller to deliver such  documents  shall be deemed to be
satisfied  upon (1) delivery to the Custodian no later than the Closing Date, of
a copy of each such document certified by the Seller in the case of (x) above or
the applicable public recording office in the case of (y) above to be a true and
complete  copy of the original  that was submitted for recording and (2) if such
copy is  certified  by the Seller,  delivery  to the  Custodian,  promptly  upon
receipt  thereof of either the original or a copy of such document  certified by
the  applicable  public  recording  office to be a true and complete copy of the
original.  If the original  lender's  title  insurance  policy was not delivered
pursuant  to Section  2.02(v)  above,  the Seller  shall  deliver or cause to be
delivered  to  the  Custodian,   a  written  commitment  or  interim  binder  or
preliminary  report of title issued by the title  insurance  or escrow  company,
with the  original to be  delivered  to the  Custodian,  promptly  upon  receipt
thereof.  The Seller shall  deliver or cause to be  delivered  to the  Custodian


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promptly upon receipt thereof any other original  documents  constituting a part
of a Mortgage File received with respect to any Mortgage  Loan,  including,  but
not limited to, any original documents  evidencing an assumption or modification
of any Mortgage Loan.

         Upon  discovery  or  receipt  of  notice  of any  materially  defective
document  in, or that a document is missing  from, a Mortgage  File,  the Seller
shall have 120 days to cure such defect or 150 days  following the Closing Date,
in the case of  missing  Mortgages  or  Assignments,  or  deliver  such  missing
document to the Trustee (or within 90 days of the earlier of Seller's  discovery
or receipt of  notification  if such defect would cause the Mortgage Loan not to
be a "qualified mortgage" for REMIC purposes).  If the Seller does not cure such
defect or deliver such  missing  document  within such time  period,  the Seller
shall either  repurchase or substitute for such Mortgage Loan in accordance with
Section 2.03 of the Pooling and Servicing Agreement.

         The Purchaser hereby  acknowledges  its acceptance of all right,  title
and  interest  to the  Mortgage  Loans  and other  property,  now  existing  and
hereafter created, conveyed to it pursuant to Section 2.01.

         The parties  hereto intend that the  transaction  set forth herein be a
sale by the  Seller  to the  Purchaser  of all the  Seller's  right,  title  and
interest in and to the Mortgage Loans and other property described above. In the
event the  transaction  set forth herein is deemed not to be a sale,  the Seller
hereby grants to the Purchaser a security interest in all of the Seller's right,
title  and  interest  in, to and under  the  Mortgage  Loans and other  property
described above, whether now existing or hereafter created, to secure all of the
Seller's obligations  hereunder;  and this Agreement shall constitute a security
agreement  under  applicable  law. The Seller and the  Purchaser  shall,  to the
extent consistent with this Agreement,  take such actions as may be necessary to
ensure that, if this Agreement were deemed to create a security  interest in the
Mortgage  Loans,  such  security  interest  would be  deemed  to be a  perfected
security  interest of first priority under applicable law and will be maintained
as such throughout the term of the Pooling and Servicing Agreement.

         (b) The Seller  shall  cause the  Assignments  of  Mortgage  which were
delivered in blank to be completed and shall cause all  Assignments  referred to
in 2.02(iii) hereof and, to the extent necessary,  in Section 2.02(iv) hereof to
be  recorded;  provided,  however,  the Seller need not cause to be recorded any
Assignment which relates to a Mortgage Loan in any  jurisdiction  under the laws
of which,  as evidenced by an Opinion of Counsel  delivered by the Seller to the
Trustee and the Rating  Agencies,  the  recordation  of such  Assignment  is not
necessary to protect the Trustee's  interest in the related Mortgage Loan. Under
the terms of the Pooling and Servicing  Agreement,  the Seller shall be required
to deliver such  assignments  for recording  within 30 days of the Closing Date.
The  Seller  shall  furnish  the  Custodian  with a copy of each  Assignment  of
Mortgage submitted for recording.  In the event that any such Assignment is lost
or returned  unrecorded  because of a defect therein,  the Seller shall promptly
have a substitute Assignment prepared or have such defect cured, as the case may
be, and thereafter cause each such Assignment to be duly recorded.  In the event
that any  Mortgage  Note is endorsed in blank as of the Closing  Date,  promptly
following  the


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Closing Date the Seller shall cause to be completed  such  endorsements  "Pay to
the order of The  Chase  Manhattan  Bank,  as  Trustee  under  the  Pooling  and
Servicing  Agreement,  dated as of November 1, 2000,  among  Credit-Based  Asset
Servicing and Securitization LLC, Residential Asset Funding Corporation,  Litton
Loan  Servicing  LP  and  The  Chase  Manhattan   Bank,   C-BASS  Mortgage  Loan
Asset-Backed Certificates, Series 2000-CB4, without recourse."

         Section  2.03  Payment of Purchase  Price for the  Mortgage  Loans.  In
consideration of the sale of the Mortgage Loans from the Seller to the Purchaser
on the Closing Date,  the  Purchaser  agrees to pay to the Seller on the Closing
Date by transfer of immediately  available funds, as directed by the Seller,  an
amount equal to  $159,520,326.62 in respect of the Mortgage Loans (the "Purchase
Price"),  net of an expense  reimbursement  amount of  $56,644.00  (the "Expense
Reimbursement  Amount"),  and to transfer  to the Seller or its  designee on the
Closing  Date  the  Class  B-2,  Class  N,  Class  X and  Class  R  Certificates
(collectively,  the "Private  Certificates").  The Expense  Reimbursement Amount
shall  reimburse  the  Purchaser  for the  Purchaser's  Securities  and Exchange
Commission   registration  statement  fees  and  the  Purchaser's   registration
statement  administration fees allocable to the Trust. The Seller shall pay, and
be billed  directly  for, all expenses  incurred by the  Purchaser in connection
with the issuance of the Certificates,  including, without limitation,  printing
fees incurred in connection  with the prospectus  relating to the  Certificates,
blue  sky  registration  fees and  expenses,  fees and  reasonable  expenses  of
Purchaser's  counsel,  fees  of  the  rating  agencies  requested  to  rate  the
Certificates,  accountant's  fees and  expenses and the fees and expenses of the
Trustee and other out-of-pocket  costs, if any. If the Purchaser shall determine
that the  Expense  Reimbursement  Amount  is not  sufficient  to  reimburse  the
Purchaser for all expenses  incurred by it that are subject to  reimbursement by
the Seller hereunder as described above, the Seller shall promptly reimburse the
Purchaser for such  additional  amounts upon written  notice by the Purchaser to
the Seller.

