<PAGE>

                                                                     EXHIBIT 4.1

================================================================================

                     MERRILL LYNCH MORTGAGE INVESTORS, INC.,
                                    Depositor

              CREDIT-BASED ASSET SERVICING AND SECURITIZATION LLC,
                                     Seller

                            LITTON LOAN SERVICING LP,
                                    Servicer

                                       and

                   JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
                                     Trustee

                         POOLING AND SERVICING AGREEMENT

                          Dated as of December 1, 2004

                                 2004-CB8 Trust

         C-BASS Mortgage Loan Asset-Backed Certificates, Series 2004-CB8

================================================================================

<PAGE>

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                                             PAGE
<S>                   <C>                                                                                    <C>
ARTICLE I             DEFINITIONS...........................................................................    4

     Section 1.01          Defined Terms....................................................................    4

     Section 1.02          Accounting.......................................................................   43

ARTICLE II            CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES.......................   43

     Section 2.01          Conveyance of Mortgage Loans.....................................................   43

     Section 2.02          Acceptance by Trustee............................................................   45

     Section 2.03          Repurchase or Substitution of Mortgage Loans by the Seller.......................   46

     Section 2.04          Representations and Warranties of the Seller with Respect to the
                           Mortgage Loans...................................................................   49

     Section 2.05          Representations, Warranties and Covenants of the Servicer........................   49

     Section 2.06          Representations and Warranties of the Depositor..................................   51

     Section 2.07          Issuance of Certificates and the Uncertificated Regular Interests................   52

     Section 2.08          Representations and Warranties of the Seller.....................................   53

     Section 2.09          Covenants of the Seller..........................................................   54

ARTICLE III           ADMINISTRATION AND SERVICING OF THE TRUST FUND........................................   55

     Section 3.01          Servicer to Act as Servicer......................................................   55

     Section 3.02          Collection of Mortgage Loan Payments.............................................   56

     Section 3.03          Realization Upon Defaulted Mortgage Loans........................................   57

     Section 3.04          Collection Account and Distribution Account......................................   58

     Section 3.05          Permitted Withdrawals From the Collection Account................................   59

     Section 3.06          Establishment of Escrow Account; Deposits in Escrow Account......................   60

     Section 3.07          Permitted Withdrawals From Escrow Account........................................   61

     Section 3.08          Payment of Taxes, Insurance and Other Charges; Collections Thereunder............   61

     Section 3.09          Transfer of Accounts.............................................................   62

     Section 3.10          Maintenance of Hazard Insurance..................................................   62

     Section 3.11          Maintenance of Mortgage Impairment Insurance Policy..............................   63

     Section 3.12          Fidelity Bond, Errors and Omissions Insurance....................................   63

     Section 3.13          Title, Management and Disposition of REO Property and Certain
                           Delinquent Mortgage Loans........................................................   64

     Section 3.14          Due-on-Sale Clauses; Assumption and Substitution Agreements......................   65

     Section 3.15          Notification of Adjustments......................................................   66
</TABLE>

                                      -i-
<PAGE>

                                TABLE OF CONTENTS
                                  (continued)

<TABLE>
<S>                   <C>                                                                                      <C>
     Section 3.16          Optional Purchases of Mortgage Loans by Servicer.................................   66

     Section 3.17          Trustee to Cooperate; Release of Files...........................................   67

     Section 3.18          Servicing Compensation...........................................................   68

     Section 3.19          Annual Statement as to Compliance................................................   68

     Section 3.20          Annual Independent Certified Public Accountants' Reports.........................   69

     Section 3.21          Access to Certain Documentation and Information Regarding the
                           Mortgage Loans...................................................................   69

     Section 3.22          Reserved.........................................................................   69

     Section 3.23          Obligations of the Servicer in Respect of Compensating Interest..................   69

     Section 3.24          Obligations of the Servicer in Respect of Mortgage Interest Rates and
                           Monthly Payments.................................................................   70

     Section 3.25          Investment of Funds in the Collection Account and the Distribution
                           Account..........................................................................   70

     Section 3.26          Liability of Servicer; Indemnification...........................................   71

     Section 3.27          Reports of Foreclosure and Abandonment of Mortgaged Properties...................   72

     Section 3.28          Protection of Assets.............................................................   72

     Section 3.29          Periodic Filings.................................................................   72

     Section 3.30          Advance Facility.................................................................   74

ARTICLE IV            FLOW OF FUNDS.........................................................................   76

     Section 4.01          Interest Distributions...........................................................   76

     Section 4.02          Distributions of Principal and Monthly Excess Cashflow Amounts...................   77

     Section 4.03          Allocation of Losses.............................................................   83

     Section 4.04          Method of Distribution...........................................................   83

     Section 4.05          Distributions on Book-Entry Certificates.........................................   84

     Section 4.06          Statements.......................................................................   84

     Section 4.07          Remittance Reports; Advances.....................................................   86

     Section 4.08          REMIC Distributions..............................................................   88

ARTICLE V             THE CERTIFICATES......................................................................   91

     Section 5.01          The Certificates.................................................................   91

     Section 5.02          Registration of Transfer and Exchange of Certificates............................   91

     Section 5.03          Mutilated, Destroyed, Lost or Stolen Certificates................................   97

     Section 5.04          Persons Deemed Owners............................................................   97

     Section 5.05          Appointment of Paying Agent......................................................   97
</TABLE>

                                      -ii-
<PAGE>

                                TABLE OF CONTENTS
                                  (continued)

<TABLE>
<S>                   <C>                                                                                     <C>
ARTICLE VI            THE SELLER, THE SERVICER AND THE DEPOSITOR...........................................    98

     Section 6.01          Liability of the Seller, the Servicer and the Depositor.........................    98

     Section 6.02          Merger or Consolidation of, or Assumption of the Obligations of, the
                           Seller, the Servicer or the Depositor...........................................    98

     Section 6.03          Limitation on Liability of the Servicer and Others..............................    98

     Section 6.04          Servicer Not to Resign..........................................................    99

     Section 6.05          Delegation of Duties............................................................    99

ARTICLE VII           DEFAULT..............................................................................   100

     Section 7.01          Servicer Events of Termination..................................................   100

     Section 7.02          Trustee to Act; Appointment of Successor........................................   101

     Section 7.03          Waiver of Defaults..............................................................   102

     Section 7.04          Notification to Certificateholders..............................................   102

     Section 7.05          Survivability of Servicer Liabilities...........................................   103

ARTICLE VIII          THE TRUSTEE..........................................................................   103

     Section 8.01          Duties of Trustee...............................................................   103

     Section 8.02          Certain Matters Affecting the Trustee...........................................   104

     Section 8.03          Trustee Not Liable for Certificates or Mortgage Loans...........................   105

     Section 8.04          Trustee May Own Certificates....................................................   106

     Section 8.05          Seller to Pay Trustee Fees and Expenses.........................................   106

     Section 8.06          Eligibility Requirements for Trustee............................................   107

     Section 8.07          Resignation or Removal of Trustee...............................................   107

     Section 8.08          Successor Trustee...............................................................   108

     Section 8.09          Merger or Consolidation of Trustee..............................................   108

     Section 8.10          Appointment of Co-Trustee or Separate Trustee...................................   108

     Section 8.11          Limitation of Liability.........................................................   110

     Section 8.12          Trustee May Enforce Claims Without Possession of Certificates...................   110

     Section 8.13          Suits for Enforcement...........................................................   110

     Section 8.14          Waiver of Bond Requirement......................................................   110

     Section 8.15          Waiver of Inventory, Accounting and Appraisal Requirement.......................   110

     Section 8.16          Compliance with National Housing Act of 1934....................................   111

ARTICLE IX            REMIC AND GRANTOR TRUST ADMINISTRATION...............................................   111

     Section 9.01          REMIC Administration............................................................   111
</TABLE>

                                     -iii-
<PAGE>

                                TABLE OF CONTENTS
                                  (continued)

<TABLE>
<S>                   <C>                                                                                     <C>
     Section 9.02          Prohibited Transactions and Activities..........................................   114

     Section 9.03          Indemnification with Respect to Certain Taxes and Loss of REMIC
                           Status..........................................................................   114

     Section 9.04          REO Property....................................................................   114

     Section 9.05          Grantor Trust Administration....................................................   115

ARTICLE X             TERMINATION..........................................................................   115

     Section 10.01         Termination.....................................................................   115

     Section 10.02         Additional Termination Requirements.............................................   117

ARTICLE XI            MISCELLANEOUS PROVISIONS.............................................................   117

     Section 11.01         Amendment.......................................................................   117

     Section 11.02         Recordation of Agreement; Counterparts..........................................   118

     Section 11.03         Limitation on Rights of Certificateholders......................................   119

     Section 11.04         Governing Law; Jurisdiction.....................................................   119

     Section 11.05         Notices.........................................................................   120

     Section 11.06         Severability of Provisions......................................................   120

     Section 11.07         Article and Section References..................................................   120

     Section 11.08         Notice to the Rating Agencies...................................................   120

     Section 11.09         Further Assurances..............................................................   121

     Section 11.10         Section 11.10   Benefits of Agreement...........................................   121

     Section 11.11         Acts of Certificateholders......................................................   121
</TABLE>

                                      -iv-
<PAGE>

                                    EXHIBITS:

Exhibit A-1        Form of Class AV-1 Certificates
Exhibit A-2        Form of Class AF-1 Certificates
Exhibit A-3        Form of Class AF-2 Certificates
Exhibit A-4        Form of Class AF-3 Certificates
Exhibit A-5        Form of Class AF-4 Certificates
Exhibit B-1        Form of Class B-1 Certificates
Exhibit B-2        Form of Class B-2 Certificates
Exhibit B-3        Form of Class B-3 Certificates
Exhibit B-4-1      Form of Class B-4 Certificates (144A)
Exhibit B-4-2      Form of Class B-4 Certificates (Regulation S)
Exhibit C-1-1      Form of Class R Certificate
Exhibit C-1-2      Form of Class R-X Certificates
Exhibit C-2        Form of Class M-1 Certificates
Exhibit C-3        Form of Class M-2 Certificates
Exhibit C-4        Form of Class M-3 Certificates
Exhibit C-5        Form of Class X Certificates
Exhibit C-6        Form of Class N Certificates
Exhibit D-1        Mortgage Loan Schedule for Group I Mortgage Loans
Exhibit D-2        Mortgage Loan Schedule for Group II Mortgage Loans
Exhibit E          Form of Request for Release of Documents
Exhibit F-1        Form of Custodian's Initial Certification
Exhibit F-2        Form of Custodian's Final Certification
Exhibit F-3        Form of Receipt of Mortgage Note
Exhibit G          Mortgage Loan Purchase Agreement
Exhibit H          Form of Lost Note Affidavit
Exhibit I          Form of ERISA Representation
Exhibit J          Forms of Investment Letters
Exhibit K          Form of Residual Certificate Transfer Affidavit
Exhibit L          Form of Transferor Certificate
Exhibit M          Monthly Information Provided by Servicer
Exhibit N          Form of Certification to be Provided with Form 10-K
Exhibit O          Form of Certification to be Provided by Trustee to the
                   Servicer
Exhibit P          [Reserved]
Exhibit Q          Form of Power of Attorney

                                      -i-

<PAGE>

      This Pooling and Servicing Agreement is dated as of December 1, 2004 (the
"Agreement"), among MERRILL LYNCH MORTGAGE INVESTORS, INC., as depositor (the
"Depositor"), CREDIT-BASED ASSET SERVICING AND SECURITIZATION LLC, as seller
(the "Seller"), LITTON LOAN SERVICING LP, as servicer (the "Servicer") and
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, as trustee (the "Trustee").

                              PRELIMINARY STATEMENT

      The Depositor intends to sell pass-through certificates (collectively, the
"Certificates"), to be issued hereunder in multiple Classes, which in the
aggregate will evidence the entire beneficial ownership interest in the Trust
Fund created hereunder. The Certificates will consist of sixteen Classes of
Certificates, designated as (i) the Class AV-1, Class AF-1, Class AF-2, Class
AF-3 and Class AF-4 Certificates, (ii) the Class M-1, Class M-2 and Class M-3
Certificates, (iii) the Class B-1, Class B-2, Class B-3 and Class B-4
Certificates, (iv) the Class N Certificates, (v) the Class X Certificates, (vi)
the Class R Certificates and the Class R-X Certificates.

      As provided herein, the Trustee shall elect that the Trust Fund (other
than the Grantor Trust) be treated for federal income tax purposes as six
separate real estate mortgage investment conduits (each a "REMIC" or, in the
alternative, "REMIC 1," "REMIC 2," "REMIC B-2," "REMIC B-3," "REMIC B-4" and
"REMIC X/N" respectively). The REMIC X/N Regular Interests represent all of the
"regular interests" in REMIC X/N. The REMIC B-4 Regular Interests represent all
of the "regular interests" in REMIC B-4. The REMIC B-3 Regular Interests
represent all of the "regular interests" in REMIC B-3. The REMIC B-2 Regular
Interests represent all of the "regular interests" in REMIC B-2. The REMIC 2
Regular Interests represent all of the "regular interests" in REMIC 2. The REMIC
1 Regular Interests represent all of the "regular interests" in REMIC 1. Each
Class of Cap Carryover Certificates (other than the Class B-2, Class B-3 and
Class B-4 Certificates) represents beneficial ownership of the Corresponding
REMIC 2 Regular Interest and the right to receive LIBOR Carryover Amounts. The
Class B-2 Certificates represent beneficial ownership of the REMIC B-2 Regular
Interest and the right to receive LIBOR Carryover Amounts. The Class B-3
Certificates represent beneficial ownership of the REMIC B-3 Regular Interest
and the right to receive LIBOR Carryover Amounts. The Class B-4 Certificates
represent beneficial ownership of the REMIC B-4 Regular Interest and the right
to receive LIBOR Carryover Amounts. For federal income tax purposes, the Class N
and Class X Certificates together represent beneficial ownership of the REMIC
X/N X/N Interest subject to the obligation to pay LIBOR Carryover Amounts. Each
of the Class R-1 and Class R-2 Interests, represented collectively by the Class
R Certificates, represents the sole Class of "residual interest" in REMIC 1 and
REMIC 2, respectively, for purposes of the REMIC Provisions. Each of the Class
R-B-2, Class R-B-3, Class R-B-4 and Class R-X/N Interests, represented
collectively by the Class R-X Certificates, represent the sole Class of
"residual interest" in REMIC B-2, REMIC B-3, REMIC B-4 and REMIC X/N,
respectively, for purposes of the REMIC provisions. The REMIC 1 Regular
Interests will be held as assets of REMIC 2. The REMIC 2 X/N Interest will be
held as the sole asset of REMIC X/N. For federal income tax purposes, the REMIC
X/N X/N Interest will be held as the asset of the Grantor Trust. The REMIC 2 B-2
Interest will be held as the sole asset of REMIC B-2. The REMIC 2 B-3 Interest
will be held as the sole asset of REMIC B-3. The REMIC 2 B-4 Interest will be
held as the sole asset of REMIC B-4. The "latest possible maturity date" for
federal income tax purposes of all interests created hereby will be the
Distribution Date in December 2034.

<PAGE>
REMIC 1

      The following table specifies the class designation, interest rate, and
initial principal amount for each class of REMIC 1 Interests.

<TABLE>
<CAPTION>
                                                                 Related Loan
                                                               Group or Related
   Designation    Interest Rate    Initial Principal Amount      Certificate
--------------    -------------    ------------------------    -----------------
<S>               <C>              <C>                         <C>
LT1-AV1                (1)              $ 81,434,750.000000       Class AV-1
LT1-AF1                (1)              $ 14,609,250.000000       Class AF-1
LT1-AF2                (1)              $  5,836,000.000000       Class AF-2
LT1-AF3                (1)              $  4,449,500.000000       Class AF-3
LT1-AF4                (1)              $  2,766,000.000000       Class AF-4
LT1-M1                 (1)              $  8,555,000.000000       Class M-1
LT1-M2                 (1)              $  7,049,250.000000       Class M-2
LT1-M3                 (1)              $  1,984,750.000000       Class M-3
LT1-B1                 (1)              $  1,916,250.000000       Class B-1
LT1-B2                 (1)              $  1,574,000.000000       Class B-2
LT1-B3                 (1)              $  1,368,750.000000       Class B-3
LT1-B4                 (1)              $  2,737,500.000000       Class B-4
LT1-X1                 (1)              $139,484,377.940000          N/A
LT1-IA                 (1)              $     41,483.793765      Loan Group I
LT1-IB                 (2)              $    204,353.293765      Loan Group I
LT1-IIA                (1)              $     14,090.584175     Loan Group II
LT1-IIB                (3)              $     69,412.084175     Loan Group II
LT1-X2                 (1)              $273,436,038.184120          N/A
R-1                    (4)                               (4)         N/A
</TABLE>

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

(1)   For any Distribution Date, the interest rate for these interests shall be
      the Net Rate.

(2)   For any Distribution Date, the interest rate for the LT1-IB Interest shall
      be a per annum rate equal to the Group I Net Rate.

(3)   For any Distribution Date, the interest rate for the LT1-IIB Interest
      shall be a per annum rate equal to the Group II Net Rate Cap.

(4)   The Class R-1 Interest shall represent the sole class of residual interest
      in REMIC 1. The Class R-1 Interest will not have a principal amount or an
      interest rate. The Class R-1 Interest shall be represented by the Class R
      Certificate.

      All computations with respect to any REMIC 1 Interest shall be taken out
to ten decimal places.

      REMIC 2

      The sole assets of REMIC 2 shall be the REMIC 1 Regular Interests. The
regular interests in REMIC 2 shall be the REMIC 2 Regular Interests. The
residual interest in REMIC 2 will be the Class R-2 Interest, which will be
represented by the Class R Certificate.

      REMIC B-2

                                       2
<PAGE>

      The sole asset of REMIC B-2 shall be the REMIC 2 B-2 Interest. The sole
regular interest in REMIC B-2 will be the REMIC B-2 B-2 Interest. The residual
interest in REMIC B-2 will be the Class R-B-2 Interest, which will be
represented by the Class R-X Certificate.

      REMIC B-3

      The sole asset of REMIC B-3 shall be the REMIC 2 B-3 Interest. The sole
regular interest in REMIC B-3 will be the REMIC B-3 B-3 Interest. The residual
interest in REMIC B-3 will be the Class R-B-3 Interest, which will be
represented by the Class R-X Certificate.

      REMIC B-4

      The sole asset of REMIC B-4 shall be the REMIC 2 B-4 Interest. The sole
regular interest in REMIC B-4 will be the REMIC B-4 B-4 Interest. The residual
interest in REMIC B-4 will be the Class R-B-4 Interest, which will be
represented by the Class R-X Certificate.

      REMIC X/N

      The sole asset of REMIC X/N shall be the REMIC 2 X/N Interest. The sole
regular interest in REMIC X/N will be the REMIC X/N X/N Interest. The residual
interest in REMIC X/N will be the Class R- X/N Interest, which will be
represented by the Class R-X Certificate.

      The following table sets forth (or describes) the Class designation,
Pass-Through Rate and Original Class Certificate Principal Balance or Original
Notional Amount, for each Class of Certificates comprising the interests in the
Trust Fund created hereunder:

<TABLE>
<CAPTION>
                    Original Class
                     Certificate
             Principal Balance or Notional    Pass-Through     Assumed Final
    Class              Amount                     Rate         Maturity Dates
---------    -----------------------------    ------------    ------------------
<S>          <C>                              <C>             <C>
AV-1                $325,739,000                   (1)        November 25, 2035
AF-1                $ 58,437,000                   (2)           November 25
AF-2                $ 23,344,000                   (3)           November 25
AF-3                $ 17,798,000                   (4)           November 25
AF-4                $ 11,064,000                   (5)           November 25
M-1                 $ 34,220,000                   (6)           November 25
M-2                 $ 28,197,000                   (7)           November 25
M-3                 $  7,939,000                   (8)           November 25
B-1                 $  7,665,000                   (9)           November 25
B-2                 $  6,296,000                  (10)           November 25
B-3                 $  5,475,000                  (11)           November 25
B-4                 $ 10,950,000                  (12)           November 25
N                   $ 22,000,000 (13)               8%               N/A
X                          N/A   (13)             N/A                N/A
R                          N/A                    N/A                N/A
R -X                       N/A                    N/A                N/A
Total               ____________ (14)
</TABLE>

(1)   Interest will accrue on the Class AV-1 Certificates during each Interest
      Accrual Period at a rate equal to the least of: (i) the Class AV-1
      Pass-Through Rate, (ii) the Group I Available Funds Cap for such
      Distribution Date and (iii) the Group I Maximum Rate Cap.

                                       3
<PAGE>

(2)   Interest will accrue on the Class AF-1 Certificates at a rate equal to the
      lesser of: (i) the Class AF-1 Pass-Through Rate and (ii) the Group II Net
      Rate Cap for such Distribution Date.

(3)   Interest will accrue on the Class AF-2 Certificates at a rate equal to the
      lesser of: (i) the Class AF-2 Pass-Through Rate and (ii) the Group II Net
      Rate Cap for such Distribution Date.

(4)   Interest will accrue on the Class AF-3 Certificates at a rate equal to the
      lesser of: (i) the Class AF-3 Pass-Through Rate and (ii) the Group II Net
      Rate Cap for such Distribution Date.

(5)   Interest will accrue on the Class AF-4 Certificates at a rate equal to the
      lesser of (i) the Class AF-4 Pass-Through Rate and (ii) the Group II Net
      Rate Cap for such Distribution Date.

(6)   Interest will accrue on the Class M-1 Certificates at a rate equal to the
      least of: (i) the Class M-1 Pass-Through Rate, (ii) the Subordinate Rate
      Cap for such Distribution Date and (iii) the Subordinate Maximum Rate Cap.

(7)   Interest will accrue on the Class M-2 Certificates at a rate equal to the
      least of: (i) the Class M-2 Pass-Through Rate, (ii) the Subordinate Rate
      Cap for such Distribution Date and (iii) the Subordinate Maximum Rate Cap.

(8)   Interest will accrue on the Class M-3 Certificates at a rate equal to the
      least of: (i) the Class M-3 Pass-Through Rate, (ii) the Subordinate Rate
      Cap for such Distribution Date and (iii) the Subordinate Maximum Rate Cap.

(9)   Interest will accrue on the Class B-1 Certificates at a rate equal to the
      least of: (i) the Class B-1 Pass-Through Rate, (ii) the Subordinate Rate
      Cap for such Distribution Date and (iii) the Subordinate Maximum Rate Cap.

(10)  Interest will accrue on the Class B-2 Certificates at a rate equal to the
      least of: (i) the Class B-2 Pass-Through Rate, (ii) the Subordinate Rate
      Cap for such Distribution Date and (iii) the Subordinate Maximum Rate Cap.

(11)  Interest will accrue on the Class B-3 Certificates at a rate equal to the
      least of: (i) the Class B-3 Pass-Through Rate, (ii) the Subordinate Rate
      Cap for such Distribution Date and (iii) the Subordinate Maximum Rate Cap.

(12)  Interest will accrue on the Class B-4 Certificates at a rate equal to the
      least of: (i) the Class B-4 Pass-Through Rate, (ii) the Subordinate Rate
      Cap for such Distribution Date and (iii) the Subordinate Maximum Rate Cap.

(13)  The Class N and Class X Certificates, collectively, represent the
      beneficial ownership of the REMIC X/N X/N Interest, subject to the
      obligation to make payments in respect of LIBOR Carryover Amounts.

(14)  Exclusive of the Class N Notional Amount. The Class N Original Notional
      Amount is $22,000,000.

                                    ARTICLE I
                                   DEFINITIONS

      Section 1.01 Defined Terms.

      Whenever used in this Agreement or in the Preliminary Statement, the
following words and phrases, unless the context otherwise requires, shall have
the meanings specified in this Article. Unless otherwise specified, interest on
the Class AV-1, Class M-1, Class M-2, Class M-3, Class B-1, Class B-2 and Class
B-3 Certificates will be calculated on the basis of the actual number of days in
the related Interest Accrual Period and a 360-day year. Interest on the Class
AF-1, Class AF-2, Class AF-3, Class AF-4, Class B-4, Class N and Class X
Certificates and the REMIC 1 Regular Interests and the REMIC 2 X/N Interest will
be calculated on the basis of a 360-day year consisting of twelve 30-day months.

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

                                       4
<PAGE>

      "60+ Day Delinquent Loan": With respect to any date of determination, each
Mortgage Loan with respect to which any portion of a Monthly Payment is, as of
the last day of the prior Collection Period, two months or more past due, each
Mortgage Loan in foreclosure, all REO Property and each Mortgage Loan for which
the Mortgagor has filed for bankruptcy after the Closing Date.

      "Account": Any of the Collection Account, the Distribution Account and the
Escrow Account.

      "Accrued Certificate Interest": With respect to each Distribution Date and
Class of Certificates, an amount equal to the interest accrued at the applicable
rate set forth or described for such Class in the table in the Preliminary
Statement during the related Interest Accrual Period on the Certificate
Principal Balance or Notional Amount of such Class of Certificates, reduced by
such Class's Interest Percentage of Relief Act Interest Shortfalls for such
Distribution Date.

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

      "Adjustment Period": As defined in the Preliminary Statement.

      "Advance": As to any Mortgage Loan or REO Property, any advance made by
the Servicer in respect of any Distribution Date pursuant to Section 4.07.

      "Advance Facility": As defined in Section 3.30(a) hereof.

      "Advance Facility Notice": As defined in Section 3.30(b) hereof.

      "Advance Financing Person": As defined in Section 3.30(a) hereof.

      "Advance Reimbursement Amounts": As defined in Section 3.30(b) hereof.

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

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

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

      "Applicable Regulations": As to any Mortgage Loan, all federal, state and
local laws, statutes, rules and regulations applicable thereto, including with
respect to each FHA Loan, the FHA Regulations and the related FHA Insurance
Contract and with respect to each VA Loan, the VA Regulations and the related VA
Guaranty.

      "Applied Realized Loss Amount": With respect to each Distribution Date,
the excess, if any, of (a) the aggregate of the Certificate Principal Balances
of the Certificates (after giving effect to all distributions on such
Distribution Date) over (b) the Pool Balance as of the end of the related
Collection Period.

                                       5
<PAGE>

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

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

      "Available Funds": As to any Distribution Date, an amount equal to the
excess of (i) the sum of (a) the aggregate of the Monthly Payments due during
the related Collection Period and received by the Servicer on or prior to the
related Determination Date, (b) Liquidation Proceeds, Insurance Proceeds,
Condemnation Proceeds, Principal Prepayments, Substitution Adjustment Amounts,
the Purchase Price for any repurchased Mortgage Loan, the Termination Price with
respect to the termination of the Trust pursuant to Section 10.01 hereof, any
Reimbursement Amount or Subsequent Recovery deposited to the Collection Account
and other unscheduled recoveries of principal and interest (excluding prepayment
penalties) in respect of the Mortgage Loans during the related Prepayment
Period, (c) the aggregate of any amounts received in respect of an REO Property
withdrawn from any REO Account and deposited in the Collection Account for such
Distribution Date, (d) any Compensating Interest for such Distribution Date, and
(e) the aggregate of any Advances made by the Servicer for such Distribution
Date over (ii) the sum of (a) amounts reimbursable or payable to the Servicer
pursuant to Section 3.05, (b) Stayed Funds, (c) the Servicing Fee and (d)
amounts deposited in the Collection Account or the Distribution Account, as the
case may be, in error.

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

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

      "Bankruptcy Code": Title 11 of the United States Code, as amended.

      "Book-Entry Certificates": Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the ownership of which
is reflected on the books of the Depository or on the books of a Person
maintaining an account with the Depository (directly, as a "Depository
Participant," or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 5.02 hereof). On the Closing
Date, the Class AV-1, Class AF-1, Class AF-2, Class AF-3, Class AF-4, Class M-1,
Class M-2, Class M-3, Class B-1, Class B-2, Class B-3 and Class B-4 Certificates
shall be Book-Entry Certificates.

      "Book-Entry Regulation S Global Securities": As defined in Section 5.01.

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

      "Cap": Any of the Group I Available Funds Cap, the Group II Net Rate Cap,
the Group I Maximum Rate Cap, the Subordinate Rate Cap or the Subordinate
Maximum Rate Cap.

      "Cap Carryover Certificates": The Class AV-1, Class M-1, Class M-2, Class
M-3, Class B-1, Class B-2, Class B-3 and Class B-4 Certificates.

                                       6
<PAGE>

      "Certificate": Any Regular Certificate or Residual Certificate.

      "Certificate Custodian": Initially, JPMorgan Chase Bank, National
Association; thereafter any other Certificate Custodian acceptable to the
Depository and selected by the Trustee.

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

      "Certificate Principal Balance": With respect to any Class of Certificates
(other than the Class N, Class X and Residual Certificates) and any Distribution
Date, the Original Class Certificate Principal Balance reduced by the sum of (i)
all amounts actually distributed in respect of principal of such Class on all
prior Distribution Dates and (ii) Applied Realized Loss Amounts allocated
thereto. The Class N, Class X and Residual Certificates do not have a
Certificate Principal Balance. With respect to any Certificate (other than a
Class X, Class N or a Residual Certificate) of a Class and any Distribution
Date, the portion of the Certificate Principal Balance of such Class represented
by such Certificate equal to the product of the Percentage Interest evidenced by
such Certificate and the Certificate Principal Balance of such Class.
Notwithstanding the foregoing on any Distribution Date relating to a Collection
Period in which a Subsequent Recovery has been received by the Servicer, the
Certificate Principal Balance of any Class of Certificates then outstanding for
which any Applied Realized Loss Amount has been allocated will be increased, in
order of seniority, by an amount equal to the lesser of (i) the Unpaid Realized
Loss Amount for such Class of Certificates and (ii) the amount of any Subsequent
Recovery allocable to principal distributed on such date to the
Certificateholders (reduced by the amount of the increase in the Certificate
Principal Balance of any more senior Class of Certificates pursuant to this
sentence on such Distribution Date).

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

      "Certificateholder" or "Holder": The Person in whose name a Certificate is
registered in the Certificate Register, except that a Disqualified Organization
or Disqualified Non-U.S. Person shall not be a Holder of a Residual Certificate
for any purpose hereof.

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

      "Class AF-1 Pass-Through Rate": For each Distribution Date, (i) on or
prior to the Optional Termination Date, 3.633% per annum and (ii) following the
Optional Termination Date, 4.133% per annum, subject in each case to a cap equal
to the Group II Net Rate Cap.

      "Class AF-2 Pass-Through Rate": For each Distribution Date (i) on or prior
to the Optional Termination Date, 4.134% per annum, and (ii) following the
Optional Termination Date, 4.634% per annum, subject in either case to a cap
equal to the Group II Net Rate Cap.

      "Class AF-3 Pass-Through Rate": For each Distribution Date (i) on or prior
to the Optional Termination Date, 5.090% per annum, and (ii) following the
Optional Termination Date, 5.590% per annum, subject in either case to a cap
equal to the Group II Net Rate Cap.

      "Class AF-4 Lockout Distribution Amount": For any Distribution Date, the
product of (x) the Class AF-4 Lockout Distribution Percentage and (y) the Class
AF-4 Pro Rata Distribution Amount. In no event shall the Class AF-4 Lockout
Distribution Amount for a Distribution Date exceed the Group II

                                       7
<PAGE>

Principal Distribution Amount for such Distribution Date or the Certificate
Principal Balance of the Class AF-4 Certificates immediately prior to such
Distribution Date.

      "Class AF-4 Lockout Percentage" means, for a Distribution Date in any
period listed in the table below, the applicable percentage listed opposite such
period:

<TABLE>
<CAPTION>
Distribution Dates                                      Lockout Percentage
------------------------------------------------        ------------------
<S>                                                     <C>
January 2005 through and including December 2007                 0%

January 2008 through and including December 2009                45%

January 2010 through and including December 2010                80%

January 2011 through and including December 2011               100%

January 2012 and thereafter                                    300%
</TABLE>

      "Class AF-4 Pass-Through Rate": For each Distribution Date, (i) on or
prior to the Optional Termination Date, 4.658% per annum, and (ii) following the
Optional Termination Date, 5.158% per annum, subject in each case to a cap equal
to the Group II Net Rate Cap.

      "Class AF-4 Pro Rata Distribution Amount" means, for any Distribution
Date, an amount equal to the product of (x) a fraction, the numerator of which
is the Certificate Principal Balance of the Class AF-4 Certificates immediately
prior to such Distribution Date and the denominator of which is the aggregate
Certificate Principal Balance of the Class AF-1, Class AF-2, Class AF-3 and
Class AF-4 Certificates immediately prior to that Distribution Date and (y) the
Group II Principal Distribution Amount for that Distribution Date.

      "Class AV-1 Certificate Margin": For each Distribution Date (i) on or
prior to the Optional Termination Date, 0.26% per annum, and (ii) following the
Optional Termination Date, 0.52% per annum.

      "Class AV-1 Pass-Through Rate": For each Distribution Date, the least of
(i) LIBOR as of the related LIBOR Determination Date, plus the Class AV-1
Certificate Margin, (ii) the Group I Available Funds Cap and (iii) the Group I
Maximum Rate Cap.

      "Class A Certificate": Any one of the Certificates with an "A" designated
on the face thereof substantially in the form annexed hereto as Exhibits A-1,
A-2, A-3, A-4 and A-5, executed by the Trustee on behalf of the Trust and
authenticated and delivered by the Certificate Registrar, representing the right
to distributions as set forth herein and therein.

      "Class A Certificateholders": Collectively, the Holders of the Class A
Certificates.

      "Class A Interest Carry Forward Amount": For any Distribution Date, the
sum of the Interest Carry Forward Amounts for the Class A Certificates for such
Distribution Date.

                                       8
<PAGE>

      "Class A Principal Distribution Amount": As of any Distribution Date (a)
prior to the Stepdown Date or with respect to which a Trigger Event is in
effect, the Principal Distribution Amount and (b) on or after the Stepdown Date
and as long as a Trigger Event is not in effect, the excess of (x) the sum of
the Certificate Principal Balances of the Class A Certificates immediately prior
to such Distribution Date over (y) the lesser of (A) the product of (i) 59.40%
and (ii) the Pool Balance as of the last day of the related Collection Period
and (B) the Pool Balance as of the last day of the related Collection Period
minus the product of 0.50% and the Pool Balance on the Cut-off Date.

      "Class B Certificate": Any one of the Certificates with a "B" designated
on the face thereof substantially in the form annexed hereto as Exhibits B-1,
B-2, B-3 and B-4, executed by the Trustee on behalf of the Trust and
authenticated and delivered by the Certificate Registrar, representing the right
to distributions as set forth herein and therein.

      "Class B Certificateholders": Collectively, the Holders of the Class B
Certificates.

      "Class B-1 Applied Realized Loss Amount": As to the Class B-1 Certificates
and as of any Distribution Date, the lesser of (x) the Certificate Principal
Balance thereof (after taking into account the distribution of the Principal
Distribution Amount on such Distribution Date, but prior to the application of
the Class B-1 Applied Realized Loss Amount, if any, on such Distribution Date)
and (y) the excess of (i) the Applied Realized Loss Amount as of such
Distribution Date over (ii) the sum of the Class B-2 Applied Realized Loss
Amount, the Class B-3 Applied Realized Loss Amount and the Class B-4 Applied
Realized Loss Amount, in each case as of such Distribution Date.

      "Class B-1 Certificate Margin": For each Distribution Date (i) on or prior
to the Optional Termination Date, 1.500% per annum, and (ii) following the
Optional Termination Date, 2.250% per annum.

      "Class B-1 Pass-Through Rate": For each Distribution Date, the least of
(i) LIBOR as of the related LIBOR Determination Date, plus the Class B-1
Certificate Margin, (ii) the Subordinate Rate Cap and (iii) the Subordinate
Maximum Rate Cap.

      "Class B-1 Principal Distribution Amount": As of any Distribution Date on
or after the Stepdown Date and as long as a Trigger Event is not in effect, the
excess of (x) the sum of (i) the sum of the Certificate Principal Balances of
the Class A Certificates (after taking into account the payment of the Class A
Principal Distribution Amount on such Distribution Date), (ii) the Certificate
Principal Balance of the Class M-1 Certificates (after taking into account the
payment of the Class M-1 Principal Distribution Amount on such Distribution
Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates
(after taking into account the payment of the Class M-2 Principal Distribution
Amount on such Distribution Date), (iv) the Certificate Principal Balance of the
Class M-3 Certificates (after taking into account the payment of the Class M-3
Principal Distribution Amount on such Distribution Date) and (v) the Certificate
Principal Balance of the Class B-1 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 87.90% and (ii)
the Pool Balance as of the last day of the related Collection Period and (B) the
Pool Balance as of the last day of the related Collection Period minus the
product of 0.50% and the Pool Balance on the Cut-off Date.

      "Class B-1 Realized Loss Amortization Amount": As to the Class B-1
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class B-1 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xiv) hereof, in each
case for such Distribution Date.

                                       9
<PAGE>

      "Class B-2 Applied Realized Loss Amount": As to the Class B-2 Certificates
and as of any Distribution Date, the lesser of (x) the Certificate Principal
Balance thereof (after taking into account the distribution of the Principal
Distribution Amount on such Distribution Date, but prior to the application of
the Class B-2 Applied Realized Loss Amount, if any, on such Distribution Date)
and (y) the excess of (i) the Applied Realized Loss Amount as of such
Distribution Date over (ii) the sum of the Class B-3 Applied Realized Loss
Amount and the Class B-4 Applied Realized Loss Amount, in each case as of such
Distribution Date.

      "Class B-2 Certificate Margin": For each Distribution Date (i) on or prior
to the Optional Termination Date, 1.750% per annum, and (ii) following the
Optional Termination Date, 2.625% per annum.

      "Class B-2 Pass-Through Rate": For each Distribution Date, the least of
(i) LIBOR as of the related LIBOR Determination Date, plus the Class B-2
Certificate Margin, (ii) the Subordinate Rate Cap and (iii) the Subordinate
Maximum Rate Cap.

      "Class B-2 Principal Distribution Amount": As of any Distribution Date on
or after the Stepdown Date and as long as a Trigger Event is not in effect, the
excess of (x) the sum of (i) the sum of the Certificate Principal Balances of
the Class A Certificates (after taking into account the payment of the Class A
Principal Distribution Amount on such Distribution Date), (ii) the Certificate
Principal Balance of the Class M-1 Certificates (after taking into account the
payment of the Class M-1 Principal Distribution Amount on such Distribution
Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates
(after taking into account the payment of the Class M-2 Principal Distribution
Amount on such Distribution Date), (iv) the Certificate Principal Balance of the
Class M-3 Certificates (after taking into account the payment of the Class M-3
Principal Distribution Amount on such Distribution Date), (v) the Certificate
Principal Balance of the Class B-1 Certificates (after taking into account the
payment of the Class B-1 Principal Distribution Amount on such Distribution
Date) and (vi) the Certificate Principal Balance of the Class B-2 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 90.20% and (ii) the Pool Balance as of the last day of the
related Collection Period and (B) the Pool Balance as of the last day of the
related Collection Period minus the product of 0.50% and the Pool Balance on the
Cut-off Date.

      "Class B-2 Realized Loss Amortization Amount": As to the Class B-2
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class B-2 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xvii) hereof, in each
case for such Distribution Date.

      "Class B-3 Applied Realized Loss Amount": As to the Class B-3 Certificates
and as of any Distribution Date, the lesser of (x) the Certificate Principal
Balance thereof (after taking into account the distribution of the Principal
Distribution Amount on such Distribution Date, but prior to the application of
the Class B-3 Applied Realized Loss Amount, if any, on such Distribution Date)
and (y) the excess of (i) the Applied Realized Loss Amount as of such
Distribution Date over (ii) the Class B-4 Applied Realized Loss Amount as of
such Distribution Date.

      "Class B-3 Certificate Margin": For each Distribution Date (i) on or prior
to the Optional Termination Date, 2.750% per annum, and (ii) following the
Optional Termination Date, 4.125% per annum.

                                       10
<PAGE>

      "Class B-3 Pass-Through Rate": For each Distribution Date, the least of
(i) LIBOR as of the related LIBOR Determination Date, plus the Class B-3
Certificate Margin, (ii) the Subordinate Rate Cap and (iii) the Subordinate
Maximum Rate Cap.