                                  ARTICLE III

               REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH

         Section  3.01 Seller  Representations  and  Warranties  Relating to the
Mortgage Loans. The Seller hereby represents and warrants to the Purchaser, with
respect to the  Mortgage  Loans,  that as of the Closing Date or as of such date
specifically provided herein:

         (a)  The  information  set  forth  in the  Mortgage  Loan  Schedule  is
complete, true and correct as of the Cut-off Date.

         (b) There are no delinquent taxes,  ground rents, water charges,  sewer
rents,  assessments,  including  assessments payable in future installments,  or
other outstanding charges affecting the related Mortgaged Property.

         (c) The  terms  of the  Mortgage  Note and the  Mortgage  have not been
impaired,  waived,  altered  or  modified  in any  respect,  except  by  written
instruments,

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recorded in the applicable  public recording office if necessary to maintain the
lien priority of the Mortgage and the interests of the  Certificateholders,  and
which have been  delivered  to the  Trustee;  the  substance of any such waiver,
alteration or modification has been approved by the title insurer, to the extent
required by the related policy,  and is reflected on the Mortgage Loan Schedule.
No instrument of waiver,  alteration or modification  has been executed,  and no
Mortgagor has been released,  in whole or in part, except, in connection with an
assumption  agreement  approved by the title insurer,  to the extent required by
the policy and, in the case of an FHA Loan or VA Loan, to the extent required by
the related Insurance Agreement,  as applicable,  and which assumption agreement
has been  delivered  to the Trustee and the terms of which are  reflected in the
Mortgage Loan Schedule.

         (d) The Mortgage  Note and the Mortgage are not subject to any right of
rescission,  set-off,  counterclaim or defense,  including the defense of usury,
nor  will  the  operation  of any of the  terms  of the  Mortgage  Note  and the
Mortgage,  or  the  exercise  of  any  right  thereunder,  render  the  Mortgage
unenforceable,  in whole or in part,  or  subject  to any  right of  rescission,
set-off,  counterclaim  or defense,  including  the defense of usury and no such
right of  rescission,  set-off,  counterclaim  or defense has been asserted with
respect thereto.

         (e)  All  buildings  upon  the  Mortgaged  Property  are  insured  by a
generally  acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are customary in the area where the Mortgaged Property
is located, pursuant to insurance policies conforming to the requirements of the
Pooling and Servicing Agreement.  All such insurance policies contain a standard
mortgagee clause naming the Seller,  its successors and assigns as mortgagee and
all premiums  thereon have been paid. If upon  origination of the Mortgage Loan,
the Mortgaged  Property was in an area identified on a Flood Hazard Map or Flood
Insurance Rate Map issued by the Federal  Emergency  Management Agency as having
special flood hazards (and such flood insurance has been made available) a flood
insurance  policy  meeting the  requirements  of the current  guidelines  of the
Federal  Insurance  Administration  is in effect  which  policy  conforms to the
requirements  of the Federal  National  Mortgage  Association  ("FNMA")  and the
Federal Home Loan Mortgage  Corporation  ("FHLMC").  The Mortgage  obligates the
Mortgagor  thereunder to maintain all such insurance at the Mortgagor's cost and
expense,  and on the Mortgagor's  failure to do so, authorizes the holder of the
Mortgage to maintain such insurance at the  Mortgagor's  cost and expense and to
seek  reimbursement  therefor  from  the  Mortgagor.  All  acts  required  to be
performed  to  preserve  the  rights  and  remedies  of the  Trustee in any such
insurance  policies have been  performed,  including,  without  limitation,  any
necessary  notifications  of insurers and  assignments  of policies or interests
therein.

         (f) Any and all  requirements  of any  federal,  state  or  local  law,
including,  without limitation,  usury, truth in lending, real estate settlement
procedures,  consumer credit protection,  equal credit opportunity or disclosure
laws applicable to the origination and servicing of the Mortgage Loans have been
complied with.


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         (g) The Mortgage has not been satisfied, canceled,  subordinated (other
than with  respect to second lien  loans,  the  subordination  to the first lien
loan)  rescinded,  in whole or in part, and the Mortgaged  Property has not been
released  from the  lien of the  Mortgage,  in  whole  or in  part,  nor has any
instrument been executed that would effect any such satisfaction,  cancellation,
subordination, rescission or release.

         (h) The Mortgage is a valid,  existing and enforceable  first or second
lien on the  Mortgaged  Property,  including all  improvements  on the Mortgaged
Property  subject  only to (1) the  lien of  current  real  property  taxes  and
assessments not yet due and payable, (2) covenants, conditions and restrictions,
rights of way,  easements  and other matters of the public record as of the date
of recording being acceptable to mortgage lending institutions generally and, in
the  case of FHA  Loans  and VA  Loans,  to the FHA  and VA,  respectively,  and
specifically referred to in the lender's title insurance policy delivered to the
originator of the Mortgage Loan, (3) 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 the Mortgage or the use, enjoyment, value or
marketability  of the related  Mortgaged  Property  and which may not in any way
prevent  realization  of the  benefits of the related  Insurance  Agreement,  if
applicable  and (4) with respect to any second lien mortgage  loan,  the lien of
the related first  mortgage loan. Any security  agreement,  chattel  mortgage or
equivalent  document  related to and delivered in  connection  with the Mortgage
Loan establishes and creates a valid,  existing and enforceable  first or second
lien and first or second priority  security  interest on the property  described
therein  and the  Seller  has  full  right to sell  and  assign  the same to the
Purchaser.

         (i) The Mortgage Note and the related  Mortgage are genuine and each is
the legal,  valid and binding  obligation of the maker  thereof,  enforceable in
accordance with its terms.

         (j) The proceeds of the Mortgage  Loan have been fully  disbursed to or
for the account of the Mortgagor and there is no obligation for the mortgagee to
advance  additional  funds  thereunder  and  any  and  all  requirements  as  to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds  therefor have been  complied  with.  All costs,  fees and expenses
incurred  in  making or  closing  the  Mortgage  Loan and the  recording  of the
Mortgage have been paid,  and the Mortgagor is not entitled to any refund of any
amounts paid or due to the mortgagee pursuant to the Mortgage Note or Mortgage.

         (k)  Immediately  prior to the  transfer  and  assignment  contemplated
herein,  the Seller was the sole owner and holder of the Mortgage  Loans and has
good and marketable  title to each Mortgage Loan,  free and clear of any and all
liens, pledges, charges, claims,  participation interests,  mortgages,  security
interests or  encumbrances  or other  interests of any nature and has full right
and authority to sell and assign the same.

         (l) Each Mortgage Loan is covered by an ALTA mortgagee  title insurance
policy acceptable to FNMA or FHLMC,  issued by a title insurer acceptable to (1)
FNMA and FHLMC,  in the case of a conventional  Mortgage Loan and (2) the FHA or

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VA, as the case may be, in the case of an FHA Loan or a VA Loan,  and  qualified
to do  business in the  jurisdiction  where the  Mortgaged  Property is located,
insuring  (subject  to the  exceptions  contained  in (h)(1)  and (2) above) the
Seller,  its successors  and assigns as to the first or second  priority lien of
the Mortgage in the original  principal  amount of the Mortgage Loan and against
any loss by reason of the invalidity or  unenforceability  of the lien resulting
from the  provisions of the Mortgage  providing  for  adjustment in the mortgage
interest  rate  and/or  monthly  payment  including  any  negative  amortization
thereunder.  Additionally,  such mortgagee title insurance policy  affirmatively
insures  ingress  and egress to and from the  Mortgaged  Property,  and  against
encroachments  by or upon the Mortgaged  Property or any interest  therein.  The
Seller is the sole insured of such mortgagee  title insurance  policy,  and such
lender's title insurance  policy is in full force and effect and will be in full
force and effect upon the consummation of the transactions  contemplated by this
Agreement. No claims have been made under such mortgagee title insurance policy,
and no prior holder of the related Mortgage,  including the Seller, has done, by
act or omission,  anything  which would  impair the  coverage of such  mortgagee
title insurance policy.

         (m) There are no  mechanics' or similar liens or claims which have been
filed for work,  labor or material (and no rights are outstanding that under law
could give rise to such lien) affecting the related Mortgaged Property which are
or may be liens prior to, or equal or coordinate  with,  the lien of the related
Mortgage.

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

         (o) The  Mortgage  and related  Mortgage  Note  contain  customary  and
enforceable  provisions  such as to render the rights and remedies of the holder
thereof  adequate  for the  realization  against the  Mortgaged  Property of the
benefits  of the  security  provided  thereby,  including,  (1) in the case of a
Mortgage  designated as a deed of trust, by trustee's sale, and (2) otherwise by
judicial foreclosure.  There is no homestead or other exemption available to the
Mortgagor which would interfere with the right to sell the Mortgaged Property at
a trustee's  sale or the right to foreclose the Mortgage.  The Mortgagor has not
notified the Seller and the Seller has no  knowledge of any relief  requested or
allowed to the  Mortgagor  under the  Soldiers  and Sailors  Civil Relief Act of
1940, as amended.

         (p) The Mortgage Note is not and has not been secured by any collateral
except the lien of the corresponding  Mortgage on the Mortgaged Property and the
security interest of any applicable security agreement or chattel mortgage.

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

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<PAGE>


         (r) No Mortgage  Loan  contains  provisions  pursuant to which  monthly
payments  are (1) paid or  partially  paid with funds  deposited in any separate
account  established by the Seller,  the  Mortgagor,  or anyone on behalf of the
Mortgagor,  (2) paid by any source other than the  Mortgagor or (3) contains any
other  similar  provisions  which may  constitute  a  "buydown"  provision.  The
Mortgage  Loan is not a graduated  payment  mortgage  loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature.

         (s) The Mortgage  Note,  the  Mortgage,  the  Assignment  and any other
documents  required to be delivered  with respect to each Mortgage Loan pursuant
to the Pooling and Servicing Agreement have been delivered to the Trustee or its
designee,  all in compliance  with the specific  requirements of the Pooling and
Servicing Agreement.

         (t)  If  the  residential  dwelling  on  the  Mortgaged  Property  is a
condominium  unit or a unit  in a  planned  unit  development  (other  than a de
minimis planned unit  development)  such condominium or planned unit development
project meets FNMA's eligibility requirements.

         (u) None of the  Mortgage  Loans are secured by a  leasehold  estate or
constitute other than real property under applicable state law.

         (v) The rights with respect to each Mortgage Loan are assignable by the
Seller  without the consent of any Person  other than  consents  which will have
been obtained on or before the Closing Date.

         (w) The Mortgage Loans are not being transferred by the Seller with any
intent to hinder, delay or defraud any creditors of the Seller.

         (x) All  parties  which have had any  interest in each  Mortgage  Loan,
whether as mortgagee,  assignee,  pledgee or otherwise,  and including,  without
limitation,  the  Seller,  are (or  during  the  period  in which  they held and
disposed  such  interest,  were)  in  compliance  with  any and  all  applicable
licensing  requirements  of the laws of the state wherein the property  securing
the Mortgage is located to the extent that any  noncompliance  thereunder  would
affect the value or marketability of the Mortgage Loans.