      "Class B-3 Principal Distribution Amount": As of any Distribution Date on
or after the Stepdown Date and as long as a Trigger Event is not in effect, the
excess of (x) the sum of (i) the sum of the Certificate Principal Balances of
the Class A Certificates (after taking into account the payment of the Class A
Principal Distribution Amount on such Distribution Date), (ii) the Certificate
Principal Balance of the Class M-1 Certificates (after taking into account the
payment of the Class M-1 Principal Distribution Amount on such Distribution
Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates
(after taking into account the payment of the Class M-2 Principal Distribution
Amount on such Distribution Date), (iv) the Certificate Principal Balance of the
Class M-3 Certificates (after taking into account the payment of the Class M-3
Principal Distribution Amount on such Distribution Date), (v) the Certificate
Principal Balance of the Class B-1 Certificates (after taking into account the
payment of the Class B-1 Principal Distribution Amount on such Distribution
Date), (vi) the Certificate Principal Balance of the Class B-2 Certificates
(after taking into account the payment of the Class B-2 Principal Distribution
Amount on such Distribution Date) and (vii) the Certificate Principal Balance of
the Class B-3 Certificates immediately prior to such Distribution Date over (y)
the lesser of (A) the product of (i) 92.20% and (ii) the Pool Balance as of the
last day of the related Collection Period and (B) the Pool Balance as of the
last day of the related Collection Period minus the product of 0.50% and the
Pool Balance on the Cut-off Date.

      "Class B-3 Realized Loss Amortization Amount": As to the Class B-3
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class B-3 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xx) hereof, in each case
for such Distribution Date.

      "Class B-4 Applied Realized Loss Amount": As to the Class B-4 Certificates
and as of any Distribution Date, the lesser of (x) the Certificate Principal
Balance thereof (after taking into account the distribution of the Principal
Distribution Amount on such Distribution Date, but prior to the application of
the Class B-4 Applied Realized Loss Amount, if any, on such Distribution Date)
and (y) the Applied Realized Loss Amount as of such Distribution Date.

      "Class B-4 Pass-Through Rate": For each Distribution Date, the least of
(i) (x) on or prior to the Optional Termination Date, 6.000% per annum, and (y)
following the Optional Termination Date, 6.500% per annum, (ii) the Subordinate
Rate Cap and (iii) the Subordinate Maximum Rate Cap.

      "Class B-4 Principal Distribution Amount": As of any Distribution Date on
or after the Stepdown Date and as long as a Trigger Event is not in effect, the
excess of (x) the sum of (i) the sum of the Certificate Principal Balances of
the Class A Certificates (after taking into account the payment of the Class A
Principal Distribution Amount on such Distribution Date), (ii) the Certificate
Principal Balance of the Class M-1 Certificates (after taking into account the
payment of the Class M-1 Principal Distribution Amount on such Distribution
Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates
(after taking into account the payment of the Class M-2 Principal Distribution
Amount on such Distribution Date), (iv) the Certificate Principal Balance of the
Class M-3 Certificates (after taking into account the payment of the Class M-3
Principal Distribution Amount on such Distribution Date), (v) the Certificate
Principal Balance of the Class B-1 Certificates (after taking into account the
payment of the Class B-1 Principal Distribution Amount on such Distribution
Date), (vi) the Certificate Principal Balance of the Class B-2 Certificates
(after taking into account the payment of the Class B-2 Principal Distribution
Amount on such Distribution Date), (vii) the Certificate Principal Balance of
the Class B-3

                                       11
<PAGE>

Certificates (after taking into account the payment of the Class B-3 Principal
Distribution Amount on such Distribution Date) and (viii) the Certificate
Principal Balance of the Class B-4 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 96.20% and (ii)
the Pool Balance as of the last day of the related Collection Period and (B) the
Pool Balance as of the last day of the related Collection Period minus the
product of 0.50% and the Pool Balance on the Cut-off Date.

      "Class B-4 Realized Loss Amortization Amount": As to the Class B-4
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class B-4 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xxiii) hereof, in each
case for such Distribution Date.

      "Class M Certificate": Any one of the Certificates with an "M" designated
on the face thereof substantially in the form annexed hereto as Exhibit C-2,
Exhibit C-3 and Exhibit C-4, executed by the Trustee on behalf of the Trust and
authenticated and delivered by the Certificate Registrar, representing the right
to distributions as set forth herein and therein.

      "Class M Certificateholders": Collectively, the Holders of the Class M
Certificates.

      "Class M-1 Applied Realized Loss Amount": As to the Class M-1 Certificates
and as of any Distribution Date, the lesser of (x) the Certificate Principal
Balance thereof (after taking into account the distribution of the Principal
Distribution Amount on such Distribution Date, but prior to the application of
the Class M-1 Applied Realized Loss Amount, if any, on such Distribution Date)
and (y) the excess of (i) the Applied Realized Loss Amount as of such
Distribution Date over (ii) the sum of the Class M-2 Applied Realized Loss
Amount, the Class M-3 Applied Realized Loss Amount, the Class B-1 Applied
Realized Loss Amount, the Class B-2 Applied Realized Loss Amount, the Class B-3
Applied Realized Loss Amount and the Class B-4 Applied Realized Loss Amount, in
each case as of such Distribution Date.

      "Class M-1 Certificate Margin": For each Distribution Date (i) on or prior
to the Optional Termination Date, 0.530% per annum, and (ii) following the
Optional Termination Date, 0.795% per annum.

      "Class M-1 Pass-Through Rate": For each Distribution Date, the least of
(i) LIBOR as of the related LIBOR Determination Date, plus the Class M-1
Certificate Margin, (ii) the Subordinate Rate Cap and (iii) the Subordinate
Maximum Rate Cap.

      "Class M-1 Principal Distribution Amount": As of any Distribution Date on
or after the Stepdown Date and as long as a Trigger Event is not in effect, the
excess of (x) the sum of (i) the Certificate Principal Balances of the Class A
Certificates (after taking into account the payment of the Class A Principal
Distribution Amount on such Distribution Date) and (ii) the Certificate
Principal Balance of the Class M-1 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 71.90% and (ii)
the Pool Balance as of the last day of the related Collection Period and (B) the
Pool Balance as of the last day of the related Collection Period minus the
product of 0.50% and the Pool Balance on the Cut-off Date.

      "Class M-1 Realized Loss Amortization Amount": As to the Class M-1
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-1 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (v) hereof, in each case
for such Distribution Date.

                                       12
<PAGE>

      "Class M-2 Applied Realized Loss Amount": As to the Class M-2 Certificates
and as of any Distribution Date, the lesser of (x) the Certificate Principal
Balance thereof (after taking into account the distribution of the Principal
Distribution Amount on such Distribution Date, but prior to the application of
the Class M-2 Applied Realized Loss Amount, if any, on such Distribution Date)
and (y) the excess of (i) the related Applied Realized Loss Amount as of such
Distribution Date over (ii) the sum of the Class M-3 Applied Realized Loss
Amount, the Class B-1 Applied Realized Loss Amount, the Class B-2 Applied
Realized Loss Amount, the Class B-3 Applied Realized Loss Amount and the Class
B-4 Applied Realized Loss Amount, in each case as of such Distribution Date.

      "Class M-2 Certificate Margin": For each Distribution Date (i) on or prior
to the Optional Termination Date, 0.880% per annum, and (ii) following the
Optional Termination Date, 1.320% per annum.

      "Class M-2 Pass-Through Rate": For each Distribution Date, the least of
(i) LIBOR as of the related LIBOR Determination Date, plus the Class M-2
Certificate Margin, (ii) the Subordinate Rate Cap and (iii) the Subordinate
Maximum Rate Cap.

      "Class M-2 Principal Distribution Amount": As of any Distribution Date on
or after the Stepdown Date and as long as a Trigger Event is not in effect, the
excess of (x) the sum of (i) the sum of the Certificate Principal Balances of
the Class A Certificates (after taking into account the payment of the Class A
Principal Distribution Amount on such Distribution Date), (ii) the Certificate
Principal Balance of the Class M-1 Certificates (after taking into account the
payment of the Class M-1 Principal Distribution Amount on such Distribution
Date) and (iii) the Certificate Principal Balance of the Class M-2 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 82.20% and (ii) the Pool Balance as of the last day of the
related Collection Period and (B) the Pool Balance as of the last day of the
related Collection Period minus the product of 0.50% and the Pool Balance on the
Cut-off Date.

      "Class M-2 Realized Loss Amortization Amount": As to the Class M-2
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-2 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (viii) hereof, in each
case for such Distribution Date.

      "Class M-3 Applied Realized Loss Amount": As to the Class M-3 Certificates
and as of any Distribution Date, the lesser of (x) the Certificate Principal
Balance thereof (after taking into account the distribution of the Principal
Distribution Amount on such Distribution Date, but prior to the application of
the Class M-3 Applied Realized Loss Amount, if any, on such Distribution Date)
and (y) the excess of (i) the related Applied Realized Loss Amount as of such
Distribution Date over (ii) the sum of the Class B-1 Applied Realized Loss
Amount, the Class B-2 Applied Realized Loss Amount, the Class B-3 Applied
Realized Loss Amount and the Class B-4 Applied Realized Loss Amount, in each
case as of such Distribution Date.

      "Class M-3 Certificate Margin": For each Distribution Date (i) on or prior
to the Optional Termination Date, 1.000% per annum, and (ii) following the
Optional Termination Date, 1.500% per annum.

      "Class M-3 Pass-Through Rate": For each Distribution Date, the least of
(i) LIBOR as of the related LIBOR Determination Date, plus the Class M-3
Certificate Margin, (ii) the Subordinate Rate Cap and (iii) the Subordinate
Maximum Rate Cap.

                                       13
<PAGE>

      "Class M-3 Principal Distribution Amount": As of any Distribution Date on
or after the Stepdown Date and as long as a Trigger Event is not in effect, the
excess of (x) the sum of (i) the sum of the Certificate Principal Balances of
the Class A Certificates (after taking into account the payment of the Class A
Principal Distribution Amount on such Distribution Date), (ii) the Certificate
Principal Balance of the Class M-1 Certificates (after taking into account the
payment of the Class M-1 Principal Distribution Amount on such Distribution
Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates
(after taking into account the payment of the Class M-2 Principal Distribution
Amount on such Distribution Date), and (iv) the Certificate Principal Balance of
the Class M-3 Certificates immediately prior to such Distribution Date over (y)
the lesser of (A) the product of (i) 85.10% and (ii) the Pool Balance as of the
last day of the related Collection Period and (B) the Pool Balance as of the
last day of the related Collection Period minus the product of 0.50% and the
Pool Balance on the Cut-off Date.

      "Class M-3 Realized Loss Amortization Amount": As to the Class M-3
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-3 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xi) hereof, in each case
for such Distribution Date.

      "Class N Certificate": Any one of the Certificates with an "N" designated
on the face thereof substantially in the form annexed hereto as Exhibit C-5,
executed by the Trustee on behalf of the Trust and authenticated and delivered
by the Certificate Registrar, representing the right to distributions as set
forth herein and therein.

      "Class N Notional Amount": As of any date, the Notional Amount of the
Class N Certificates.

      "Class R Certificate": The Class R Certificate executed by the Trustee on
behalf of the Trust, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit C-1-1 and
evidencing the ownership of the Residual Interest in each of REMIC 1 and REMIC
2. The Class R Certificate represents the ownership of the Class R-1 Interest
and Class R-2 Interest.

      "Class R Excess Interest Amount": For any Distribution Date, 0.05% of the
Monthly Excess Interest Amount for such Distribution Date.

      "Class R Excess Interest Carryforward Amount": For any Distribution Date,
the excess of the Class R Excess Interest Amount for all prior Distribution
Dates over all amounts previously distributed to the Class R Certificates in
respect of Class R Excess Interest Amounts or Class R Excess Interest
Carryforward Amounts.

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

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

      "Class R-B-2 Interest": The uncertificated residual interest in REMIC B-2.

      "Class R-B-3 Interest": The uncertificated residual interest in REMIC B-3.

      "Class R-B-4 Interest": The uncertificated residual interest in REMIC B-4.

      "Class R-X/N Interest": The uncertificated residual interest in REMIC X/N.

                                       14
<PAGE>

      "Class R-X Certificate": The Class R-X Certificate executed by the Trustee
on behalf of the Trust, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit C-1-2 and
evidencing the ownership of the Residual Interest in each of REMIC B-2, REMIC
B-3, REMIC B-4 and REMIC X/N. The Class R-X Certificate represents the ownership
of the Class R-B-2 Interest, Class R-B-3 Interest, Class R-B-4 Interest and
Class R-X/N Interest.

      "Class X": Any one of the Class X Certificates as designated on the face
thereof substantially in the form annexed hereto as Exhibit C-4, executed by the
Trustee on behalf of the Trust and authenticated and delivered by the
Certificate Registrar, representing the right to distributions as set forth
herein and therein.

      "Class X/N Interest": An uncertificated interest in the Trust held by the
Trustee on behalf of the holders of the Class X and Class N Certificates,
representing, for federal income tax purposes, ownership of the REMIC X/N X/N
Interest, and which is entitled to all distributions in respect of the REMIC X/N
X/N Interest less the amount of any LIBOR Carryover Amounts paid pursuant to
Section 4.02(b)(xxvii) or (xxviii).

      "Class X Distributable Amount": With respect to any Distribution Date, the
excess of (i) the aggregate of amounts distributable on the Class X/N Interest
for such Distribution Date, over (ii) the aggregate of amounts distributable to
the Class N Certificates pursuant to Section 4.02(b).

      "Closing Date": January 7, 2005.

      "Code": The Internal Revenue Code of 1986, as it may be amended from time
to time.

      "Collection Account": The account or accounts created and maintained by
the Servicer pursuant to Section 3.04, which shall be entitled "Collection
Account, Litton Loan Servicing LP, as Servicer for the Trust under the Pooling
and Servicing Agreement dated as of December 1, 2004 among Merrill Lynch
Mortgage Investors, Inc., as Depositor, Credit-Based Asset Servicing and
Securitization LLC, as Seller, Litton Loan Servicing LP, as Servicer, and
JPMorgan Chase Bank, National Association, as Trustee, in trust for registered
Holders of 2004-CB8 Trust, C-BASS Mortgage Loan Asset-Backed Certificates,
Series 2004-CB8," and which must be an Eligible Account.

      "Collection Period": With respect to any Distribution Date, the period
from the second day of the calendar month preceding the month in which such
Distribution Date occurs through the first day of the month in which such
Distribution Date occurs.

      "Combined Loan-to-Value Ratio": As of any date and Mortgage Loan, the
fraction, expressed as a percentage, the numerator of which is the Principal
Balance of the Mortgage Loan as of the Cut-off Date plus the principal balance
of any related senior mortgage loan, if any, at origination of the Mortgage Loan
and the denominator of which is the Value of the related Mortgaged Property.

      "Compensating Interest": As defined in Section 3.23 hereof.

      "Condemnation Proceeds": All awards or settlements in respect of a taking
of a Mortgaged Property by exercise of the power of eminent domain or
condemnation.

      "Conventional Mortgage Loan": Any Mortgage Loan that is not an FHA Loan or
VA Loan.

      "Corporate Trust Office": With respect to the Trustee, (i) the principal
corporate trust office of the Trustee at which at any particular time its
corporate trust business in connection with this Agreement

                                       15
<PAGE>

shall be administered, which office at the date of the execution of this
instrument is located at 4 New York Plaza, New York, New York 10004-2477,
Attention: Institutional Trust Services/Global Debt, C-BASS 2004-CB8 and (ii)
for purposes of Certificate transfers, is located at 2001 Bryan Street, 8th
Floor, Dallas, Texas 75201, Attention: Institutional Trust Services-C-BASS
2004-CB8, or at such other addresses as the Trustee may designate from time to
time by notice to the Certificateholders, the Depositor, the Servicer and the
Seller.

      "Corresponding Cap Carryover Certificate" and "Corresponding REMIC 2
Regular Interest": For any REMIC 2 Regular Interest set forth below, the
corresponding Cap Carryover Certificate set forth below, and for any Cap
Carryover Certificate set forth below, the corresponding REMIC 2 Regular
Interest set forth below:

<TABLE>
<CAPTION>
      Corresponding Cap Carryover Certificate            Corresponding REMIC 2 Regular Interest
-------------------------------------------------     ---------------------------------------------
<S>                                                   <C>
Class AV-1 Certificate                                REMIC 2 AV-1 Interest
Class M-1 Certificate                                 REMIC 2 M-1 Interest
Class M-2 Certificate                                 REMIC 2 M-2 Interest
Class M-3 Certificate                                 REMIC 2 M-3 Interest
Class B-1 Certificate                                 REMIC 2 B-1 Interest
Class B-2 Certificate                                 REMIC 2 B-2 Interest
Class B-3 Certificate                                 REMIC 2 B-3 Interest
Class B-4 Certificate                                 REMIC 2 B-4 Interest
</TABLE>

      "Custodial Agreement": The Custodial Agreement, dated as of December 1,
2004, among the Trustee, the Servicer and the Custodian, as the same may be
amended or supplemented pursuant to the terms thereof.

      "Custodian": The Bank of New York, a New York banking corporation, or any
successor custodian appointed pursuant to the terms of the Custodial Agreement.

      "Cut-off Date": December 1, 2004.

      "Cut-off Date Principal Balance": With respect to any Mortgage Loan, the
unpaid principal balance thereof as of the Cut-off Date after application of
funds received or advanced on or before such date (or as of the applicable date
of substitution with respect to an Eligible Substitute Mortgage Loan).

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

      "Defective Mortgage Loan": A Mortgage Loan replaced or to be replaced by
one or more Eligible Substitute Mortgage Loans.

                                       16
<PAGE>

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

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

      "Delinquent": Any Mortgage Loan with respect to which the Monthly Payment
and/or any Escrow Payment due on a Due Date is not made by the close of business
on the next scheduled Due Date for such Mortgage Loan or any Mortgage Loan with
respect to which any Servicing Advances made on or before the Cut-off Date has
not been reimbursed by the related Mortgagor.

      "Depositor": Merrill Lynch Mortgage Investors, Inc., a Delaware
corporation, or any successor in interest.

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

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

      "Determination Date": With respect to any Distribution Date, the 10th day
of the calendar month in which such Distribution Date occurs or, if such 10th
day is not a Business Day, the Business Day immediately preceding such 10th day.

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

      "Disqualified Non-U.S. Person": With respect to a Residual Certificate,
any (A) non-U.S. Person or agent thereof or (B) U.S. Person with respect to whom
income from a Residual Certificate is attributable to a foreign permanent
establishment or fixed base, within the meaning of an applicable income tax
treaty, of such Person or any other U.S. Person.

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

                                       17
<PAGE>

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

      "Distribution Account": The trust account or accounts created and
maintained by the Trustee pursuant to Section 3.04(b) which shall be entitled
"Distribution Account, JPMorgan Chase Bank, National Association, as Trustee, in
trust for the registered Holders of 2004-CB8 Trust, C-BASS Mortgage Loan
Asset-Backed Certificates, Series 2004-CB8" and which must be an Eligible
Account.

      "Distribution Date": The 25th day of any calendar month, or if such 25th
day is not a Business Day, the Business Day immediately following such 25th day,
commencing in January 2005.

      "DBRS": Dominion Bond Rating Service and its successors and if such
company shall for any reason no longer perform the functions of a securities
rating agency, "DBRS" shall be deemed to refer to any other "nationally
recognized statistical rating organization" as set forth on the most current
list of such organizations released by the Securities and Exchange Commission.

      "Due Date": With respect to each Mortgage Loan and any Distribution Date,
the day of the calendar month in which such Distribution Date occurs on which
the Monthly Payment for such Mortgage Loan was due, exclusive of any grace
period.

      "Eligible Account": Any of (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company the
short-term unsecured debt obligations of which (or, in the case of a depository
institution or trust company that is the principal subsidiary of a holding
company, the short-term unsecured debt obligations of such holding company) are
rated "A - 2" (or the equivalent) by each of the Rating Agencies at the time any
amounts are held on deposit therein, (ii) an account or accounts the deposits in
which are fully insured by the FDIC (to the limits established by such
corporation), the uninsured deposits in which account are otherwise secured such
that, as evidenced by an Opinion of Counsel delivered to the Trustee and to each
Rating Agency, the Certificateholders will have a claim with respect to the
funds in such account or a perfected first priority security interest against
such collateral (which shall be limited to Permitted Investments) securing such
funds that is superior to claims of any other depositors or creditors of the
depository institution with which such account is maintained, (iii) a trust
account or accounts maintained with the trust department of a federal or state
chartered depository institution, national banking association or trust company
acting in its fiduciary capacity or (iv) an account otherwise acceptable to each
Rating Agency without reduction or withdrawal of their then current ratings of
the Certificates as evidenced by a letter from each Rating Agency to the
Trustee.

      "Eligible Substitute Mortgage Loan": A mortgage loan substituted for a
Defective Mortgage Loan pursuant to the terms of this Agreement which must, on
the date of such substitution, (i) have an outstanding principal balance, after
application of all scheduled payments of principal and interest due during or
prior to the month of substitution, not in excess of, and not more than 5% less
than, the outstanding principal balance of the Defective Mortgage Loan as of the
Due Date in the calendar month during which the substitution occurs, (ii) have a
Mortgage Interest Rate, with respect to a Group II Mortgage Loan, not less than
the Mortgage Interest Rate of the Defective Mortgage Loan and not more than 1%
in excess of the Mortgage Interest Rate of such Defective Mortgage Loan, (iii)
if a Group I Mortgage Loan, have a Maximum Loan Rate not less than the Maximum
Loan Rate for the Defective

                                       18
<PAGE>
Mortgage Loan, (iv) if a Group I Mortgage Loan, have a Minimum Loan Rate not
less than the Minimum Loan Rate of the Defective Mortgage Loan, (v) if a Group I
Mortgage Loan, have a Gross Margin equal to or greater than the Gross Margin of
the Defective Mortgage Loan, (vi) if a Group I Mortgage Loan, have the same
Index as the Defective Mortgage Loan, (vii) if a Group I Mortgage Loan, have a
next Adjustment Date not more than two months later than the next Adjustment
Date on the Defective Mortgage Loan, (viii) have a remaining term to maturity
not greater than (and not more than one year less than) that of the Defective
Mortgage Loan, (ix) be current as of the date of substitution, (x) have a
Combined Loan-to-Value Ratio as of the date of substitution equal to or lower
than the Combined Loan-to-Value Ratio of the Defective Mortgage Loan as of such
date, (xi) have a risk grading determined by the Seller at least equal to the
risk grading assigned on the Defective Mortgage Loan, (xii) have been
reunderwritten by the Seller in accordance with the same underwriting criteria
and guidelines as the Defective Mortgage Loan, (xiii) have the same Due Date as
the Defective Mortgage Loan and (xiv) conform to each representation and
warranty set forth in Section 2.04 hereof applicable to the Defective Mortgage
Loan. In the event that one or more mortgage loans are substituted for one or
more Defective Mortgage Loans, the amounts described in clause (i) hereof shall
be determined on the basis of aggregate principal balances, the Mortgage
Interest Rates described in clause (ii) hereof shall be determined on the basis
of weighted average Mortgage Interest Rates, the risk gradings described in
clause (xi) hereof shall be satisfied as to each such mortgage loan, the terms
described in clause (viii) hereof shall be determined on the basis of weighted
average remaining term to maturity, the Combined Loan-to-Value Ratios described
in clause (x) hereof shall be satisfied as to each such mortgage loan and,
except to the extent otherwise provided in this sentence, the representations
and warranties described in clause (xiv) hereof must be satisfied as to each
Eligible Substitute Mortgage Loan or in the aggregate, as the case may be.

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

      "ERISA-Qualifying Underwriting": A best efforts or firm commitment
underwriting or private placement that would satisfy the requirements of
Prohibited Transaction Exemption 90-25, 55 Fed. Reg. 21459 (1990), as amended,
granted to the Underwriter by the United States Department of Labor (or any
other applicable underwriter's exemption granted by the United States Department
of Labor), except, in relevant part, for the requirement that the certificates
have received a rating at the time of acquisition that is in one of the three
(or four, in the case of a "designated transaction") highest generic rating
categories by at least one of the Rating Agencies.

      "ERISA-Restricted Certificate": The Class M-1, Class M-2, Class M-3, Class
B-1, Class B-2, Class B-3, Class B-4, Class N, Class X, Class R-X and Class R
Certificates and any other Certificate, unless the acquisition and holding of
such other Certificate is covered by and exempt under Prohibited Transaction
Exemption 90-25, 55 Fed. Reg. 21459 (1990), as amended, granted to the
Underwriter by the United States Department of Labor (or any other applicable
underwriter's exemption granted by the United States Department of Labor).

      "Escrow Account": The account or accounts created and maintained pursuant
to Section 3.06.

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

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

      "Expense Fee Rate": The sum of (i) the Trustee Fee Rate and (ii) the
Servicing Fee Rate.

      "Extended Period": As defined in Section 9.04(b).

                                       19
<PAGE>

      "Extra Principal Distribution Amount": As of any Distribution Date, the
lesser of (x) 99.95% of the Monthly Excess Interest Amount for such Distribution
Date and (y) the Overcollateralization Deficiency for such Distribution Date.

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

      "FHA": The Federal Housing Administration, an agency within HUD.

      "FHA Approved Mortgagee": Those institutions which are approved by FHA to
act as servicer and mortgagee of record pursuant to FHA Regulations.

      "FHA Insurance Contract" or "FHA Insurance": The contractual obligation of
FHA respecting the insurance of an FHA Loan pursuant to the National Housing
Act, as amended.

      "FHA Loan": A Mortgage Loan which is the subject of an FHA Insurance
Contract as evidenced by a Mortgage Insurance Certificate.

      "FHA Regulations": Regulations promulgated by HUD under the National
Housing Act, codified in 24 Code of Federal Regulations, and other HUD issuances
relating to FHA Loans, including the related handbooks, circulars, notices and
mortgagee letters.

      "Fidelity Bond": Shall have the meaning assigned thereto in Section 3.12.

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

      "First Lien Mortgage Loan": Any of the Mortgage Loans which are secured by
a first mortgage lien that is senior to a Second Lien Mortgage Loan on the
related Mortgaged Property.

      "Fitch": Fitch Ratings and its successors, and if such company shall for
any reason no longer perform the functions of a securities rating agency,
"Fitch" shall be deemed to refer to any other "nationally recognized statistical
rating organization" as set forth on the most current list of such organizations
released by the Securities and Exchange Commission.

      "Foreclosure Price": The amount reasonably expected to be received from
the sale of the related Mortgaged Property net of any expenses associated with
foreclosure proceedings.

      "Grantor Trust": That portion of the Trust Fund exclusive of REMIC 1,
REMIC 2, REMIC B-2, REMIC B-3, REMIC B-4 and REMIC X/N which holds (a) the REMIC
X/N X/N Interest and (b) the obligation to pay LIBOR Carryover Amounts.

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

                                       20
<PAGE>

      "Group I Available Funds Cap": With respect to any Distribution Date, a
per annum rate (subject to adjustment based on the actual number of days elapsed
in the related Interest Accrual Period) equal to 12 times the quotient of (x)
the total scheduled interest on the Group I Mortgage Loans for the related
Interest Accrual Period at the Net Mortgage Interest Rates and (y) the aggregate
Principal Balance of the Group I Mortgage Loans (as of the first day of the
related Collection Period).

      "Group I Group Subordinate Amount": For any Distribution Date, the excess
of the aggregate Principal Balance of the Group I Mortgage Loans (as of the
first day of the related Collection Period) over the aggregate Certificate
Principal Balance of the Class AV-1 Certificates as of such Distribution Date
(before distributions in respect of principal on such Distribution Date).

      "Group I Interest Remittance Amount": As of any Distribution Date, the
sum, without duplication, of (i) all interest received by the Servicer on or
prior to the related Determination Date for such Distribution Date or advanced
with respect to Monthly Payments due during the related Collection Period on the
Group I Mortgage Loans (less the Servicing Fee, amounts available for
reimbursement of Advances and Servicing Advances pursuant to Section 3.05 and
expenses reimbursable pursuant to Section 6.03), (ii) the portion of any full or
partial Principal Prepayment related to interest with respect to a Group I
Mortgage Loan received during the related Prepayment Period, (iii) all
Compensating Interest paid by the Servicer on the related Determination Date
with respect to the Group I Mortgage Loans, (iv) the portion of any payment in
connection with any Purchase Price, Net Liquidation Proceeds, Insurance Proceeds
or Condemnation Proceeds relating to interest with respect to the Group I
Mortgage Loans received during the related Prepayment Period, (v) the portion of
any Substitution Adjustment Amount relating to interest with respect to the
Group I Mortgage Loans received during the related Prepayment Period, (vi) with
respect to the related Distribution Date on which the Trust is to be terminated
in accordance with the Section 10.01 hereof, that portion of the Termination
Price with respect to the Group I Mortgage Loans in respect of interest and
(vii) the portion of any Reimbursement Amount or Subsequent Recovery allocable
to interest related to the Group I Mortgage Loans received during the related
Prepayment Period.

      "Group I Maximum Rate Cap": With respect to any Distribution Date, a per
annum rate (subject to adjustment based on the actual number of days elapsed in
the related Interest Accrual Period) equal to the 12 times the quotient of (x)
the total scheduled interest that would have accrued on the Group I Mortgage
Loans at their maximum lifetime Net Mortgage Interest Rates and (y) the
aggregate Principal Balance of the Group I Mortgage Loans (as of the first day
of the related Collection Period).

      "Group I Mortgage Loan": A Mortgage Loan in Loan Group I.

      "Group I Net Rate": With respect to any Distribution Date, a per annum
rate equal to 12 times the quotient of (x) the total scheduled interest on the
Group I Mortgage Loans for the related Interest Accrual Period at their Net
Mortgage Interest Rates and (y) the aggregate Principal Balance of the Group I
Mortgage Loans (as of the first day of the related Collection Period).

      "Group I Principal Allocation Percentage": As of any Distribution Date, a
fraction expressed as a percentage, the numerator of which is the Principal
Remittance Amount allocable to the Group I Mortgage Loans during the related
Collection Period and the denominator of which is equal to the Principal
Remittance Amount for such Distribution Date.

      "Group I Principal Distribution Amount": As of any Distribution Date, the
product of the Group I Principal Allocation Percentage and the Class A Principal
Distribution Amount.

                                       21
<PAGE>

      "Group II Group Subordinate Amount": For any Distribution Date, the excess
of the aggregate Principal Balance of the Group II Mortgage Loans (as of the
first day of the related Collection Period) over the aggregate Certificate
Principal Balance of the Class AF-1, Class AF-2, Class AF-3 and Class AF-4
Certificates as of such Distribution Date (before distributions in respect of
principal on such Distribution Date).

      "Group II Interest Remittance Amount": As of any Distribution Date, the
sum, without duplication, of (i) all interest received by the Servicer on or
prior to the related Determination Date for such Distribution Date or advanced
with respect to Monthly Payments due during the related Collection Period on the
Group II Mortgage Loans (less the Servicing Fee, amounts available for
reimbursement of Advances and Servicing Advances pursuant to Section 3.05 and
expenses reimbursable pursuant to Section 6.03), (ii) the portion of any full or
partial Principal Prepayment related to interest with respect to a Group II
Mortgage Loan received during the related Prepayment Period, (iii) all
Compensating Interest paid by the Servicer on the related Determination Date
with respect to the Group II Mortgage Loans, (iv) the portion of any payment in
connection with any Purchase Price, Net Liquidation Proceeds, Insurance Proceeds
or Condemnation Proceeds relating to interest with respect to the Group II
Mortgage Loans received during the related Prepayment Period, (v) the portion of
any Substitution Adjustment Amount relating to interest with respect to the
Group II Mortgage Loans received during the related Prepayment Period, (vi) with
respect to the related Distribution Date on which the Trust is to be terminated
in accordance with the Section 10.01 hereof, that portion of the Termination
Price with respect to the Group II Mortgage Loans in respect of interest and
(vii) the portion of any Reimbursement Amount or Subsequent Recovery related to
the Group II Mortgage Loans related to interest received during the related
Prepayment Period.

      "Group II Mortgage Loan": A Mortgage Loan in Loan Group II.

      "Group II Net Rate": With respect to any Distribution Date, a per annum
rate equal to 12 times the quotient of (x) the total scheduled interest on the
Group II Mortgage Loans for the related Interest Accrual Period at their Net
Mortgage Interest Rates and (y) the aggregate Principal Balance of the Group II
Mortgage Loans (as of the first day of the related Collection Period).

      "Group II Net Rate Cap": With respect to any Distribution Date, a per
annum rate equal to 12 times the quotient of (x) the total scheduled interest on
the Group II Mortgage Loans for the related Interest Accrual Period at their Net
Mortgage Interest Rates and (y) the aggregate Principal Balance of the Group II
Mortgage Loans (as of the first day of the related Collection Period).

      "Group II Principal Allocation Percentage": As of any Distribution Date, a
fraction expressed as a percentage, the numerator of which is the Principal
Remittance Amount allocable to the Group II Mortgage Loans during the related
Collection Period and the denominator of which is equal to the Principal
Remittance Amount for such Distribution Date.

      "Group II Principal Distribution Amount": As of any Distribution Date, the
product of the Group II Principal Allocation Percentage and the Class A
Principal Distribution Amount.

      "Group Subordinate Amount": In the case of Loan Group I, the Group I Group
Subordinate Amount, and, in the case of Loan Group II, the Group II Group
Subordinate Amount.

      "HUD": The United States Department of Housing and Urban Development, or
any successor thereto, including the Federal Housing Commissioner and the
Secretary of Housing and Urban Development where appropriate under the FHA
Regulations.

                                       22
<PAGE>

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

      "Independent Contractor": Either (i) any Person (other than the Servicer)
that would be an "independent contractor" with respect to the Trust Fund within
the meaning of Section 856(d)(3) of the Code if the Trust Fund were a real
estate investment trust (except that the ownership tests set forth in that
section shall be considered to be met by any Person that owns, directly or
indirectly, 35 percent or more of any Class of Certificates), so long as the
Trust Fund does not receive or derive any income from such Person and provided
that the relationship between such Person and the Trust Fund is at arm's length,
all within the meaning of Treasury Regulation Section 1.856-4(b)(5), or (ii) any
other Person (including the Servicer) if the Trustee has received an Opinion of
Counsel, which Opinion of Counsel shall be an expense of the Trust Fund, to the
effect that the taking of any action in respect of any REO Property by such
Person, subject to any conditions therein specified, that is otherwise herein
contemplated to be taken by an Independent Contractor will not cause such REO
Property to cease to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code (determined without regard to the exception
applicable for purposes of Section 860D(a) of the Code), or cause any income
realized in respect of such REO Property to fail to qualify as Rents from Real
Property.

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

      "Initial Certificate Principal Balance": With respect to any Certificate
of a Class other than a Class N, Class X or Residual Certificate, the amount
designated "Initial Certificate Principal Balance" on the face thereof.

      "Initial Notional Amount": With respect to any Class N Certificate, the
amount designated "Initial Notional Amount" on the face thereof.

      "Initial Overcollateralization Amount": $10,406,755.88.

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

      "Interest Accrual Period": With respect to any Distribution Date and (i)
with respect to the Class AV-1, Class M-1, Class M-2, Class M-3, Class B-1,
Class B-2 and Class B-3 Certificates, the period from the preceding Distribution
Date through the day prior to the current Distribution Date (or, in the case of
the first Distribution Date, the period from the Closing Date through January
24, 2005), and (ii) with respect to the Class AF-1, Class AF-2, Class AF-3,
Class AF-4, Class B-4, Class N and Class X Certificates, the REMIC 1 Regular
Interests and the REMIC 2 X/N Interest, the calendar month immediately preceding
the month in which such Distribution Date occurs.

                                       23
<PAGE>

      "Interest Carry Forward Amount": For any Class of Certificates (other than
the Residual Certificates) and any Distribution Date, the sum of (a) the excess,
if any, of the Accrued Certificate Interest and any Interest Carry Forward
Amount for each Class for the prior Distribution Date, over the amount in
respect of interest actually distributed on such Class on such prior
Distribution Date and (b) interest on such excess at the applicable Pass-Through
Rate (x) with respect to the Certificates (other than the Class AF-1, Class
AF-2, Class AF-3, Class AF-4, Class B-4, Class N and Class X Certificates), on
the basis of the actual number of days elapsed on the basis of a 360-day year
since the prior Distribution Date, and (y) with respect to the Class AF-1, Class
AF-2, Class AF-3, Class AF-4, Class B-4, Class N and Class X Certificates, on
the basis of a 360-day year consisting of twelve 30-day months.

      "Interest Percentage": With respect to any Class of Certificates and any
Distribution Date, the ratio (expressed as a decimal carried to ten places) of
the Accrued Certificate Interest for such Class to the sum of the Accrued
Certificate Interest for all Classes of Certificates, in each case with respect
to such Distribution Date and without regard to shortfalls caused by the Relief
Act or similar state law.

      "Interest Remittance Amount": As of any Determination Date, the sum of the
Group I Interest Remittance Amount and the Group II Interest Remittance Amount.

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

      "Lender": As defined in Section 3.30(a) hereof.

      "LIBOR": With respect to each Interest Accrual Period, the rate determined
by the Trustee on the related LIBOR Determination Date on the basis of the
offered rate for one-month United States dollar deposits, as such rate appears
on the Telerate Page 3750, as of 11:00 a.m. (London time) on such LIBOR
Determination Date. If no such quotations are available on an LIBOR
Determination Date, LIBOR for the related Interest Accrual Period will be
established by the Trustee as follows:

            (i) If on such LIBOR Determination Date two or more Reference Banks
provide quotations as to the rate at which deposits in U.S. Dollars are offered
as of 11:00 a.m. (London time) to prime banks in the London interbank market for
a period of one month in amounts approximately equal to the aggregate
Certificate Principal Balance of the Class AV-1, Class M-1, Class M-2, Class
M-3, Class B-1, Class B-2 and Class B-3 Certificates, LIBOR for the related
Interest Accrual Period shall be the arithmetic mean of such offered quotations
(rounded upwards if necessary to the nearest whole multiple of 0.001%);

            (ii) If on such LIBOR Determination Date fewer than two Reference
Banks provide such offered quotations, LIBOR for the related Interest Accrual
Period shall be the arithmetic mean of the rates quoted by one or more major
banks in New York City, selected by the Trustee after consultation with the
Servicer, 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 period of one month in amounts
approximately equal to the aggregate Certificate Principal Balance of the Class
AV-1, Class M-1, Class M-2, Class M-3, Class B-1, Class B-2 and Class B-3
Certificates; and

            (iii) If no such quotations can be obtained, LIBOR for the related
Interest Accrual Period shall be LIBOR for the prior Distribution Date.

                                       24
<PAGE>

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

      "LIBOR Carryover Amount": If on any Distribution Date, the Accrued
Certificate Interest for (a) the Class AV-1 Certificates is based upon the Group
I Available Funds Cap or (b) the Class M-1, Class M-2, Class M-3, Class B-1,
Class B-2, Class B-3 or Class B-4 Certificates is based on the Subordinate Rate
Cap, the excess of (i) the amount of interest such Certificate would have been
entitled to receive on such Distribution Date based on the related Pass-Through
Rate (up to but not exceeding the Group I Maximum Rate Cap in the case of the
Class AV-1 Certificates and up to but not exceeding the Subordinate Maximum Rate
Cap in the case of the Class M-1, Class M-2, Class M-3, Class B-1, Class B-2,
Class B-3 and Class B-4 Certificates), over (ii) the amount of interest such
Certificate was entitled to receive on such Distribution Date based on the
applicable Cap, together with the unpaid portion of any such excess from prior
Distribution Dates (and interest accrued thereon at the then applicable
Pass-Through Rate on such Certificate).

      "LIBOR Determination Date": With respect to the Offered Certificates
(other than the Class AF-1, Class AF-2, Class AF-3 and Class AF-4 Certificates),
(i) for the first Distribution Date, the second LIBOR Business Day preceding the
Closing Date and (ii) for each subsequent Distribution Date, the second LIBOR
Business Day prior to the immediately preceding Distribution Date.

      "Liquidated Mortgage Loan": As to any Distribution 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 Prepayment
Period, that all Liquidation Proceeds and Insurance Proceeds which it expects to
recover with respect to the liquidation of the Mortgage Loan or disposition of
the related REO Property have been recovered.