         (y) To the best of Seller's  knowledge,  the Mortgaged Property is free
from any and all toxic or hazardous  substances and there exists no violation of
any local, state or federal environmental law, rule or regulation.

         (z)  The Mortgaged Property is free from material damage.

         (aa) Each Mortgage Loan has been serviced by the Servicer in accordance
with the terms thereof and Applicable Regulations.

         (bb) [Reserved]

         (cc) [Reserved]

                                       9

<PAGE>

         (dd)  There  is  no  proceeding   pending  for  the  total  or  partial
condemnation and no eminent domain  proceedings  pending affecting any Mortgaged
Property.

         (ee) There was no fraud  involved in the  origination  of any  Mortgage
Loan by the applicable  mortgagee or Mortgagor,  and to the best of the Seller's
knowledge,  there was no fraud by the  appraiser or any other party  involved in
the origination of any such Mortgage Loan.

         (ff) Each mortgage  file  contains an appraisal of or a broker's  price
opinion regarding the related Mortgaged  Property  indicating an appraised value
equal to the  appraised  value  identified  for such  Mortgaged  Property on the
Mortgage Loan Schedule. Each appraisal has been prepared on FNMA or FHLMC forms.

         (gg) No  improvements on any Mortgaged  Property  encroach on adjoining
properties (and in the case of a condominium  unit, such improvements are within
the  project  with  respect to that  unit),  and no  improvements  on  adjoining
properties  encroach  upon such  Mortgaged  Property  unless there exists in the
applicable  Mortgage File a title policy with endorsements  which insure against
losses sustained by the insured as a result of such encroachments.

         (hh) Each  Insurance  Agreement is in full force and effect and will be
in full force and effect upon the consummation of the transactions  contemplated
by this Agreement.

         (ii) With respect to escrow deposits,  if any, all such payments are in
the  possession  of, or under the control of, the  Servicer  and there exists no
deficiencies  in  connection  therewith  for which  customary  arrangements  for
repayment  thereof have not been made. No escrow  deposits or escrow advances or
other  charges or payments  due the  Servicer  have been  capitalized  under any
Mortgage or the related Note.

         (jj) Each Mortgaged Property consists of detached or semi-detached one-
to  four-family  dwelling  units,  townhouses,  mobile  or  manufactured  homes,
individual condominium units and individual units in planned unit developments.

         (kk) No Mortgage Loan,  other than a Bankruptcy  Plan Mortgage Loan, is
subject to any pending bankruptcy or insolvency proceeding. To the Seller's best
knowledge,  no material  litigation or lawsuit  relating to any Mortgage Loan is
pending.

         (ll) The  Seller  used no  selection  procedures  that  identified  the
Mortgage  Loans as being  less  desirable  or  valuable  than  other  comparable
mortgage loans originated or acquired by the Seller.

         (mm) The sale, transfer, assignment and conveyance of Mortgage Loans by
the  Seller  pursuant  to this  Agreement  will not  result  in any tax,  fee or
governmental  charge (other than income taxes and related  taxes) payable by the
Seller,  the Depositor or the Trustee to any federal,  state or local government
other  than taxes  which  have or will be paid by the  Seller as due  ("Transfer
Taxes").  In the event that the Depositor or the

                                       10

<PAGE>

Trustee  receives  actual  notice  of  any  Transfer  Taxes  arising  out of the
transfer,  assignment and conveyance of the Mortgage Loans, other than any taxes
to be paid by the creditor, on written demand by the Depositor,  or the Trustee,
or upon the Seller's  otherwise  being given notice  thereof by the Depositor or
the  Trustee,  the  Seller  shall  pay,  and  otherwise  indemnify  and hold the
Depositor and the Trustee harmless,  on an after-tax basis, from and against any
and all such Transfer Taxes (it being  understood  that the  Certificateholders,
the Trustee and the  Depositor  shall have no  obligation  to pay such  Transfer
Taxes).

         (nn) With respect to each  Mortgage  Loan that is a "mortgage"  as such
term is defined in 15 U.S.C.  1602(aa),  no obligor  has or will have a claim or
defense  under  such  Mortgage  Loan as a  result  of a  violation  of the  Home
Ownership and Equity Protection Act of 1994.

         (oo) With  respect to the  Mortgage  Loans,  the  Mortgaged  Properties
securing  repayment  of the  related  Mortgage  Note,  consists  of a fee simple
interest in a single parcel or two contiguous  parcels of real property improved
by a (A) detached one-family dwelling, (B) detached two-to four family dwelling,
(C)  one-family  unit  in a FNMA  eligible  condominium  project,  (D)  detached
one-family  dwelling in a planned unit development  which is not a co-operative,
(E)  multi-family  dwelling or (F) mobile home or  manufactured  dwelling  which
constitutes real property.

         (pp) Except for the Mortgage  Loans  identified  on the  Mortgage  Loan
Schedule as  delinquent,  there is no  default,  breach,  violation  or event of
acceleration  existing  under the  Mortgage  or the  Mortgage  Note and no event
which,  with the passage of time or with notice and the  expiration of any grace
or cure  period,  would  constitute  a default,  breach,  violation  or event of
acceleration,  and the Seller has not waived any default,  breach,  violation or
event of  acceleration  except,  in the  case of an FHA  Loan or a VA  Loan,  by
written instruments,  and the substance of which waiver has been approved by the
FHA or VA,  as the  case  may  be,  to the  extent  required  by the  applicable
Insurance Agreement.

         (qq) The  Seller  has no  actual  knowledge  that with  respect  to any
Mortgage  Loan (1) the  Servicer  has sent a notice of  default  to the  related
Mortgagor  which the  Servicer  is  currently  seeking  to  enforce,  or (2) any
foreclosure  proceedings have been commenced or acceleration been declared which
is currently  pending The Seller is not  transferring  any Mortgage  Loan to the
Purchaser  with the intention or knowledge  that the Purchaser or the Trust will
acquire the related Mortgaged Property.