      "Liquidation Event": With respect to any Mortgage Loan, any of the
following events: (i) such Mortgage Loan is paid in full; (ii) a Final Recovery
Determination is made as to such Mortgage Loan; or (iii) such Mortgage Loan is
removed from the Trust Fund by reason of its being purchased, sold or replaced
pursuant to or as contemplated by Section 2.03 or Section 10.01. With respect to
any REO Property, either of the following events: (i) a Final Recovery
Determination is made as to such REO Property; or (ii) such REO Property is
removed from the Trust Fund by reason of its being sold or purchased pursuant to
Section 3.13 or Section 10.01.

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

      "Liquidation Report": The report with respect to a Liquidated Mortgage
Loan in such form and containing such information as is agreed to by the
Servicer and the Trustee.

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

      "Loan Group Balance": Either the Group I Loan Balance or the Group II Loan
Balance, as applicable.

      "Loan Group I": The pool of Mortgage Loans identified in Exhibit D-1 of
the Mortgage Loan Schedule as having been assigned to Loan Group I.

                                       25
<PAGE>

      "Loan Group II": The pool of Mortgage Loans identified in Exhibit D-2 of
the Mortgage Loan Schedule as having been assigned to Loan Group II.

      "Losses": As defined in Section 9.03.

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

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

      "Majority Class R Certificateholders": The Holders of Class R Certificates
evidencing at least a 51% Percentage Interest in the Class R Certificates.

      "Marker Interest": Each of the LT1-AV1 Interest, the LT1-AF1 Interest, the
LT1-AF2 Interest, the LT1-AF3 Interest, the LT1-AF4 Interest, the LT1-M1
Interest, the LT1-M2 Interest, the LT1-M3 Interest, the LT1-B1 Interest, the
LT1-B2 Interest, the LT1-B3 Interest and the LT1-B4 Interest.

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

      "Minimum Loan Rate": With respect to each Group I Mortgage Loan, the
percentage set forth in the related Mortgage Note as the minimum Mortgage
Interest Rate thereunder or if no such percentage is set forth in the related
Mortgage Note, the Gross Margin set forth in the related Mortgage Note.

      "Monthly Excess Cashflow Amount": The sum of the Monthly Excess Interest
Amount, the Overcollateralization Release Amount and (without duplication) any
portion of the Principal Distribution Amount remaining after principal
distributions on the Offered Certificates and the Class B-4 Certificates.

      "Monthly Excess Interest Amount": With respect to each Distribution Date,
the amount, if any, by which the Interest Remittance Amount for such
Distribution Date exceeds the aggregate amount distributed on such Distribution
Date pursuant to paragraphs (i) through (xi) under Section 4.01.

      "Monthly Payment": With respect to any Mortgage Loan, the scheduled
monthly payment of principal and interest on such Mortgage Loan which is payable
by the related Mortgagor from time to time under the related Mortgage Note,
determined: (a) after giving effect to (i) any Deficient Valuation and/or Debt
Service Reduction with respect to such Mortgage Loan and (ii) any reduction in
the amount of interest collectible from the related Mortgagor pursuant to the
Relief Act or similar state laws; (b) without giving effect to any extension
granted or agreed to by the Servicer pursuant to Section 3.01; and (c) on the
assumption that all other amounts, if any, due under such Mortgage Loan are paid
when due.

      "Moody's": Moody's Investors Service, Inc. and its successors, and if such
company shall for any reason no longer perform the functions of a securities
rating agency, "Moody's" shall be deemed to refer to any other "nationally
recognized statistical rating organization" as set forth on the most current
list of such organizations released by the Securities and Exchange Commission.

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

                                       26
<PAGE>

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

      "Mortgage Insurance Certificate": The certificate evidencing an FHA
Insurance Contract.

      "Mortgage Interest Rate": With respect to each Mortgage Loan, the annual
rate at which interest accrues on such Mortgage Loan from time to time in
accordance with the provisions of the related Mortgage Note, which rate (i) in
the case of each Group I Mortgage Loan (A) as of any date of determination until
the first Adjustment Date following the Cut-off Date shall be the rate set forth
in the Mortgage Loan Schedule as the Mortgage Interest Rate in effect
immediately following the Cut-off Date and (B) as of any date of determination
thereafter shall be the rate as adjusted on the most recent Adjustment Date, to
equal the sum, rounded to the nearest 0.125% as provided in the Mortgage Note,
of the Index, determined as set forth in the related Mortgage Note, plus the
related Gross Margin subject to the limitations set forth in the related
Mortgage Note and (ii) in the case of each Group II Mortgage Loan shall remain
constant at the rate set forth in the Mortgage Loan Schedule as the Mortgage
Interest Rate in effect immediately following the Cut-off Date. With respect to
each Mortgage Loan that becomes an REO Property, as of any date of
determination, the annual rate determined in accordance with the immediately
preceding sentence as of the date such Mortgage Loan became an REO Property.

      "Mortgage Loan": Each mortgage loan transferred and assigned to the
Trustee pursuant to Section 2.01 or Section 2.03(d) as from time to time held as
a part of the Trust Fund, the Mortgage Loans so held being identified in the
Mortgage Loan Schedule and set forth in Exhibits D-1 and D-2 attached hereto.

      "Mortgage Loan Purchase Agreement": The agreement between the Seller and
the Depositor, dated as of January 7, 2005, regarding the transfer of the
Mortgage Loans by the Seller to or at the direction of the Depositor attached
hereto as Exhibit G.

      "Mortgage Loan Schedule": As of any date (i) with respect to the Mortgage
Loans, the list of such Mortgage Loans included in the Trust Fund on such date,
separately identifying the Group I Mortgage Loans and the Group II Mortgage
Loans, attached hereto as Exhibits D-1 and D-2. The Mortgage Loan Schedule shall
be prepared by the Seller and shall set forth the following information with
respect to each Mortgage Loan:

      (1) the Seller's Mortgage Loan identifying number;

      (2) the city, state, and zip code of the Mortgaged Property;

      (3) the type of Residential Dwelling constituting the Mortgaged Property
      or a designation that the Mortgaged Property is a multi-family property;

      (4) the occupancy status of the Mortgaged Property at origination;

      (5) the original months to maturity;

      (6) the date of origination;

      (7) the first payment date;

      (8) the stated maturity date;

                                       27
<PAGE>

      (9) the stated remaining months to maturity;

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

      (11) the Principal Balance of each Mortgage Loan as of the Cut-off Date;

      (12) the Mortgage Interest Rate of the Mortgage Loan as of the Cut-off
      Date;

      (13) the current principal and interest payment of the Mortgage Loan as of
      the Cut-off Date;

      (14) the contractual interest paid to date of the Mortgage Loan;

      (15) if the Mortgage Loan is not owner-financed, the Combined
      Loan-to-Value Ratio at origination;

      (16) a code indicating the loan performance status of the Mortgage Loan as
      of the Cut-off Date;

      (17) a code indicating whether the Mortgaged Property is in bankruptcy or
      in its forbearance period as of the Cut-off Date;

      (18) a code indicating whether the Mortgage Loan is conventional, insured
      by the FHA or guaranteed by the VA;

      (19) a code indicating the Index that is associated with such Mortgage
      Loan;

      (20) the Gross Margin;

      (21) the Periodic Rate Cap;

      (22) the Minimum Loan Rate;

      (23) the Maximum Loan Rate;

      (24) a code indicating whether the Mortgage Loan has a prepayment penalty
      and the type of prepayment penalty;

      (25) the first Adjustment Date immediately following the Cut-off Date;

      (26) the rate adjustment frequency;

      (27) the payment adjustment frequency;

      (28) a code indicating whether the Mortgage Loan is owner-financed; and

      (29) a code indicating whether the Mortgage Loan is a Second Lien Mortgage
      Loan.

      The Mortgage Loan Schedule shall set forth the following information, as
of the Cut-off Date, with respect to the Mortgage Loans in the aggregate, for
each Loan Group: (1) the number of Mortgage

                                       28
<PAGE>

Loans; (2) the current Principal Balance of the Mortgage Loans; (3) the weighted
average Mortgage Interest Rate of the Mortgage Loans; and (4) the weighted
average maturity of the Mortgage Loans. The Mortgage Loan Schedule shall be
amended from time to time by the Seller in accordance with the provisions of
this Agreement. With respect to any Eligible Substitute Mortgage Loan, Cut-off
Date shall refer to the related Cut-off Date for such Mortgage Loan, determined
in accordance with the definition of Cut-off Date herein.

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

      "Mortgage Pool": The pool of Mortgage Loans, identified on Exhibits D-1
and D-2 from time to time, and any REO Properties acquired in respect thereof.

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

      "Mortgagor": The obligor on a Mortgage Note.

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

      "Net Mortgage Interest Rate": With respect to any Mortgage Loan, the
Mortgage Interest Rate borne by such Mortgage Loan minus the Expense Fee Rate.

      "Net Rate": With respect to any Distribution Date, a per annum rate equal
to 12 times the quotient of (x) the excess of the total scheduled interest on
the Mortgage Loans for the related Interest Accrual Period at their Net Mortgage
Rates over the Insurer Fee for such Distribution Date and (y) the aggregate
Principal Balance of the Mortgage Loans (as of the first day of the related
Collection Period).

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

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

      "Notional Amount": With respect to the Class N Certificates, an amount
equal to the Original Class N Notional Amount reduced by the aggregate
distributions made to the Class N Certificates in respect of the Class N
Notional Amount pursuant to Section 4.02(b)(xxix) or Section 4.02(c).

      "Offered Certificates": The Class AV-1, Class AF-1, Class AF-2, Class
AF-3, Class AF-4, Class M-1, Class M-2, Class M-3, Class B-1, Class B-2 and
Class B-3 Certificates.

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

                                       29
<PAGE>

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

      "Optional Termination Date": The first Distribution Date on which the
Servicer may opt to terminate the Mortgage Pool pursuant to Section 10.01.

      "Original Class N Notional Amount": The Notional Amount of the Class N
Certificates on the Closing Date, as set forth opposite such Class in the
Preliminary Statement.

      "Original Class Certificate Principal Balance": With respect to each Class
of Certificates, the Certificate Principal Balance thereof on the Closing Date,
as set forth opposite such Class in the Preliminary Statement, except with
respect to the Class N, Class X and Residual Certificates, which have an
Original Class Certificate Principal Balance of zero.

      "Original Notional Amount": The Original Class N Notional Amount.

      "Overcollateralization Amount": As of any Distribution Date, the excess,
if any, of (x) the Pool Balance as of the last day of the immediately preceding
Collection Period over (y) the aggregate Certificate Principal Balances of all
Classes of Offered Certificates and the Class B-4 Certificates (after taking
into account all distributions of principal on such Distribution Date).

      "Overcollateralization Deficiency": As of any Distribution Date, the
excess, if any, of (x) the Targeted Overcollateralization Amount for such
Distribution Date over (y) the Overcollateralization Amount for such
Distribution Date, calculated for this purpose after taking into account the
reduction on such Distribution Date of the Certificate Principal Balances of all
Classes of Offered Certificates and the Class B-4 Certificates resulting from
the distribution of the Principal Distribution Amount (but not the Extra
Principal Distribution Amount) on such Distribution Date, but prior to taking
into account any Applied Realized Loss Amounts on such Distribution Date.

      "Overcollateralization Release Amount": With respect to any Distribution
Date on or after the Stepdown Date on which a Trigger Event is not in effect,
the lesser of (x) the Principal Remittance Amount for such Distribution Date and
(y) the excess, if any, of (i) the Overcollateralization Amount for such
Distribution Date, assuming that 100% of the Principal Remittance Amount is
applied as a principal payment on the Offered Certificates and the Class B-4
Certificates on such Distribution Date, over (ii) the Targeted
Overcollateralization Amount for such Distribution Date. With respect to any
Distribution Date on which a Trigger Event is in effect, the
Overcollateralization Release Amount will be zero.

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

      "Pass-Through Rate": Any of the Class AV-1 Pass-Through Rate, the Class
AF-1 Pass-Through Rate, the Class AF-2 Pass-Through Rate, the Class AF-3
Pass-Through Rate, the Class AF-4 Pass-Through Rate, the Class M-1 Pass-Through
Rate, the Class M-2 Pass-Through Rate, the Class M-3 Pass-Through Rate, Class
B-1 Pass-Through Rate, the Class B-2 Pass-Through Rate, the Class B-3
Pass-Through Rate and the Class B-4 Pass-Through Rate. With respect to the Class
N Certificates, the Pass-Through Rate is 8.00% per annum.

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

                                       30
<PAGE>

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

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

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

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

            (ii) (A) demand and time deposits in, certificates of deposit of,
      bankers' acceptances issued by or federal funds sold by any depository
      institution or trust company (including the Trustee or its agents acting
      in their respective commercial capacities) incorporated under the laws of
      the United States of America or any state thereof and subject to
      supervision and examination by federal and/or state authorities, so long
      as, at the time of such investment or contractual commitment providing for
      such investment, such depository institution or trust company or its
      ultimate parent has a short-term uninsured debt rating in one of the two
      highest available rating categories of S&P and Moody's and the highest
      available rating category of Fitch and provided that each such investment
      has an original maturity of no more than 365 days and (B) any other demand
      or time deposit or deposit which is fully insured by the FDIC;

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

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

                                       31
<PAGE>

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

            (vi) units of money market funds registered under the Investment
      Company Act of 1940 including funds managed or advised by the Trustee or
      affiliates thereof having the highest rating category by the applicable
      Rating Agency; and

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

provided, that (i) 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 provide a yield to maturity at par greater than
120% of the yield to maturity at par of the underlying obligations and (ii) each
such investment must be a "permitted investment" within the meaning of Section
860G(a)(5) of the Code.

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

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

      "Pool Balance": As of any date of determination, the aggregate Principal
Balance of the Mortgage Loans.

      "Prepayment Interest Shortfall": With respect to any Distribution Date,
for each Mortgage Loan that was during the related Prepayment Period the subject
of a Principal Prepayment in full that was applied by the Servicer to reduce the
outstanding principal balance of such loan on a date preceding the related Due
Date, an amount equal to interest at the applicable Mortgage Interest Rate (net
of the Servicing Fee Rate) on the amount of such Principal Prepayment for the
number of days commencing on the date on which the prepayment is applied and
ending on the last day of the related Prepayment Period.

      "Prepayment Period": With respect to any Distribution Date, the calendar
month preceding the month in which such Distribution Date occurs.

      "Primary Insurance Policy": Each policy of primary guaranty mortgage
insurance issued by a Qualified Insurer in effect with respect to any Mortgage
Loan, or any replacement policy therefor obtained by the Servicer pursuant to
Section 3.08.

      "Principal Balance": As to any Mortgage Loan and any day, other than a
Liquidated Mortgage Loan, the related Cut-off Date Principal Balance, minus the
sum of (i) all collections and other amounts credited against the principal
balance of any such Mortgage Loan, (ii) the principal portion of Advances, (iii)
any Deficient Valuation and (iv) any principal reduction resulting from a
Servicer Modification. For purposes of this definition, a Liquidated Mortgage
Loan shall be deemed to have a Principal Balance equal to the Principal Balance
of the related Mortgage Loan as of the final recovery of related Liquidation

                                       32
<PAGE>

Proceeds and a Principal Balance of zero thereafter. As to any REO Property and
any day, the Principal Balance of the related Mortgage Loan immediately prior to
such Mortgage Loan becoming REO Property minus any REO Principal Amortization
received with respect thereto on or prior to such day.

      "Principal Distribution Amount": As to any Distribution Date, the sum of
(i) the Principal Remittance Amount minus, for Distribution Dates occurring on
and after the Stepdown Date and for which a Trigger Event is not in effect, the
Overcollateralization Release Amount, if any, and (ii) the Extra Principal
Distribution Amount, if any.

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

      "Principal Remittance Amount": With respect to any Distribution Date, to
the extent of funds available therefor, the sum (less amounts available for
reimbursement of Advances and Servicing Advances pursuant to Section 3.05 and
expenses reimbursable pursuant to Section 6.03) of: (i) each payment of
principal on a Mortgage Loan due during the related Collection Period and
received by the Servicer on or prior to the related Determination Date, and any
Advances with respect thereto, (ii) the portion of all full and partial
Principal Prepayments or Insurance Proceeds, Condemnation Proceeds and
Subsequent Recoveries allocable to principal received by the Servicer during the
related Prepayment Period, (iii) the Net Liquidation Proceeds allocable to
principal actually collected by the Servicer during the related Prepayment
Period, (iv) with respect to Defective Mortgage Loans repurchased with respect
to such Prepayment Period, the portion of the Purchase Price allocable to
principal, (v) any Substitution Adjustment Amounts allocable to principal
received during the related Prepayment Period and (vi) on the Distribution Date
on which the Trust is to be terminated in accordance with Section 10.01 hereof,
that portion of the Termination Price in respect of principal.

      "Private Certificates": Any of the Class B-4, Class N, Class X and
Residual Certificates.

      "Property Insurance Proceeds": Proceeds of any title policy, hazard policy
or other insurance policy covering a Mortgage Loan, to the extent such proceeds
are received by the Servicer and are not to be applied to the restoration of the
related Mortgaged Property or released to the Mortgagor in accordance with the
Servicer's servicing procedures, subject to the terms and conditions of the
related Mortgage Note and Mortgage.

      "Proportionate Holder": A Person that beneficially owns pro rata shares of
the Class N and Class X Certificates.

      "Prospectus Supplement": That certain Prospectus Supplement dated January
4, 2005 relating to the public offering of the Offered Certificates.

      "Purchase Price": With respect to any Mortgage Loan or REO Property to be
purchased pursuant to or as contemplated by Section 2.03 or 10.01, and as
confirmed by an Officer's Certificate from the Servicer to the Trustee, an
amount equal to the sum of (i) 100% of the Principal Balance thereof as of the
date of purchase (or such other price as provided in Section 10.01), (ii) in the
case of (x) a Mortgage Loan, accrued interest on such Principal Balance at the
applicable Mortgage Interest Rate in effect from time to time from the Due Date
as to which interest was last covered by a payment by the Mortgagor or an
Advance by the Servicer, which payment or Advance had as of the date of purchase
been distributed pursuant to Section 4.01, through the end of the calendar month
in which the purchase is to be effected, and (y) an REO Property, its fair
market value, determined in good faith by the Servicer, (iii) any

                                       33
<PAGE>

unreimbursed Servicing Advances and Advances and any unpaid Servicing Fees
allocable to such Mortgage Loan or REO Property, (iv) any amounts previously
withdrawn from the Collection Account in respect of such Mortgage Loan or REO
Property pursuant to Section 3.13, and (v) in the case of a Mortgage Loan
required to be purchased pursuant to Section 2.03, (x) any costs and damages
incurred by the Trust in connection with any violation by such Mortgage Loan of
any predatory and abusive lending law and (y) expenses reasonably incurred or to
be incurred by the Servicer or the Trustee in respect of the breach or defect
giving rise to the purchase obligation.

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

      "Rating Agency or Rating Agencies": Fitch, Moody's, S&P and DBRS, or their
respective successors. If such agencies or their successors are no longer in
existence, "Rating Agencies" shall be such nationally recognized statistical
rating organizations as set forth on the most current list of such organizations
released by the Securities and Exchange Commission and designated by the
Depositor, notice of which designation shall be given to the Trustee and the
Servicer.

      "Realized Loss": With respect to a Liquidated Mortgage Loan, the amount by
which the remaining unpaid Principal Balance of the Mortgage Loan plus accrued
and unpaid interest thereon at the Mortgage Interest Rate through the last day
of the month of liquidation, exceeds the amount of Net Liquidation Proceeds
applied to the principal balance of the related Mortgage Loan. With respect to
any Mortgage Loan, a Deficient Valuation or a reduction in the Principal Balance
thereof resulting from a Servicer Modification.

      "Realized Loss Amortization Amount": Any of the Class M-1 Realized Loss
Amortization Amount, the Class M-2 Realized Loss Amortization Amount, the Class
M-3 Realized Loss Amortization Amount, the Class B-1 Realized Loss Amortization
Amount, the Class B-2 Realized Loss Amortization Amount, the Class B-3 Realized
Loss Amortization Amount and the Class B-4 Realized Loss Amortization Amount.

      "Record Date": With respect to all of the Certificates (except for the
Class AF-1, Class AF-2, Class AF-3, Class AF-4, Class B-4, Class N, Class X,
Class R and Class R-X Certificates), the Business Day immediately preceding such
Distribution Date; provided, however, that if any such Certificate becomes a
Definitive Certificate, the Record Date for such Certificate shall be the last
Business Day of the month immediately preceding the month in which the related
Distribution Date occurs. With respect to the Class AF-1, Class AF-2, Class
AF-3, Class AF-4, Class B-4, Class N, Class X, Class R and Class R-X
Certificates, the last Business Day of the month immediately preceding the month
in which the related Distribution Date occurs or the Closing Date, in the case
of the first Distribution Date.

      "Reference Banks": Those banks (i) with an established place of business
in London, England, (ii) not controlling, under the control of or under common
control with the Depositor or the Trustee, (iii) that have been designated as
such by the Trustee, after consultation with the Servicer and (iv) that are
engaged in transactions in the London interbank market.

      "Regular Certificate": Any of the Offered Certificates, the Class B-4
Certificates, the Class N Certificates and the Class X Certificates.

      "Regulation S": Regulation S promulgated under the Securities Act or any
successor provision thereto, in each case as the same may be amended from time
to time; and all references to any rule, section or subsection of, or definition
or term contained in, Regulation S means such rule, section, subsection,
definition or term, as the case may be, or any successor thereto, in each case
as the same may be amended from time to time.

                                       34
<PAGE>

      "Regulation S Global Securities": The Book-Entry Regulation S Global
Securities and the Definitive Regulation S Global Securities.

      "Reimbursement Amount": As defined in Section 2.03.

      "Related Documents": With respect to any Mortgage Loan, the related
Mortgage Notes, Mortgages and other related documents.

      "Relief Act": The Servicemembers Civil Relief Act.

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

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

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

      "REMIC Regular Interest": Any REMIC 1 Regular Interest, REMIC 2 Regular
Interest, REMIC B-2 Regular Interest, REMIC B-3 Regular Interest, REMIC B-4
Regular Interest or REMIC X/N Regular Interest.

      "REMIC 1": As defined in the Preliminary Statement.

      "REMIC 1 Interest": Each interest in REMIC 1 as described in the
Preliminary Statement.

      "REMIC 1 Regular Interest": Each REMIC 1 Interest other than the Class R-1
Interest.

      "REMIC 1 Subordinated Balance Ratio": The ratio among the principal
balances of the Class LT1-IA Interest and the Class LT1-IIA Interest that is
equal to the ratio among, with respect to each such REMIC 1 Regular Interest,
the Group Subordinate Amount for the related Loan Group.

      "REMIC 2": As defined in the Preliminary Statement.

      "REMIC 2 Interest": Each of the REMIC 2 Regular Interests and the Class
R-2 Interest.

      "REMIC 2 Regular Interest": Each of the Class AF-1 Certificates, the Class
AF-2 Certificates, the Class AF-3 Certificates, the Class AF-4 Certificates, the
REMIC 2 AV-1 Interest, the REMIC 2 M-1 Interest, the REMIC 2 M-2 Interest, the
REMIC 2 M-3 Interest, the REMIC 2 B-1 Interest, the REMIC 2 B-2 Interest, the
REMIC 2 B-3 Interest, the REMIC 2 B-4 Interest and the REMIC 2 X/N Interest.

      "REMIC 2 AV-1 Interest": An uncertificated "regular interest" in REMIC 2
represented by the Class AV-1 Certificates having the same rights to payments as
the Class AV-1 Certificates other than the right to any payments in respect of
LIBOR Carryover Amounts.

                                       35
<PAGE>

      "REMIC 2 M-1 Interest": An uncertificated "regular interest" in REMIC 2
represented by the Class M-1 Certificates having the same rights to payments as
the Class M-1 Certificates other than the right to any payments in respect of
LIBOR Carryover Amounts.

      "REMIC 2 M-2 Interest": An uncertificated "regular interest" in REMIC 2
represented by the Class M-2 Certificates having the same rights to payments as
the Class M-2 Certificates other than the right to any payments in respect of
LIBOR Carryover Amounts.

      "REMIC 2 M-3 Interest": An uncertificated "regular interest" in REMIC 2
represented by the Class M-3 Certificates having the same rights to payments as
the Class M-3 Certificates other than the right to any payments in respect of
LIBOR Carryover Amounts.

      "REMIC 2 B-1 Interest": An uncertificated "regular interest" in REMIC 2
represented by the Class B-1 Certificates having the same rights to payments as
the Class B-1 Certificates other than the right to any payments in respect of
LIBOR Carryover Amounts.

      "REMIC 2 B-2 Interest": An uncertificated "regular interest" in REMIC 2
held by REMIC B-2 having the same rights to payments as the Class B-2
Certificates other than the right to any payments in respect of LIBOR Carryover
Amounts.

      "REMIC 2 B-3 Interest": An uncertificated "regular interest" in REMIC 2
held by REMIC B-3 having the same rights to payments as the Class B-3
Certificates other than the right to any payments in respect of LIBOR Carryover
Amounts.

      "REMIC 2 B-4 Interest": An uncertificated "regular interest" in REMIC 2
held by REMIC B-4 having the same rights to payments as the Class B-4
Certificates other than the right to any payments in respect of LIBOR Carryover
Amounts.

      "REMIC 2 X/N Interest": An uncertificated "regular interest" in REMIC 2
held by REMIC X/N having an initial principal balance of $10,406,755.88 and
bearing interest at the REMIC 2 X/N Interest Distributable Interest Rate on a
notional balance equal to 99.95% of the aggregate of the Principal Balance of
the Mortgage Loans outstanding as of the beginning of the related Interest
Accrual Period. The REMIC 2 X/N Interest shall be entitled to all prepayment
penalties (including amounts deposited in connection with the full or partial
waiver of such prepayment penalties pursuant to Section 3.01).

      "REMIC 2 X/N Interest Current Interest": As of any Distribution Date, the
interest accrued during the related Interest Accrual Period at the REMIC 2 X/N
Interest Distributable Interest Rate on a notional amount equal to 99.95% of the
aggregate of the Principal Balance of the Mortgage Loans outstanding as of the
beginning of such Interest Accrual Period (such amount of interest representing
a "specified portion" (within the meaning of Treasury Regulations Section
1.860G-1(a)(2)(i)(C)) of interest payments on the REMIC 1 Regular Interests
(other than the LT1-IB Interest and the LT1-IIB Interest)).

      "REMIC 2 X/N Interest Distributable Interest Rate": The excess, if any, of
(a) the weighted average of the interest rates on the REMIC 1 Regular Interests
over (b) two times the weighted average of the interest rates on the Marker
Interests and the LT1-X1 Interest (treating for purposes of this clause (b) the
interest rate on each of the Marker Interests as being subject to a cap and a
floor equal to the Pass-Through Rate (as adjusted to reflect a 30-day accrual
period) of the Related Certificate of such Marker Interest (as described in the
Preliminary Statement) and treating the LT1-X1 Interest as being capped at
zero). The averages described in the preceding sentence shall be weighted on the
basis of the respective principal balances of the relevant REMIC 1 Regular
Interests immediately prior to any date of determination.

                                       36
<PAGE>

      "REMIC B-2": As defined in the Preliminary Statement.

      "REMIC B-2 Interest": Each of the REMIC B-2 Regular Interests and the
Class R-B-2 Interest.

      "REMIC B-2 Regular Interest": The REMIC B-2 B-2 Interest.

      "REMIC B-2 B-2 Interest": An uncertificated "regular interest" in REMIC
B-2 represented by the Class B-2 Certificates having the same rights to payments
as the Class B-2 Certificates other than the right to any payments in respect of
LIBOR Carryover Amounts.

      "REMIC B-3": As defined in the Preliminary Statement.

      "REMIC B-3 Interest": Each of the REMIC B-3 Regular Interests and the
Class R-B-3 Interest.

      "REMIC B-3 Regular Interest": The REMIC B-3 B-3 Interest.

      "REMIC B-3 B-3 Interest": An uncertificated "regular interest" in REMIC
B-3 represented by the Class B-3 Certificates having the same rights to payments
as the Class B-3 Certificates other than the right to any payments in respect of
LIBOR Carryover Amounts.

      "REMIC B-4": As defined in the Preliminary Statement.

      "REMIC B-4 Interest": Each of the REMIC B-4 Regular Interests and the
Class R-B-4 Interest.

      "REMIC B-4 Regular Interest": The REMIC B-4 B-4 Interest.

      "REMIC B-4 B-4 Interest": An uncertificated "regular interest" in REMIC
B-4 having the same rights to payments as the Class B-4 Certificates other than
the right to any payments in respect of LIBOR Carryover Amounts.

      "REMIC X/N": As defined in the Preliminary Statement.

      "REMIC X/N Interest": Each of the REMIC X/N Regular Interests and the
Class R-X/N Interest.

      "REMIC X/N Regular Interest": The REMIC X/N X/N Interest.

      "REMIC X/N X/N Interest": An uncertificated "regular interest" in REMIC
X/N held by the Trustee on behalf of the holders of the Class X and Class N
Certificates and entitled to all payments in respect of the REMIC 2 X/N
Interest.

      "Remittance Report": A report prepared by the Servicer and delivered to
the Trustee pursuant to Section 4.07, containing the information attached hereto
as Exhibit M.

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

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

      "REO Principal Amortization": With respect to any REO Property, for any
calendar month, the aggregate of all amounts received in respect of such REO
Property during such calendar month, whether in the form of rental income, sale
proceeds (including, without limitation, that portion of the Termination

                                       37
<PAGE>

Price paid in connection with a purchase of all of the Mortgage Loans and REO
Properties pursuant to Section 10.01 that is allocable to such REO Property) or
otherwise, net of any portion of such amounts (i) payable pursuant to Section
3.13 in respect of the proper operation, management and maintenance of such REO
Property or (ii) payable or reimbursable to the Servicer pursuant to Section
3.13 for unpaid Servicing Fees in respect of the related Mortgage Loan and
unreimbursed Servicing Advances and Advances in respect of such REO Property or
the related Mortgage Loan.

      "REO Property": A Mortgaged Property acquired by the Servicer on behalf of
the Trust Fund through foreclosure or deed-in-lieu of foreclosure, as described
in Section 3.13.

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

      "Residential Dwelling": Any one of the following: (i) a one-family
dwelling, (ii) a two- to four-family dwelling, (iii) a one-family dwelling unit
in a Fannie Mae eligible condominium project, (iv) a one-family dwelling in a
planned unit development, which is not a co-operative, or (v) a mobile or
manufactured home (as defined in 42 United States Code, Section 5402(6)).

      "Residual Certificates": The Class R Certificates and the Class R-X
Certificates .

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

      "Responsible Officer": When used with respect to the Trustee, any officer
assigned to the Corporate Trust Division (or any successor thereto), including
any Vice President, Assistant Vice President, Trust Officer, any Assistant
Secretary, any trust officer or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and in each case having direct responsibility for the administration of
this Agreement.

      "S&P": Standard & Poor's, a division of The McGraw-Hill Companies, Inc.,
and its successors, and if such company shall for any reason no longer perform
the functions of a securities rating agency, "S&P" shall be deemed to refer to
any other "nationally recognized statistical rating organization" as set forth
on the most current list of such organizations released by the Securities and
Exchange Commission.

      "Second Lien Mortgage Loan": Any of the Mortgage Loans which are secured
by a second mortgage lien that is junior to a First Lien Mortgage Loan on the
related Mortgaged Property.

      "Seller": Credit-Based Asset Servicing and Securitization LLC, or its
successor in interest, in its capacity as seller under the Mortgage Loan
Purchase Agreement.

      "Senior Certificates": The Class AV-1, Class AF-1, Class AF-2, Class AF-3
and Class AF-4 Certificates.

      "Senior Enhancement Percentage": For any Distribution Date, the percentage
obtained by dividing (x) the sum of (i) the aggregate Certificate Principal
Balances of the Subordinated Certificates and (ii) the Overcollateralization
Amount, in each case after taking into account the distribution of the Principal
Distribution Amount on such Distribution Date by (y) the Pool Balance as of the
last day of the related Collection Period.

      "Senior Specified Enhancement Percentage": On any date of determination
thereof, 40.60%.

                                       38
<PAGE>

      "Servicer": Litton Loan Servicing LP, a Delaware limited partnership, or
any successor servicer appointed as herein provided, in its capacity as Servicer
hereunder.

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

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

      "Servicer Modification": A modification to the terms of a Mortgage Loan,
in accordance with the terms of Section 3.01, as to which the Mortgagor is in
default or as to which, in the judgment of the Servicer, default is reasonably
foreseeable.

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

      "Servicer's Assignee": As defined in Section 3.30(b) hereof.

      "Servicing Advances": All customary, reasonable and necessary "out of
pocket" costs and expenses incurred by the Servicer in the performance of its
servicing obligations to the extent such costs or expenses constitute
"unanticipated expenses" within the meaning of Treasury Regulations
1.860G-1(b)(3)(ii), including, but not limited to, the cost of (i) the
preservation, restoration and protection of the Mortgaged Property, (ii) any
enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of the REO Property and (iv) compliance with the
obligations under Section 3.08.

      "Servicing Fee": With respect to each Mortgage Loan (including each REO
Property) and for any calendar month, an amount equal to one month's interest
(or in the event of any payment of interest which accompanies a Principal
Prepayment in full made by the Mortgagor during such calendar month, interest
for the number of days covered by such payment of interest) at the Servicing Fee
Rate on the same principal amount on which interest on such Mortgage Loan
accrues for such calendar month.

      "Servicing Fee Rate": With respect to each Mortgage Loan, 0.50% per annum.

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

      "Servicing Rights Pledgee": One or more lenders, selected by the Servicer,
to which the Servicer may pledge and assign all of its right, title and interest
in, to and under this Agreement, including Wachovia Bank, National Association,
as the representative of certain lenders.

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

      "Special Hazard Loss": Any Realized Losses that result from direct
physical damage to Mortgaged Properties caused by natural disasters and other
hazards (i) which are not covered by hazard insurance policies (such as
earthquakes) and (ii) for which claims have been submitted and rejected by the
related hazard insurer and any shortfall in insurance proceeds for partial
damage due to the application of the co-insurance clauses contained in hazard
insurance policies.

                                       39
<PAGE>

      "SPV": As defined in Section 3.30(a) hereof.

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

      "Stayed Funds": Any payment required to be made under the terms of the
Certificates and this Agreement but which is not remitted by the Servicer
because the Servicer is the subject of a proceeding under the Bankruptcy Code
and the making of such remittance is prohibited by Section 362 of the Bankruptcy
Code.

      "Stepdown Date": The later to occur of (x) the earlier to occur of (A) the
Distribution Date in January 2008 and (B) the Distribution Date on which the
aggregate Certificate Principal Balance of the Class A Certificates is reduced
to zero, and (y) the first Distribution Date on which the Senior Enhancement
Percentage (after taking into account distributions of principal on such
Distribution Date) is greater than or equal to the Senior Specified Enhancement
Percentage.

      "Subordinate Maximum Rate Cap": For any Distribution Date will be a per
annum rate equal to the weighted average of the Group I Maximum Rate Cap and the
Group II Net Rate Cap (as adjusted to reflect the actual number of days in the
related Interest Accrual Period) weighted on the basis of the Group I Group
Subordinate Amount and the Group II Group Subordinate Amount, respectively.

      "Subordinate Rate Cap": With respect to any Distribution Date, a per annum
rate equal to the weighted average of the Group I Available Funds Cap and the
Group II Net Rate Cap (as adjusted to reflect the actual number of days in the
related Interest Accrual Period), weighted on the basis of the Group I Group
Subordinate Amount and the Group II Group Subordinate Amount, respectively.

      "Subordinated Certificates": The Class M-1, Class M-2, Class M-3, Class
B-1, Class B-2, Class B-3, Class B-4, Class N, Class X, Class R and Class R-X
Certificates.

      "Subsequent Overcollateralization Amount": As of any Distribution Date,
after the application of principal payments and Applied Realized Loss Amounts,
an amount equal to the excess, if any of (a) the Pool Balance over (b) the sum
of (i) the Certificate Principal Balance of each Class of Offered Certificates
and the Class B-4 Certificates and (ii) the remaining Initial
Overcollateralization Amount.

      "Subsequent Recovery": Any amount received on a Mortgage Loan subsequent
to such Mortgage Loan being determined to be a Liquidated Mortgage Loan.

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

      "Targeted Overcollateralization Amount": As of any Distribution Date, (x)
prior to the Stepdown Date, 1.90% of the Pool Balance on the Cut-off Date and
(y) on and after the Stepdown Date, (i) if a Trigger Event has not occurred, the
lesser of (a) 1.90% of the Pool Balance on the Cut-off Date and (b) the greater
of (A) 3.80% of the Pool Balance as of the last day of the related Collection
Period and (B) 0.50% of the Pool Balance on the Cut-off Date and (ii) if a
Trigger Event has occurred, the Targeted Overcollateralization Amount for the
immediately preceding Distribution Date. Notwithstanding the foregoing, on and
after any Distribution Date following the reduction of the Aggregate Certificate
Principal Balance of the Offered Certificates and the Class B-4 Certificates
to zero, the Targeted Overcollateralization Amount shall be zero.

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

                                       40
<PAGE>

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

      "Telerate Page 3750": The display page currently so designated on the
Moneyline Telerate Service (or such other page as may replace the Telerate Page
3750 page on that service for the purpose of displaying London interbank offered
rates of major banks).

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

      "Trigger Event": With respect to any Distribution Date, if (i) the
six-month rolling average of 60+ Day Delinquent Loans equals or exceeds 37.00%
of the Senior Enhancement Percentage or (ii) the aggregate amount of Realized
Losses incurred since the Cut-off Date through the last day of the related
Collection Period divided by the Pool Balance as of the Cut-off Date exceeds the
applicable percentages set forth below with respect to such Distribution Date:

<TABLE>
<CAPTION>
DISTRIBUTION DATE OCCURRING IN                    PERCENTAGE
------------------------------                    ----------
<S>                                               <C>
January 2008 through December 2008                   2.75%
January 2009 through December 2009                   4.50%
January 2010 through December 2010                   5.75%
January 2011  and thereafter                         6.50%
</TABLE>

      "Trust": 2004-CB8 Trust, the trust created hereunder.

      "Trust Fund": The segregated pool of assets subject hereto, constituting
the primary trust created hereby and to be administered hereunder, with respect
to a portion of which eight REMIC elections are to be made, such entire Trust
Fund consisting of: (i) such Mortgage Loans as from time to time are subject to
this Agreement, together with the Mortgage Files relating thereto, and together
with all collections thereon and proceeds thereof, (ii) any REO Property,
together with all collections thereon and proceeds thereof, (iii) the Trustee's
rights with respect to the Mortgage Loans under all insurance policies required
to be maintained pursuant to this Agreement and any proceeds thereof, (iv) the
Depositor's rights under the Mortgage Loan Purchase Agreement (including any
security interest created thereby) and (v) the Collection Account, the
Distribution Account and any REO Account and such assets that are deposited
therein from time to time and any investments thereof, together with any and all
income, proceeds and payments with respect thereto.

      "Trustee": JPMorgan Chase Bank, National Association, a national banking
association organized and existing under the laws of United States of America,
or any successor Trustee appointed as herein provided.

      "Trustee Fee": With respect to any Distribution Date, the product of (x)
one-twelfth of the Trustee Fee Rate and (y) the aggregate of the Principal
Balances of all Mortgage Loans as of the opening of business on the first day of
the related Collection Period.

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<PAGE>

      "Trustee Fee Rate": With respect to any Distribution Date, 0.0075% per
annum.

      "Underwriter": Merrill Lynch, Pierce, Fenner & Smith Incorporated, as
underwriter with respect to the Offered Certificates.

      "United States Person" or "U.S. Person": (i) A citizen or resident of the
United States, (ii) a corporation, partnership or other entity treated as a
corporation or partnership for United States federal income tax purposes
organized in or under the laws of the United States or any state thereof or the
District of Columbia (unless, in the case of a partnership, Treasury regulations
provide otherwise) or (iii) an estate the income of which is includible in gross
income for United States tax purposes, regardless of its source, or (iv) a trust
if a court within the United States is able to exercise primary supervision over
the administration of the trust and one or more United States persons have
authority to control all substantial decisions of the trust. Notwithstanding the
preceding sentence, to the extent provided in Treasury regulations, certain
Trusts in existence on August 20, 1996, and treated as United States persons
prior to such date, that elect to continue to be treated as United States
persons will also be a U.S. Person.