         (rr) Except with respect to 3.60% and 0.48% of the Mortgage  Loans that
are 30-59 days and 60-89  days,  respectively,  contractually  delinquent  as of
November  1, 2000 no  Mortgage  Loan is  delinquent  (other  than  Re-performing
Mortgage Loans and Bankruptcy Plan Mortgage Loans. The Seller has not waived any
default,  breach,  violation  or event of  acceleration,  and the Seller has not
taken  any  action  to  waive  any  default,   breach,  violation  or  event  of
acceleration, with respect to any Mortgage Loan.

                                       11

<PAGE>


         (ss) Each Mortgage Loan is a "qualified Mortgage" within the meaning of
Section 860 G(a)(3) of the Code.

         (tt) With respect to any Mortgage Loan which provides for an adjustable
interest rate, all rate  adjustments  have been performed in accordance with the
terms of the related Mortgage Note or subsequent modifications, if any.

         (uu) At the  time of  their  origination,  all FHA  Loans  and VA Loans
conformed to HUD  origination  guidelines or VA origination  guidelines,  as the
case may be.

         (vv)  Each  Mortgage  Loan  is  directly  secured  by a  Mortgage  on a
residential  property,  and either (1)  substantially all of the proceeds of the
Mortgage  Loan were used to  acquire,  improve  or  protect  the  portion of the
residential  property that consists of an interest in real property  (within the
meaning of Treasury  Regulations  Sections  1.856-3(c) and  1.856-3(d))  and the
interest in real  property was the only security for the Mortgage Loan as of the
Testing Date (as defined below), or (2) the fair market value of the interest in
real  property  which secures the Mortgage Loan was at least equal to 80% of the
principal  amount of the Mortgage  Loan (a) as of the Testing Date, or (b) as of
the Closing  Date.  For purposes of the previous  sentence,  (1) the fair market
value of the referenced  interest in real property shall first be reduced by (a)
the amount of any lien on the  interest in real  property  that is senior to the
Mortgage  Loan,  unless the Mortgage  Loans include both a first lien loan and a
second  lien loan on the same  Mortgaged  Property,  in which  case the 80% test
shall be applied in the aggregate, and (b) a proportionate amount of any lien on
the interest in real  property that is on a parity with the Mortgage  Loan,  and
(2) the "Testing Date" shall be the date on which the  referenced  Mortgage Loan
was  originated  unless (a) the Mortgage Loan was modified after the date of its
origination  in a manner  that would  cause  "significant  modification"  of the
Mortgage Loan within the meaning of Treasury  Regulations Section 1.1001-3,  and
(b) the  "significant  modification"  did not occur at a time when the  Mortgage
Loan was in default  or when  default  with  respect  to the  Mortgage  Loan was
reasonably foreseeable.

         (ww)  With  respect  to  each   Mortgage  Loan  that  is  a  mobile  or
manufactured  housing unit, such unit is a "single family  residence" within the
meaning of Section 25(e)(1) of the Code, and has a minimum of 400 square feet of
living space, a minimum width of 102 inches and is of a kind customarily used at
a fixed location.

         With respect to the  representations  and  warranties set forth in this
Section 3.01 that are made to the best of the Seller's  knowledge or as to which
the Seller has no knowledge,  if it is discovered by the Depositor,  the Seller,
the  Servicer  or the  Trustee as set forth in Section  2.04 of the  Pooling and
Servicing  Agreement that the substance of such  representation  and warranty is
inaccurate and such inaccuracy materially and adversely affects the value of the
related  Mortgage  Loan  or  the  interest  therein  of  the  Purchaser  or  the
Purchaser's assignee,  transferee or designee then, notwithstanding the Seller's
lack of knowledge  with  respect to the  substance  of such  representation  and
warranty being inaccurate at the time the  representation  or warranty was made,
such  inaccuracy  shall be deemed a breach of the applicable  representation  or
warranty.

                                       12

<PAGE>

         Upon  discovery  by  the  Depositor,  the  Seller,  the  Servicer,  the
Purchaser or any  assignee,  transferee or designee of the Purchaser of a breach
of any of the  representations  and warranties  contained in this Article III or
Section  2.04  of the  Pooling  and  Servicing  Agreement  that  materially  and
adversely  affects the value of any Mortgage Loan or the interest therein of the
Purchaser  or the  Purchaser's  assignee,  transferee  or  designee,  the  party
discovering the breach shall give prompt written notice to the others. Within 90
days of the earlier of its discovery or its receipt of notice of any such breach
of a representation  or warranty,  the Seller shall promptly cure such breach in
all material  respects,  or in the event such breach cannot be cured, the Seller
shall  repurchase  the  affected  Mortgage  Loan or cause  the  removal  of such
Mortgage  Loan from the Trust Fund and  substitute  for it one or more  Eligible
Substitute  Mortgage  Loans,  in either case, in accordance with Section 2.03 of
the Pooling and Servicing Agreement.

         Upon  discovery  or  receipt  of  notice  of any  materially  defective
document  in, or that a document is missing  from, a Mortgage  File,  the Seller
shall have 120 days to cure such defect or 150 days  following the Closing Date,
in the case of  missing  Mortgages  or  Assignments  (or  within  90 days of the
earlier of the  Seller's  discovery  or receipt of  notification  if such defect
would  cause  the  Mortgage  Loan not to be a  "qualified  mortgage"  for  REMIC
purposes),  or in the  event  such  defect  cannot be cured,  the  Seller  shall
repurchase the affected Mortgage Loan or cause the removal of such Mortgage Loan
from  the  Trust  Fund and  substitute  for it one or more  Eligible  Substitute
Mortgage Loans, in either case,  within such time periods and in accordance with
Section 2.03 of the Pooling and Servicing Agreement.

         It is understood and agreed that the representations and warranties set
forth in this Section 3.01 shall  survive  delivery of the  respective  Mortgage
Files to the Trustee on behalf of the Purchaser.

         It is  understood  and agreed  that the  obligations  of the Seller set
forth in this Section 3.01 to cure,  repurchase  or  substitute  for a defective
Mortgage Loan constitute the sole remedies of the Purchaser respecting a missing
or defective document or a breach of the representations or warranties contained
in this Section 3.01.

         Section 3.02 Seller  Representations and Warranties.  The Seller hereby
represents  and warrants to the  Purchaser  that as of the Closing Date or as of
such date specifically provided herein:

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


                                       13

<PAGE>

     Mortgage  Loans,  or  (d)  its  ability  to   foreclose   on  the   related
     Mortgaged Properties.

              (ii) The  Seller  has the power and  authority  to make,  execute,
     deliver  and  perform  this   Agreement  and  to  consummate   all  of  the
     transactions  contemplated  hereunder 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 Seller's legal,
     valid and binding  obligations  enforceable  in accordance  with its terms,
     except as  enforcement  of such  terms may be  limited  by (1)  bankruptcy,
     insolvency,  reorganization,   receivership,  moratorium  or  similar  laws
     affecting  the  enforcement  of  creditors'  rights  generally  and  by the
     availability  of  equitable   remedies,   (2)  general  equity   principals
     (regardless  of whether such  enforcement  is considered in a proceeding in
     equity  or at law)  or (3)  public  policy  considerations  underlying  the
     securities  laws, to the extent that such policy  considerations  limit the
     enforceability of the provisions of this Agreement which purport to provide
     indemnification from securities laws liabilities.

              (iii) The Seller holds all necessary  licenses,  certificates  and
     permits from all  governmental  authorities  necessary for  conducting  its
     business  as  it  is  presently   conducted,   except  for  such  licenses,
     certificates  and  permits  the  absence of which,  individually  or in the
     aggregate,  would not have a material  adverse effect on the ability of the
     Seller to conduct its  business  as it is  presently  conducted.  It 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 consents, licenses, approvals or authorizations,  or registrations
     or  declarations  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 Seller will not conflict with or result in a breach of, or constitute a
     default under, any provision of any existing law or regulation or any order
     or decree of any court applicable to the Seller or any of its properties or
     any provision of its Limited Liability Company  Agreement,  or constitute a
     material  breach of, or result in the creation or  imposition  of any lien,
     charge or encumbrance upon any of its properties  pursuant to any mortgage,
     indenture,  contract or other  agreement to which it is a party or by which
     it may be bound.

              (v) No  certificate  of an officer,  written  statement  or report
     delivered  pursuant to the terms  hereof by the Seller  contains any untrue
     statement of a material fact or omits to state any material fact  necessary
     to make the certificate, statement or report not misleading.

              (vi) The  transactions  contemplated  by this Agreement are in the
     ordinary course of the Seller's business.


                                       14

<PAGE>

              (vii) The  Seller is not  insolvent,  nor will the  Seller be made
     insolvent by the transfer of the Mortgage Loans, nor is the Seller aware of
     any pending insolvency.

              (viii) The Seller is not in violation  of, and the  execution  and
     delivery of this Agreement by it and its  performance  and compliance  with
     the terms of this Agreement will not constitute a violation with respect to
     any  order or  decree  of any  court,  or any  order or  regulation  of any
     federal, state, municipal or governmental agency having jurisdiction, which
     violation  would  materially  and adversely  affect the Seller's  condition
     (financial or  otherwise) or operations or any of the Seller's  properties,
     or materially  and adversely  affect the  performance  of any of its duties
     hereunder.

              (ix)   There  are  no   actions   or   proceedings   against,   or
     investigations  of, the Seller  pending or, to its  knowledge,  threatened,
     before any court,  administrative  agency or other  tribunal  (i) that,  if
     determined  adversely,  would  prohibit the Seller from  entering into this
     Agreement and the Pooling and Servicing Agreement,  (ii) seeking to prevent
     the consummation of any of the transactions  contemplated by this Agreement
     or (iii) that, if determined  adversely,  would  prohibit or materially and
     adversely  affect  the  Seller's  performance  of  any  of  its  respective
     obligations under, or the validity or enforceability of, this Agreement and
     the Pooling and Servicing Agreement.

              (x) The  Seller  is not  transferring  the  Mortgage  Loans to the
     Purchaser hereunder with any intent to hinder,  delay or defraud any of its
     creditors.

              (xi)  The  Seller  acquired  title to the  Mortgage  Loans in good
     faith, without notice of any adverse claims.

              (xii) The  transfer,  assignment  and  conveyance  of the Mortgage
     Notes and the  Mortgages by the Seller  pursuant to this  Agreement are not
     subject to the bulk  transfer laws or any similar  statutory  provisions in
     effect in any applicable jurisdiction.

              (xiii) The Seller  understands  that (a) the Private  Certificates
     have not been and will not be registered or qualified  under the Securities
     Act of 1933, as amended (the "Securities Act") or any state securities law,
     (b) the  Purchaser  is not  required  to so register or qualify the Private
     Certificates, (c) the Private Certificates may be resold only if registered
     and qualified pursuant to the provisions of the Act or any state securities
     law,  or if an  exemption  from  such  registration  and  qualification  is
     available,  (d) the Pooling and Servicing  Agreement contains  restrictions
     regarding  the  transfer  of the Private  Certificates  and (e) the Private
     Certificates will bear a legend to the foregoing effect.

              (xiv) The Seller is acquiring the Private Certificates for its own
     account  for  investment  only  and  not  with a view  to or  for  sale  in
     connection with


                                       15

<PAGE>

     any  distribution  thereof in any manner that would violate the  Securities
     Act or any applicable state securities laws.