      "Unpaid Realized Loss Amount": For any Class M-1, Class M-2, Class M-3,
Class B-1, Class B-2, Class B-3 and Class B-4 Certificates and as to any
Distribution Date, the excess of (1) the cumulative amount of related Applied
Realized Loss Amounts with respect to such Class for all prior Distribution
Dates over (2) the sum of (x) the cumulative amount of related Realized Loss
Amortization Amounts with respect to such Class for all prior Distribution Dates
and (y) all increases in the Certificate Principal Balance of such Class
pursuant to the last sentence of the definition of "Certificate Principal
Balance."

      "VA": The United States Department of Veterans Affairs.

      "VA Approved Lender": Those institutions that are approved by the VA to
act as servicer and mortgagee of record pursuant to the VA Regulations.

      "VA Guaranty": The obligation of VA respecting the guaranty of a VA Loan
pursuant to the Servicemen's Readjustment Act of 1944, as amended.

      "VA Regulations" Any and all regulations promulgated by the VA under the
Servicemen's Readjustment Act of 1944, as amended.

      "Value": With respect to any Mortgaged Property, the lower of the value
thereof as determined by an independent appraisal made at the time of the
origination of the related Mortgage Loan or the sale price, if the appraisal is
not available; except that, with respect to any Mortgage Loan that is a purchase
money mortgage loan, the lesser of (i) the value thereof as determined by an
independent appraisal made at the time of the origination of such Mortgage Loan,
if any, and (ii) the sales price of the related Mortgaged Property.

      "Voting Rights": The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. The Voting Rights allocated
among Holders of the Offered Certificates and the Class B-4 Certificates shall
be 98%, and shall be allocated among each such Class according to the fraction,
expressed as a percentage, the numerator of which is the aggregate Certificate
Principal Balance of all the Certificates of such Class then outstanding and the
denominator of which is the aggregate Certificate Principal Balance of all the
Offered Certificates and the Class B-4 Certificates then outstanding. The Voting
Rights allocated to each such Class of Certificates shall be allocated among all
holders of each such Class in proportion to the outstanding Certificate
Principal Balance of such Certificates; provided, however, that any Certificate
registered in the name of the Servicer, the Depositor or the Trustee or any of
their respective affiliates shall not be included in the calculation of Voting
Rights; provided that only such

                                       42
<PAGE>

Certificates as are known by a Responsible Officer of the Trustee to be so
registered will be so excluded. On each Distribution Date (a) prior to the date
on which the Notional Amount of the Class N Certificates is reduced to zero, the
percentage of all the Voting Rights allocated among the Holders of the Class N
and Class X Certificates, respectively, shall be 1% and (b) on and after the
date on which the Notional Amount of the Class N Certificates is reduced to
zero, the percentage of all the Voting Rights allocated among the Holders of the
Class N Certificates shall be 0% and the percentage of all the Voting Rights
allocated among the Holder of the Class X Certificates shall be 2%. The Residual
Certificates shall have no Voting Rights.

      "Written Order to Authenticate": A written order by which the Depositor
directs the Trustee to execute, authenticate and deliver the Certificates.

      Section 1.02 Accounting.

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

                                   ARTICLE II

                          CONVEYANCE OF MORTGAGE LOANS;
                        ORIGINAL ISSUANCE OF CERTIFICATES

      Section 2.01 Conveyance of Mortgage Loans.

      The Depositor, concurrently with the execution and delivery hereof, does
hereby transfer, assign, set over and otherwise convey to the Trustee, on behalf
of the Trust, without recourse, for the benefit of the Certificateholders, all
the right, title and interest of the Depositor, including any security interest
therein for the benefit of the Depositor, in and to (i) each Mortgage Loan
identified on the Mortgage Loan Schedule, including the related Cut-off Date
Principal Balance, all interest accruing thereon after the Cut-off Date and all
collections in respect of interest and principal due after the Cut-off Date;
(ii) property which secured each such Mortgage Loan and which has been acquired
by foreclosure or deed in lieu of foreclosure; (iii) its interest in any
insurance policies in respect of the Mortgage Loans and all rights under the
related FHA Insurance Contract and VA Guaranty; (iv) all proceeds of any of the
foregoing; (v) the rights of the Depositor under the Mortgage Loan Purchase
Agreement, and (vi) all other assets included or to be included in the Trust
Fund; provided, however, so long as the Servicer is an FHA Approved Mortgagee,
the Commissioner of HUD shall have no obligation to recognize or deal with any
person other than the Servicer with respect to FHA Insurance. Such assignment
includes all interest and principal due to the Depositor or the Servicer after
the Cut-off Date with respect to the Mortgage Loans.

      It is agreed and understood by the Depositor, the Seller, the Servicer and
the Trustee that it is not intended that any Mortgage Loan be included in the
Trust that is a "High-Cost Home Loan" as defined in (i) the New Jersey Home
Ownership Act effective November 27, 2003; (ii) the New Mexico Home Loan
Protection Act effective January 1, 2004 or (iii) the Massachusetts Predatory
Home Loan Practices Act, effective November 7, 2004.

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

                                       43
<PAGE>

                  (i) the original Mortgage Note including any riders thereto,
endorsed either (A) in blank or (B) in the following form: "Pay to the order of
JPMorgan Chase Bank, National Association, as Trustee, C-BASS Mortgage Loan
Asset-Backed Certificates, Series 2004-CB8, without recourse," or with respect
to any lost Mortgage Note, an original Lost Note Affidavit, together with a copy
of the related Mortgage Note;

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

                  (iii) an original Assignment of Mortgage, in form and
substance acceptable for recording. The Mortgage shall be assigned either (A) in
blank or (B) to "JPMorgan Chase Bank, National Association, as Trustee, C-BASS
Mortgage Loan Asset-Backed Certificates, Series 2004-CB8, without recourse";

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

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

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

                  (vii) for each FHA Loan, the original Mortgage Insurance
Certificate and for each VA Loan, the original VA Guaranty.

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

      If any of the documents referred to in Section 2.01(ii), (iii) or (iv)
above has as of the Closing Date been submitted for recording but either (x) has
not been returned from the applicable public recording office or (y) has been
lost or such public recording office has retained the original of such document,
the obligations of the Seller to deliver such documents shall be deemed to be
satisfied upon (1) delivery to the Trustee or the Custodian no later than the
Closing Date, of a copy of each such document certified by the Seller in the
case of (x) above or the applicable public recording office in the case of (y)
above to be a true and complete copy of the original that was submitted for
recording and (2) if such copy is certified by the Seller, delivery to the
Trustee or the Custodian, promptly upon receipt thereof of either the original
or a copy of such document certified by the applicable public recording office
to be a true and complete copy of the original. The Seller shall deliver or
cause to be delivered to the Trustee or the Custodian promptly upon receipt
thereof any other documents constituting a part of a Mortgage File received with
respect to any Mortgage Loan, including, but not limited to, any original
documents evidencing an assumption or modification of any Mortgage Loan.

      Upon discovery or receipt of notice of any materially defective document
in, or that a document is missing from, a Mortgage File, the Seller shall have
120 days to cure such defect or 150 days following the Closing Date, in the case
of missing Mortgages or Assignments or deliver such missing document to the
Trustee or the Custodian. If the Seller does not cure such defect or deliver
such missing document

                                       44
<PAGE>

within such time period, the Seller shall either repurchase or substitute for
such Mortgage Loan in accordance with Section 2.03.

      The Servicer shall cause the Assignments of Mortgage which were delivered
in blank to be completed and shall cause all Assignments referred to in Section
2.01(iii) hereof and, to the extent necessary, in Section 2.01(iv) hereof to be
recorded at the Servicer's expense and of no cost to the Trust Fund; provided,
however, the Servicer 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 Servicer to the Trustee and the Rating
Agencies, the recordation of such assignment is not necessary to protect the
Trustee's interest, on behalf of the Trust, in the related Mortgage Loan. The
Servicer shall be required to deliver such assignments for recording within 30
days of the Closing Date. The Servicer shall furnish the Trustee, or its
designated agent, 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 Servicer 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 Closing Date the Servicer shall cause to be completed such endorsements "Pay
to the order of JPMorgan Chase Bank, National Association, as Trustee, C-BASS
Mortgage Loan Asset-Backed Certificates, Series 2004-CB8, without recourse."

      In the event that any Assignments of Mortgage is not recorded or is
improperly recorded (as a result of actions taken or not taken by a person other
than the Servicer), neither the Servicer nor the Trustee shall have any
liability for its failure to receive notices related to such Assignment of
Mortgage.

      The Depositor herewith delivers to the Trustee executed copies of the
Mortgage Loan Purchase Agreement.

      Section 2.02 Acceptance by Trustee.

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

      The Trustee agrees, for the benefit of the Certificateholders, to review
(or cause the Custodian to review) each Mortgage File within 60 days after the
Closing Date (or, with respect to any document delivered after the Startup Day,
within 60 days of receipt and with respect to any Qualified Substitute Mortgage,
within 60 days after the assignment thereof) and to certify (or cause the
Custodian to certify) in substantially the form attached hereto as Exhibit F-1
that, as to each Mortgage Loan listed in the Mortgage Loan Schedule (other than
any Mortgage Loan paid in full or any Mortgage Loan specifically identified in
the exception report annexed thereto as not being covered by such
certification), (i) all documents required to be delivered to it pursuant to
Section 2.01 of this Agreement are in its possession, (ii) such documents have
been reviewed by it and have not been mutilated, damaged or torn and relate to
such Mortgage Loan and (iii) based on its examination and only as to the
foregoing, the information set forth in the Mortgage Loan Schedule that
corresponds to items (1), (2), (3), (5), (13) and (26) (in the case of (26),
only as to whether there is a prepayment penalty) of the Mortgage Loan Schedule
accurately reflects information set forth in the Mortgage File. It is herein
acknowledged that, in conducting such review, the Trustee (or the Custodian, as
applicable) is under no duty or obligation to inspect, review or

                                       45
<PAGE>

examine any such documents, instruments, certificates or other papers to
determine that they are genuine, enforceable, or appropriate for the represented
purpose or that they have actually been recorded or that they are other than
what they purport to be on their face.

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

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

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

      Section 2.03 Repurchase or Substitution of Mortgage Loans by the Seller.

            (a) Upon discovery or receipt of written notice of any materially
defective document in, or that a document is missing from, a Mortgage File or of
the breach by the Seller of any representation, warranty or covenant under the
Mortgage Loan Purchase Agreement or in Section 2.04 in respect of any Mortgage
Loan which materially adversely affects the value of such Mortgage Loan or the
interest therein of the Certificateholders, the Trustee (or the Custodian, as
applicable) shall promptly notify the Seller, the Servicer and the Trustee of
such defect, missing document or breach and request that the Seller deliver such
missing document or cure such defect or breach within 120 days or 150 days
following the Closing Date, in the case of missing Mortgages or Assignments from
the date the Seller was notified of such missing document, defect or breach, and
if the Seller does not deliver such missing document or cure such defect or
breach in all material respects during such period, the Trustee shall enforce
the Seller's obligation under the Mortgage Loan Purchase Agreement and inform
the Seller of its obligation to repurchase such Mortgage Loan from the Trust
Fund at the Purchase Price on or prior to the Determination Date following the
expiration of such 120 day period (subject to Section 2.03(e)); provided that,
in connection with any such breach that is susceptible to cure but that could
not reasonably have been cured within such 120 day or 150 day period, if the
Seller shall have commenced to cure such breach within such 120 day or 150 day
period, the Seller shall be permitted to proceed thereafter diligently and
expeditiously to cure the same within 120 days. The Purchase Price for the
repurchased Mortgage Loan shall be deposited in the Collection Account, and the
Trustee, upon receipt of written certification from the Servicer of such
deposit, shall release to the Seller the related Mortgage File and shall execute
and

                                       46
<PAGE>

deliver such instruments of transfer or assignment, in each case without
recourse, representation or warranty, as the Seller shall furnish to it and as
shall be necessary to vest in the Seller any Mortgage Loan released pursuant
hereto and the Trustee shall have no further responsibility with regard to such
Mortgage File. In lieu of repurchasing any such Mortgage Loan as provided above,
the Seller may cause such Mortgage Loan to be removed from the Trust Fund (in
which case it shall become a Defective Mortgage Loan) and substitute one or more
Eligible Substitute Mortgage Loans in the manner and subject to the limitations
set forth in Section 2.03(d). In addition to the foregoing, in the case of a
breach of the Seller's representation set forth in Section 3.01(f) of the
Mortgage Loan Purchase Agreement, the Seller shall reimburse the Trust for all
costs or damages incurred by the Trust as a result of the violation of such law
(such amount, the "Reimbursement Amount"). The Reimbursement Amount shall be
delivered to the Servicer for deposit into the Collection Account within 10 days
from the date the Seller was notified by the Trustee of the amount of such costs
and damages. It is understood and agreed that the obligation of the Seller to
pay the Reimbursement Amount and to either cure or repurchase (or substitute
for) any Mortgage Loan as to which a document is missing, a material defect in a
constituent document exists or as to which such a breach has occurred and is
continuing shall constitute the sole remedy against the Seller respecting such
omission, defect or breach available to the Trustee and the Trustee on behalf of
the Certificateholders.

            (b) [Reserved].

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

            (d) Any substitution of Eligible Substitute Mortgage Loans for
Defective Mortgage Loans made pursuant to Section 2.03(a) must be effected prior
to the last Business Day that is within two years after the Closing Date. As to
any Defective Mortgage Loan for which the Seller substitutes a Eligible
Substitute Mortgage Loan or Loans, such substitution shall be effected by the
Seller delivering to the Trustee for such Eligible Substitute Mortgage Loan or
Loans, the Mortgage Note, the Mortgage, the Assignment to the Trustee, and such
other documents and agreements, with all necessary endorsements thereon, as are
required by Section 2.01, together with an Officer's Certificate providing that
each such Eligible Substitute Mortgage Loan satisfies the definition thereof and
specifying the Substitution Adjustment Amount (as described below), if any, in
connection with such substitution. The Trustee shall acknowledge receipt for
such Eligible Substitute Mortgage Loan or Loans and, within ten Business Days
thereafter, shall review (or cause the Custodian to review) such documents as
specified in Section 2.02 and deliver (or cause the Custodian to deliver) to the
Servicer, with respect to such Eligible Substitute Mortgage Loan or Loans, a
certification substantially in the form attached hereto as Exhibit F-1, with any
applicable exceptions noted thereon. Within one year of the date of
substitution, the Trustee shall deliver (or cause the Custodian to deliver) to
the Servicer a certification substantially in the form of Exhibit F-2 hereto
with respect to such Eligible Substitute Mortgage Loan or Loans, with any
applicable exceptions noted thereon. Monthly Payments due with respect to
Eligible Substitute Mortgage Loans in the month of substitution are not part of
the Trust Fund and will be retained by the Seller. For the month of
substitution, distributions to Certificateholders will reflect the collections
and recoveries in respect of such Defective Mortgage Loan in the Collection
Period preceding the month of substitution and the Depositor or the Seller, as
the case may be, shall thereafter be entitled to retain all amounts subsequently
received in respect of such Defective Mortgage Loan. The Seller shall give or
cause to be given written notice to the Certificateholders that such
substitution has taken place, shall amend the Mortgage Loan Schedule to reflect
the removal of such Defective Mortgage Loan from the terms of this Agreement and
the substitution of the Eligible Substitute Mortgage Loan or Loans and shall
deliver a copy of such amended Mortgage Loan Schedule to the Trustee. Upon such
substitution, such Eligible Substitute

                                       47
<PAGE>

Mortgage Loan or Loans shall constitute part of the Mortgage Pool and shall be
subject in all respects to the terms of this Agreement and, in the case of a
substitution effected by the Seller, the Mortgage Loan Purchase Agreement, and
consistent with the standard of care which the Servicer uses and/or would use in
servicing mortgage loans for its own account including, in the case of a
substitution effected by the Seller all applicable representations and
warranties thereof included in the Mortgage Loan Purchase Agreement and all
applicable representations and warranties thereof set forth in Section 2.04, in
each case as of the date of substitution.

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

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

            (e) Upon discovery by the Seller, the Servicer or the Trustee that
any Mortgage Loan does not constitute a "qualified mortgage" within the meaning
of Section 860G(a)(3) of the Code, the party discovering such fact shall within
two Business Days give written notice thereof to the other parties. In
connection therewith, the Seller shall repurchase or, subject to the limitations
set forth in Section 2.03(d), substitute one or more Eligible Substitute
Mortgage Loans for the affected Mortgage Loan within 90 days of the earlier of
discovery or receipt of such notice with respect to such affected Mortgage Loan.
In addition, upon discovery that a Mortgage Loan is defective in a manner that
would cause it to be a "defective obligation" within the meaning of Treasury
regulations relating to REMICs, the Seller shall cure the defect or make the
required purchase or substitution no later than 90 days after the discovery of
the defect. Any such repurchase or substitution shall be made in the same manner
as set forth in Section 2.03(a), if made by the Seller. The Trustee shall
reconvey to the Seller the Mortgage Loan to be released pursuant hereto in the
same manner, and on the same terms and conditions, as it would a Mortgage Loan
repurchased for breach of a representation or warranty.

      Notwithstanding anything to the contrary contained herein, the parties
hereto acknowledge that the functions of the Trustee with respect to the
custody, acceptance, inspection and release of the Mortgage Files pursuant to
Sections 2.01, 2.02 and 2.03 and preparation and delivery of the certifications
in the form of Exhibit F-1 and Exhibit F-2 shall be performed by the Custodian
pursuant to the terms and conditions of the Custodial Agreement. The fees and
expenses of the Custodian shall be paid by the Servicer.

                                       48
<PAGE>

      Section 2.04 Representations and Warranties of the Seller with Respect to
the Mortgage Loans.

      The Seller hereby represents and warrants to the Trustee for the benefit
of the Certificateholders that as of the Closing Date or as of such other date
specifically provided herein:

      (a) The representations and warranties made by the Seller pursuant to
Section 3.01 of the Mortgage Loan Purchase Agreement are hereby being made to
the Trustee and are true and correct as of the Closing Date.

      (b) Any written agreement between the Mortgagor in respect of a Mortgage
Loan and the Servicer modifying such Mortgagor's obligation to make payments
under the Mortgage Loan (such modified Mortgage Loan, a "Modified Mortgage
Loan") involved some assessment of the Mortgagor's ability to repay the Modified
Mortgage Loan.

      With respect to the representations and warranties set forth in this
Section 2.04 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 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
Certificateholders 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.

      Upon discovery by the Depositor, the Seller, the Servicer or the Trustee
of a breach of any of the representations and warranties contained in this
Section that materially and adversely affects the value of any Mortgage Loan or
the interest therein of the Certificateholders, the party discovering the breach
shall give prompt written notice to the others and in no event later than two
Business Days from the date of such discovery. Within ninety days of its
discovery or its receipt of notice of any such missing or materially defective
documentation or any such breach of a representation or warranty, the Seller
shall promptly deliver such missing document or cure such defect or breach in
all material respects, or in the event such defect or 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.

      It is understood and agreed that the representations and warranties set
forth in this Section 2.04 shall survive delivery of the Mortgage Files to the
Trustee and shall inure to the benefit of the Certificateholders notwithstanding
any restrictive or qualified endorsement or assignment. It is understood and
agreed that the obligations of the Seller set forth in Section 2.03(a) and (c)
to cure, substitute for or repurchase a Mortgage Loan pursuant to the Mortgage
Loan Purchase Agreement and to reimburse the Trust the Reimbursement Amount,
constitute the sole remedies available to the Certificateholders or to the
Trustee on their behalf respecting a breach of the representations and
warranties contained in this Section 2.04.

      Section 2.05 Representations, Warranties and Covenants of the Servicer.

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

                                       49
<PAGE>

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

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

                  (iii) The Servicer is an approved seller/servicer of
conventional mortgage loans for Fannie Mae and is an FHA Approved Mortgagee in
good standing to service mortgages, is a VA Approved Lender and has not been
suspended as a mortgagee or servicer by the FHA or VA and has the facilities,
procedures and experienced personnel necessary for the sound servicing of
mortgage loans of the same type as the Mortgage Loans. The Servicer is, and
shall remain for as long as it is servicing the Mortgage Loans hereunder, in
good standing as a FHA Approved Mortgagee and a VA Approved Lender and to
service mortgage loans for HUD, Fannie Mae or Freddie Mac, and no event has
occurred, including but not limited to a change in insurance coverage, which
would make the Servicer unable to comply with HUD, Fannie Mae, Freddie Mac or
FHA eligibility requirements or which would require notification to any of HUD,
Fannie Mae, Freddie Mac, FHA or VA;

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

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

                  (vi) There is no action, suit, proceeding or investigation
pending or, to its knowledge, threatened against the Servicer that, either
individually or in the aggregate, may result in any material adverse change in
the business, operations, financial condition, properties or assets of the
Servicer, or in any material impairment of the right or ability of the Servicer
to carry on its business substantially as now conducted, or in any material
liability on the part of the Servicer, or that would draw into question the
validity or enforceability of this Agreement or of any action taken or to be
taken in connection with the obligations of the Servicer contemplated herein, or
that would be likely to impair materially the ability of the Servicer to perform
under the terms of this Agreement;

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<PAGE>

                  (vii) No consent, approval or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Servicer of or compliance by the Servicer with this Agreement
or the consummation of the transactions contemplated by this Agreement, except
for such consents, approvals, authorizations and orders, if any, that have been
obtained;

                  (viii) Neither this Agreement nor any information, certificate
of an officer, statement furnished in writing or report delivered to the Trustee
by the Servicer in connection with the transactions contemplated hereby contains
or will contain any untrue statement of a material fact or omits or will omit to
state a material fact necessary in order to make the statements contained
therein, in light of the circumstances under which they were made, not
misleading; and

                  (ix) The Servicer has fully furnished, and shall continue to
fully furnish for so long as it is servicing the Mortgage Loans hereunder, in
accordance with the Fair Credit Reporting Act and its implementing regulations,
accurate and complete information on the Mortgagor credit files to Equifax,
Experian and Trans Union Credit Information Company on a monthly basis.

      It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.05 shall survive delivery of the Mortgage
Files to the Trustee and shall inure to the benefit of the Trustee, the
Depositor and the Certificateholders. Upon discovery by any of the Depositor,
the Servicer, the Seller or the Trustee of a breach of any of the foregoing
representations, warranties and covenants which materially and adversely affects
the value of any Mortgage Loan or the interests therein of the
Certificateholders, the party discovering such breach shall give prompt written
notice (but in no event later than two Business Days following such discovery)
to the other parties hereto.

      Section 2.06 Representations and Warranties of the Depositor.

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

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

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

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

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

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

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<PAGE>

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

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

                  (viii) To the best of the Depositor's knowledge without any
independent investigation, no consent, approval, authorization, order,
registration or qualification of or with any court or governmental agency or
body of the United States or any other jurisdiction is required for the issuance
of the Certificates, or the consummation by the Depositor of the other
transactions contemplated by this Agreement, except such consents, approvals,
authorizations, registrations or qualifications as (a) may be required under
State securities or Blue Sky laws, (b) have been previously obtained or (c) the
failure of which to obtain would not have a material adverse effect on the
performance by the Depositor of its obligations under, or the validity or
enforceability of, this Agreement; and

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

      Section 2.07 Issuance of Certificates and the Uncertificated Regular
Interests.

      The Trustee acknowledges the assignment to it of the Mortgage Loans and
the delivery to it (or the Custodian, as bailee and Custodian of the Trustee) of
the Mortgage Files, subject to the provisions of Sections 2.01 and 2.02, and the
Trustee acknowledges the assignment to it of all other assets included in the
Trust Fund, receipt of which is hereby acknowledged. Concurrently with such
assignment and delivery and in exchange therefor, the Trustee, pursuant to the
Written Order to Authenticate executed by an officer of the Depositor, has
executed, and the Certificate Registrar has authenticated and delivered to or
upon the order of the Depositor, the Certificates (other than the Class X and
Residual Certificates) in minimum dollar denominations or $25,000 and integral
dollar multiples of $1 in excess. The Class X and Class R Certificates are
issuable only in minimum Percentage Interests of 10%. The Class R-X Certificates
are issuable only in minimum Percentage Interests of 50%. The Trustee
acknowledges the issuance of the uncertificated REMIC 1 Regular Interests, the
uncertificated REMIC 2 Regular Interests, the uncertificated REMIC B-2 Regular
Interests, the uncertificated REMIC B-3 Regular Interests, the

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<PAGE>

uncertificated REMIC B-4 Regular Interests and the uncertificated REMIC X/N
Regular Interests and declares that it holds the REMIC 1 Regular Interests as
assets of REMIC 2, the REMIC 2 B-2 Interest as the asset of REMIC B-2, the REMIC
2 B-3 Interest as the asset of REMIC B-3, the REMIC 2 B-4 Interest as the asset
of REMIC B-4 and the REMIC 2 X/N Interest as the asset of REMIC X/N. The Trustee
acknowledges the issuance of the uncertificated REMIC X/N X/N Interest,
beneficial ownership of which is evidenced by the Class X/N Interest, and
declares that it holds the same as assets of the Grantor Trust on behalf of the
Holders of the Class N and Class X Certificates. The interests evidenced by the
Certificates constitute the entire beneficial ownership interest in the Trust
Fund.

      Section 2.08 Representations and Warranties of the Seller.

      The Seller hereby represents and warrants to the Trust and the Trustee on
behalf of the Certificateholders 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 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 principles (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.

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<PAGE>

                  (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.

                  (vii) The Seller is not insolvent, nor will the Seller be made
insolvent by the transfer of the Mortgage Loans to the Depositor, 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, (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.

                  (x) The Seller did not transfer the Mortgage Loans to the
Depositor 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 to the Depositor are not subject to the
bulk transfer laws or any similar statutory provisions in effect in any
applicable jurisdiction.

      Section 2.09 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 Depositor, 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 Depositor, 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 2.09 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

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<PAGE>

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 III

                          ADMINISTRATION AND SERVICING
                                OF THE TRUST FUND

      Section 3.01 Servicer to Act as Servicer.

      The Servicer, as independent contract servicer, shall service and
administer the Mortgage Loans in accordance with this Agreement and the normal
and usual standards of practice of prudent mortgage servicers, and shall have
full power and authority, acting alone, to do or cause to be done any and all
things in connection with such servicing and administration which the Servicer
may deem necessary or desirable and consistent with the terms of this Agreement
and consistent with the standard of care which the Servicer uses and/or would
use in servicing mortgage loans for its own account including, in the case of
FHA Loans and the VA Loans, taking all actions that a mortgagee is permitted or
required to take by the FHA or VA, as applicable (the "Servicing Standards").

      Consistent with the terms of this Agreement, the Servicer may waive,
modify or vary any term of any Mortgage Loan or consent to the postponement of
strict compliance with any such term or in any manner grant indulgence to any
Mortgagor if in the Servicer's reasonable and prudent determination such waiver,
modification, postponement or indulgence is not materially adverse to the
Certificateholders; provided, however, that the Servicer shall not make future
advances and (unless the Mortgagor is in default with respect to the Mortgage
Loan or such default is, in the judgment of the Servicer, reasonably
foreseeable) the Servicer shall not permit any modification with respect to any
Mortgage Loan that would (i) change the Mortgage Interest Rate, defer or forgive
the payment thereof of any principal or interest payments, reduce the
outstanding principal amount (except for actual payments of principal) or extend
the final maturity date with respect to such Mortgage Loan, (ii) in the case of
FHA Loans, affect the FHA Insurance Contract with respect to such Mortgage Loan
and in the case of the VA Loans, affect the VA Guaranty with respect to such
Mortgage Loan, (iii) affect adversely the status of any REMIC constituting part
of the Trust Fund as a REMIC or (iv) cause any REMIC to be subject to a tax on
"prohibited transactions" or "contributions" pursuant to the REMIC Provisions.
Notwithstanding the foregoing, the Servicer shall not permit any modification
with respect to any Mortgage Loan that would both (x) effect an exchange or
reissuance of such Mortgage Loan under Section 1.860G-2(b) of the Treasury
Regulations and (y) cause any REMIC constituting part of the Trust Fund to fail
to qualify as a REMIC under the Code or the imposition of any tax on "prohibited
transactions" or "contributions" after the Startup Day under the REMIC
Provisions. Without limiting the generality of the foregoing, the Servicer shall
continue, and is hereby authorized and empowered to execute and deliver on
behalf of itself, and the Trustee, all instruments of satisfaction or
cancellation, or of partial or full release, discharge and all other comparable
instruments, with respect to the Mortgage Loans and with respect to the
Mortgaged Property. The Servicer shall make all required Servicing Advances and
shall service and administer the Mortgage Loans in accordance with Applicable
Regulations, and shall provide to the Mortgagors any reports required to be
provided to them thereby. If reasonably required by the Servicer, the Trustee
shall furnish the Servicer a power of attorney (substantially in the form
annexed hereto as Exhibit Q) and other documents necessary or appropriate to
enable the Servicer to carry out its servicing and administrative duties under
this Agreement.

      In servicing and administering FHA Loans, the Servicer shall comply
strictly with the National Housing Act, the FHA Regulations, the Servicemen's
Readjustment Act and administrative guidelines

                                       55
<PAGE>

issued thereunder or pursuant thereto (insofar as the same apply to any Mortgage
Loan) and, to the extent permitted hereunder, promptly discharge all of the
obligations of the mortgagee thereunder and under each Mortgage including the
timely giving of notices, the essence hereof being that the full benefits of
each FHA Insurance Contract inure to the Trustee, on behalf of the
Certificateholders.

      In servicing and administering the Mortgage Loans, the Servicer shall
employ procedures including collection procedures and exercise the same care
that it customarily employs and exercises in servicing and administering
mortgage loans for its own account giving due consideration to accepted mortgage
servicing practices of prudent lending institutions and the FHA Insurance
Contracts and the Certificateholders' reliance on the Servicer.

      The Servicer shall give prompt notice to the Trustee of any action, of
which the Servicer has actual knowledge, which action purports to (i) assert a
claim against the Trust Fund or (ii) assert jurisdiction over the Trust Fund.

      Notwithstanding anything in this Agreement to the contrary, in the event
of a Principal Prepayment in full, the Servicer may not waive any prepayment
penalty or portion thereof required by the terms of the related Mortgage Note
unless (i) the related Mortgage Loan is in default or foreseeable default and
such waiver (a) is standard and customary in servicing mortgage loans similar to
the Mortgage Loans and (b) would, in the reasonable judgment of the Servicer,
maximize recovery of total proceeds taking into account the value of such
prepayment penalty and the related Mortgage Loan, (ii) (A) the enforceability
thereof is limited (1) by bankruptcy, insolvency, moratorium, receivership, or
other similar law relating to creditors' rights generally or (2) due to
acceleration in connection with a foreclosure or other involuntary payment, or
(B) the enforceability is otherwise limited or prohibited by applicable law, or
(iii) the Servicer has not been provided with information sufficient to enable
it to collect the prepayment penalty. For the avoidance of doubt, the Servicer
may waive a prepayment penalty in connection with a short sale or short payoff
on a defaulted Mortgage Loan. If the Servicer has waived all or a portion of a
prepayment penalty relating to a Principal Prepayment, other than as provided
above, the Servicer shall deliver to the Trustee no later than the next
succeeding Servicer Remittance Date, for deposit into the Distribution Account
the amount of such prepayment penalty (or such portion thereof as had been
waived) for distribution in accordance with the terms of this Agreement.

      Based solely on information provided to it by the Servicer, the Trustee
shall prepare and deliver to the Depositor and the owners of the Class N and
Class X Certificates, on a monthly basis, a statement setting forth the amounts
received with respect to prepayment penalties.

      Section 3.02 Collection of Mortgage Loan Payments.

      Continuously from the date hereof until the principal and interest on all
Mortgage Loans are paid in full, the Servicer will diligently collect all
payments due under each Mortgage Loan when the same shall become due and payable
and shall, to the extent such procedures shall be consistent with this Agreement
and the terms and provisions of any related Primary Insurance Policy and
Applicable Regulations, follow such collection procedures as it follows with
respect to mortgage loans comparable to the Mortgage Loans and held for its own
account. Further, the Servicer will take special care in ascertaining and
estimating annual ground rents, taxes, assessments, water rates, fire and hazard
insurance premiums, mortgage insurance premiums, and all other charges that, as
provided in the Mortgage, will become due and payable to that end that the
installments payable by the Mortgagors will be sufficient to pay such charges as
and when they become due and payable.

                                       56
<PAGE>

      Section 3.03 Realization Upon Defaulted Mortgage Loans.

      In the event that any payment due under any Conventional Mortgage Loan is
not paid when the same becomes due and payable, or in the event the Mortgagor
fails to perform any other covenant or obligation under the Mortgage Loan and
such failure continues beyond any applicable grace period, the Servicer shall
take such action as it shall deem to be in the best interest of the
Certificateholders. In the event that any payment due under any FHA Loan becomes
delinquent, the Servicer shall take all such actions as are in the best
interests of the Certificateholders and permitted under any applicable FHA loss
mitigation proceedings, including, but not limited to, requesting the FHA to
accept an assignment of such FHA Loan, and, upon the Servicer's determination
that foreclosure is in the best interest of the Certificateholders, commencing
foreclosure proceedings. With respect to any defaulted Mortgage Loan, the
Servicer shall have the right to review the status of the related forbearance
plan and, subject to the second paragraph of Section 3.01, may modify such
forbearance plan; including, extending the Mortgage Loan repayment date for a
period of one year or reducing the Mortgage Interest Rate up to 50 basis points.

      In connection with a foreclosure or other conversion, the Servicer shall
exercise such rights and powers vested in it hereunder and use the same degree
of care and skill in its exercise as prudent mortgage servicers would exercise
or use under the circumstances in the conduct of their own affairs and
consistent with Applicable Regulations and the servicing standards set forth in
the Fannie Mae Guide, including, without limitation, advancing funds for the
payment of taxes and insurance premiums with respect to first lien Mortgage
Loans.

      Notwithstanding the foregoing provisions of this Section 3.03, with
respect to any Mortgage Loan as to which the Servicer has received actual notice
of, or has actual knowledge of, the presence of any toxic or hazardous substance
on the related Mortgaged Property, the Servicer shall not either (i) obtain
title to such Mortgaged Property as a result of or in lieu of foreclosure or
otherwise, or (ii) otherwise acquire possession of, or take any other action
with respect to, such Mortgaged Property if, as a result of any such action, the
Trust Fund would be considered to hold title to, to be a mortgagee-in-possession
of, or to be an owner or operator of such Mortgaged Property within the meaning
of the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended from time to time, or any comparable law, unless the Servicer
has also previously determined, based on its reasonable judgment and a prudent
report prepared by a Person who regularly conducts environmental audits using
customary industry standards, that:

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

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

      The cost of the environmental audit report contemplated by this Section
3.03 shall be advanced by the Servicer, subject to the Servicer's right to be
reimbursed therefor from the Collection Account as provided in Section 3.05(ii).

                                       57
<PAGE>

      If the Servicer determines, as described above, that it is in the best
economic interest of the Certificateholders to take such actions as are
necessary to bring any such Mortgaged Property into compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes, or petroleum-based materials affecting any such Mortgaged Property, then
the Servicer shall take such action as it deems to be in the best economic
interest of the Certificateholders. The cost of any such compliance,
containment, cleanup or remediation shall be advanced by the Servicer, subject
to the Servicer's right to be reimbursed therefor from the Collection Account as
provided in Section 3.05(ii).

      Section 3.04 Collection Account and Distribution Account.

            (a) The Servicer shall segregate and hold all funds collected and
received pursuant to each Mortgage Loan separate and apart from any of its own
funds and general assets and shall establish and maintain one or more Collection
Accounts. Each Collection Account shall be an Eligible Account.

      The Servicer shall deposit in the Collection Account on a daily basis
within two Business Days of receipt, and retain therein, the following payments
and collections received or made by it after the Cut-off Date with respect to
the Mortgage Loans:

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

                  (ii) all payments on account of interest on the Mortgage Loans
adjusted to the Mortgage Interest Rate less the Servicing Fee Rate;

                  (iii) all proceeds from a Cash Liquidation;

                  (iv) all Insurance Proceeds including amounts required to be
deposited pursuant to Section 3.10, other than proceeds to be held in the Escrow
Account and applied to the restoration or repair of the Mortgaged Property or
released to the Mortgagor in accordance with the Servicer's normal servicing
procedures, the loan documents or applicable law;

                  (v) all Condemnation Proceeds affecting any Mortgaged Property
which are not released to the Mortgagor in accordance with the Servicer's normal
servicing procedures, the loan documents or applicable law; and

                  (vi) any amounts required to be deposited by the Servicer in
connection with any REO Property pursuant to Section 3.13.

      Any interest paid on funds deposited in the Collection Account, subject to
Section 3.25, shall accrue to the benefit of the Servicer and the Servicer shall
be entitled to retain and withdraw such interest from the Collection Account
pursuant to Section 3.05(v). The foregoing requirements for deposit from the
Collection Account shall be exclusive, it being understood and agreed that,
without limiting the generality of the foregoing, payments in the nature of late
payment charges, prepayment charges that are not prepayment penalties, and
assumption fees need not be deposited by the Servicer in the Collection Account.

            (b) On behalf of the Trust Fund, the Trustee shall establish and
maintain one or more accounts (such account or accounts, the "Distribution
Account"), held in trust for the benefit of the Certificateholders. On behalf of
the Trust Fund, the Servicer shall deliver to the Trustee in immediately
available funds for deposit in the Distribution Account by the close of business
New York time on the

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Servicer Remittance Date, that portion of the Available Funds (calculated
without regard to the references in the definition thereof to amounts that may
be deposited to the Distribution Account from a different source as provided
herein) then on deposit in the Collection Account. Amounts in the Distribution
Account shall be deemed to be held on behalf of the related REMICs and the
Grantor Trust in accordance with the REMIC distributions set forth in Section
4.08. Funds on deposit in the Distribution Account will remain uninvested.

            (c) Funds in the Collection Account may be invested in Permitted
Investments in accordance with the provisions set forth in Section 3.25. The
Servicer shall give notice to the Trustee certifying the location of the
Collection Account maintained by it when established and prior to any change
thereof. The Trustee shall give notice to the Servicer and the Depositor of the
location of the Distribution Account when established and prior to any change
thereof.

            (d) In the event the Servicer shall deliver to the Trustee for
deposit in the Distribution Account any amount not required to be deposited
therein, it may at any time in writing request that the Trustee withdraw such
amount from the Distribution Account and remit to the Servicer any such amount,
any provision herein to the contrary notwithstanding. In addition, the Servicer
shall deliver to the Trustee from time to time for deposit, and the Trustee
shall so deposit, in the Distribution Account in respect of REMIC 1:

                  (i) any Advances, as required pursuant to Section 4.07;

                  (ii) any Stayed Funds, as soon as permitted by the federal
bankruptcy court having jurisdiction in such matters;

                  (iii) any prepayment penalties or amounts in connection with
the waiver of such prepayment penalties, in each case required to be deposited
pursuant to Section 3.01;

                  (iv) any amounts required to be deposited in the Distribution
Account pursuant to Sections 2.03, 3.04, 3.15, 3.16, 3.23 or 4.07; and

                  (v) any amounts required to be deposited by the Servicer
pursuant to Section 3.11 in connection with the deductible clause in any blanket
hazard insurance policy, such deposit being made from the Servicer's own funds,
without reimbursement therefor.

            (e) Promptly upon receipt of any Stayed Funds, whether from the
Servicer, a trustee in bankruptcy, or federal bankruptcy court or other source,
the Trustee shall notify the Servicer of such receipt and deposit such funds in
the Distribution Account, subject to withdrawal thereof as permitted hereunder.

      Section 3.05 Permitted Withdrawals From the Collection Account.

      The Servicer may, from time to time, withdraw from the Collection Account
for the following purposes:

                  (i) to remit to the Trustee for deposit in the Distribution
Account the amounts required to be so remitted pursuant to Section 3.04(b) or
permitted to be so remitted pursuant to the first sentence of Section 3.04(d) or
clause (ii) of the first sentence of the second paragraph of Section 4.07(b);

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                  (ii) to reimburse itself for (a) Advances and Servicing
Advances to the extent of amounts received on the related Mortgage Loan which
represent payments of (x) principal and/or interest respecting which any such
Advance was made or (y) Condemnation Proceeds, Insurance Proceeds or Liquidation
Proceeds respecting which any such Servicing Advance was made; or (b) any
unreimbursed Advances to the extent of funds held in the Collection Account for
future distributions that were not included in Available Funds for the preceding
Distribution Date (provided, however, any funds so applied will be replaced by
the Servicer by deposit in the Collection Account no later than one Business Day
prior to the Distribution Date on which such funds are required to be
distributed);

                  (iii) to reimburse itself for unreimbursed Servicing Advances,
any unpaid Servicing Fees and for unreimbursed Advances to the extent that such
amounts are deemed to be Nonrecoverable Advances and to reimburse itself for
such amounts to the extent that such amounts are nonrecoverable from the
disposition of the related REO Property or have been written-off pursuant to
Section 3.13 hereof;

                  (iv) to reimburse itself for any amounts paid pursuant to
Section 3.03 (and not otherwise previously reimbursed);

                  (v) to pay to itself as servicing compensation (a) any
interest earned on funds in the Collection Account (all such interest to be
withdrawn monthly not later than each Servicer Remittance Date) and (b) the
Servicing Fee from that portion of any payment or recovery as to interest to a
particular Mortgage Loan to the extent not retained pursuant to Section
3.04(ii);

                  (vi) to pay or reimburse itself for any amounts payable or
paid pursuant to Section 6.03 (and not otherwise previously reimbursed) and to
reimburse itself as set forth in Section 9.01(c); and

                  (vii) to clear and terminate the Collection Account upon the
termination of this Agreement.

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

      Section 3.06 Establishment of Escrow Account; Deposits in Escrow Account.

      The Servicer shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan which constitute Escrow Payments separate and
apart from any of its own funds and general assets and shall establish and
maintain one or more Escrow Accounts, in the form of time deposit or demand
accounts. A copy of such letter agreement shall be furnished to the Trustee upon
request. The Escrow Account shall be an Eligible Account.

      The Servicer shall deposit in the Escrow Account on a daily basis within
two Business Days of receipt, and retain therein, (i) all Escrow Payments
collected on account of the Mortgage Loans, for the purpose of effecting timely
payment of any such items as required under the terms of this Agreement, and
(ii) all Insurance Proceeds which are to be applied to the restoration or repair
of any Mortgaged Property. The Servicer shall make withdrawals therefrom only to
effect such payments as are required under this Agreement, and for such other
purposes as shall be set forth in, or in accordance with, Section 3.07. The
Servicer shall be entitled to retain any interest paid on funds deposited in the
Escrow Account by the depository institution other than interest on escrowed
funds required by law to be paid to the Mortgagor

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and, to the extent required by the related Mortgage Loan or Applicable
Regulations, the Servicer shall pay interest on escrowed funds to the Mortgagor
notwithstanding that the Escrow Account is non-interest bearing or that interest
paid thereon is insufficient for such purposes.

      Section 3.07 Permitted Withdrawals From Escrow Account.

      Withdrawals from the Escrow Account may be made by the Servicer (i) to
effect timely payments of ground rents, taxes, assessments, water rates, fire,
flood and hazard insurance premiums, Primary Insurance Policy premiums, if
applicable, and comparable items, (ii) to reimburse the Servicer for any
Servicing Advance made by the Servicer with respect to a related Mortgage Loan
but only from amounts received on the related Mortgage Loan which represent late
payments or Late Collections of Escrow Payments thereunder, (iii) to refund to
the Mortgagor any funds as may be determined to be overages, (iv) for transfer
to the Collection Account in accordance with the terms of this Agreement, (v)
for application to restoration or repair of the Mortgaged Property, (vi) to pay
to the Servicer, or to the Mortgagor to the extent required by the related
Mortgage Loan or Applicable Regulations, any interest paid on the funds
deposited in the Escrow Account, (vii) to clear and terminate the Escrow Account
on the termination of this Agreement, (viii) to transfer to the Collection
Account any insurance proceeds, or (ix) in the case of FHA Loans, for transfer
to the Collection Account, fire and hazard insurance proceeds and Escrow
Payments with respect to any Mortgage Loan where the FHA, as the case may be,
has directed application of such funds as a credit against the proceeds of the
FHA Insurance Contract. As part of its servicing duties, the Servicer shall pay
to the Mortgagor interest on funds in the Escrow Account, to the extent required
by the related Mortgage Loan or Applicable Regulations, and to the extent that
interest earned on funds in the Escrow Account is insufficient, shall pay such
interest from its own funds, without any reimbursement therefor.

      In the event the Servicer shall deposit in the Escrow Account any amount
not required to be deposited therein, it may at any time withdraw such amount
from the Escrow Account, any provision herein to the contrary notwithstanding.

      Section 3.08 Payment of Taxes, Insurance and Other Charges; Collections
Thereunder.

      With respect to each first lien Mortgage Loan, the Servicer shall maintain
accurate records reflecting the status of ground rents, taxes, assessments,
water rates and other charges which are or may become a lien upon the Mortgaged
Property and the status of Primary Insurance Policy premiums and fire, flood and
hazard insurance coverage and shall obtain, from time to time, all bills for the
payment of such charges (including renewal premiums) and shall effect payment
thereof prior to the applicable penalty or termination date and at a time
appropriate for securing maximum discounts allowable, employing for such purpose
deposits of the Mortgagor in the Escrow Account which shall have been estimated
and accumulated by the Servicer in amounts sufficient for such purposes, as
allowed under the terms of the Mortgage or Applicable Regulations. To the extent
that a Mortgage does not provide for Escrow Payments, the Servicer shall (i)
determine whether any such payments are made by the Mortgagor in a manner and at
a time that is necessary to avoid the loss of the Mortgaged Property due to a
tax sale or the foreclosure as a result of a tax lien and (ii) ensure that all
insurance required to be maintained on the Mortgaged Property pursuant to this
Agreement is maintained. If any such payment has not been made and the Servicer
receives notice of a tax lien with respect to the Mortgage Loan being imposed,
the Servicer will, to the extent required to avoid loss of the Mortgaged
Property, advance or cause to be advanced funds necessary to discharge such lien
on the Mortgaged Property. The Servicer assumes full responsibility for the
payment of all such bills and shall effect payments of all such bills
irrespective of the Mortgagor's faithful performance in the payment of same or
the making of the Escrow Payments and shall make Servicing Advances from its own
funds to effect such payments.

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<PAGE>

      The Servicer, on behalf of the Trustee, as mortgagee, will maintain in
full force and effect (to the extent a Mortgage Loan has a Primary Insurance
Policy) a Primary Insurance Policy issued by a Qualified Insurer with respect to
each Mortgage Loan for which such coverage is required. Such coverage will be
maintained until the Combined Loan-to-Value Ratio of the related Mortgage Loan
is reduced to 80% or less. The Servicer will not cancel or refuse to renew any
Primary Insurance Policy in effect on the Closing Date that is required to be
kept in force under this Agreement unless a replacement Primary Insurance Policy
for such cancelled or non-renewed policy is obtained from and maintained with a
Qualified Insurer. The Servicer shall not take any action which would result in
non-coverage under any applicable Primary Insurance Policy of any loss which,
but for the actions of the Servicer, would have been covered thereunder. In
connection with any assumption or substitution agreement entered into or to be
entered into pursuant to Section 3.14, the Servicer shall promptly notify the
insurer under the related Primary Insurance Policy, if any, of such assumption
or substitution of liability in accordance with the terms of such policy and
shall take all actions which may be required by such insurer as a condition to
the continuation of coverage under the Primary Insurance Policy. If such Primary
Insurance Policy is terminated as a result of such assumption or substitution of
liability, the Servicer shall obtain a replacement Primary Insurance Policy as
provided above.

      In connection with its activities as servicer, the Servicer agrees to
prepare and present, on behalf of itself and the Trustee, claims to the insurer
under any Primary Insurance Policy in a timely fashion in accordance with the
terms of such policies and, in this regard, to take such action as shall be
necessary to permit recovery under any Primary Insurance Policy respecting a
defaulted Mortgage Loan. Pursuant to Section 3.04, any amounts collected by the
Servicer under any Primary Insurance Policy shall be deposited in the Collection
Account, subject to withdrawal pursuant to Section 3.05.

      Section 3.09 Transfer of Accounts.

      The Servicer may transfer the Collection Account or the Escrow Account to
a different depository institution from time to time. Upon such transfer, the
Servicer shall deliver to the Trustee and the Depositor, a certification or
letter agreement, as the case may be, as required pursuant to Sections 3.04 and
3.06.

      Section 3.10 Maintenance of Hazard Insurance.

      The Servicer shall cause to be maintained for each first lien Mortgage
Loan fire and hazard insurance with extended coverage as is customary in the
area where the Mortgaged Property is located in an amount which is at least
equal to the lesser of (i) the amount necessary to fully compensate for any
damage or loss to the improvements which are a part of such property on a
replacement cost basis, (ii) the Principal Balance of the Mortgage Loan, in each
case in an amount not less than such amount as is necessary to prevent the
Mortgagor and/or the Mortgagee from becoming a co-insurer or (iii) the amount
required under applicable HUD/FHA/VA regulations. If the Mortgaged Property is
in an area identified in the Federal Register by the Flood Emergency Management
Agency as having special flood hazards and flood insurance has been made
available, the Servicer will cause to be maintained a flood insurance policy
meeting the requirements of the current guidelines of the Federal Insurance
Administration with a generally acceptable insurance carrier, in an amount
representing coverage not less than the least of (i) the Principal Balance of
the Mortgage Loan, (ii) the maximum insurable value of the improvements securing
such Mortgage Loan or (iii) the maximum amount of insurance which is available
under the Flood Disaster Protection Act of 1973, as amended. The Servicer shall
also maintain on the REO Property for the benefit of the Certificateholders, (x)
fire and hazard insurance with extended coverage in an amount which is at least
equal to the replacement cost of the improvements which are a part of such
property, (y) public liability insurance and, (z) to the extent required and
available under the Flood Disaster Protection Act of 1973, as amended, flood
insurance in an amount as provided above. Any amounts collected by the

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<PAGE>

Servicer under any such policies other than amounts to be deposited in the
Escrow Account and applied to the restoration or repair of the Mortgaged
Property or REO Property, or released to the Mortgagor in accordance with the
Servicer's normal servicing procedures, shall be deposited in the Collection
Account, subject to withdrawal pursuant to Section 3.05. It is understood and
agreed that no earthquake or other additional insurance is required to be
maintained by the Servicer or the Mortgagor or maintained on property acquired
in respect of the Mortgage Loan, other than pursuant to such Applicable
Regulations as shall at any time be in force and as shall require such
additional insurance. All such policies shall be endorsed with standard
mortgagee clauses with loss payable to the Servicer and shall provide for at
least thirty days prior written notice of any cancellation, reduction in the
amount of or material change in coverage to the Servicer. The Servicer shall not
interfere with the Mortgagor's freedom of choice in selecting either his
insurance carrier or agent, provided, however, that the Servicer shall not
accept any such insurance policies from insurance companies unless such
companies currently reflect a general policy rating of B:VI or better in Best's
Key Rating Guide and are licensed to do business in the state wherein the
property subject to the policy is located.

      Section 3.11 Maintenance of Mortgage Impairment Insurance Policy.

      In the event that the Servicer shall obtain and maintain a blanket policy
issued by an insurer that has a general policy rating of B:VI or better in
Best's Key Rating Guide insuring against hazard losses on all of the Mortgage
Loans, then, to the extent such policy provides coverage in an amount equal to
the amount required pursuant to Section 3.10 and otherwise complies with all
other requirements of Section 3.10, it shall conclusively be deemed to have
satisfied its obligations as set forth in Section 3.10, it being understood and
agreed that such policy may contain a deductible clause, in which case the
Servicer shall, in the event that there shall not have been maintained on the
related Mortgaged Property or REO Property a policy complying with Section 3.10,
and there shall have been a loss which would have been covered by such policy,
deliver to the Trustee for deposit in the Distribution Account the amount not
otherwise payable under the blanket policy because of such deductible clause,
which amount shall not be reimbursable to the Servicer from the Trust Fund. In
connection with its activities as servicer of the Mortgage Loans, the Servicer
agrees to prepare and present, on behalf of the Trustee, claims under any such
blanket policy in a timely fashion in accordance with the terms of such policy.
Upon request of the Trustee, the Servicer shall cause to be delivered to the
Trustee a certified true copy of such policy and a statement from the insurer
thereunder that such policy shall in no event be terminated or materially
modified without thirty days prior written notice to the Trustee.

      Section 3.12 Fidelity Bond, Errors and Omissions Insurance.

      The Servicer shall maintain, at its own expense, a blanket fidelity bond
(the "Fidelity Bond") and an errors and omissions insurance policy, with broad
coverage with financially responsible companies on all officers, employees or
other persons acting in any capacity with regard to the Mortgage Loans to handle
funds, money, documents and papers relating to the Mortgage Loans. The Fidelity
Bond and errors and omissions insurance shall be in the form of the Mortgage
Banker's Blanket Bond and shall protect and insure the Servicer against losses,
including forgery, theft, embezzlement, fraud, errors and omissions and
negligent acts of such persons. Such Fidelity Bond shall also protect and insure
the Servicer against losses in connection with the failure to maintain any
insurance policies required pursuant to this Agreement and the release or
satisfaction of a Mortgage Loan without having obtained payment in full of the
indebtedness secured thereby. No provision of this Section 3.12 requiring the
Fidelity Bond and errors and omissions insurance shall diminish or relieve the
Servicer from its duties and obligations as set forth in this Agreement. The
minimum coverage under any such bond and insurance policy shall be at least
equal to the corresponding amounts required by Fannie Mae in the Fannie Mae MBS
Selling and Servicing Guide or by Freddie Mac in the Freddie Mac Servicer's
Guide. Upon request of the Trustee, the Servicer shall cause to be delivered to
the requesting party a certified true copy of the Fidelity Bond

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and errors and omissions insurance policy and a statement from the surety and
the insurer that such Fidelity Bond and errors and omissions insurance policy
shall in no event be terminated or materially modified without thirty days'
prior written notice to the Trustee.

      Section 3.13 Title, Management and Disposition of REO Property and Certain
Delinquent Mortgage Loans.

            (a) In the event that title to a Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be taken (pursuant to a limited power of attorney to be provided by the
Trustee to the Servicer) in the name of the Trustee or a nominee thereof, on
behalf of the Certificateholders, or in the event the Trustee or a nominee
thereof is not authorized or permitted to hold title to real property in the
state where the REO Property is located, or would be adversely affected under
the "doing business" or tax laws of such state by so holding title, the deed or
certificate of sale shall be taken in the name of such Person or Persons as
shall be consistent with an Opinion of Counsel obtained by the Servicer from an
attorney duly licensed to practice law in the state where the REO Property is
located. Any Person or Persons holding such title other than the Trustee shall
acknowledge in writing that such title is being held as nominee for the benefit
of the Trustee.

            (b) In the event that the Trust Fund acquires any REO Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Servicer shall dispose of such REO Property before the end of
the third calendar year beginning after the year of its acquisition by the Trust
Fund for purposes of Section 860G(a)(8) of the Code or if the Trust Fund has
received (at the expense of the Trust Fund) from the Internal Revenue Service an
extension of the period during which it may hold such REO Property without such
REO Property failing to be treated as "foreclosure property" (within the meaning
of Section 860G(a)(8) of the Code), before the end of such extension, unless the
Servicer obtains an Opinion of Counsel, addressed to the Servicer and the
Trustee, to the effect that the holding by the Trust Fund of such REO Property
subsequent to such period will not: (i) result in the imposition of any tax on
"prohibited transactions" as defined in Section 860F of the Code; or (ii) cause
any REMIC constituting part of the Trust Fund to fail to qualify as a REMIC at
any time that any Certificates are outstanding, in which case the Trust Fund may
continue to hold such REO Property (subject to any conditions contained in such
Opinion of Counsel). The Servicer shall be entitled to be reimbursed from the
Collection Account for any costs incurred in obtaining such Opinion of Counsel,
as provided in Section 3.05.

      Subject to compliance with applicable laws and regulations as shall at any
time be in force, and notwithstanding any other provisions of this Agreement, no
REO Property acquired by the Trust Fund shall be rented (or allowed to continue
to be rented) or otherwise used by or on behalf of the Trust Fund in such a
manner or pursuant to any terms that would: (i) cause such REO Property to fail
to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of
the Code; or (ii) subject any REMIC constituting part of the Trust Fund to the
imposition of any federal income taxes on the income earned from such REO
Property, including any taxes imposed by reason of Sections 860F or 860G(c) of
the Code, unless the Servicer has agreed to indemnify and hold harmless the
Trust Fund with respect to the imposition of any such taxes.

      The Servicer shall manage, conserve, protect and operate each REO Property
for the Certificateholders and the Trust Fund solely for the purpose of its
prompt disposition and sale in a manner which does not cause such REO Property
to fail to qualify as "foreclosure property" within the meaning of Section
860G(a)(8) of the Code or result in the receipt by the related REMIC of any
"income from non-permitted assets" within the meaning of Section 860F(a)(2)(B)
of the Code, or any "net income from foreclosure property" which is subject to
taxation under the REMIC Provisions. The Servicer shall cause each REO Property
to be inspected promptly upon the acquisition of title thereto and shall cause
each

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REO Property to be inspected at least annually thereafter. The Servicer shall
make or cause to be made a written report of each such inspection. Such reports
shall be retained in the Mortgage Servicing File and copies thereof shall be
forwarded by the Servicer to the Trustee upon request. The Servicer shall
attempt to sell the same (and may temporarily rent the same) on such terms and
conditions as the Servicer deems to be in the best interest of the
Certificateholders and the Trust Fund.

      With respect to each REO Property, the Servicer shall account separately
for each REO Property with respect to all funds collected and received in
connection with the operation of such REO Property.

      The Servicer shall deposit or cause to be deposited, on a daily basis,
within two Business Days of receipt, in the Collection Account, all revenues
received with respect to each REO Property and shall withdraw therefrom funds
necessary for the proper operation, management and maintenance of the related
REO Property, including the cost of maintaining any hazard insurance pursuant to
Section 3.10 hereof and the fees of any managing agent acting on behalf of the
Servicer.

      The Servicer shall furnish to the Trustee, on each Servicer Remittance
Date, an operating statement for each REO Property covering the operation of
each REO Property for the previous month. Such operating statement shall be
accompanied by such other information as the Trustee shall reasonably request.

      The Servicer shall use its best efforts to dispose of the REO Property as
promptly as is practically consistent with protecting the Certificateholders'
interests.

      Each REO Disposition shall be carried out by the Servicer at such price
and upon such terms and conditions as the Servicer deems to be in the best
interest of the Certificateholders. If as of the date title to any REO Property
was acquired by the Servicer there were outstanding unreimbursed Servicing
Advances with respect to the REO Property or the related Mortgage Loan, the
Servicer, upon an REO Disposition of such REO Property, shall be entitled to
reimbursement for any related unreimbursed Servicing Advances from proceeds
received in connection with such REO Disposition. The proceeds from the REO
Disposition, net of any payment to the Servicer as provided above, shall be
deposited in the Collection Account for distribution on the succeeding Servicer
Remittance Date in accordance with Section 4.01.

      Any REO Disposition shall be for cash only (unless changes in the REMIC
Provisions made subsequent to the Startup Day allow a sale for other
consideration and an Opinion of Counsel is obtained by the Servicer to the
effect that such sale shall not cause any REMIC constituting part of the Trust
Fund to fail to qualify as a REMIC).

            (c) The Servicer may write-off any Second Lien Mortgage Loan that
has been Delinquent for a period of 180 days or more if the Servicer determines
that any amount that could be recovered on such Mortgage Loan would be less than
the cost required to achieve such recovery.

      Section 3.14 Due-on-Sale Clauses; Assumption and Substitution Agreements.

      When a Mortgaged Property has been or is about to be conveyed by the
Mortgagor, the Servicer shall, to the extent it has knowledge of such conveyance
or prospective conveyance, exercise its rights to accelerate the maturity of the
related Mortgage Loan under any "due-on-sale" clause contained in the related
Mortgage or Mortgage Note; provided, however, that the Servicer shall not
exercise any such right if the "due-on-sale" clause, in the reasonable belief of
the Servicer, is not enforceable under applicable law. An Opinion of Counsel at
the expense of the Servicer (which expense shall constitute a Servicing Advance)
delivered to the Trustee and the Depositor to the foregoing effect shall
conclusively establish

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<PAGE>

the reasonableness of such belief. In such event, the Servicer shall make
reasonable efforts to enter into an assumption and modification agreement with
the Person to whom such property has been or is about to be conveyed, pursuant
to which such Person becomes liable under the Mortgage Note and, unless
prohibited by applicable law or the Mortgage, the Mortgagor remains liable
thereon. If the foregoing is not permitted under applicable law, the Servicer is
authorized to enter into a substitution of liability agreement with such Person,
pursuant to which the original Mortgagor is released from liability and such
Person is substituted as Mortgagor and becomes liable under the Note. In
addition to the foregoing, the Servicer shall not be required to enforce any
"due-on-sale" clause if, in the reasonable judgment of the Servicer, entering
into an assumption and modification agreement with a person to whom such
Mortgaged Property shall be conveyed and releasing the original Mortgagor from
liability would be in the best interests of the Certificateholders. The Mortgage
Loan, as assumed, shall conform in all respects to the requirements,
representations and warranties of this Agreement. The Servicer shall notify the
Trustee that any such assumption or substitution agreement has been completed by
forwarding to the Trustee (or the Custodian, as the case may be) the original
copy of such assumption or substitution agreement (indicating the Mortgage File
to which it relates) which copy shall be added by the Trustee (or the Custodian,
as the case may be) to the related Mortgage File and which shall, for all
purposes, be considered a part of such Mortgage File to the same extent as all
other documents and instruments constituting a part thereof. The Servicer shall
be responsible for recording any such assumption or substitution agreements. In
connection with any such assumption or substitution agreement, the Monthly
Payment on the related Mortgage Loan shall not be changed but shall remain as in
effect immediately prior to the assumption or substitution, the stated maturity
or outstanding principal amount of such Mortgage Loan shall not be changed nor
shall any required monthly payments of principal or interest be deferred or
forgiven. Any fee collected by the Servicer for consenting to any such
conveyance or entering into an assumption or substitution agreement shall be
retained by or paid to the Servicer as additional servicing compensation.

      Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any assumption of a
Mortgage Loan by operation of law or any assumption which the Servicer may be
restricted by law from preventing, for any reason whatsoever.

      Section 3.15 Notification of Adjustments.

      On each Adjustment Date, the Servicer shall make Mortgage Interest Rate
adjustments for each Group I Mortgage Loan in compliance with the requirements
of the related Mortgage and Mortgage Note and Applicable Regulations. The
Servicer shall execute and deliver the notices required by each Mortgage and
Mortgage Note and Applicable Regulations regarding Mortgage Interest Rate
adjustments. The Servicer also shall provide timely notification to the Trustee
of all applicable data and information regarding such Mortgage Interest Rate
adjustments and the Servicer's methods of implementing such Mortgage Interest
Rate adjustments. Upon the discovery by the Servicer or the Trustee that the
Servicer has failed to adjust or has incorrectly adjusted a Mortgage Interest
Rate or a Monthly Payment pursuant to the terms of the related Mortgage Note and
Mortgage, the Servicer shall deliver to the Trustee for deposit in the
Distribution Account from its own funds the amount of any interest loss caused
thereby without reimbursement therefor; provided, however, the Servicer shall be
held harmless with respect to any Mortgage Interest Rate adjustments made by any
servicer prior to the Servicer.

      Section 3.16 Optional Purchases of Mortgage Loans by Servicer.

      The Servicer (or an affiliate of the Servicer) may, at its option,
repurchase a Mortgage Loan or REO Property which becomes 120 or more days
Delinquent or for which the Servicer has accepted a deed in lieu of foreclosure,
during the period commencing on the first day of the calendar quarter succeeding
the calendar quarter in which the Initial Delinquency Date occurred with respect
to such Mortgage Loan

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and ending on the last Business Day of such calendar quarter. If the Servicer
(or an affiliate of the Servicer) does not exercise its purchase right with
respect to a Mortgage Loan during the period specified in the preceding
sentence, such Mortgage Loan shall thereafter again become eligible for purchase
pursuant to the preceding sentence only after the Mortgage Loan ceases to be 120
days or more Delinquent and thereafter becomes 120 days Delinquent again. The
"Initial Delinquency Date" of a Mortgage Loan shall mean the date on which the
Mortgage Loan first became 120 days Delinquent. Prior to repurchase pursuant to
this Section 3.16, the Servicer shall be required to continue to make monthly
advances pursuant to Section 4.07. The Servicer shall not use any procedure in
selecting Mortgage Loans to be repurchased which is materially adverse to the
interests of the Certificateholders. The Servicer shall purchase such (i)
delinquent Mortgage Loan at a price equal to the Principal Balance of the
Mortgage Loan plus accrued interest thereon at the Mortgage Interest Rate from
the date to which interest has last been paid to the Trust Fund to the date of
purchase plus any unreimbursed Servicing Advances and Advances or (ii) REO
Property at its fair market value as determined in good faith by the Servicer.
Any such repurchase of a Mortgage Loan or REO Property pursuant to this Section
3.16(a) shall be accomplished by delivery to the Trustee for deposit in the
Distribution Account of the amount of the purchase price. The Trustee shall
immediately effectuate the conveyance of such delinquent Mortgage Loan or REO
Property to the Servicer to the extent necessary, including the prompt delivery
of all necessary documentation provided by it to the Servicer.

      Section 3.17 Trustee to Cooperate; Release of Files.

            (a) Upon the payment in full of any Mortgage Loan (including any
liquidation of such Mortgage Loan through foreclosure or otherwise, or the
receipt by the Servicer of a notification that payment in full will be escrowed
in a manner customary for such purposes), the Servicer shall deliver to the
Trustee (or the Custodian as the case may be) two executed copies of a completed
"Request for Release" in the form of Exhibit E. Upon receipt of such Request for
Release of Documents, the Trustee (or the Custodian as the case may be) shall
promptly release the related Mortgage File, in trust to (i) the Servicer, or
(ii) such other party identified in the related Request for Release. Upon any
such payment in full, or the receipt of such notification that such funds have
been placed in escrow, the Servicer shall direct the Trustee in writing to
execute an instrument of satisfaction (or assignment of Mortgage without
recourse, representation or warranty) regarding the Mortgaged Property relating
to such Mortgage, which instrument of satisfaction or assignment, as the case
may be, shall be delivered to the Person or Persons entitled thereto against
receipt therefor of payment in full, it being understood and agreed that no
expense incurred in connection with such instrument of satisfaction or
assignment, as the case may be, shall be chargeable to the Collection Account.
In lieu of executing any such satisfaction or assignment, as the case may be,
the Servicer may prepare and submit to the Trustee a satisfaction (or assignment
without recourse, representation or warranty if requested by the Person or
Persons entitled thereto) in form for execution by the Trustee with all
requisite information completed by the Servicer; in such event, the Trustee
shall execute and acknowledge such satisfaction or assignment, as the case may
be, and deliver the same with the related Mortgage File, as aforesaid.

            (b) From time to time and as appropriate in the servicing of any
Mortgage Loan, including, without limitation, foreclosure or other comparable
conversion of a Mortgage Loan or collection under any insurance policy relating
to a Mortgage Loan, the Trustee shall (except in the case of the payment or
liquidation pursuant to which the related Mortgage File is released to an escrow
agent or an employee, agent or attorney of the Trustee), upon written request of
the Servicer and delivery to the Trustee (or the Custodian, as the case may be)
of two executed copies of a "Request for Release" in the form of Exhibit E
signed by a Servicing Officer, release the related Mortgage File to the Servicer
and shall execute such documents as shall be necessary to the prosecution of any
such proceedings, including, without limitation, an assignment without recourse,
representation or warranty of the related Mortgage to the Servicer. Such receipt
shall obligate the Servicer to return the Mortgage File to the Trustee (or the

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Custodian, as the case may be) when the need therefor by the Servicer no longer
exists unless the Mortgage Loan shall be liquidated, in which case, upon receipt
of a Request for Release evidencing such liquidation, the receipt shall be
released by the Trustee (or the Custodian, as the case may be) to the Servicer.

            (c) Subject to Section 3.01, the Servicer shall have the right to
accept applications of Mortgagors for consent to (i) partial releases of
Mortgages, (ii) alterations, (iii) removal, demolition or division of properties
subject to Mortgages and (iv) second mortgage subordination agreements. No
application for approval shall be considered by the Servicer unless: (w) it has
received an Opinion of Counsel, addressed to the Trustee (which opinion shall
not be an expense of the Trustee or the Trust Fund) that such sale, disposition,
substitution, acquisition or contribution will not affect adversely the status
of any REMIC constituting part of the Trust Fund as a REMIC or cause any REMIC
constituting part of the Trust Fund to be subject to a tax on "prohibited
transactions" or "contributions" pursuant to the REMIC Provisions; (x) the
provisions of the related Note and Mortgage have been complied with; (y) the
Combined Loan-to-Value Ratio and debt-to-income ratio after any release does not
exceed the maximum Combined Loan-to-Value Ratio and debt-to-income ratio
established in accordance with the underwriting standards of the Mortgage Loans;
and (z) the lien priority of the related Mortgage is not affected. Upon receipt
by the Trustee of a Servicing Officer's certificate setting forth the action
proposed to be taken in respect of a particular Mortgage Loan and certifying
that the criteria set forth in the immediately preceding sentence have been
satisfied, the Trustee shall execute and deliver to the Servicer the consent or
partial release so requested by the Servicer. A proposed form of consent or
partial release, as the case may be, shall accompany any Servicing Officer's
certificate delivered by the Servicer pursuant to this paragraph.

      Section 3.18 Servicing Compensation.

      As compensation for its activities hereunder, the Servicer shall be
entitled to retain the amount of the Servicing Fee with respect to each Mortgage
Loan (including REO Properties). The Servicer shall be entitled to retain
additional servicing compensation in the form of release fees, bad check
charges, assumption fees, modification or extension fees, late payment charges,
customary real-estate referral fees or any other service-related fees, Insurance
Proceeds and Liquidation Proceeds not required to be deposited in the Collection
Account or the Distribution Account and similar items, to the extent collected
from Mortgagors.

      Section 3.19 Annual Statement as to Compliance.

            (a) The Servicer, at its own expense, will deliver to the Trustee
and the Depositor, not later than March 15 of each year, commencing in 2006, a
Servicing Officer's certificate stating, as to each signer thereof, that (i) a
review of the activities of the Servicer during such preceding fiscal year (or
such shorter period in the case of the first such report) and of performance
under this Agreement has been made under such officers' supervision, and (ii) to
the best of such officers' knowledge, based on such review, the Servicer has
fulfilled all its obligations under this Agreement for such year, or, if there
has been a default in the fulfillment of all such obligations, specifying each
such default known to such officers and the nature and status thereof including
the steps being taken by the Servicer to remedy such default.

            (b) Delivery of such reports, information and documents to the
Trustee is for informational purposes only and its receipt of such shall not
constitute constructive notice of any information contained therein or
determinable, from information contained therein, including the Servicer's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).

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      Section 3.20 Annual Independent Certified Public Accountants' Reports.

            (a) Not later than March 15 of each year, commencing in 2006, the
Servicer, at its expense, shall cause a nationally recognized firm of
independent certified public accountants to furnish to the Trustee and the
Depositor a report stating that (i) it has obtained a letter of representation
regarding certain matters from the management of the Servicer which includes an
assertion that the Servicer has complied with certain minimum residential
mortgage loan servicing standards, identified in either the Uniform Single
Attestation Program for Mortgage Bankers established by the Mortgage Bankers
Association of America or the Audit Program for Mortgages serviced by Freddie
Mac, with respect to the servicing of residential mortgage loans during the most
recently completed fiscal year and (ii) on the basis of an examination conducted
by such firm in accordance with standards established by the American Institute
of Certified Public Accountants, such representation is fairly stated in all
material respects, subject to such exceptions and other qualifications that may
be appropriate. Immediately upon receipt of such report, the Servicer shall
furnish a copy of such report to the Trustee, the Depositor and each Rating
Agency. Copies of such statement shall be provided by the Trustee to any
Certificateholder upon request at the Servicer's expense, provided that such
statement is delivered by the Servicer to the Trustee.

            (b) Delivery of such reports, information and documents to the
Trustee is for informational purposes only and their receipt of such shall not
constitute constructive notice of any information contained therein or
determinable, from information contained therein, including the Servicer's
compliance with any of its covenants hereunder (as to the Trustee is entitled to
rely exclusively on Officers' Certificates).

      Section 3.21 Access to Certain Documentation and Information Regarding the
Mortgage Loans.

         The Servicer shall provide to the Trustee, Certificateholders that are
federally insured savings and loan associations, the Office of Thrift
Supervision, the FDIC and the supervisory agents and examiners of each of the
foregoing (which, in the case of supervisory agents and examiners, may be
required by applicable state and federal regulations) access to the
documentation regarding the Mortgage Loans, such access being afforded without
charge but only upon reasonable request and during normal business hours at the
offices of the Servicer designated by it.

      Section 3.22 Reserved.

      Section 3.23 Obligations of the Servicer in Respect of Compensating
Interest.

      Not later than the close of business on each Servicer Remittance Date, the
Servicer shall deliver to the Trustee for deposit in the Distribution Account an
amount ("Compensating Interest") equal to the lesser of (A) the aggregate of the
Prepayment Interest Shortfalls on the Mortgage Loans for the related
Distribution Date resulting from Principal Prepayments on the Mortgage Loans
during the related Prepayment Period and (B) 50% of its aggregate Servicing Fee
received in the related Collection Period. The Servicer shall apply Compensating
Interest to offset any Prepayment Interest Shortfalls on the Mortgage Loans. The
Servicer shall not have the right to reimbursement for any amounts remitted to
the Trustee in respect of Compensating Interest. Such amounts so remitted shall
be included in the Available Funds and distributed therewith on the next
Distribution Date. The Servicer shall not be obligated to pay Compensating
Interest with respect to Prepayment Interest Shortfalls on Relief Act Interest
Shortfalls.

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      Section 3.24 Obligations of the Servicer in Respect of Mortgage Interest
Rates and Monthly Payments.

      In the event that a shortfall in any collection on or liability with
respect to any Mortgage Loan results from or is attributable to adjustments to
Mortgage Interest Rates, Monthly Payments or Principal Balances that were made
by the Servicer in a manner not consistent with the terms of the related
Mortgage Note and this Agreement, the Servicer, upon discovery or receipt of
notice thereof, immediately shall deliver to the Trustee for deposit in the
Distribution Account from its own funds the amount of any such shortfall and
shall indemnify and hold harmless the Trust Fund, the Trustee, the Depositor and
any successor servicer in respect of any such liability. Such indemnities shall
survive the termination or discharge of this Agreement.

      Section 3.25 Investment of Funds in the Collection Account and the
Distribution Account.

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

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

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

            (b) All income and gain realized from the investment of funds in the
Collection Account shall be for the benefit of the Servicer. The Servicer shall
deposit in the Collection Account the amount of any loss incurred in respect of
any such Permitted Investment made with funds in such account immediately upon
realization of such loss. Funds on deposit in the Distribution Account will
remain uninvested.

            (c) Except as otherwise expressly provided in this Agreement, if any
default occurs in the making of a payment due under any Permitted Investment, or
if a default occurs in any other performance required under any Permitted
Investment, the Trustee may and, subject to Section 8.01 and Section 8.02(a)(v),
upon the request of the Holders of Certificates representing more than 50% of
the

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Voting Rights allocated to any Class of Certificates, shall take such action as
may be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate proceedings.

      The Trustee shall not in any way be held liable by reason of any
insufficiency in any Account held by the Trustee resulting from any investment
loss on any Permitted Investment included therein (except to the extent that the
Trustee is the obligor and has defaulted thereon).

      Section 3.26 Liability of Servicer; Indemnification.

            (a) Subject to clause (b) below and Section 6.03, the Servicer (or
its successor hereunder) indemnifies and holds the Trustee, the Seller, the
Depositor and each Certificateholder harmless against any and all claims,
losses, penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments, and any other costs, fees and expenses that the Trustee, the
Depositor and any Certificateholder may sustain in any way related to the
failure of the Servicer to perform its duties and service the Mortgage Loans in
compliance with the Servicing Standards. The Servicer shall immediately notify
the Trustee, the Depositor and each Certificateholder if a claim is made that
may result in such claims, losses, penalties, fines, forfeitures, legal fees or
related costs, judgments, or any other costs, fees and expenses, and the
Servicer shall assume (with the consent of the Trustee) the defense of any such
claim and pay all expenses in connection therewith, including reasonable counsel
fees, and promptly pay, discharge and satisfy any judgment or decree which may
be entered against the Servicer, Trustee, the Depositor and/or Certificateholder
in respect of such claim. The provisions of this Section 3.26 shall survive the
termination of this Agreement, the termination or resignation of the Servicer or
the Trustee and the payment of the outstanding Certificates.

            (b) None of the Depositor, the Seller, the Servicer, or any of the
directors, officers, employees or agents of the Depositor, the Seller or the
Servicer shall be under any liability to the Trust Fund or the
Certificateholders for any action taken, or for refraining from the taking of
any action, in good faith pursuant to this Agreement, or for errors in judgment;
provided, however, that this provision shall not protect the Depositor, the
Seller or the Servicer or any such Person against any breach of warranties or
representations made herein, or against any specific liability imposed on the
Servicer for a breach of the Servicing Standard, or against any liability which
would otherwise be imposed by reason of its respective willful misfeasance, bad
faith, fraud or negligence in the performance of its duties or by reasons of
negligent disregard of its respective obligations or duties hereunder.

      The Depositor, the Servicer, the Seller and any director, officer,
employee or agent of the Depositor, the Seller or the Servicer, may rely in good
faith on any document of any kind which, prima facie, is properly executed and
submitted by any appropriate Person with respect to any matters arising
hereunder. The Depositor, the Servicer, the Seller, and any director, officer,
employee or agent of the Depositor, the Seller or the Servicer shall be
indemnified and held harmless by the Trust Fund 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 incurred in
connection with any legal action incurred by reason of its respective
misfeasance, bad faith, fraud or negligence, a breach of a representation or
warranty hereunder or (in the case of the Servicer) a breach of the Servicing
Standard in the performance of its respective duties or by reason of negligent
disregard of its respective obligations or duties hereunder. Neither the
Depositor, the Seller nor the Servicer shall be under any obligation to appear
in, prosecute or defend any legal action unless such action is related to its
respective duties under this Agreement and in its opinion does not expose it to
any expense or liability; provided, however, that the Depositor, the Seller or
the Servicer may in its discretion undertake any action related to its
obligations hereunder which it may deem necessary or desirable with respect to
this Agreement and the rights and duties of the parties hereto and the interests
of the Certificateholders hereunder.

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      Section 3.27 Reports of Foreclosure and Abandonment of Mortgaged
Properties.

      On or before the last day of February of each year beginning in 2006, the
Servicer shall file the reports of foreclosure and abandonment of any Mortgaged
Property required by Section 6050J of the Code with the Internal Revenue Service
and provide an Officer's Certificate certifying its compliance with this Section
3.27 to the Trustee. The reports from the Servicer shall be in form and
substance sufficient to meet the reporting requirements imposed by such Section
6050J.

      Section 3.28 Protection of Assets.

            (a) Except for transactions and activities entered into in
connection with the securitization that is the subject of this Agreement, the
Trust is not authorized and has no power to:

                  (1)   borrow money or issue debt;

                  (2)   merge with another entity, reorganize, liquidate or sell
                        assets; or

                  (3)   engage in any business or activities.

            (b) Each party to this Agreement agrees that it will not file an
involuntary bankruptcy petition against the Trustee or the Trust Fund or
initiate any other form of insolvency proceeding until after the Certificates
have been paid.

      Section 3.29 Periodic Filings.