              (xv) The Seller is (a) a substantial,  sophisticated institutional
     investor  having such  knowledge  and  experience in financial and business
     matters, and, in particular,  in such matters related to securities similar
     to the  Private  Certificates,  such that it is capable of  evaluating  the
     merits and risks of  investment  in the Private  Certificates,  (b) able to
     bear  the  economic  risks  of such an  investment  and (c) an  "accredited
     investor"  within the meaning of Rule 501 (a)  promulgated  pursuant to the
     Securities Act.

              (xvi)  The  Seller  has  been  furnished  with  such   information
     concerning the Private Certificates and the Purchaser as has been requested
     by the Seller from the Purchaser  and is relevant to the Seller's  decision
     to purchase  the  Private  Certificates.  The Seller has had any  questions
     arising  from such review  answered by the  Purchaser  or the Seller to the
     satisfaction of the Seller.

              (xvii) The Seller  has not and will not nor has it  authorized  or
     will it  authorize  any person to (a) offer,  pledge,  sell,  dispose of or
     otherwise  transfer  any Private  Certificate,  any interest in any Private
     Certificate or any other similar security to any person in any manner,  (b)
     solicit  any  offer to buy or to  accept  a  pledge,  disposition  of other
     transfer  of  any  Private   Certificate,   any  interest  in  any  Private
     Certificate  or any other  similar  security from any person in any manner,
     (c)   otherwise   approach  or  negotiate   with  respect  to  any  Private
     Certificate,  any interest in any Private  Certificate or any other similar
     security with any person in any manner,  (d) make any general  solicitation
     by means of  general  advertising  or in any  other  manner or (e) take any
     other action,  that (as to any of (a) through (e) above) would constitute a
     distribution  of any Private  Certificate  under the  Securities  Act, that
     would  render the  disposition  of any Private  Certificate  a violation of
     Section 5 of the Securities Act or any state  securities law, or that would
     require registration or qualification pursuant thereto. The Seller will not
     sell or  otherwise  transfer  any of the  Private  Certificates,  except in
     compliance with the provisions of the Pooling and Servicing Agreement.

              (xviii)  The  Seller  is not an  employee  benefit  plan or  other
     retirement  arrangement  subject to the Employee Retirement Income Security
     Act of 1974, as amended ("ERISA"),  or Section 4975 of the Internal Revenue
     Code of 1986, as amended (the "Code"), (collectively, an "ERISA Plan"), and
     is not  acting  on behalf  of, as named  fiduciary  of, as  trustee  of, or
     investing the assets of an ERISA Plan.


                                       16

<PAGE>


                                   ARTICLE IV

                               SELLER'S COVENANTS

         Section 4.01 Covenants of the Seller.

         (a) The Seller hereby covenants that except for the transfer hereunder,
the Seller will not sell,  pledge,  assign or transfer to any other  Person,  or
grant,  create,  incur, assume or suffer to exist any lien on any Mortgage Loan,
or any interest therein;  the Seller will notify the Trustee, as assignee of the
Purchaser,  of the existence of any lien on any Mortgage Loan  immediately  upon
discovery  thereof,  and the Seller will defend the right, title and interest of
the Trust,  as assignee of the Purchaser,  in, to and under the Mortgage  Loans,
against  all  claims of third  parties  claiming  through  or under the  Seller;
provided,  however, that nothing in this Section 4.01 shall prevent or be deemed
to prohibit the Seller from  suffering  to exist upon any of the Mortgage  Loans
any liens for municipal or other local taxes and other  governmental  charges if
such taxes or  governmental  charges shall not at the time be due and payable or
if the Seller shall  currently be contesting the validity  thereof in good faith
by  appropriate  proceedings  and shall  have set  aside on its  books  adequate
reserves with respect thereto.

         (b) The Seller  hereby  covenants  that neither it nor any affiliate of
the Seller will  directly  solicit any  Mortgagor  hereunder  to  refinance  the
related Mortgage Loan. For the purposes of the foregoing, neither the Seller nor
any affiliate of the Seller shall be deemed to directly solicit any Mortgagor if
the Seller responds to a request from a Mortgagor  regarding a refinancing or if
the Mortgagor receives marketing materials which are generally disseminated.

                                   ARTICLE V

                                   [RESERVED]


                                   ARTICLE VI

                                   TERMINATION

         Section   6.01    Termination.    The   respective    obligations   and
responsibilities  of the Seller and the Purchaser created hereby shall terminate
upon the  termination  of the Trust as  provided in Article X of the Pooling and
Servicing Agreement.


                                       17

<PAGE>

                                  ARTICLE VII

                            MISCELLANEOUS PROVISIONS

         Section 7.01 Amendment. This Agreement may be amended from time to time
by the Seller and the Purchaser,  by written  agreement signed by the Seller and
the Purchaser.

         Section 7.02  Governing  Law. This  Agreement  shall be governed by and
construed  in  accordance  with  the  laws  of the  State  of New  York  and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.

         Section 7.03 Notices. All demands, notices and communications hereunder
shall be in writing  and shall be deemed to have been duly  given if  personally
delivered  at or  mailed by  registered  mail,  postage  prepaid,  addressed  as
follows:

                  if to the Seller:

                  Credit-Based Asset Servicing and Securitization LLC
                  335 Madison Avenue
                  19th Floor
                  New York, New York  10017
                  Attention:  General Counsel

or such other  address as may hereafter be furnished to the Purchaser in writing
by the Seller.

                  if to the Purchaser:

                  Residential Asset Funding Corporation
                  301 South College Street, TW-09
                  Charlotte, North Carolina  28288-0610
                  Attention:  General Counsel

or such other  address as may hereafter be furnished to the Seller in writing by
the Purchaser.

         Section  7.04  Severability  of  Provisions.  If any one or more of the
covenants,  agreements,  provisions  or  terms of this  Agreement  shall be held
invalid for any reason whatsoever, then such covenants,  agreements,  provisions
or terms shall be deemed  severable  from the remaining  covenants,  agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement.

         Section 7.05  Counterparts.  This  Agreement  may be executed in one or
more counterparts by the different parties hereto on separate counterparts, each
of which,


                                       18

<PAGE>

when so  executed,  shall be deemed  to be an  original  and such  counterparts,
together, shall constitute one and the same agreement.