            (a) The Trustee and the Servicer shall reasonably cooperate with the
Depositor in connection with the Trust's satisfying the reporting requirements
under the Exchange Act. Without limiting the generality of the foregoing, the
Trustee shall prepare on behalf of the Trust any monthly Current Reports on Form
8-K (each, a "Monthly Form 8-K") and Annual Reports on Form 10-K customary for
similar securities as required by the Exchange Act and the rules and regulations
of the Securities and Exchange Commission thereunder, and the Trustee shall sign
(other than any Annual Reports on Form 10-K) and file (via the Securities and
Exchange Commission's Electronic Data Gathering and Retrieval System) such forms
on behalf of the Trust. The Servicer shall sign any Annual Reports on Form 10-K.

            (b) Each Monthly Form 8-K shall be filed by the Trustee within 15
days after each Distribution Date (commencing on the Distribution Date occurring
in March 2006 and ending with the Distribution Date following the filing of the
Form 15 Suspension Notification as set forth in Section 3.29(h) hereof),
including a copy of the statement set forth in Section 4.06(a) hereof for such
Distribution Date as an exhibit thereto. Prior to March 30th of each year (or
such earlier date as may be required by the Exchange Act and the rules and
regulations of the Securities and Exchange Commission), the Trustee shall file a
Form 10-K, in substance as required by applicable law or applicable Securities
and Exchange Commission staff's interpretations. Such Form 10-K shall include as
exhibits the Servicer's annual statement of compliance described under Section
3.19 and the accountant's report described under Section 3.20, in each case to
the extent they have been timely delivered to the Trustee. If they are not so
timely delivered, the Trustee shall file an amended Form 10-K at the expense of
the Seller including such documents as exhibits reasonably promptly after they
are delivered to the Trustee. The Form 10-K shall also include a certification
in the form attached hereto as Exhibit N (the "Certification"), which shall be
signed by the senior officer of the Servicer in charge of servicing.

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            (c) The Trustee shall sign a certification (in the form attached
hereto as Exhibit O) for the benefit of the Servicer and its officers, directors
and Affiliates (provided, however, that the Trustee shall not undertake an
analysis of the accountant's report attached as an exhibit to the Form 10-K). No
later than the 20th day prior to the latest date on which the Form 10-K is
permitted to be filed, without regard to extension (or if such day is not a
Business Day, the immediately preceding Business Day), the Trustee shall deliver
to the Servicer (i) such certification and (ii) a completed Form 10-K to be
executed by the Servicer. No later than the 10th day prior to the latest date on
which the Form 10-K is permitted to be filed, without regard to extension (or if
such day is not a Business Day, the immediately preceding Business Day), the
Servicer shall deliver the signed Form 10-K and the signed Certification to be
filed to the Trustee. In addition, the Trustee shall indemnify and hold harmless
the Servicer and its officers, directors and Affiliates from and against any
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
fees and related costs, judgments and other costs and expenses arising out of
the Trustee's failure to deliver the certification (in the form attached hereto
as Exhibit O) pursuant to this Section 3.29(c) or any inaccuracy in such
certification, other than any losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments and other costs
and expenses arising out of the Servicer's breach of its obligations under this
Agreement. If the indemnification provided for herein is unavailable or
insufficient to hold harmless the Servicer and its officers, directors and
Affiliates, then the Trustee shall contribute to the amount paid or payable by
the Servicer, its officers, directors or Affiliates as a result of the losses,
claims, damages or liabilities of the Servicer, its officers, directors or
Affiliates in such proportion as is appropriate to reflect the relative fault of
the Servicer and its officers, directors and Affiliates on the one hand and the
Trustee on the other.

            (d) The Servicer shall indemnify and hold harmless the Trustee and
its officers, directors and Affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments and other costs and expenses arising out of the Servicer's
failure to sign and deliver either the Certification or the Form 10-K within the
time frame provided in Section 3.29(c), other than any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments and other costs and expenses arising out of the Trustee's
breach of its obligations under this Agreement. If the indemnification provided
for herein is unavailable or insufficient to hold harmless the Trustee and its
officers, directors and Affiliates, then the Servicer shall contribute to the
amount paid or payable by the Trustee, its officers, directors or Affiliates as
a result of the losses, claims, damages or liabilities of the Trustee, its
officers, directors or Affiliates in such proportion as is appropriate to
reflect the relative fault of the Trustee and its officers, directors and
Affiliates on the one hand and the Servicer on the other.

            (e) If the Securities and Exchange Commission issues additional
interpretative guidance or promulgates additional rules or regulations, or if
other changes in applicable law occur, that would require the reporting
arrangements, or the allocation of responsibilities with respect thereto,
described in this Section 3.29, to be conducted differently than as described,
the Depositor, Servicer and Trustee will reasonably cooperate to amend the
provisions of this Section 3.29 in order to comply with such amended reporting
requirements and such amendment of this Section 3.29. Any such amendment shall
be made in accordance with the first paragraph of Section 11.01 without further
consent of the Certificateholders and without the requirement to deliver notice
in writing to the Depositor, the Servicer and the Trustee from the Rating
Agencies that such action will not result in the reduction or withdrawal of the
rating of any outstanding Class of Certificates with respect to which it is a
Rating Agency. Such amendment may result in the reduction of the reports filed
by the Trustee on behalf of the Trust under the Exchange Act. Notwithstanding
the foregoing, none of the Depositor, Servicer or Trustee shall be obligated to
enter into any amendment pursuant to this Section 3.29 that adversely affects
its obligations and immunities under this Agreement.

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            (f) In filing any Monthly Form 8-K or Form 10-K, the Trustee shall
not undertake any analysis of, and shall have no responsibility for, any
financial information, accountant's report, certification or other matter
contained therein, except for computations performed by the Trustee and
reflected in the statement set forth in Section 4.06(a) hereof.

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

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

      Section 3.30 Advance Facility.

            (a) The Servicer is hereby authorized to enter into a financing or
other facility (any such arrangement, an "Advance Facility"), the documentation
for which complies with Section 3.30(e) below, under which (1) the Servicer
assigns or pledges its rights under this Agreement to be reimbursed for any or
all Advances and/or Servicing Advances to (i) a Person, which may be a
special-purpose bankruptcy-remote entity (an "SPV"), (ii) a Person, which may
simultaneously assign or pledge such rights to an SPV or (iii) a lender (a
"Lender"), which, in the case of any Person or SPV of the type described in
either of the preceding clauses (i) or (ii), may directly or through other
assignees and/or pledgees, assign or pledge such rights to a Person, which may
include a trustee acting on behalf of holders of debt instruments (any such
Person or any such Lender, an "Advance Financing Person"), and/or (2) an Advance
Financing Person agrees to fund all the Advances and/or Servicing Advances
required to be made by the Servicer pursuant to this Agreement. No consent of
the Trustee, Certificateholders or any other party shall be required before the
Servicer may enter into an Advance Facility nor shall the Trustee or the
Certificateholders be a third party beneficiary of any obligation of an Advance
Financing Person to the Servicer. Notwithstanding the existence of any Advance
Facility under which an Advance Financing Person agrees to fund Advances and/or
Servicing Advances, (A) the Servicer (i) shall remain obligated pursuant to this
Agreement to make Advances and/or Servicing Advances pursuant to and as required
by this Agreement and (ii) shall not be relieved of such obligations by virtue
of such Advance Facility and (B) neither the Advance Financing Person nor any
Servicer's Assignee (as hereinafter defined) shall have any right to proceed
against or otherwise contact any Mortgagor for the purpose of collecting any
payment that may be due with respect to any related Mortgage Loan or enforcing
any covenant of such Mortgagor under the related Mortgage Loan documents.

            (b) If the Servicer enters into an Advance Facility, the Servicer
and the related Advance Financing Person shall deliver to the Trustee at the
address set forth in Section 11.05 hereof a written notice (an "Advance Facility
Notice"), stating (a) the identity of the Advance Financing Person and (b) the
identity of the Person (the "Servicer's Assignee") that will, subject to Section
3.30(c) hereof, have the right to make withdrawals from the Collection Account
pursuant to Section 3.05 hereof to reimburse previously unreimbursed Advances
and/or Servicing Advances ("Advance Reimbursement Amounts"). Advance
Reimbursement Amounts (i) shall consist solely of amounts in respect of Advances
and/or Servicing Advances for which the Servicer would be permitted to reimburse
itself in accordance with Section 3.05 hereof, assuming the Servicer had made
the related Advance(s) and/or Servicing Advance(s) and (ii) shall not consist of
amounts payable to a successor Servicer in accordance with Section 3.05 hereof
to the extent permitted under Section 3.30(e) below.

            (c) Notwithstanding the existence of an Advance Facility, the
Servicer, on behalf of the Advance Financing Person, and the Servicer's Assignee
shall be entitled to receive reimbursements of Advances and/or Servicing
Advances in accordance with Section 3.05 hereof, which entitlement may be

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terminated by the Advance Financing Person pursuant to a written notice to the
Trustee in the manner set forth in Section 11.05 hereof. Upon receipt of such
written notice, the Servicer shall no longer be entitled to receive
reimbursement for any Advance Reimbursement Amounts and the Servicer's Assignee
shall immediately have the right to receive from the Collection Account all
Advance Reimbursement Amounts. Notwithstanding the foregoing, and for the
avoidance of doubt, (i) the Servicer and/or the Servicer's Assignee shall only
be entitled to reimbursement of Advance Reimbursement Amounts hereunder pursuant
to Section 3.05 of this Agreement and shall not otherwise be entitled to make
withdrawals of, or receive, Advance Reimbursement Amounts that shall be
deposited in the Distribution Account pursuant to Section 3.04(b) hereof, and
(ii) none of the Trustee or the Certificateholders shall have any right to, or
otherwise be entitled to, receive any Advance Reimbursement Amounts to which the
Servicer or Servicer's Assignee, as applicable, shall be entitled pursuant to
Section 3.05 hereof. An Advance Facility may be terminated by the joint written
direction of the Servicer and the related Advance Financing Person. Written
notice of such termination shall be delivered to the Trustee in the manner set
forth in Section 11.05 hereof. The Trustee shall have no duty or liability with
respect to the calculation of any Advance Reimbursement Amount and shall be
entitled to rely without independent investigation on the Advance Facility
Notice and on such Servicer's report of the amount of Advance Reimbursement
Amounts and Servicing Advance Reimbursement Amounts that were included in the
remittance from such Servicer to the Trustee pursuant to Section 4.07. Such
Servicer shall maintain and provide to any successor Servicer a detailed
accounting on a loan-by-loan basis as to amounts advanced by, pledged or
assigned to, and reimbursed to any Advance Financing Person. The successor
Servicer shall be entitled to rely on any such information provided by the
predecessor Servicer, and the successor Servicer shall not be liable for any
errors in such information.

            (d) [Reserved.]

            (e) As between a predecessor Servicer and its Advance Financing
Person, on the one hand, and a successor Servicer and its Advance Financing
Person, if any, on the other hand, Advance Reimbursement Amounts on a
loan-by-loan basis with respect to each Mortgage Loan as to which a Advance
and/or Servicing Advance shall have been made and be outstanding shall be
allocated on a "first-in, first out" basis. In the event the Servicer's Assignee
shall have received some or all of an Advance Reimbursement Amount related to
Advances and/or Servicing Advances that were made by a Person other than such
predecessor Servicer or its related Advance Financing Person in error, then such
Servicer's Assignee shall be required to remit any portion of such Advance
Reimbursement Amount to each Person entitled to such portion of such Advance
Reimbursement Amount. Without limiting the generality of the foregoing, the
Servicer shall remain entitled to be reimbursed by the Advance Financing Person
for all Advances and/or Servicing Advances funded by the Servicer to the extent
the related Advance Reimbursement Amounts have not been assigned or pledged to
such Advance Financing Person or Servicer's Assignee.

            (f) For purposes of any certification of a Servicing Officer of the
Servicer made pursuant to Section 4.07(d), any Nonrecoverable Advance referred
to therein may have been made by such Servicer or any predecessor Servicer. In
making its determination that any Advance or Servicing Advance theretofore made
has become a Nonrecoverable Advance, the Servicer shall apply the same criteria
in making such determination regardless of whether such Advance or Servicing
Advance shall have been made by the Servicer or any predecessor Servicer.

            (g) The Trustee shall not, as a result of the existence of any
Advance Facility, have any additional responsibility to track or monitor Advance
Reimbursement Amounts or any Advance Facility, and is not and shall not be
obligated to make any payment with respect to any Advance Reimbursement Amount.
The Servicer hereby indemnifies the Trustee, the Trust Fund and any successor
Servicer, as applicable, from and against any claims, losses, liabilities or
damages resulting from any

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claim by the related Advancing Person, except to the extent that such claim,
loss, liability or damage resulted from or arose out of negligence, recklessness
or willful misconduct on the part of the Trustee or the successor Servicer, or
failure by the successor Servicer to remit funds as required by this Agreement
or the commission of an act or omission to act by the successor Servicer or the
Trustee.

            Any amendment to this Section 3.30 or to any other provision of this
Agreement that may be necessary or appropriate to effect the terms of an Advance
Facility as described generally in this Section 3.30, including amendments to
add provisions relating to a successor Servicer, may be entered into by the
Trustee, the Depositor, the Seller and the Servicer without the consent of any
Certificateholder, provided such amendment complies with Section 11.01 hereof.
All reasonable costs and expenses (including attorneys' fees) of each party
hereto of any such amendment shall be borne solely by the Servicer. The parties
hereto hereby acknowledge and agree that (a) the Advances and/or Servicing
Advances financed by and/or pledged to an Advance Financing Person under any
Advance Facility are obligations owed to the Servicer payable only from the cash
flows and proceeds received under this Agreement for reimbursement of Advances
and/or Servicing Advances only to the extent provided herein, and the Trustee
and the Trust are not, as a result of the existence of any Advance Facility,
obligated or liable to pay any Advances and/or Servicing Advances financed by
the Advance Financing Person; (b) the Servicer will be responsible for remitting
to the Advance Financing Person the applicable amounts collected by it as
reimbursement for Advances and/or Servicing Advances funded by the Advance
Financing Person, subject to the provisions of this Agreement; and (c) the
Trustee shall not have any responsibility to track or monitor the administration
of the financing arrangement between the Servicer and any Advance Financing
Person.

                                   ARTICLE IV

                                  FLOW OF FUNDS

      Section 4.01 Interest Distributions.

      On each Distribution Date, the Trustee shall withdraw from the
Distribution Account the Interest Remittance Amount and apply it in the
following order of priority (based upon the Mortgage Loan information provided
to it in the Remittance Report, upon which the Trustee may conclusively rely),
the calculations required to be made by the Trustee, to the extent available:

                  (i) to the Trustee, the Trustee Fee for such Distribution
Date;

                  (ii) concurrently, as follows:

                        (A) from the Group I Interest Remittance Amount, to the
Class AV-1 Certificates, the applicable Accrued Certificate Interest for such
Distribution Date; and

                        (B) from the Group II Interest Remittance Amount to the
Class AF-1, Class AF-2, Class AF-3 and Class AF-4 Certificates, pro rata, the
applicable Accrued Certificate Interest for such Distribution Date;

                  (iii) concurrently, as follows:

                        (A) from the Group I Interest Remittance Amount, to the
Class AV-1 Certificates, the applicable Interest Carry Forward Amount for such
Distribution Date for the Class AV-1 Certificates; and

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                        (B) from the Group II Interest Remittance Amount, pro
rata, all applicable Interest Carry Forward Amounts for such Distribution Date
to the Class AF-1, Class AF-2, Class AF-3 and the Class AF-4 Certificates;

                  (iv) concurrently, as follows:

                        (A) from the Group I Interest Remittance Amount, pro
rata, to the Class AF-1, Class AF-2, Class AF-3 and Class AF-4 Certificates, any
unpaid Accrued Certificate Interest and Interest Carry Forward Amount for each
such Class for such Distribution Date; and

                        (B) from the Group II Interest Remittance Amount, to the
Class AV-1 Certificates, any unpaid Accrued Certificate Interest and Interest
Carry Forward Amount for such Class for such Distribution Date;

                  (v) to the Class M-1 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date;

                  (vi) to the Class M-2 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date;

                  (vii) to the Class M-3 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date;

                  (viii) to the Class B-1 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date;

                  (ix) to the Class B-2 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date;

                  (x) to the Class B-3 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date;

                  (xi) to the Class B-4 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date; and

                  (xii) the amount, if any, of the Interest Remittance Amount
remaining after application with respect to the priorities set forth above will
be applied as described under Section 4.02(b) hereof.

      Section 4.02 Distributions of Principal and Monthly Excess Cashflow
Amounts.

            (a) On each Distribution Date, the Trustee shall make the following
distributions in the following order of priority (based upon the Mortgage Loan
information provided to it in the Remittance Report), and the calculations
required to be made by the Trustee, to the extent of the Principal Distribution
Amount:

                  (i) before the Stepdown Date or with respect to which a
Trigger Event is in effect, sequentially, as follows:

                        (A) concurrently, as follows:

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                              (1) the Group I Principal Distribution Amount to
the Class AV-1 Certificates, until the Certificate Principal Balance thereof has
been reduced to zero; and

                              (2) the Group II Principal Distribution Amount,
concurrently, pro rata, as follows: (a) to the Class AF-4 Certificates, the
Class AF-4 Lockout Distribution Amount; and (b) sequentially, to the Class AF-1
Certificates until the Certificate Principal Balance thereof has been reduced to
zero, to the Class AF-2 Certificates until the Certificate Principal Balance
thereof has been reduced to zero, to the Class AF-3 Certificates until the
Certificate Principal Balance thereof has been reduced to zero and to the Class
AF-4 Certificates until the Certificate Principal Balance thereof has been
reduced to zero, in that order;

                        (B) concurrently, as follows:

                              (1) the Group I Principal Distribution Amount
remaining after distributions pursuant to priority (A)(1) above, pro rata, as
follows: (a) to the Class AF-4 Certificates, the Class AF-4 Lockout Distribution
Amount and (b) sequentially, to the Class AF-1 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero, to the Class
AF-2 Certificates, until the Certificate Principal Balance thereof has been
reduced to zero, to the Class AF-3 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero, and to the Class AF-4 Certificates,
until the Certificate Principal Balance thereof has been reduced to zero, in
that order; and

                              (2) the Group II Principal Distribution Amount
remaining after distributions pursuant to priority (A)(2) above, to the Class
AV-1 Certificates, until the Certificate Principal Balance thereof has been
reduced to zero;

                        (C) to the Holders of the Class M-1 Certificates, 100%
of the remaining Principal Distribution Amount for such Distribution Date, until
the Certificate Principal Balance of the Class M-1 Certificates has been reduced
to zero;

                        (D) to the Holders of the Class M-2 Certificates, 100%
of the remaining Principal Distribution Amount, until the Certificate Principal
Balance of the Class M-2 Certificates has been reduced to zero;

                        (E) to the Holders of the Class M-3 Certificates, 100%
of the remaining Principal Distribution Amount, until the Certificate Principal
Balance of the Class M-3 Certificates has been reduced to zero;

                        (F) to the Holders of the Class B-1 Certificates, 100%
of the remaining Principal Distribution Amount, until the Certificate Principal
Balance of the Class B-1 Certificates has been reduced to zero;

                        (G) to the Holders of the Class B-2 Certificates, 100%
of the remaining Principal Distribution Amount, until the Certificate Principal
Balance of the Class B-2 Certificates has been reduced to zero

                        (H) to the Holders of the Class B-3 Certificates, 100%
of the remaining Principal Distribution Amount, until the Certificate Principal
Balance of the Class B-3 Certificates has been reduced to zero;

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                        (I) to the Holders of the Class B-4 Certificates, 100%
of the remaining Principal Distribution Amount, until the Certificate Principal
Balance of the Class B-4 Certificates has been reduced to zero; and

                        (J) any amount of the Principal Distribution Amount
remaining after making all of the distributions in clauses (A), (B), (C), (D),
(E), (F), (G), (H) and (I) shall be applied as set forth in Section 4.02(b).

                  (ii) on or after the Stepdown Date and as long as a Trigger
Event is not in effect:

                        (A) concurrently as follows:

                              (1) the Group I Principal Distribution Amount to
the Class AV-1 Certificates, until the Certificate Principal Balance thereof has
been reduced to zero; and

                              (2) the Group II Principal Distribution Amount,
concurrently, pro rata, as follows (a) to the Class AF-4 Certificates, the Class
AF-4 Lockout Distribution Amount and (b) sequentially, to the Class AF-1
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero, to the Class AF-2 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero, to the Class AF-3 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero, and to the Class
AF-4 Certificates, until the Certificate Principal Balance thereof has been
reduced to zero, in that order;

                        (B) concurrently, as follows:

                              (1) the Group I Principal Distribution Amount
remaining after distributions pursuant to priority (A)(1) above, pro rata, as
follows: (a) to the Class AF-4 Certificates, the Class AF-4 Lockout Distributin
Amount and (b) sequentially to the Class AF-1 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero, to the Class
AF-2 Certificates, until the Certificate Principal Balance thereof has been
reduced to zero, to the Class AF-3 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero, and to the Class AF-4 Certificates,
until the Certificate Principal Balance thereof has been reduced to zero, in
that order; and

                              (2) the Group II Principal Distribution Amount
remaining after distributions pursuant to priority (A)(2) above, to the Class
AV-1 Certificates, until the Certificate Principal Balance thereof has been
reduced to zero;

                        (C) the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the sum of the amount distributed to the Class A
Certificates in clauses (A) and (B) above and (y) the Class M-1 Principal
Distribution Amount will be distributed to the Class M-1 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero;

                        (D) the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the sum of the amount distributed to the Class A
Certificates in clauses (A) and (B) above and the amount distributed to the
Class M-1 Certificates in clause (C) above and (y) the Class M-2 Principal
Distribution Amount will be distributed to the Class M-2 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero;

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                        (E) the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the sum of the amount distributed to the Class A
Certificates in clauses (A) and (B) above, the amount distributed to the Class
M-1 Certificates in clause (C) above and the amount distributed to the Class M-2
Certificates in clause (D) above and (y) the Class M-3 Principal Distribution
Amount will be distributed to the Class M-3 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;

                        (F) the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the sum of the amount distributed to the Class A
Certificates pursuant to clauses (A) and (B) above, the amount distributed to
the Class M-1 Certificates pursuant to clause (C) above, the amount distributed
to the Class M-2 Certificates pursuant to clause (D) above and the amount
distributed to the Class M-3 Certificates pursuant to clause (E) above and (y)
the Class B-1 Principal Distribution Amount will be distributed to the Class B-1
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero;

                        (G) the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the sum of the amount distributed to the Class A
Certificates pursuant to clauses (A) and (B) above, the amount distributed to
the Class M-1 Certificates pursuant to clause (C) above, the amount distributed
to the Class M-2 Certificates pursuant to clause (D) above, the amount
distributed to the Class M-3 Certificates pursuant to clause (E) above and the
amount distributed to the Class B-1 Certificates pursuant to clause (F) above
and (y) the Class B-2 Principal Distribution Amount will be distributed to the
Class B-2 Certificates, until the Certificate Principal Balance thereof has been
reduced to zero;

                        (H) the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the sum of the amount distributed to the Class A
Certificates pursuant to clauses (A) and (B) above, the amount distributed to
the Class M-1 Certificates pursuant to clause (C) above, the amount distributed
to the Class M-2 Certificates pursuant to clause (D) above, the amount
distributed to the Class M-3 Certificates pursuant to clause (E) above, the
amount distributed to the Class B-1 Certificates pursuant to clause (F) above
and the amount distributed to the Class B-2 Certificates pursuant to clause (G)
above and (y) the Class B-3 Principal Distribution Amount will be distributed to
the Class B-3 Certificates, until the Certificate Principal Balance thereof has
been reduced to zero;

                        (I) the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the sum of the amount distributed to the Class A
Certificates pursuant to clauses (A) and (B) above, the amount distributed to
the Class M-1 Certificates pursuant to clause (C) above, the amount distributed
to the Class M-2 Certificates pursuant to clause (D) above, the amount
distributed to the Class M-3 Certificates pursuant to clause (E) above, the
amount distributed to the Class B-1 Certificates pursuant to clause (F) above,
the amount distributed to the Class B-2 Certificates pursuant to clause (G)
above and the amount distributed to the Class B-3 Certificates pursuant to
clause (H) above and (y) the Class B-4 Principal Distribution Amount will be
distributed to the Class B-4 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; and

                        (J) any amount of the Principal Distribution Amount
remaining after making all of the distributions in clauses (A), (B), (C), (D),
(E), (F), (G), (H) and (I) above shall be applied as set forth in Section
4.02(b).

            (b) On each Distribution Date, any Monthly Excess Cashflow Amount
shall be distributed, to the extent available, in the following order of
priority on such Distribution Date:

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                  (i) to pay any remaining unpaid Accrued Certificate Interest
for such Distribution Date, pro rata, among the Class AV-1, Class AF-1, Class
AF-2, Class AF-3, Class AF-4 Certificates;

                  (ii) pro rata, to pay any remaining Interest Carry Forward
Amounts for the classes of Class A Certificates, if any, among the Class AV-1,
Class AF-1, Class AF-2, Class AF-3 and Class AF-4 Certificates;

                  (iii) to pay the Extra Principal Distribution Amount for such
Distribution Date in accordance with Section 4.02(a);

                  (iv) to pay any remaining unpaid Accrued Certificate Interest
for such Distribution Date for the Class M-1 Certificates;

                  (v) to pay the remaining Class M-1 Interest Carry Forward
Amount, if any;

                  (vi) to pay the Class M-1 Realized Loss Amortization Amount
for such Distribution Date;

                  (vii) to pay any remaining unpaid Accrued Certificate Interest
for such Distribution Date for the Class M-2 Certificates;

                  (viii) to pay the remaining Class M-2 Interest Carry Forward
Amount, if any;

                  (ix) to pay the Class M-2 Realized Loss Amortization Amount
for such Distribution Date;

                  (x) to pay any remaining unpaid Accrued Certificate Interest
for such Distribution Date for the Class M-3 Certificates;

                  (xi) to pay the remaining Class M-3 Interest Carry Forward
Amount, if any;

                  (xii) to pay the Class M-3 Realized Loss Amortization Amount
for such Distribution Date;

                  (xiii) to pay any remaining unpaid Accrued Certificate
Interest for such Distribution Date for the Class B-1 Certificates;

                  (xiv) to pay the remaining Class B-1 Interest Carry Forward
Amount, if any;

                  (xv) to pay the Class B-1 Realized Loss Amortization Amount
for such Distribution Date;

                  (xvi) to pay any remaining unpaid Accrued Certificate Interest
for such Distribution Date for the Class B-2 Certificates;

                  (xvii) to pay the remaining Class B-2 Interest Carry Forward
Amount, if any;

                  (xviii) to pay the Class B-2 Realized Loss Amortization Amount
for such Distribution Date;

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                  (xix) to pay any remaining unpaid Accrued Certificate Interest
for such Distribution Date for the Class B-3 Certificates;

                  (xx) to pay the remaining Class B-3 Interest Carry Forward
Amount, if any;

                  (xxi) to pay the Class B-3 Realized Loss Amortization Amount
for such Distribution Date;

                  (xxii) to pay any remaining unpaid Accrued Certificate
Interest for such Distribution Date for the Class B-4 Certificates;

                  (xxiii) to pay the remaining Class B-4 Interest Carry Forward
Amount, if any;

                  (xxiv) to pay the Class B-4 Realized Loss Amortization Amount
for such Distribution Date;

                  (xxv) to pay the Class R Excess Interest Amount for such
Distribution Date;

                  (xxvi) to pay the Class R Excess Interest Carryforward Amount
for such Distribution Date;

                  (xxvii) to the Class AV-1 Certificates, the aggregate amount
of any LIBOR Carryover Amount due to such Certificates;

                  (xxviii) sequentially, to the Class M-1, Class M-2, Class M-3,
Class B-1, Class B-2, Class B-3 and Class B-4 Certificates, in that order, any
LIBOR Carryover Amount due to such Certificates;

                  (xxix) to pay the Class N Certificates, from the remaining
amount distributable on the Class X/N Interest, (A) the Accrued Certificate
Interest for the Class N Certificates, (B) the unpaid Interest Carry Forward
Amount for the Class N Certificates and (C) any remaining Monthly Excess
Cashflow Amount to reduce the Class N Notional Amount, until the Class N
Notional Amount has been reduced to zero; and

                  (xxx) to the Class X Certificates, the Class X Distributable
Amount for such Distribution Date.

      On each Distribution Date, there shall be distributed to the Holders of
the Class R Certificates any remaining amount in the Distribution Account on
such date after the application pursuant to Sections 4.01, 4.02(a),
4.02(b)(i)-(xxx) and 4.02(c).

            (c) On each Distribution Date, all prepayment penalties (including
amounts deposited in connection with the full or partial waiver of such
prepayment penalties pursuant to Section 3.01) shall be allocated to the Class N
Certificates (first as payments of Accrued Certificate Interest for the Class N
Certificates, then as payments in respect of the unpaid Interest Carry Forward
Amount for the Class N Certificates and finally as payments in respect of the
Class N Notional Amount) for so long as the Notional Amount of the Class N
Certificates is greater than zero pursuant to Section 4.02(b)(xxix) above and
this Section 4.02(c)), and to the Class X Certificates after the Class N
Notional Amount has been reduced to zero.

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            (d) Any amounts distributed to the Certificates in respect of LIBOR
Carryover Amounts pursuant to Sections 4.02(b)(xxvii) and (xxviii) shall first
be deemed distributed by REMIC 2 as a distribution in respect of the REMIC 2 X/N
Interest, to REMIC X/N and distributed thereby as a distribution to the REMIC
X/N Class X/N Interest, and then distributed to the Certificates from the
Grantor Trust as payments on notional principal contracts in the nature of cap
contracts. The Trustee shall account for the rights to receive LIBOR Carryover
Amounts as rights in a limited recourse interest rate cap contract written by
the Holder of the Class X/N Interest. For federal information reporting
purposes, such rights shall be assigned a value of zero.

            (e) Any amounts distributed to the Class B-2 Certificates pursuant
to Section 4.01 or this Section 4.02, other than LIBOR Carryover Amounts, shall
be deemed distributed by REMIC 2 to REMIC B-2 in respect of the REMIC 2 B-2
Interest, and distributed thereby as a distribution in respect of the REMIC B-2
B-2 Interest. Any amounts distributed to the Class B-3 Certificates pursuant to
Section 4.01 or this Section 4.02, other than LIBOR Carryover Amounts, shall be
deemed distributed by REMIC 2 to REMIC B-3 in respect of the REMIC 2 B-3
Interest, and distributed thereby as a distribution in respect of the REMIC B-3
B-3 Interest. Any amounts distributed to the Class B-4 Certificates pursuant to
Section 4.01 or this Section 4.02, other than LIBOR Carryover Amounts, shall be
deemed distributed by REMIC 2 to REMIC B-4 in respect of the REMIC 2 B-4
Interest, and distributed thereby as a distribution in respect of the REMIC B-4
B-4 Interest.

      Section 4.03 Allocation of Losses.

      Realized Losses shall be allocated first against any Initial
Overcollateralization Amount remaining and second to the Subsequent
Overcollateralization Amount, until the Overcollateralization Amount has been
reduced to zero. If, after giving effect to the distribution of the Principal
Distribution Amount on any Distribution Date the aggregate Certificate Principal
Balance of the Offered Certificates and Class B-4 Certificates exceeds the Pool
Balance as of the end of the related Collection Period, such excess will be
allocated against the Class B-4, Class B-3, Class B-2, Class B-1, Class M-3,
Class M-2 and Class M-1 Certificates, in that order, until the respective
Certificate Principal Balances thereof are reduced to zero.

      Special Hazard Losses will be allocated as described above, provided that
if the cumulative amount of such losses, as of any date of determination,
exceeds the greatest of (i) 1.0% of the Pool Balance as of the Cut-off Date,
(ii) two times the amount of the principal balance of the largest Mortgage Loan
as of the date of determination and (iii) an amount equal to the aggregate
principal balances of the Mortgage Loans in the largest zip-code concentration
in the State of California as of the date of determination, such losses will be
allocated among the Class M-1, Class M-2, Class M-3, Class B-1, Class B-2, Class
B-3 and Class B-4 Certificates, pro rata, based on their respective Certificate
Principal Balances.

      Section 4.04 Method of Distribution.

      The Trustee shall make distributions in respect of a Distribution Date to
each Certificateholder of record on the related Record Date (other than as
provided in Section 10.01 respecting the final distribution), in the case of
Certificateholders of the Certificates, by wire transfer in immediately
available funds to the account of the Person entitled thereto if such Person
shall have so notified the Trustee in writing at least five Business Days prior
to the Record Date immediately prior to such Distribution Date and is the
registered owner of such Certificates the aggregate initial Certificate
Principal Balance or Notional Amount of which is in excess of $5,000,000, or by
check mailed by first class mail to the address of the Person entitled thereto,
as such name and address shall appear on the Certificate Register, provided that
the Trustee may deduct a reasonable wire transfer fee from any payment made by
wire

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transfer. Distributions among Certificateholders shall be made in proportion to
the Percentage Interests evidenced by the Certificates held by such
Certificateholders.

      Section 4.05 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 Certificates. None of the Trustee, the Depositor, the Servicer or the Seller
shall have any responsibility therefor except as otherwise provided by
applicable law.

      Section 4.06 Statements.

            (a) On each Distribution Date, based, as applicable, on the Mortgage
Loan information contained in the Remittance Report, the Trustee shall prepare
and post on its website at www.jpmorgan.com/sfr, a statement as to the
distributions made on such Distribution Date:

                  (i) the amount of the distribution made on such Distribution
Date to the Holders of each Class of Certificates allocable to principal or
reduction of Notional Amount, separately identified;

                  (ii) the amount of the distribution made on such Distribution
Date to the Holders of each Class of Certificates allocable to interest or Class
X Distributable Amount, separately identified;

                  (iii) the Overcollateralization Amount, the
Overcollateralization Release Amount, the Overcollateralization Deficiency and
the Targeted Overcollateralization Amount as of such Distribution Date and the
Monthly Excess Interest Amount and Monthly Excess Cashflow Amount for such
Distribution Date;

                  (iv) the aggregate amount of servicing compensation received
by the Servicer during the related Collection Period;

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

                  (vi) the Pool Balance and the Loan Group Balance for each Loan
Group at the close of business at the end of the related Collection Period;

                  (vii) separately stated for each Loan Group, the number,
weighted average remaining term to maturity and weighted average Mortgage
Interest Rate of the Mortgage Loans as of the related Due Date;

                  (viii) separately stated for each Loan Group, the number and
aggregate unpaid principal balance of Mortgage Loans (a) 30 to 59 days past due
on a contractual basis, (b) 60 to 89 days past due on a contractual basis, (c)
90 or more days past due on a contractual basis, (d) as to which

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foreclosure proceedings have been commenced and (e) in bankruptcy as of the
close of business on the last day of the calendar month preceding such
Distribution Date;

                  (ix) separately stated for each Loan Group, with respect to
any Mortgage Loan that became an REO Property during the preceding calendar
month, the loan number of such Mortgage Loan, the unpaid principal balance and
the Principal Balance of such Mortgage Loan as of the date it became an REO
Property;

                  (x) separately stated for each Loan Group, the book value of
any REO Property as of the close of business on the last Business Day of the
calendar month preceding the Distribution Date, and, cumulatively, the total
number and cumulative principal balance of all REO Properties as of the close of
business of the last day of the preceding Collection Period;

                  (xi) separately stated for each Loan Group, the aggregate
amount of Principal Prepayments made during the related Prepayment Period;

                  (xii) the aggregate amount of prepayment penalties collected
(including amounts deposited in connection with the full or partial waiver of
such prepayment penalties pursuant to Section 3.01) during the related
Collection Period and the amounts thereof allocable to the Class N Certificates
and the Class X Certificates;

                  (xiii) separately stated for each Loan Group, the aggregate
amount of Realized Losses incurred during the related Collection Period and the
cumulative amount of Realized Losses;

                  (xiv) the Certificate Principal Balance, or Notional Amount,
as applicable, of each Class of Certificates, after giving effect to the
distributions, and allocations of Realized Losses or Applied Realized Loss
Amounts, as applicable, made on such Distribution Date, separately identifying
any reduction thereof due to allocations of Realized Losses or Applied Realized
Loss Amounts;

                  (xv) the Accrued Certificate Interest in respect of each Class
of Offered Certificates and Class B-4 Certificates for such Distribution Date,
separately identifying the portions thereof attributable to LIBOR Carryover
Amounts, and the respective portions thereof, if any, remaining unpaid following
the distributions made in respect of such Certificates on such Distribution
Date;

                  (xvi) the aggregate amount of any Prepayment Interest
Shortfalls for such Distribution Date, to the extent not covered by payments by
the Servicer pursuant to Section 3.23;

                  (xvii) [Reserved];

                  (xviii) [Reserved];

                  (xix) the amount of the Trustee Fee paid;

                  (xx) the LIBOR Carryover Amounts distributed on such
Distribution Date;

                  (xxi) any Overcollateralization Deficiency after giving effect
to the distribution of principal on such Distribution Date;

                  (xxii) whether a Trigger Event has occurred and is continuing,
and the cumulative Realized Losses, as a percentage of the original Pool
Balance;

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                  (xxiii) the Available Funds;

                  (xxiv) the rate at which interest accrues for each Class of
Certificates for such Distribution Date;

                  (xxv) the Liquidation Report for such Distribution Date;

                  (xxvi) the aggregate Principal Balance of Mortgage Loans
purchased by the Servicer or Seller during the related Collection Period and
indicating the Section of this Agreement requiring or allowing the purchase of
each such Mortgage Loan; and

                  (xxvii) the aggregate Principal Balance of the Mortgage Loans
repurchased by the Servicer (or an affiliate) during the related Collection
Period in connection with Section 3.16.

      Parties that are unable to use www.jpmorgan.com/sfr are entitled to have a
paper copy mailed to them via first class mail by calling the Trustee at (877)
722-1095 and indicating such. The Trustee shall have the right to change the way
such statements are distributed in order to make such distribution more
convenient and/or more accessible to the above parties and the Trustee shall
provide timely and adequate notification to all above parties regarding any such
changes.

      The Trustee may fully rely upon and shall have no liability with respect
to information with respect to the Mortgage Loans provided by the Servicer.

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

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

            (c) On each Distribution Date, the Trustee shall make available to
the Residual Certificateholders a copy of the reports made available to the
Regular Certificateholders in respect of such Distribution Date with such other
information as the Trustee deems necessary or appropriate. Such obligation of
the Trustee shall be deemed to have been satisfied to the extent that
substantially comparable information shall be prepared and furnished to Residual
Certificateholders by the Trustee pursuant to any requirements of the Code as
from time to time in force.

      Section 4.07 Remittance Reports; Advances.

            (a) On the second Business Day following each Determination Date but
in no event less than four Business Days prior to the related Distribution Date,
the Servicer shall deliver to the Trustee by telecopy (or by such other means as
the Servicer and the Trustee may agree from time to time) a Remittance Report
with respect to the related Distribution Date. On the same date, the Servicer
shall forward to the Trustee by overnight mail a computer readable magnetic tape
or diskette or in such other medium as may be agreed between the Servicer and
the Trustee containing the information set forth in

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such Remittance Report with respect to the related Distribution Date. Not later
than the close of business New York time on the Servicer Remittance Date, the
Servicer shall deliver or cause to be delivered to the Trustee in addition to
the information provided on the Remittance Report, such other information
reasonably available to it with respect to the Mortgage Loans as the Trustee may
reasonably request or order in order for the Trustee to perform the calculations
necessary to make the distributions contemplated by Section 4.01, 4.02 and 4.03
and to prepare the statements to Certificateholders contemplated by Section
4.06. The Trustee shall not be responsible to recompute, recalculate or verify
any information provided to it by the Servicer.

            (b) The amount of Advances to be made by the Servicer for any
Distribution Date shall equal, subject to Section 4.07(d), the sum of (i) the
aggregate amount of Monthly Payments (net of the related Servicing Fee), due
during the related Collection Period in respect of the Mortgage Loans, which
Monthly Payments were delinquent on a contractual basis as of the close of
business on the related Determination Date and (ii) with respect to each REO
Property, which REO Property was acquired during or prior to the related
Prepayment Period and as to which such REO Property an REO Disposition did not
occur during the related Prepayment Period, an amount equal to the excess, if
any, of the interest portion of Monthly Payments (net of the related Servicing
Fee) that would have been due on the related Due Date in respect of the related
Mortgage Loans, over the net income from such REO Property deposited in the
Collection Account pursuant to Section 3.13 for distribution on such
Distribution Date. For purposes of the preceding sentence, the Monthly Payment
on each Balloon Mortgage Loan with a delinquent Balloon Payment is equal to the
assumed monthly payment that would have been due on the related Due Date based
on the original principal amortization schedule for the such Balloon Mortgage
Loan. The Servicer shall not be required to make any Advances with respect to
the principal portion of the Monthly Payments that would have been due on the
related Due Date with respect to Second Lien Mortgage Loans and shall not make
any Advances with respect to the principal portion of the Monthly Payments that
would have been due on the related Due Date with respect to REO Properties.

      On or before the close of business New York time on the Servicer
Remittance Date, the Servicer shall remit in immediately available funds to the
Trustee for deposit in the Distribution Account an amount equal to the aggregate
amount of Advances, if any, to be made in respect of the Mortgage Loans and REO
Properties for the related Distribution Date either (i) from its own funds or
(ii) from the Collection Account, to the extent of funds held therein for future
distribution (in which case it will cause to be made an appropriate entry in the
records of the Collection Account that amounts held for future distribution have
been, as permitted by this Section 4.07, used by the Servicer in discharge of
any such Advance) or (iii) in the form of any combination of (i) and (ii)
aggregating the total amount of Advances to be made by the Servicer with respect
to the Mortgage Loans and REO Properties. In addition, the Servicer shall have
the right to reimburse itself for any such Advance from amounts held from time
to time in the Collection Account to the extent such amounts are not then
required to be distributed. Any amounts held for future distribution and so used
shall be appropriately reflected in the Servicer's records and replaced by the
Servicer by deposit in the Collection Account on or before any future Servicer
Remittance Date to the extent that the Available Funds for the related
Distribution Date (determined without regard to Advances to be made on the
Servicer Remittance Date) shall be less than the total amount that would be
distributed to the Classes of Certificateholders pursuant to Section 4.01 and
4.02 on such Distribution Date if such amounts held for future distributions had
not been so used to make Advances. The Trustee will provide notice to the
Servicer by telecopy by the close of business on any Servicer Remittance Date in
the event that the amount remitted by the Servicer to the Trustee on such date
is less than the Advances required to be made by the Servicer for the related
Distribution Date, as set forth in the related Remittance Report.

            (c) The obligation of the Servicer to make such Advances is
mandatory, notwithstanding any other provision of this Agreement but subject to
(d) below, and, with respect to any

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Mortgage Loan or REO Property, shall continue until the earlier of such time as
the Trust acquires title to the related Mortgaged Property or such Mortgage Loan
is paid in full by the Mortgagor or disposed of by the Trust, or until the
recovery of all Liquidation Proceeds thereon.

            (d) Notwithstanding anything herein to the contrary, no Advance or
Servicing Advance shall be required to be made hereunder by the Servicer if such
Advance would, if made, constitute a Nonrecoverable Advance. The determination
by the Servicer that it has made a Nonrecoverable Advance or that any proposed
Advance, if made, would constitute a Nonrecoverable Advance, shall be evidenced
by an Officers' Certificate of the Servicer delivered to the Depositor and the
Trustee.

      Section 4.08 REMIC Distributions.

            (a) REMIC X/N. All amounts deemed distributed in respect of the
REMIC 2 X/N Interest shall be treated as received by REMIC X/N then distributed
by REMIC X/N in respect of the REMIC X/N X/N Interest. All allocations of
Applied Realized Loss Amounts and Realized Loss Amortization Amounts to the
REMIC 2 X/N Interest shall result in similar allocations to the REMIC X/N X/N
Interest.

            (b) REMIC B-4. All amounts deemed distributed in respect of the
REMIC 2 B-4 Interest shall be treated as received by REMIC B-4 then distributed
by REMIC B-4 in respect of the REMIC B-4 B-4 Interest. All allocations of
Applied Realized Loss Amounts and Realized Loss Amortization Amounts to the
REMIC 2 B-4 Interest shall result in similar allocations to the REMIC B-4 B-4
Interest. If on any Distribution Date the Class Principal Balance of the Class
B-4 Certificates is increased pursuant to the last sentence of the definition of
"Certificate Principal Balance", then there shall be an equivalent increase in
the principal amount of the REMIC B-4 B-4 Interest on such Distribution Date.

            (c) REMIC B-3. All amounts deemed distributed in respect of the
REMIC 2 B-3 Interest shall be treated as received by REMIC B-3 then distributed
by REMIC B-3 in respect of the REMIC B-3 B-3 Interest. All allocations of
Applied Realized Loss Amounts and Realized Loss Amortization Amounts to the
REMIC 2 B-3 Interest shall result in similar allocations to the REMIC B-3 B-3
Interest. If on any Distribution Date the Class Principal Balance of the Class
B-3 Certificates is increased pursuant to the last sentence of the definition of
"Certificate Principal Balance", then there shall be an equivalent increase in
the principal amount of the REMIC B-3 B-3 Interest on such Distribution Date.

            (d) REMIC B-2. All amounts deemed distributed in respect of the
REMIC 2 B-2 Interest shall be treated as received by REMIC B-2 then distributed
by REMIC B-2 in respect of the REMIC B-2 B-2 Interest. All allocations of
Applied Realized Loss Amounts and Realized Loss Amortization Amounts to the
REMIC 2 B-2 Interest shall result in similar allocations to the REMIC B-2 B-2
Interest. If on any Distribution Date the Class Principal Balance of the Class
B-2 Certificates is increased pursuant to the last sentence of the definition of
"Certificate Principal Balance", then there shall be an equivalent increase in
the principal amount of the REMIC B-2 B-2 Interest on such Distribution Date.

            (e) REMIC 2. On each Distribution Date, REMIC 2 shall be deemed to
have received the amounts deemed distributed in respect of the REMIC 1 Regular
Interests. Principal, interest, shortfalls and Realized Losses shall be deemed
paid to and allocated among the REMIC 2 Regular Interests in the same manner as
such items (other than payments to the Cap Carryover Certificates in respect of
LIBOR Carryover Amounts, which shall be deemed paid in respect of the REMIC 2
X/N

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Interest if made pursuant to Section 4.02(b)(xxvii) or (xxviii)) are paid or
allocated in respect of the related Certificates (the REMIC 2 AV-1 Interest
being related to the Class AV-1 Certificates, the REMIC 2 M-1 Interest being
related to the Class M-1 Certificates, the REMIC 2 M-2 Interest being related to
the Class M-2 Certificates, the REMIC 2 M-3 Interest being related to the Class
M-3 Certificates, the REMIC 2 B-1 Interest being related to the Class B-1
Certificates, the REMIC 2 B-2 Interest being related to the Class B-2
Certificates, the REMIC 2 B-3 Interest being related to the Class B-3
Certificates and the REMIC 2 B-4 Interest being related to the Class B-4
Certificates). On each Distribution Date, principal shall be paid to, Realized
Losses shall be allocated to and accrued but unpaid interest shall be added to
the principal amount of the REMIC 2 X/N Interest so that such principal amount
shall equal the excess of (i) the Pool Balance as of the close of the related
Collection Period over (ii) the aggregate Certificate Principal Balance of each
Class of Certificates on such Distribution Date after all principal payments
have been made and Realized Losses have been allocated to such Certificates
(other than the Class X or Class N Certificates). The portion of Available Funds
remaining in REMIC 2 on a Distribution Date after all distributions have been
made to the REMIC 2 Regular Interests shall be distributed to the Class R
Certificates in respect of the Class R-2 Interest. If on any Distribution Date
the Class Principal Balance of any Class of Certificates is increased pursuant
to the last sentence of the definition of "Certificate Principal Balance", then
there shall be an equivalent increase in the principal amounts of the REMIC 2
Regular Interests, with each Corresponding REMIC 2 Regular Interest having an
increase in its principal amount equal to the increase in the Class Principal
Balance of the Corresponding Cap Carryover Certificates.

            (f) REMIC 1. On each Distribution Date, the REMIC 1 Regular
Interests shall receive distributions of interest and principal equal in the
aggregate to amounts distributable pursuant to Sections 4.01 and 4.02 (other
than to the Class R Certificates pursuant the last sentence of Section 4.02(b))
from amounts on deposit in the Distribution Account. Amounts with respect to
interest shall accrue on the REMIC 1 Regular Interests at the rates specified in
the Preliminary Statement. Payments and Realized Losses shall be allocated among
the REMIC 1 Regular Interests so that (i) each of the Marker Interests shall
have a principal balance equal to 25% of the principal balance of the related
REMIC 2 Regular Interest (with, for purposes of this Section 4.08(i), the Class
AF-1 Certificates being related to the Class LT1-AF1 Interest, the Class AF-2
Certificates being related to the Class LT1-AF2 Interest, the Class AF-3
Certificates being related to the Class LT1-AF3 Interest, the Class AF-4
Certificates being related to the Class LT1-AF4 Interest, the REMIC 2 AV-1
Interest being related to the Class LT1-AV1 Interest, the REMIC 2 M-1 Interest
being related to the Class LT1-M1 Interest, the REMIC 2 M-2 Interest being
related to the Class LT1-M2 Interest, the REMIC 2 M-3 Interest being related to
the Class LT1-M3 Interest, the REMIC 2 B-1 Interest being related to the Class
LT1-B1 Interest, the REMIC 2 B-2 Interest being related to the Class LT1-B2
Interest, the REMIC 2 B-3 Interest being related to the Class LT1-B3 Interest
and the REMIC 2 B-4 Interest being related to the Class LT1-B4 Interest), (ii)
the Class LT1-X1 Interest has a principal balance equal to the excess of (x) 50%
of the remaining principal balance of the Mortgage Loans over (y) the aggregate
principal balance of the Marker Interests (if necessary to reflect an increase
in overcollateralization, accrued and unpaid interest on the Class LT1-X1
interest may be added to its principal amount to achieve this result) and (iii)
the aggregate principal amount of the Class LT1-IA Interest, Class LT1-IB
Interest, Class LT1-IIA Interest, Class LT1-IIB Interest and the Class LT1-X2
Interest shall equal 50% of the remaining principal balance of the Mortgage
loans. Distributions and Realized Losses allocated to the REMIC 1 Regular
Interests described in clause (iii) of the preceding sentence will be allocated
among such REMIC 1 Regular Interests in the following manner: (x) distributions
shall be deemed made to such REMIC 1 Regular Interests first, so as to keep the
principal balance of the each such REMIC 1 Regular Interest with "B" at the end
of its designation equal to 0.05% of the aggregate scheduled principal balance
of the Mortgage Loans in the related Loan Group; second, to such REMIC 1 Regular
Interests with "A" at the end of its designation so that the uncertificated
principal balance of each such REMIC 1 Regular Interest is equal to 0.05% of the
excess of (I) the aggregate scheduled principal balance of the Mortgage Loans in
the related Loan Group

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over (II) the aggregate principal balance of the Class AV-1 Certificates, in the
case of Loan Group I, or the Class AF-1, Class AF-2, Class AF-3 and Class AF-4
Certificates, in the case of Loan Group II (except that if 0.05% of any such
excess is greater than the principal amount of the corresponding REMIC 1 Regular
Interest with "A" at the end of its designation, the least amount of principal
shall be distributed to such REMIC 1 Regular Interests with "A" at the end of
its designation such that the REMIC 1 Subordinated Balance Ratio is maintained)
and finally, any remaining distributions of principal to the Class LT1-X2
Interest and (y) Realized Losses shall be allocated among the REMIC 1 Regular
Interests described in clause (iii) of the preceding sentence in the following
manner: (x) Realized Losses shall be deemed allocated to such REMIC 1 Regular
Interests first, so as to keep the principal balance of the each such REMIC 1
Regular Interest with "B" at the end of its designation equal to 0.05% of the
aggregate scheduled principal balance of the Mortgage Loans in the related Loan
Group; second, to such REMIC 1 Regular Interests with "A" at the end of its
designation so that the uncertificated principal balance of each such REMIC 1
Regular Interest is equal to 0.05% of the excess of (I) the aggregate scheduled
principal balance of the Mortgage Loans in the related Loan Group over (II) the
aggregate principal balance of the Class AV-1 Certificates, in the case of Loan
Group I, or the Class AF-1, Class AF-2, Class AF-3 and Class AF-4 Certificates,
in the case of Loan Group II (except that if 0.05% of any such excess is greater
than the principal amount of the corresponding REMIC 1 Regular Interest with "A"
at the end of its designation, the least amount of Realized Losses shall be
allocated to such REMIC 1 Regular Interests with "A" at the end of its
designation such that the REMIC 1 Subordinated Balance Ratio is maintained) and
finally, any remaining Realized Losses to the Class LT1-X2 Interest.
Notwithstanding the preceding two sentences, however, Realized Losses not
allocated to any Class of Certificates will not be allocated to any REMIC 1
Regular Interests. All computations with respect to the REMIC 1 Regular
Interests shall be taken out to ten decimal places. Any portion of Available
Funds remaining in REMIC 1 on a Distribution Date after distributions to the
REMIC 1 Regular Interests shall be distributed to the Class R Certificates in
respect of the Class R-1 Interest. If on any Distribution Date the Class
Principal Balance of any Class of Certificates is increased pursuant to the last
sentence of the definition of "Certificate Principal Balance", then there shall
be an equivalent increase in the principal amounts of the REMIC 1 Regular
Interests, with such increase allocated (before the making of distributions and
the allocation of losses on the REMIC 1 Regular Interests on such Distribution
Date) among the REMIC 1 Regular Interests so that, to the greatest extent
possible, (i) each of the Marker Interests has a principal balance equal to 25%
of the principal balance of the related REMIC 2 Regular Interest, (ii) the Class
LT1-X1 Interest has a principal balance equal to the excess of (x) 50% of the
remaining principal balance of the Mortgage Loans over (y) the aggregate
principal balance of the Marker Interests and (iii) the aggregate principal
amount of the Class LT1-IA Interest, Class LT1-IB Interest, Class LT1-IIA
Interest, Class LT1-IIB Interest and Class LT1-X2 Interest shall equal 50% of
the remaining principal balance of the Mortgage Loans. Allocations in connection
with clause (iii) shall be made so that, to the greatest extent possible, (a)
the principal balance of each REMIC 1 Regular Interest with "B" at the end of
its designation equals 0.05% of the aggregate scheduled principal balance of the
Mortgage Loans in related Loan Group, (b) the principal balance of each REMIC 1
Regular Interest with "A" at the end of its designation equals 0.05% of the
excess of (x) the aggregate scheduled principal balance of the Mortgage Loans in
related Loan Group over (y) the aggregate principal balance of the Class AV-1
Certificates in the case of the Class LT3-IA Interest, or the Class AF-1, Class
AF-2, Class AF-3 and Class AF-4 Certificates in the case of the Class LT1-IIA
Interest and (c) any remaining allocations are made to the Class LT1-X2
Interest.

            (g) All prepayment penalties (including amounts deposited in
connection with the full or partial waiver of prepayment penalties pursuant to
Section 3.01) shall be distributed from REMIC 1 to REMIC 2 in respect of the
Class LT1-X1 Interest, from REMIC 2 to REMIC X/N in respect of the REMIC 2 X/N
Interest, and from REMIC X/N to the Class X/N Interest in respect of the REMIC
X/N X/N Interest.

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            (h) Notwithstanding anything to the contrary contained herein, the
above distributions in this Section 4.08 (other than on the Certificates) are
deemed distributions, and distributions of funds from the Distribution Account
shall be made only in accordance with Sections 4.01 and 4.02 hereof.

                                    ARTICLE V

                                THE CERTIFICATES

      Section 5.01 The Certificates.

      Each of the Class AV-1, Class AF-1, Class AF-2, Class AF-3, Class AF-4,
Class M-1, Class M-2, Class M-3, Class B-1, Class B-2, Class B-3, Class B-4,
Class N, Class X, Class R and Class R-X Certificates shall be substantially in
the forms annexed hereto as exhibits, and shall, on original issue, be executed
by the Trustee and authenticated and delivered by the Certificate Registrar to
or upon the receipt of a Written Order to Authenticate from the Depositor
concurrently with the sale and assignment to the Trustee of the Trust Fund. Each
Class of the Offered Certificates and the Class B-4 Certificates shall be
initially evidenced by one or more Certificates representing a Percentage
Interest with a minimum dollar (or notional amount) denomination of $25,000 and
integral multiples of $1 in excess thereof. The Class N, Class X and Class R
Certificates are issuable only in minimum Percentage Interests of 10%. The Class
R-X Certificates are issuable only in minimum Percentage Interests of 50%.

      The Certificates shall be executed on behalf of the Trust by manual or
facsimile signature on behalf of the Trustee by a Responsible Officer.
Certificates bearing the manual or facsimile signatures of individuals who were,
at the time when such signatures were affixed, authorized to sign on behalf of
the Trustee shall bind the Trust, notwithstanding that such individuals or any
of them have ceased to be so authorized prior to the authentication and delivery
of such Certificates or did not hold such offices at the date of such
Certificate. No Certificate shall be entitled to any benefit under this
Agreement or be valid for any purpose, unless such Certificate shall have been
manually authenticated by the Certificate Registrar substantially in the form
provided for herein, and such authentication upon any Certificate shall be
conclusive evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their authentication. Subject to Section 5.02(c), the Offered Certificates
and the Class B-4 Certificates shall be Book-Entry Certificates. The Class N,
Class X, Class R and Class R-X Certificates shall not be Book-Entry Certificates
but shall be issued in fully registered certificate form.

      The Class B-4 Certificates sold in offshore transactions in reliance on
Regulation S shall be issued initially in the form of one or more permanent
global certificates in definitive, fully registered form without interest
coupons with the applicable legends set forth in Exhibit B-4 hereto added to the
forms of such Certificates (each, a "Book-Entry Regulation S Global Security"),
which shall be deposited on behalf of the Holders of such Certificates
represented thereby with the Certificate Registrar, as custodian for DTC and
registered in the name of a nominee of DTC, duly executed and authenticated by
the Certificate Registrar as hereinafter provided. The aggregate principal
amounts of the Book-Entry Regulation S Global Securities may from time to time
be increased or decreased by adjustments made on the records of the Certificate
Registrar or DTC or its nominee, as the case may be, as hereinafter provided.

      Section 5.02 Registration of Transfer and Exchange of Certificates.

            (a) The Certificate Registrar shall cause to be kept at the
Corporate Trust Office of the Trustee a Certificate Register in which, subject
to such reasonable regulations as it may prescribe, the

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Certificate Registrar shall provide for the registration of Certificates and of
transfers and exchanges of Certificates as herein provided. The Trustee shall
initially serve as Certificate Registrar for the purpose of registering
Certificates and transfers and exchanges of Certificates as herein provided. The
Trustee as Certificate Registrar shall be subject to the same standards of care,
limitations on liability and rights to indemnity as the Trustee, and the
provisions of Sections 8.01, 8.02, 8.03, 8.04, 8.05, 8.14, 8.15 and 8.16 shall
apply to the Certificate Registrar to the same extent as they apply to the
Trustee. Any Certificate Registrar appointed in accordance with this Section
5.02(a) may at any time resign by giving at least 30 days' advance written
notice of resignation to the Trustee, the Servicer and the Depositor, such
resignation to become effective upon appointment of a successor Certificate
Registrar.

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

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

            (b) Upon original issuance, the Book-Entry Certificates shall be
issued in the form of one or more typewritten certificates, to be delivered to
the Depository, the initial Depository, by, or on behalf of, the Depositor; or
to, and deposited with the Certificate Custodian, on behalf of the Depository,
if directed to do so pursuant to instructions from the Depository. Except as
provided in paragraph (c) below, the Book-Entry Certificates shall at all times
remain registered in the name of the Depository or its nominee and at all times:
(i) registration of such Certificates may not be transferred by the Trustee
except to another Depository; (ii) the Depository shall maintain book-entry
records with respect to the Certificate Owners and with respect to ownership and
transfers of such Certificates; (iii) ownership and transfers of registration of
such Certificates on the books of the Depository shall be governed by applicable
rules established by the Depository; (iv) the Depository may collect its usual
and customary fees, charges and expenses from its Depository Participants; (v)
the Trustee shall for all purposes deal with the Depository as representative of
the Certificate Owners of the Certificates for purposes of exercising the rights
of Holders under this Agreement, and requests and directions for and votes of
such representative shall not be deemed to be inconsistent if they are made with
respect to different Certificate Owners; (vi) the Trustee may rely and shall be
fully protected in relying upon information furnished by the Depository with
respect to its Depository Participants and furnished by the Depository
Participants with respect to indirect participating firms and Persons shown on
the books of such indirect participating firms as direct or indirect Certificate
Owners; and (vii) the direct participants of the Depository shall have no rights
under this Agreement under or with respect to any of the Certificates held on
their behalf by the Depository, and the Depository may be treated by the Trustee
and their agents, employees, officers and directors as the absolute owner of the
Certificates for all purposes whatsoever.

      All transfers by Certificate Owners of Book-Entry Certificates shall be
made in accordance with the procedures established by the Depository Participant
or brokerage firm representing such Certificate Owners. Each Depository
Participant shall only transfer Book-Entry Certificates of Certificate Owners

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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 Depositor is unable to locate a
qualified successor, (ii) the Depositor, at its sole option elects to terminate
the book-entry system through the Depository or (iii) after the occurrence of a
Servicer Event of Termination, the Certificate Owners of each Class of
Book-Entry Certificates representing Percentage Interests of such Classes
aggregating not less than 51% advises the Trustee and Depository through the
Financial Intermediaries and the Depository Participants in writing that the
continuation of a book-entry system through the Depository to the exclusion of
definitive, fully registered certificates (the "Definitive Certificates") to
Certificate Owners is no longer in the best interests of the Certificate Owners.
Upon surrender to the Certificate Registrar of the Book-Entry Certificates by
the Depository, accompanied by registration instructions from the Depository for
registration, the Trustee shall, at the Depositor's expense, in the case of (ii)
above, or the Seller's expense, in the case of (i) and (iii) above, execute on
behalf of the Trust and the Certificate Registrar shall authenticate the
Definitive Certificates. Neither the Depositor nor the Trustee shall be liable
for any delay in delivery of such instructions and may conclusively rely on, and
shall be protected in relying on, such instructions. Upon the issuance of
Definitive Certificates, the Trustee, the Certificate Registrar, the Servicer,
any Paying Agent and the Depositor shall recognize the Holders of the Definitive
Certificates as Certificateholders hereunder.

            (d) No transfer, sale, pledge or other disposition of any Private
Certificate shall be made unless such disposition is exempt from the
registration requirements of the Securities Act of 1933, as amended (the "1933
Act"), and any applicable state securities laws or is made in accordance with
the 1933 Act and laws. In the event of any such transfer, other than the initial
transfer of the Private Certificates by the Depositor, (i) unless such transfer
is made in reliance upon Rule 144A (as evidenced by the investment letter
delivered to the Certificate Registrar, in substantially the form attached
hereto as Exhibit J) under the 1933 Act, the Certificate Registrar and the
Depositor may require a written Opinion of Counsel (which may be in-house
counsel) acceptable to and in form and substance reasonably satisfactory to the
Certificate Registrar and the Depositor that such transfer may be made pursuant
to an exemption, describing the applicable exemption and the basis therefor,
from the 1933 Act or is being made pursuant to the 1933 Act, which Opinion of
Counsel shall not be an expense of the Certificate Registrar, the Trustee or the
Depositor or (ii) the Certificate Registrar shall require the transferor to
execute a transferor certificate (in substantially the form attached hereto as
Exhibit L) and the transferee to execute an investment letter (in substantially
the form attached hereto as Exhibit J) acceptable to and in form and substance
reasonably satisfactory to the Depositor and the Certificate Registrar
certifying to the Depositor and the Certificate Registrar the facts surrounding
such transfer, which investment letter shall not be an expense of the
Certificate Registrar or the Depositor. The Holder of a Private Certificate
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee, the Certificate Registrar and the Depositor against any liability that
may result if the transfer is not so exempt or is not made in accordance with
such federal and state laws.

      By acceptance of a Regulation S Global Security, whether upon original
issuance or subsequent transfer, each Holder of such a Certificate acknowledges
the restrictions on the transfer of such Certificate set forth thereon and
agrees that it will only transfer such a Certificate as provided herein. In
addition, each Holder of a Regulation S Global Security shall be deemed to have
represented and warranted to the Trustee, the Depositor, the Certificate
Registrar and any of their respective successors that: (i) such Person is not a
"U.S. person" within the meaning of Regulation S and was, at the time the buy
order was

                                       93
<PAGE>

originated, outside the United States and (ii) such Person understands that such
Certificates have not been registered under the Securities Act and that (x)
until the expiration of the 40-day distribution compliance period (within the
meaning of Regulation S), no offer, sale, pledge or other transfer of such
Certificates or any interest therein shall be made in the United States or to or
for the account or benefit of a U.S. person (each as defined in Regulation S),
(y) if in the future it decides to offer, resell, pledge or otherwise transfer
such Certificates, such Certificates may be offered, resold, pledged or
otherwise transferred only (A) to a person which the seller reasonably believes
is a "qualified institutional buyer" (a "QIB") as defined in Rule 144A under the
Securities Act, that is purchasing such Certificates for its own account or for
the account of a qualified institutional buyer to which notice is given that the
transfer is being made in reliance on Rule 144A or (B) in an offshore
transaction (as defined in Regulation S) in compliance with the provisions of
Regulation S, in each case in compliance with the requirements of this
Agreement; and it will notify such transferee of the transfer restrictions
specified in this Section.

      The beneficial ownership (as determined for federal income tax purposes)
of a Class N or Class X Certificate shall not be transferred to a non-United
States Person unless (i) such beneficial ownership is transferred to a
non-United States Person who will at all times be a Proportionate Holder and
provides the Certificate Registrar with a representation and covenant to such
effect and (ii) the Certificate Registrar has received, in the manner required
by applicable Treasury regulations (and with all required attachments,
including, where the non-United States Person is providing a Form W-8IMY, Forms
W-8BEN or W-9 from all persons treated as beneficially owning an interest in the
Class X or Class N Certificate through such non-U.S. Person either directly,
through an intermediary or through another entity that is treated as a
partnership for U.S. federal income tax purposes), a properly completed Internal
Revenue Service Form W-8IMY, Form W-8BEN or Form W-8ECI from such non-United
States Person. No Class N or Class X Certificate may be pledged or used as
collateral for any obligation if it would cause any portion of the Trust Fund to
be treated as a taxable mortgage pool under Section 7701(i) of the Code.

      No transfer of an ERISA-Restricted Certificate that is a Class R-X or
Class R Certificate shall be registered unless the Trustee and the Certificate
Registrar shall have received a representation from the transferee of such
Certificate, acceptable to and in form and substance satisfactory to the Trustee
and the Certificate Registrar (such requirement is satisfied only by the
Certificate Registrar's receipt of a representation letter from the transferee
substantially in the form of Exhibit K hereto), to the effect that such
transferee is not an employee benefit plan or arrangement subject to Title I of
ERISA, a plan subject to Section 4975 of the Code or a plan subject to any
state, local, federal, non-U.S. or other law substantively similar to the
foregoing provisions of ERISA or the Code ("Similar Law") (collectively, a
"Plan"), and is not directly or indirectly acquiring the Certificate for, on
behalf of or with any assets of any such Plan.

      No transfer of an ERISA-Restricted Certificate (other than a Class R-X or
Class R Certificate) shall be registered unless the Trustee and the Certificate
Registrar shall have received (i) a representation from the transferee of such
Certificate, acceptable to and in form and substance satisfactory to the Trustee
and the Certificate Registrar (such requirement is satisfied only by the
Certificate Registrar's receipt of a representation letter from the transferee
substantially in the form of Exhibit I hereto), to the effect that such
transferee is not a Plan and is not directly or indirectly acquiring the
Certificate for, on behalf of or with any assets of any such Plan, (ii) if the
Certificate has been the subject of an ERISA-Qualifying Underwriting, a
representation from the transferee, acceptable to and in form and substance
satisfactory to the Trustee and the Certificate Registrar (such requirement is
satisfied only by the Certificate Registrar's receipt of a representation letter
from the transferee substantially in the form of Exhibit I hereto), that the
transferee is an insurance company that is acquiring the Certificate with assets
of an "insurance company general account" as defined in Section V(e) of
Prohibited Transaction Class Exemption ("PTCE") 95-60 and the acquisition and
holding of the Certificate are covered and exempt under Sections I and III of

                                       94
<PAGE>

PTCE 95-60, or (iii) solely in the case of a Definitive Certificate, an Opinion
of Counsel satisfactory to the Trustee and the Certificate Registrar, and upon
which the Trustee and the Certificate Registrar shall be entitled to rely, to
the effect that the acquisition and holding of such Certificate by the
transferee will not result in a nonexempt prohibited transaction under Title I
of ERISA or Section 4975 of the Code, or a violation of Similar Law, and will
not subject the Certificate Registrar, the Depositor, the Servicer or the
Trustee to any obligation in addition to those undertaken by such entities in
this Agreement, which opinion of counsel shall not be an expense of the
Certificate Registrar, the Depositor, the Servicer or the Trustee. The
representations in clause (i) or (ii) of the preceding sentence shall be deemed
to have been made to the Certificate Registrar and the Trustee by the
Certificate Owner's acceptance of the beneficial interest in any such class of
ERISA-Restricted Certificates, unless the Trustee and the Certificate Registrar
shall have received from the transferee an alternative representation acceptable
in form and substance to the Trustee and the Certificate Registrar.

      Notwithstanding any other provision herein to the contrary, any purported
transfer of an ERISA-Restricted Certificate to or on behalf of a Plan without
the delivery to the Trustee and the Certificate Registrar of a representation or
an Opinion of Counsel satisfactory to the Trustee and the Certificate Registrar
as described above shall be void and of no effect. None of the Certificate
Registrar, the Depositor, the Servicer or the Trustee shall be under any
liability to any Person for any registration or transfer of any ERISA-Restricted
Certificate that is in fact not permitted by this Section 5.02(d) nor shall the
Paying Agent be under any liability for making any payments due on such
ERISA-Restricted Certificate to the holder thereof or taking any other action
with respect to such holder under the provisions of this Agreement so long as
the transfer was registered by the Certificate Registrar in accordance with the
foregoing requirements. The Certificate Registrar, Depositor, Servicer, Paying
Agent and/or Trustee shall be entitled, but not obligated, to recover from any
holder of any ERISA-Restricted Certificate that was in fact a Plan and that held
such ERISA-Restricted Certificate in violation of this Section 5.02(d) all
payments made on such ERISA-Restricted Certificate at and after the time it
commenced such holding. Any such payments so recovered shall be paid and
delivered to the last preceding holder of such ERISA-Restricted Certificate that
is not a Plan.

      Each Person who has or who acquires any Ownership Interest in a Residual
Certificate shall be deemed by the acceptance or acquisition of such Ownership
Interest to have agreed to be bound by the following provisions and to have
irrevocably appointed the Depositor or its designee as its attorney-in-fact to
negotiate the terms of any mandatory sale under clause (v) below and to execute
all instruments of transfer and to do all other things necessary in connection
with any such sale, and the rights of each Person acquiring any Ownership
Interest in a Residual Certificate are expressly subject to the following
provisions:

                  (i) Each Person holding or acquiring any Ownership Interest in
a Residual Certificate shall be a Permitted Transferee and shall promptly notify
the Certificate Registrar of any change or impending change in its status as a
Permitted Transferee.

                  (ii) No Person shall acquire an Ownership Interest in a
Residual Certificate unless such Ownership Interest is a pro rata undivided
interest.

                  (iii) In connection with any proposed transfer of any
Ownership Interest in a Residual Certificate, the Certificate Registrar shall as
a condition to registration of the transfer, require delivery to it, in form and
substance satisfactory to it, of each of the following:

                              (A) an affidavit in the form of Exhibit K hereto
from the proposed transferee to the effect that, among other things, such
transferee is a Permitted Transferee and

                                       95
<PAGE>

that it is not acquiring its Ownership Interest in the Residual Certificate that
is the subject of the proposed transfer as a nominee, trustee or agent for any
Person who is not a Permitted Transferee; and

                              (B) a covenant of the proposed transferee to the
effect that the proposed transferee agrees to be bound by and to abide by the
transfer restrictions applicable to the Residual Certificates.

                  (iv) Any attempted or purported transfer of any Ownership
Interest in a Residual Certificate in violation of the provisions of this
Section shall be absolutely null and void and shall vest no rights in the
purported transferee. If any purported transferee shall, in violation of the
provisions of this Section, become a Holder of a Residual Certificate, then the
prior Holder of such Residual Certificate that is a Permitted Transferee shall,
upon discovery that the registration of transfer of such Residual Certificate
was not in fact permitted by this Section, be restored to all rights as Holder
thereof retroactive to the date of registration of transfer of such Residual
Certificate. The Certificate Registrar shall be under no liability to any Person
for any registration of transfer of a Residual Certificate that is in fact not
permitted by this Section or for making any distributions due on such Residual
Certificate to the Holder thereof or taking any other action with respect to
such Holder under the provisions of this Agreement so long as the Certificate
Registrar received the documents specified in clause (iii). The Trustee shall be
entitled to recover from any Holder of a Residual Certificate that was in fact
not a Permitted Transferee at the time such distributions were made all
distributions made on such Residual Certificate. Any such distributions so
recovered by the Trustee shall be distributed and delivered by the Trustee to
the prior Holder of such Residual Certificate that is a Permitted Transferee.

                  (v) If any Person other than a Permitted Transferee acquires
any Ownership Interest in a Residual Certificate in violation of the
restrictions in this Section, then the Certificate Registrar shall have the
right but not the obligation, without notice to the Holder of such Residual
Certificate or any other Person having an Ownership Interest therein, to notify
the Depositor to arrange for the sale of such Residual Certificate. The proceeds
of such sale, net of commissions (which may include commissions payable to the
Depositor or its affiliates in connection with such sale), expenses and taxes
due, if any, will be remitted by the Trustee to the previous Holder of such
Residual Certificate that is a Permitted Transferee, except that in the event
that the Trustee determines that the Holder of such Residual Certificate may be
liable for any amount due under this Section or any other provisions of this
Agreement, the Trustee may withhold a corresponding amount from such remittance
as security for such claim. The terms and conditions of any sale under this
clause (v) shall be determined in the sole discretion of the Trustee and it
shall not be liable to any Person having an Ownership Interest in a Residual
Certificate as a result of its exercise of such discretion.

                  (vi) If any Person other than a Permitted Transferee acquires
any Ownership Interest in a Residual Certificate in violation of the
restrictions in this Section, then the Trustee will provide to the Internal
Revenue Service, and to the persons specified in Sections 860E(e)(3) and (6) of
the Code, information needed to compute the tax imposed under Section 860E(e)(5)
of the Code on transfers of residual interests to disqualified organizations.
The Trustee shall be entitled to reasonable compensation for providing such
information from the person to whom it is provided.

The foregoing provisions of this Section shall cease to apply to transfers
occurring on or after the date on which there shall have been delivered to the
Certificate Registrar, in form and substance satisfactory to the Certificate
Registrar, (i) written notification from each Rating Agency that the removal of
the restrictions on Transfer set forth in this Section will not cause such
Rating Agency to downgrade its rating of the Certificates and (ii) an Opinion of
Counsel to the effect that such removal will not cause any REMIC hereunder to
fail to qualify as a REMIC.

                                       96
<PAGE>

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

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

      Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.

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

      Section 5.04 Persons Deemed Owners.

      The Servicer, the Depositor, the Trustee, the Certificate Registrar, any
Paying Agent and any agent of the Servicer, the Depositor, the Certificate
Registrar, any Paying Agent or the Trustee may treat the Person, including a
Depository, in whose name any Certificate is registered as the owner of such
Certificate for the purpose of receiving distributions pursuant to Section 4.01
and 4.02 and for all other purposes whatsoever, and none of the Servicer, the
Trust, the Trustee, any Paying Agent nor any agent of any of them shall be
affected by notice to the contrary.

      Section 5.05 Appointment of Paying Agent.

      The Paying Agent shall make distributions to Certificateholders from the
Distribution Account pursuant to Section 4.01 and 4.02 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 3.05 and for the purpose of making the distributions
referred to above and (ii) to distribute statements and provide information to
Certificateholders as required hereunder. The Paying Agent hereunder shall at
all times be an entity duly incorporated and validly existing under the laws of
the United States of America or any state thereof, authorized under such laws to
exercise corporate trust powers and subject to supervision or examination by
federal or state authorities. The Paying Agent shall initially be the Trustee.
The Trustee may appoint a successor to act as Paying Agent, which appointment
shall be reasonably satisfactory to the Depositor and the Rating Agencies. The
Trustee as Paying Agent shall be subject to the same standards of care,
limitations on liability and rights to indemnity as the Trustee, and the
provisions of Sections 8.01, 8.02, 8.03, 8.04, 8.05, 8.14, 8.15 and 8.16 shall
apply to the Paying Agent to the same extent as they apply to the Trustee. Any
Paying Agent appointed in accordance with this Section 5.05 may at any time
resign by giving at least 30 days' advance written notice of resignation to the
Trustee, the Servicer and the Depositor, such resignation to become effective
upon appointment of a successor Paying Agent.

                                       97
<PAGE>

                                   ARTICLE VI

                   THE SELLER, THE SERVICER AND THE DEPOSITOR

      Section 6.01 Liability of the Seller, the Servicer and the Depositor.

      The Seller and the Servicer shall be liable in accordance herewith only to
the extent of the obligations specifically imposed upon and undertaken by the
Seller 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 6.02 Merger or Consolidation of, or Assumption of the Obligations
of, the Seller, the Servicer or the Depositor.

      Any entity into which the Seller, the Servicer or the Depositor may be
merged or consolidated, or any entity resulting from any merger, conversion or
consolidation to which the Seller, the Servicer or the Depositor shall be a
party, or any corporation succeeding to the business of the Seller, the Servicer
or the Depositor, shall be the successor of the Seller, the Servicer or the
Depositor, as the case may be, hereunder, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding; provided, however, that the successor
Servicer shall satisfy all the requirements of Section 7.02 with respect to the
qualifications of a successor Servicer.

      Section 6.03 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 its willful misfeasance, bad faith or gross negligence in
the performance of duties of the Servicer or by reason of its reckless disregard
of its obligations and duties of the Servicer hereunder; provided, further, that
this provision shall not be construed to entitle the Servicer to indemnity in
the event that amounts advanced by the Servicer to retire any senior lien exceed
Liquidation Proceeds (in excess of related liquidation expenses) realized with
respect to the related Mortgage Loan. 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 incurred by reason of its willful misfeasance, bad
faith or negligence in the performance of duties hereunder or by reason of its
reckless disregard of obligations and duties hereunder. The Servicer may
undertake any such action which it may deem necessary or desirable in respect of
this Agreement, and the rights and duties of the parties hereto and the
interests of the Certificateholders hereunder. In such event, 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 be
entitled to pay such expenses from the proceeds of the Trust or to be reimbursed
therefor pursuant to Section 3.05 upon presentation to the Trustee of
documentation of such expenses, costs and liabilities. The Servicer's right to
indemnity or reimbursement pursuant to this Section shall survive any
resignation or termination of the Servicer pursuant to Section 6.04 or 7.01 with
respect to any losses, expenses, costs or liabilities arising prior to such
resignation or termination (or arising from events that occurred prior to such
resignation or termination). This paragraph shall apply to the Servicer solely
in its capacity as Servicer hereunder and in no other capacities.

                                       98
<PAGE>

      Section 6.04 Servicer Not to Resign.

      Subject to the provisions of Section 7.01 and Section 6.02, 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; and (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 Regular Certificates; or the ratings that are in
effect; provided, however, that no such resignation by the Servicer shall become
effective until such successor servicer or, in the case of (i) above, the
Trustee shall have assumed the Servicer's responsibilities and obligations
hereunder or the Trustee shall have designated a successor servicer in
accordance with Section 7.02. Any such resignation shall not relieve the
Servicer of responsibility for any of the obligations specified in Sections 7.01
and 7.02 as obligations that survive the resignation or termination of the
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. Any such determination permitting the
resignation of the Servicer shall be evidenced by an Opinion of Counsel to such
effect delivered to the Trustee.