         Section  7.06 Further  Agreements.  The  Purchaser  and the Seller each
agree to execute and deliver to the other such additional documents, instruments
or agreements as may be necessary or reasonable  and  appropriate  to effectuate
the purposes of this Agreement or in connection  with the issuance of any Series
of Certificates representing interests in the Mortgage Loans.

         Without  limiting  the  generality  of  the  foregoing,  as  a  further
inducement for the Purchaser to purchase the Mortgage Loans from the Seller, the
Seller will cooperate  with the Purchaser in connection  with the sale of any of
the securities representing interests in the Mortgage Loans. In that connection,
the Seller will provide to the Purchaser any and all information and appropriate
verification of information, whether through letters of its auditors and counsel
or otherwise,  as the Purchaser shall reasonably request and will provide to the
Purchaser such additional representations and warranties, covenants, opinions of
counsel, letters from auditors, and certificates of public officials or officers
of the Seller as are reasonably  required in connection  with such  transactions
and the offering of investment grade securities rated by the Rating Agencies.

         Section  7.07  Intention  of the  Parties.  It is the  intention of the
parties  that the  Purchaser  is  purchasing,  and the  Seller is  selling,  the
Mortgage  Loans rather than the pledging of the Mortgage  Loans by the Seller to
secure a loan by the Purchaser to the Seller.  Accordingly,  the parties  hereto
each intend to treat the  transaction  for Federal  income tax  purposes and all
other  purposes as a sale by the Seller and a purchase by the  Purchaser  of the
Mortgage  Loans.  The Purchaser will have the right to review the Mortgage Loans
and the related Mortgage Files to determine the  characteristics of the Mortgage
Loans  which will  affect the  Federal  income  tax  consequences  of owning the
Mortgage Loans and the Seller will  cooperate with all reasonable  requests made
by the Purchaser in the course of such review.

         Section 7.08 Successors and Assigns; Assignment of this Agreement. This
Agreement  shall  bind and inure to the  benefit  of and be  enforceable  by the
Seller, the Purchaser and the Trustee.  The obligations of the Seller under this
Agreement  cannot be assigned or delegated to a third party  without the consent
of the Purchaser and which consent shall be at the Purchaser's  sole discretion,
except that the Purchaser acknowledges and agrees that the Seller may assign its
obligations  hereunder  to any  Person  into  which the  Seller is merged or any
corporation resulting from any merger,  conversion or consolidation to which the
Seller is a party or any Person  succeeding  to the business of the Seller.  The
parties  hereto  acknowledge  that the Purchaser is acquiring the Mortgage Loans
for the  purpose  of  contributing  them to a trust  that will issue a series of
certificates  representing  undivided  interests in such Mortgage  Loans.  As an
inducement  to  the  Purchaser  to  purchase  the  Mortgage  Loans,  the  Seller
acknowledges  and consents to the  assignment by the Purchaser to the Trustee of
all of the  Purchaser's  rights  against the Seller  pursuant to this  Agreement
insofar as such rights relate to Mortgage  Loans  transferred to the Trustee and
to the enforcement or exercise of any right or remedy


                                       19

<PAGE>

against the Seller pursuant to this Agreement by the Trustee.  Such  enforcement
of a right or remedy by the  Trustee  shall have the same force and effect as if
the right or remedy had been enforced or exercised by the Purchaser directly.

         Section 7.09 Survival.  The representations and warranties set forth in
Sections 3.01 and 3.02 hereof shall  survive the purchase of the Mortgage  Loans
hereunder.













                                       20
<PAGE>


     IN WITNESS WHEREOF, the Seller and the Purchaser have caused their names to
be signed to this Mortgage Loan Purchase Agreement by their respective  officers
thereunto duly authorized as of the day and year first above written.


                                            RESIDENTIAL ASSET FUNDING
                                             CORPORATION,
                                             as Purchaser


                                            By: /s/  Eric Kaplan
                                               --------------------------------
                                                Name:  Eric Kaplan
                                                Title: Vice President


                                            CREDIT-BASED ASSET SERVICING
                                             AND SECURITIZATION LLC,
                                             as Seller


                                            By: /s/  Ivan Halpern
                                               --------------------------------
                                               Name:  Ivan Halpern
                                               Title: Vice President


<PAGE>


STATE OF       NC       )
          -------------
                        )  ss.:
COUNTY OF   Mecklenburg )
          -------------


     On the 12th day of December 2000 before me, a Notary Public in and for said
State,  personally  appeared Eric Kaplan,  known to me to be a Vice President of
Residential Asset Funding Corporation,  the corporation that executed the within
instrument,  and also known to me to be the person who  executed it on behalf of
said  corporation,  and  acknowledged to me that such  corporation  executed the
within instrument.

     IN WITNESS  WHEREOF,  I have  hereunto  set my hand and affixed my official
seal the day and year in this certificate first above written.


                                                     /s/  Margaret Gavin
                                                    ----------------------
                                                         Notary Public


<PAGE>


STATE OF NEW YORK   )
                    )  ss.:
COUNTY OF NEW YORK  )


     On the 11th day of December 2000 before me, a Notary Public in and for said
State,  personally appeared Ivan Halpern,  known to me to be a Vice President of
Credit-Based Asset Servicing and  Securitization  LLC, the company that executed
the within instrument,  and also known to me to be the person who executed it on
behalf of said  limited  liability  company,  and  acknowledged  to me that such
limited liability company executed the within instrument.

     IN WITNESS  WHEREOF,  I have  hereunto  set my hand and affixed my official
seal the day and year in this certificate first above written.


                                                     /s/  Maria D. Rodriguez
                                                    --------------------------
                                                          Notary Public


<PAGE>


                                   SCHEDULE I

                             MORTGAGE LOAN SCHEDULE

                       [On File with Dewey Ballantine LLP]