      The Trustee and the Depositor hereby specifically (i) consent to the
pledge and assignment by the Servicer of all the Servicer's right, title and
interest in, to and under this Agreement to the Servicing Rights Pledgee, for
the benefit of certain lenders, and (ii) provided that no Servicer Event of
Termination exists, agree that upon delivery to the Trustee by the Servicing
Rights Pledgee of a letter signed by the Servicer whereunder the Servicer shall
resign as Servicer under this Agreement, the Trustee shall appoint the Servicing
Rights Pledgee or its designee as successor Servicer, provided that at the time
of such appointment, the Servicing Rights Pledgee or such designee meets the
requirements of a successor Servicer pursuant to Section 7.02(a) and agrees to
be subject to the terms of this Agreement. If, pursuant to any provision hereof,
the duties of the Servicer are transferred to a successor, the entire amount of
the Servicing Fee and other compensation payable to the Servicer pursuant hereto
shall thereafter be payable to such successor.

      Section 6.05 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, who
agrees to conduct such duties in accordance with standards comparable to those
set forth in Section 3.01. Such delegation shall not relieve the Servicer of its
liabilities and responsibilities with respect to such duties and shall not
constitute a resignation within the meaning of Section 6.04. The Servicer shall
provide the Trustee and the Rating Agencies with 60 days prior written notice
prior to the delegation of any of its duties to any Person other than any of the
Servicer's Affiliates or their respective successors and assigns.

                                       99
<PAGE>

                                   ARTICLE VII

                                     DEFAULT

      Section 7.01 Servicer Events of Termination.

            (a) If any one of the following events (each, a "Servicer Event of
Termination") shall occur and be continuing:

                  (i) (A) The failure by the Servicer to make any required
Advance; or (B) any other failure by the Servicer to deposit in the Collection
Account or Distribution Account any deposit required to be made under the terms
of this Agreement which continues unremedied for a period of one Business Day
after the date upon which written notice of such failure shall have been given
to the Servicer by the Trustee or by any Holder of a Regular Certificate
evidencing at least 25% of the Voting Rights; or

                  (ii) The failure by the Servicer to make any required
Servicing Advance which failure continues unremedied for a period of 30 days, or
the failure by the Servicer duly to observe or perform, in any material respect,
any other covenants, obligations or agreements of the Servicer as set forth in
this Agreement, which failure continues unremedied for a period of 30 days,
after the date (A) on which written notice of such failure, requiring the same
to be remedied, shall have been given to the Servicer by the Trustee or by any
Holder of a Regular Certificate evidencing at least 25% of the Voting Rights or
(B) actual knowledge of such failure by a Servicing Officer of the Servicer; 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, and the continuance of any such decree or order
unstayed and in effect for a period of 60 days; or

                  (iv) The Servicer shall voluntarily go into liquidation,
consent to the appointment of a conservator or receiver or liquidator or similar
person in any insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings of or relating to the Servicer or of or
relating to all or substantially all of its property; or a decree or order of a
court or agency or supervisory authority having jurisdiction in the premises for
the appointment of a conservator, receiver, liquidator or similar person in any
insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of its affairs, shall
have been entered against the Servicer and such decree or order shall have
remained in force undischarged, unbonded or unstayed for a period of 60 days; 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; or

                  (v) The aggregate amount of cumulative Realized Losses
incurred since the Cut-off Date through the last day of the related Collection
Period divided by the Pool Balance as of the Cut-off Date exceeds the applicable
percentages set forth below with respect to such Distribution Date:

<TABLE>
<CAPTION>
  DISTRIBUTION DATE OCCURRING IN                    PERCENTAGE
----------------------------------                  ----------
<S>                                                 <C>
January 2008 through December 2008                    3.75%
January 2009 through December 2009                    6.25%
January 2010 through December 2010                    8.00%
January 2011 and thereafter                           8.50%
</TABLE>

                                      100
<PAGE>

            (b) Then, and in each and every such case, so long as a Servicer
Event of Termination shall not have been remedied within the applicable grace
period, (x) with respect solely to clause (i)(A) above, if such Advance is not
made by 2:00 P.M., New York time, on the Business Day immediately following the
Servicer Remittance Date, the Trustee may terminate all of the rights and
obligations of the Servicer under this Agreement and the Trustee, or a successor
servicer appointed in accordance with Section 7.02, shall immediately make such
Advance and assume, pursuant to Section 7.02, the duties of a successor Servicer
and (y) in the case of (i)(B), (ii), (iii), (iv) and (v) above, the Trustee
shall, at the direction of the Holders of each Class of Regular Certificates
evidencing Percentage Interests aggregating not less than 51%, by notice then
given in writing to the Servicer (and to the Trustee if given by Holders of
Certificates), 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, the Depositor and the Seller. On or after the
receipt by the Servicer (and by the Trustee if such notice is given by the
Holders) 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; 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 (or the applicable successor
Servicer) in effecting the termination of the responsibilities and rights of the
Servicer hereunder, including, without limitation, the delivery to the Trustee
of all documents and records requested by it to enable it to assume the
Servicer's functions under this Agreement within ten Business Days subsequent to
such notice, the transfer within one Business Day subsequent to such notice to
the Trustee (or the applicable successor Servicer) 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, the Distribution Account, any REO
Account or any Escrow Account or that have been deposited by the Servicer in
such accounts or thereafter received by the Servicer with respect to the
Mortgage Loans or any REO Property received by the Servicer. All reasonable
costs and expenses (including attorneys' fees) incurred in connection with
transferring the servicing to the successor Servicer and amending this Agreement
to reflect such succession as Servicer pursuant to this Section 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.

      Section 7.02 Trustee to Act; Appointment of Successor.

            (a) Within 90 days of the time the Servicer (and the Trustee, if
notice is sent by the Holders) receives a notice of termination pursuant to
Section 7.01 or 6.04, the Trustee (or such other successor Servicer as is
approved in accordance with this Agreement) 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 arising on and after its succession.
As compensation therefor, the Trustee (or such other successor Servicer) shall
be entitled to such compensation as the Servicer would have been entitled to
hereunder if no such notice of termination had been given. Notwithstanding the
above, (i) if the Trustee is unwilling to act as successor Servicer or (ii) if
the Trustee is legally unable so to act, the Trustee shall appoint or petition a
court of competent jurisdiction to appoint, any established housing and home
finance institution, bank or other mortgage loan or home equity loan servicer
having a net worth of not less than $50,000,000 as the successor to the Servicer
hereunder in the assumption of all or any part of the responsibilities, duties
or liabilities of the Servicer hereunder; provided, that the appointment of any
such successor Servicer will not result in the qualification, reduction or
withdrawal of

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the ratings assigned to the Certificates or the ratings that are in effect by
the Rating Agencies as evidenced by a letter to such effect from the Rating
Agencies; and provided further that the representations and warranties in
Section 2.05 shall be true and correct as to such successor Servicer. 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 3.18 (or such other compensation as the
Trustee and such successor shall agree, not to exceed the Servicing Fee). The
successor servicer shall be entitled to withdraw from the Collection Account all
costs and expenses associated with the transfer of the servicing to the
successor servicer. 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 to pay any deductible under an insurance
policy pursuant to Section 3.12 or to indemnify the parties indicated in Section
3.26 pursuant to the terms thereof, 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 its representations or warranties contained herein or in any
related document or agreement. The Trustee and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession.

      In the event of a Servicer Event of Termination, notwithstanding anything
to the contrary above, the Trustee and the Depositor hereby agree that upon
delivery to the Trustee by the Servicing Rights Pledgee of a letter signed by
the Servicer within ten Business Days of when notification of such event shall
have been provided to the Trustee, whereunder the Servicer shall resign as
Servicer under this Agreement, the Servicing Rights Pledgee or its designee
shall be appointed as successor Servicer (provided that at the time of such
appointment the Servicing Rights Pledgee or such designee meets the requirements
of a successor Servicer set forth above) and the Servicing Rights Pledgee agrees
to be subject to the terms of this Agreement.

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

      Section 7.03 Waiver of Defaults.

      The Holders of Certificates entitled to at least 66 2/3% of the Voting
Rights allocated to the Class of Certificates affected by a Servicer Event of
Termination may, on behalf of all Certificateholders, waive any events
permitting removal of the Servicer as servicer pursuant to this Article VII,
provided, however, that such Holders may not waive a default in making a
required distribution on a Certificate without the consent of the Holder of such
Certificate. Upon any waiver of a past default, such default shall cease to
exist and any Servicer Event of Termination arising therefrom shall be deemed to
have been remedied for every purpose of this Agreement. No such waiver shall
extend to any subsequent or other default or impair any right consequent thereto
except to the extent expressly so waived. Notice of any such waiver shall be
given by the Trustee to the Rating Agencies.

      Section 7.04 Notification to Certificateholders.

            (a) On any termination or appointment of a successor the Servicer
pursuant to this Article VII or Section 6.04, the Trustee shall give prompt
written notice thereof to the Certificateholders at their respective addresses
appearing in the Certificate Register and each Rating Agency.

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            (b) No later than 60 days after the occurrence of any event which
constitutes or which, with notice or a lapse of time or both, would constitute a
Servicer Event of Termination for five Business Days after a Responsible Officer
of the Trustee becomes aware of the occurrence of such an event, the Trustee
shall transmit by mail to all Certificateholders notice of such occurrence
unless such default or Servicer Event of Termination shall have been waived or
cured. Such notice shall be given to the Rating Agencies promptly after any such
occurrence.

      Section 7.05 Survivability of Servicer Liabilities.

      Notwithstanding anything herein to the contrary, upon termination of the
Servicer hereunder, any liabilities of the Servicer which accrued prior to such
termination shall survive such termination.

                                  ARTICLE VIII

                                   THE TRUSTEE

      Section 8.01 Duties of Trustee.

      The Trustee, prior to the occurrence of a Servicer Event of Termination of
which a Responsible Officer of the Trustee shall have actual knowledge and after
the curing of all Servicer Events of Termination which may have occurred,
undertakes to perform such duties and only such duties as are specifically set
forth in this Agreement. If a Servicer Event of Termination has occurred (which
has not been cured) of which a Responsible Officer has actual 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 person would exercise or use under the circumstances in the conduct of
such person's own affairs.

      The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform on their face to the requirements of this Agreement to the extent
specified herein; provided, however, that that the Trustee shall not be
responsible for the accuracy or content of any resolution, certificate,
statement, opinion, report, document, order or other instrument furnished by the
Servicer, the Seller or the Depositor hereunder. If any such instrument is found
not to conform in any material respect to the requirements of this Agreement,
the Trustee shall notify the Certificateholders of such instrument in the event
that the Trustee, after so requesting, does not receive a satisfactorily
corrected instrument.

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

                  (i) prior to the occurrence of a Servicer Event of
Termination, and after the curing of all such Servicer Events of Termination
which may have occurred, the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Agreement, the Trustee shall
not be liable except for the performance of such duties and obligations as are
specifically set forth in this Agreement, no implied covenants or obligations
shall be read into this Agreement against the Trustee and, in the absence of bad
faith on the part of the Trustee, the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Trustee and conforming on
their face to the requirements of this Agreement to the extent specified herein;

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                  (ii) the Trustee shall not be 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 liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in accordance
with the direction of the Majority Certificateholders relating to the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or exercising or omitting to exercise any trust or power conferred upon
the Trustee under this Agreement; and

                  (iv) the Trustee shall not be charged with knowledge of any
failure by the Servicer to comply with the obligations of the Servicer referred
to in clauses (i) and (ii) of Section 7.01(a) or any Servicer Event of
Termination unless a Responsible Officer of the Trustee at the applicable
Corporate Trust Office obtains actual knowledge of such failure or the Trustee
receives written notice of such failure from the Servicer or the Majority
Certificateholders. In the absence of such receipt of such notice, the Trustee
may conclusively assume that there is no Servicer Event of Termination.

      The Trustee shall not be required to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it, and
none of the provisions contained in this Agreement shall in any event require
the Trustee to perform, or be responsible for the manner of performance of, any
of the obligations of the 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; provided, however, the Trustee shall not seek
reimbursement or repayment of any of its expenses from the Trust Fund except in
connection with expenses that would constitute "unanticipated expenses" under
Treasury Regulation 1.860G-1(b)(3)(ii).

      The Trustee shall not have any duty (A) to see any recording, filing, or
depositing of this Agreement or any agreement referred to herein or any
financing statement or continuation statement evidencing a security interest, or
to see to the maintenance of any such recording or filing or depositing or to
any rerecording, refiling or redepositing of any thereof, (B) to see to any
insurance or (C) to see to the payment or discharge of any tax, assessment, or
other governmental charge or any lien or encumbrance of any kind owing with
respect to, assessed or levied against, any part of the Trust Fund other than
from funds available in the Distribution Account.

      The Trustee shall have no duty hereunder with respect to any complaint,
claim, demand, notice or other document it may receive or which may be alleged
to have been delivered to or served upon it by the parties as a consequence of
the assignment of any Mortgage Loan hereunder; provided, however, that the
Trustee shall promptly remit to the Servicer upon receipt any such complaint,
claim, demand, notice or other document (i) which is delivered to the Trustee at
its Corporate Trust Office; (ii) of which a Responsible Officer has actual
knowledge and (iii) which contains information sufficient to permit the Trustee
to make a determination that the real property to which such document relates to
is a Mortgaged Property.

      Section 8.02 Certain Matters Affecting the Trustee.

            (a) Except as otherwise provided in Section 8.01:

                  (i) the Trustee may request and rely upon, and shall be
protected in acting or refraining from acting upon, any resolution, Officer's
Certificate, certificate of auditors or any other

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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;

                  (ii) the Trustee may consult with counsel and any advice or
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 not be under any 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 the Certificateholders pursuant to the
provisions of this Agreement, unless such Certificateholders 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;

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

                  (v) prior to the occurrence of a Servicer Event of Termination
and after the curing of all Servicer Events of Termination which may have
occurred, the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or other paper
or documents, unless requested in writing to do so by the Majority
Certificateholder; provided, however, that if the payment within a reasonable
time to the Trustee of the costs, expenses or liabilities likely to be incurred
by it in the making of such investigation is, in the opinion of the Trustee not
reasonably assured to the Trustee by the security afforded to it by the terms of
this Agreement, the Trustee may require reasonable indemnity against such cost,
expense or liability as a condition to such proceeding. The reasonable expense
of every such examination shall be paid by the 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 any
liability or make any representation as to any acts or omissions hereunder of
the Servicer until such time as the Trustee may be required to act as Servicer
pursuant to Section 7.02;

                  (vii) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian and the Trustee shall not be responsible for
any misconduct or negligence on the part of any such agent, attorney or
custodian appointed by it with due care; and

                  (viii) the right of the Trustee to perform any discretionary
act enumerated in this Agreement shall not be construed as a duty, and the
Trustee shall not be answerable for other than its negligence or willful
misconduct in the performance of such act.

      Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans.

      The recitals contained herein and in the Certificates (other than the
authentication of the Trustee on the Certificates) shall be taken as the
statements of the Seller, and the Trustee does not assumes any

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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 Servicer, or for the use or
application of any funds paid to the Servicer in respect of the Mortgage Loans
or deposited in or withdrawn from the Collection Account by the Servicer. The
Trustee shall not at any 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 7.02); the validity of the
assignment of any Mortgage Loan to the Trustee or of any intervening assignment;
the completeness of any Mortgage Loan; the performance or enforcement of any
Mortgage Loan (other than if the Trustee shall assume the duties of the Servicer
pursuant to Section 7.02); the compliance by the Depositor, the Seller 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; the acts or omissions of any of
the Servicer (other than if the Trustee shall assume the duties of the Servicer
pursuant to Section 7.02), or any Mortgagor; any action of the Servicer (other
than if the Trustee shall assume the duties of the Servicer pursuant to Section
7.02), taken in the name of the Trustee; the failure of the Servicer to act or
perform any duties required of it as agent of the Trustee hereunder; or any
action by the Trustee taken at the instruction of the Servicer (other than if
the Trustee shall assume the duties of the Servicer pursuant to Section 7.02);
provided, however, that the foregoing shall not relieve the Trustee of its
obligation to perform its duties under this Agreement. The Trustee shall not
have any 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.

      Section 8.04 Trustee May Own Certificates.

      The Trustee in its individual or any other capacity may become the owner
or pledgee of Certificates with the same rights as it would have if it were not
Trustee and may transact any banking and trust business with the Seller, the
Servicer, the Depositor or their Affiliates.

      Section 8.05 Seller to Pay Trustee Fees and Expenses.

      The Trustee shall withdraw from the Distribution Account on each
Distribution Date and pay to itself the Trustee Fee pursuant to Section 4.01(i)
and, to the extent the Interest Remittance Amount is at any time insufficient
for such purpose, the Seller shall pay such fees as 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
Seller 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 such party's negligence or bad faith or which is
the responsibility of Certificateholders, the Trustee hereunder. Notwithstanding
any other provision of this Agreement, including Section 2.03(a) and Section
2.04, to the contrary, the Seller covenants and agrees to indemnify the Trustee
and its officers, directors, employees and agents from, and hold each of them
harmless against, any and all losses, liabilities, damages, claims

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or expenses incurred in connection with (a) any legal action relating to this
Agreement, the Custodial Agreement, the Certificates or incurred in connection
with the administration of the Trust, other than with respect to a party, any
loss, liability or expense incurred by reason of willful misfeasance, bad faith
or negligence of such party in the performance of its duties hereunder or by
reason of such party's reckless disregard of obligations and duties hereunder
and (b) the second paragraph of Section 2.01. Anything in this Agreement to the
contrary notwithstanding, in no event shall the Trustee be liable for special,
indirect or consequential loss or damage of any kind whatsoever (including but
not limited to lost profits), even if the Trustee has been advised of the
likelihood of such loss or damage and regardless of the form of action. The
Trustee and any director, officer, employee or agent of the Trustee shall be
indemnified, to the extent not paid by the Seller pursuant to this Section, by
the Trust Fund and held harmless against any loss, liability or expense (not
including expenses, disbursements and advances incurred or made by the Trustee,
in the ordinary course of the Trustee's performance in accordance with the
provisions of this Agreement) incurred by the Trustee or such party arising out
of or in connection with the acceptance or administration of its duties under
this Agreement, other than in connection with the indemnification provided
pursuant to clause (a) above, any loss, liability or expense incurred by reason
of willful misfeasance, bad faith or negligence in the performance by the
Trustee of its duties under this Agreement or by reason of the reckless
disregard of the Trustee's obligations and duties under this Agreement. This
section shall survive termination of this Agreement or the resignation or
removal of any Trustee hereunder.

      Section 8.06 Eligibility Requirements for Trustee.

      The Trustee hereunder shall at all times be a Department of Housing and
Urban Development and Federal Housing Administration approved mortgagee, an
entity duly organized and validly existing under the laws of the United States
of America or any state thereof, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
$50,000,000 and a minimum long-term debt rating of BBB by Fitch and S&P and a
long term debt rating of at least A1 or better by Moody's, and subject to
supervision or examination by federal or state authority. If such entity
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 8.06, the combined capital and surplus of such entity
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. The principal office of the Trustee
(other than the initial Trustee) shall be in a state with respect to which an
Opinion of Counsel has been delivered to such Trustee 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 8.06, the Trustee
shall resign immediately in the manner and with the effect specified in Section
8.07.

      Section 8.07 Resignation or Removal of Trustee.

      The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice thereof to the Depositor, the Servicer
and each Rating Agency. Upon receiving such notice of resignation, the Depositor
shall promptly appoint a successor Trustee, by written instrument, in duplicate,
one copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor Trustee. If no successor Trustee shall have been so
appointed and having accepted appointment within 30 days after the giving of
such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.

      If at any time the Trustee shall cease to be eligible in accordance with
the provisions of Section 8.06 and shall fail to resign after written request
therefor by the Depositor, or 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

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property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Depositor may remove the Trustee. If the Depositor or the
Servicer removes the Trustee under the authority of the immediately preceding
sentence, the Depositor shall promptly appoint a successor Trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor Trustee.

      The Majority Certificateholders may at any time remove the Trustee by
written instrument or instruments delivered to the Servicer, the Depositor and
the Trustee; the Depositor 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 8.07 shall not become
effective until acceptance of appointment by the successor Trustee as provided
in Section 8.08.

      Section 8.08 Successor Trustee.

      Any successor Trustee appointed as provided in Section 8.07 shall execute,
acknowledge and deliver to the Depositor, the Rating Agencies, the Servicer and
to its predecessor Trustee an instrument accepting such appointment hereunder,
and thereupon the resignation or removal of the predecessor Trustee shall become
effective, and such successor Trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with like effect as if originally
named as Trustee. The Depositor, the 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.

      No successor Trustee shall accept appointment as provided in this Section
8.08 unless at the time of such acceptance such successor Trustee shall be
eligible under the provisions of Section 8.06 and the appointment of such
successor Trustee shall not result in a downgrading of the Regular Certificates
by either Rating Agency, as evidenced by a letter from each Rating Agency.

      Upon acceptance of appointment by a successor Trustee as provided in this
Section 8.08, the successor Trustee shall mail notice of the appointment of a
successor Trustee hereunder to all Holders of Certificates at their addresses as
shown in the Certificate Register and to each Rating Agency.

      Section 8.09 Merger or Consolidation of Trustee.

      Any entity into which the Trustee may be merged or converted or with which
it may be consolidated, or any entity resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any entity succeeding to
the business of the Trustee, shall be the successor of the Trustee hereunder,
provided such entity shall be eligible under the provisions of Section 8.06 and
8.08, without the execution or filing of any paper or any further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.

      Section 8.10 Appointment of Co-Trustee or Separate Trustee.

      Notwithstanding any other provisions of this Agreement, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust or any Mortgaged Property may at the time be located, the
Depositor and the Trustee acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by the
Trustee 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,

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and to vest in such Person or Persons, in such capacity and for the benefit of
the Certificateholders, such title to the Trust, or any part thereof, and,
subject to the other provisions of this Section 8.10, such powers, duties,
obligations, rights and trusts as the Servicer and the Trustee may consider
necessary or desirable. Any such co-trustee or separate trustee shall be subject
to the written approval of the Servicer. If the Servicer shall not have joined
in such appointment within 15 days after the receipt by it of a request so to
do, or in the case a Servicer Event of Termination shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor Trustee under Section 8.06, and no notice to
Certificateholders of the appointment of any co-trustee or separate trustee
shall be required under Section 8.08. The 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 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 a Servicer Event of Termination, the
Trustee acting alone may accept the resignation or remove any separate trustee
or co-trustee.

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

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      Section 8.11 Limitation of Liability.

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

      Section 8.12 Trustee May Enforce Claims Without Possession of
Certificates.

            (a) All rights of action and claims under this Agreement or the
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and such proceeding instituted by the Trustee shall
be brought in its own name or in its capacity as Trustee for the benefit of all
Holders of such Certificates, subject to the provisions of this Agreement. Any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursement and advances of the Trustee, its agents and
counsel, be for the ratable benefit of the Certificateholders in respect of
which such judgment has been recovered.

            (b) The Trustee shall afford the Seller, the Depositor, the Servicer
and each Certificateholder upon reasonable notice during normal business hours,
access to all records maintained by the Trustee in respect of its duties
hereunder and access to officers of the Trustee responsible for performing such
duties. The Trustee shall cooperate fully with the Seller, the Servicer, the
Depositor and such Certificateholder and shall make available to the Seller, the
Servicer, the Depositor and such Certificateholder for review and copying at the
expense of the party requesting such copies, such books, documents or records as
may be requested with respect to the Trustee's duties hereunder. The Seller, the
Depositor, the Servicer and the Certificateholders shall not have any
responsibility or liability for any action or failure to act by the Trustee and
are not obligated to supervise the performance of the Trustee under this
Agreement or otherwise.

      Section 8.13 Suits for Enforcement.

      In case a Servicer Event of Termination or other default by the Servicer
or the Seller hereunder shall occur and be continuing, the Trustee may proceed
to protect and enforce its rights and the rights of the 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, and subject to the foregoing, shall deem most
effectual to protect and enforce any of the rights of the Trustee and the
Certificateholders.

      Section 8.14 Waiver of Bond Requirement.

      The Trustee shall be relieved of, and each Certificateholder hereby
waives, any requirement of any jurisdiction in which the Trust, or any part
thereof, may be located that the Trustee post a bond or other surety with any
court, agency or body whatsoever.

      Section 8.15 Waiver of Inventory, Accounting and Appraisal Requirement.

      The Trustee shall be relieved of, and each Certificateholder hereby
waives, any requirement of any jurisdiction in which the Trust, or any part
thereof, may be located that the Trustee file any inventory,

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accounting or appraisal of the Trust with any court, agency or body at any time
or in any manner whatsoever.

      Section 8.16 Compliance with National Housing Act of 1934.

      In performing its duties hereunder with respect to FHA Loans, the Trustee
shall comply with all requirements of the National Housing Act of 1934, as
amended.

                                   ARTICLE IX

                     REMIC AND GRANTOR TRUST ADMINISTRATION

      Section 9.01 REMIC Administration.

            (a) The Trustee shall make or cause to be made REMIC elections for
each of REMIC 1, REMIC 2, REMIC B-2, REMIC B-3, REMIC B-4 and REMIC X/N as set
forth in the Preliminary Statement on Forms 1066 or other appropriate federal
tax or information return for the taxable year ending on the last day of the
calendar year in which the Certificates are issued. The regular interests and
residual interest in each REMIC shall be as designated in the Preliminary
Statement.

            (b) The Closing Date is hereby designated as the "Startup Day" of
each REMIC within the meaning of section 860G(a)(9) of the Code.

            (c) The Servicer shall pay any and all tax related expenses (not
including taxes) of each REMIC, including but not limited to any professional
fees or expenses related to audits or any administrative or judicial proceedings
with respect to such REMIC that involve the Internal Revenue Service or state
tax authorities, but only to the extent that (i) such expenses are ordinary or
routine expenses, including expenses of a routine audit but not expenses of
litigation (except as described in (ii)); or (ii) such expenses or liabilities
(including taxes and penalties) are attributable to the negligence or willful
misconduct of the Servicer in fulfilling its duties hereunder. The Servicer
shall be entitled to reimbursement of expenses to the extent provided in clause
(i) above from the Collection Account, but only to the extent that such expenses
are "unanticipated expenses" under Treasury Regulations Section
1.860G-1(b)(3)(ii).

            (d) The Trustee shall prepare or cause to be prepared, sign and file
or cause to be filed, each REMIC's federal and state tax and information returns
as such REMIC's direct representative. The expenses of preparing and filing such
returns shall be borne by the Trustee.

            (e) The Holder of the Residual Certificates with respect to each
REMIC holding the largest Percentage Interest shall be the "tax matters person"
as defined in the REMIC Provisions (the "Tax Matters Person") with respect to
the applicable REMIC or REMICs, and the Trustee is irrevocably designated as and
shall act as attorney-in-fact and agent for such Tax Matters Person for each
REMIC. The Trustee, as agent for the Tax Matters Person, shall perform, on
behalf of each REMIC, all reporting and other tax compliance duties that are the
responsibility of such REMIC under the Code, the REMIC Provisions, or other
compliance guidance issued by the Internal Revenue Service or any state or local
taxing authority. Among its other duties, if required by the Code, the REMIC
Provisions, or other such guidance, the Trustee, as agent for the Tax Matters
Person, shall provide (i) to the Treasury or other governmental authority such
information as is necessary for the application of any tax relating to the
transfer of a Residual Certificate to any disqualified person or organization
and (ii) to the Certificateholders such information or reports as are required
by the Code or REMIC Provisions.

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            (f) The Trustee, the Servicer, and the Holders of Certificates shall
take any action or cause any REMIC to take any action necessary to create or
maintain the status of such REMIC as a REMIC under the REMIC Provisions and
shall assist each other as necessary to create or maintain such status. Neither
the Trustee, the Servicer, nor the Holder of any Residual Certificate shall take
any action or cause any REMIC to take any action or fail to take (or fail to
cause to be taken) any action that, under the REMIC Provisions, if taken or not
taken, as the case may be, could (i) endanger the status of such REMIC as a
REMIC or (ii) result in the imposition of a tax upon such REMIC (including but
not limited to the tax on prohibited transactions as defined in Code Section
860F(a)(2) and the tax on prohibited contributions set forth on Section 860G(d)
of the Code) (either such event, an "Adverse REMIC Event") unless such action or
failure to take such action is expressly permitted under the terms of this
Agreement or the Trustee and the Servicer have received an Opinion of Counsel
(at the expense of the party seeking to take such action) to the effect that the
contemplated action will not endanger such status or result in the imposition of
such a tax. In addition, prior to taking any action with respect to any REMIC or
the assets therein, or causing such REMIC to take any action, which is not
expressly permitted under the terms of this Agreement, any Holder of a Residual
Certificate will consult with the Trustee and the Servicer, or their respective
designees, in writing, with respect to whether such action could cause an
Adverse REMIC Event to occur with respect to such REMIC, and no such Person
shall take any such action or cause such REMIC to take any such action as to
which the Trustee or the Servicer has advised it in writing that an Adverse
REMIC Event could occur.

            (g) Each Holder of a Residual Certificate shall pay when due its pro
rata share of any and all taxes imposed on any REMIC by federal or state
governmental authorities. To the extent that such REMIC taxes are not paid by
Residual Certificateholders, the Trustee shall pay any remaining REMIC taxes out
of current or future amounts otherwise distributable to the Holder of the
Residual Certificate in each REMIC or, if no such amounts are available, out of
other amounts held in the Collection Account, and shall reduce amounts otherwise
payable to Holders of the REMIC Regular Interests or the Certificates, as the
case may be.

            (h) The Trustee, shall, for federal income tax purposes, maintain or
cause to be maintained books and records with respect to each REMIC on a
calendar year and on an accrual basis.

            (i) No additional contributions of assets shall be made to any
REMIC, except as expressly provided in this Agreement with respect to Eligible
Substitute Mortgage Loans.

            (j) Neither the Trustee nor the Servicer shall enter into any
arrangement by which any REMIC will receive a fee or other compensation for
services.

            (k) On or before April 15 of each calendar year beginning in 2006,
the Servicer shall deliver to the Trustee and each Rating Agency an Officer's
Certificate stating the Servicer's compliance with the provisions of this
Section 9.01.

            (l) The Trustee shall treat the rights of the Cap Carryover
Certificates to receive LIBOR Carryover Amounts as a right in interest rate cap
contracts written by the Holder of the Class X/N Interest, in favor of the
Holders of the Cap Carryover Certificates, and the Trustee shall account for
such as property held separate and apart from the regular interests it holds in
each of the REMICs created hereunder. This provision is intended to satisfy the
requirements of Treasury Regulations Section 1.860G-2(i) for the treatment of
property rights coupled with regular interests to be separately respected and
shall be interpreted consistent with such regulation. On each Distribution Date,
to the extent the Cap Carryover Certificates receive payments in respect of
LIBOR Carryover Amounts pursuant to Section 4.02(b)(xxvii) or (xxviii), such
interest will be treated as distributed on the REMIC 2 X/N Interest, then

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on the REMIC X/N X/N Interest and then paid to the respective Class of Cap
Carryover Certificates pursuant to the related interest rate cap agreement.

            (m) [RESERVED]

            (n) In the event that the beneficial ownership of the Class N
Certificates and the Class X Certificates is held by a single Person for federal
income tax purposes or by multiple Persons who beneficially own the Class N and
Class X Certificates proportionately, such Person or Persons shall be treated as
the direct or indirect beneficial owner of the Class X/N Interest and the REMIC
X/N Regular Interest represented thereby. In the event the Trustee receives
written notice that beneficial ownership of the Class N and the Class X
Certificates is held by two or more Persons for tax purposes that do not
beneficially own the Class N and Class X Certificates proportionately, the
Trustee shall treat the Class N Certificateholders and the Class X
Certificateholders as partners in a partnership that owns the Class X/N Interest
and the REMIC X/N Regular Interest represented thereby for federal income tax
purposes and shall not treat the Class N and Class X Certificates as a direct
interest in any REMIC created hereunder. By acquiring the Class N Certificates
and the Class X Certificates, the respective Holders will agree to treat the
Class N Certificates and the Class X Certificates in the manner described in the
preceding sentences for federal income tax purposes in the event that the
beneficial ownership of the Class N Certificates and the Class X Certificates is
separated. In such event, (i) a separate capital account shall be established
and maintained for each Holder of a Class N or Class X Certificate in accordance
with Treasury Regulations Section 1.704-1(b)(2)(iv), which shall be credited
with income or gain and debited by any expenses (including any payments deemed
made to the Holders of any of the Class AV-1, Class M or Class B Certificates on
interest rate cap agreements for federal income tax purposes) or losses and
distributions allocable to such Certificates, (ii) the Class N Certificates
shall be allocated income in an amount equal to interest at the Pass-Through
Rate thereon and any original issue discount that would be reportable thereon if
the Class N Certificate were a debt instrument issued on the date ownership of
the Class N and Class X Certificates is separated, with a principal balance
equal to its Notional Amount, (iii) the Class X and Class N Certificates shall
be allocated income with respect to all prepayment penalties (including amounts
in connection with the full or partial waiver of such prepayment penalties or
premiums pursuant to Section 3.01) in accordance with the allocation of such
amounts pursuant to Section 4.02(c), to the extent not allocated pursuant to
Section 9.01(n)(ii) above, (iv) the Class X and Class N Certificates shall be
allocated accruals (under any reasonable method) of any "cap premiums" deemed
received on the date ownership of the Class X and Class N Certificates is
separated in respect of the obligation of the Class X/N Interest to pay LIBOR
Carryover Amounts, and shall be allocated expense in respect of such LIBOR
Carryover Amounts based on which one of such Classes economically bears such
expense, (v) the Class X Certificates shall be allocated all remaining income
and any expenses and Realized Losses with respect to the Class X/N Interest,
until the capital account of the Class X Certificates is reduced to zero, and
any remaining expenses or losses shall be allocated to the Class N Certificates,
(vi) neither the Class N Certificates nor the Class X Certificates shall be
responsible for restoring any deficit to its capital account, (vii) upon
termination of the Trust Fund pursuant to Article X, all amounts available for
distribution to Holders of the Class N and Class X Certificates shall be
distributed in accordance with their positive capital account balances, first to
the Class N Certificates until their Notional Amount and any accrued but unpaid
interest thereon are reduced to zero, and then to the Class X Certificates, and
(viii) the Trustee shall maintain books and records with respect to the
partnership on a calendar year basis (unless a different taxable year shall be
required by the Code) and shall prepare or cause to be prepared, and cause the
Holder of the largest Percentage Interest of the Class X Certificates to sign
and file or cause to be filed all federal and state tax and information returns
for the partnership, and shall furnish or cause to be furnished Schedule K-1 to
the Holders of the Class N and Class X Certificates at the time required by the
Code. Unless otherwise directed by a majority of the Percentage Interests of the
Class X and Class N Certificates, the Trustee shall not make an election under
Section 754 of the Code. The Holder of the largest Percentage Interest of the
Class X Certificates, by

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acceptance of its Class X Certificate, agrees to act as "tax matters partner"
(within the meaning of Section 6231(a)(7) of the Code) and to sign and timely
file all federal and state partnership tax and information returns prepared by
the Trustee pursuant to this Section 9.01(n).

      Section 9.02 Prohibited Transactions and Activities.

      Neither the Seller, the Depositor, the Servicer nor the Trustee shall
sell, dispose of, or substitute for any of the Mortgage Loans, except in a
disposition pursuant to (i) the foreclosure of a Mortgage Loan, (ii) the
bankruptcy of the Trust Fund, (iii) the termination of any REMIC pursuant to
Article X of this Agreement, (iv) a substitution pursuant to Article II of this
Agreement or (v) a repurchase of Mortgage Loans pursuant to Article II of this
Agreement, nor acquire any assets for any REMIC constituting part of the Trust
Fund, nor sell or dispose of any investments in the Distribution Account for
gain, nor accept any contributions to any REMIC constituting part of the Trust
Fund after the Closing Date, unless it has received an Opinion of Counsel (at
the expense of the party causing such sale, disposition, or substitution) that
such disposition, acquisition, substitution, or acceptance will not (a) affect
adversely the status of such REMIC as a REMIC or of the interests therein other
than the Residual Certificates as the regular interests therein, (b) affect the
distribution of interest or principal on the Certificates, (c) result in the
encumbrance of the assets transferred or assigned to the Trust Fund (except
pursuant to the provisions of this Agreement) or (d) cause such REMIC to be
subject to a tax on prohibited transactions or prohibited contributions pursuant
to the REMIC Provisions.

      Section 9.03 Indemnification with Respect to Certain Taxes and Loss of
REMIC Status.

      In the event that any REMIC formed hereunder fails to qualify as a REMIC,
loses its status as a REMIC, or incurs federal, state or local taxes as a result
of a prohibited transaction or prohibited contribution under the REMIC
Provisions due to the negligent performance by the Servicer of its duties and
obligations set forth herein, the Servicer shall indemnify the Holder of the
related Residual Certificate against any and all losses, claims, damages,
liabilities or expenses ("Losses") resulting from such negligence; provided,
however, that the Servicer shall not be liable for any such Losses attributable
to the action or inaction of the Trustee, the Depositor or the Holder of such
Residual Certificate, as applicable, nor for any such Losses resulting from
misinformation provided by the Holder of such Residual Certificate on which the
Servicer has relied. The foregoing shall not be deemed to limit or restrict the
rights and remedies of the Holder of such Residual Certificate now or hereafter
existing at law or in equity. Notwithstanding the foregoing, however, in no
event shall the Servicer have any liability (1) for any action or omission that
is taken in accordance with and in compliance with the express terms of, or
which is expressly permitted by the terms of, this Agreement, (2) for any Losses
other than arising out of a negligent performance by the Servicer of its duties
and obligations set forth herein, and (3) for any special or consequential
damages to Certificateholders (in addition to payment of principal and interest
on the Certificates).

      Section 9.04 REO Property.

            (a) Subject to compliance with applicable laws and regulations as
shall at any time be in force, and notwithstanding any other provision of this
Agreement, the Servicer, acting on behalf of the Trust hereunder, shall not
rent, lease, or otherwise earn income on behalf of any REMIC constituting part
of the Trust Fund with respect to any REO Property which might cause such REO
Property to fail to qualify as "foreclosure" property within the meaning of
section 860G(a)(8) of the Code or result in the receipt by any REMIC
constituting part of the Trust Fund of any "income from non-permitted assets"
within the meaning of section 860F(a)(2) of the Code or any "net income from
foreclosure property" which is subject to tax under the REMIC Provisions unless
the Servicer has advised the Trustee in writing to the effect that, under the
REMIC Provisions, such action would not adversely affect the status of any

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REMIC constituting part of the Trust Fund as a REMIC and any income generated
for such REMIC by the REO Property would not result in the imposition of a tax
upon such REMIC.

            (b) The Servicer shall make reasonable efforts to sell any REO
Property for its fair market value. In any event, however, the Servicer shall
dispose of any REO Property before the close of the third calendar year
beginning after the year of its acquisition by the Trust Fund unless the
Servicer has received a grant of extension from the Internal Revenue Service to
the effect that, under the REMIC Provisions and any relevant proposed
legislation and under applicable state law, any REMIC constituting part of the
Trust Fund may hold REO Property for a longer period without adversely affecting
its REMIC status or causing the imposition of a Federal or state tax upon any
REMIC. If the Servicer has received such an extension, then the Servicer shall
continue to attempt to sell the REO Property for its fair market value as
determined in good faith by the Servicer for such longer period as such
extension permits (the "Extended Period"). If the Servicer has not received such
an extension and the Servicer is unable to sell the REO Property within 33
months after its acquisition by the Trust Fund or if the Servicer has received
such an extension, and the Servicer is unable to sell the REO Property within
the period ending three months before the close of the Extended Period, the
Servicer shall, before the end of the applicable period, (i) purchase such REO
Property at a price equal to the REO Property's fair market value as determined
in good faith by the Servicer or (ii) auction the REO Property to the highest
bidder (which may be the Servicer) in an auction reasonably designed to produce
a fair price prior to the expiration of the applicable period.

      Section 9.05 Grantor Trust Administration.

      The parties intend that the portions of the Trust Fund consisting of the
REMIC X/N X/N Interest and the obligation to pay LIBOR Carryover Amounts, shall
be treated as a "grantor trust" under the Code, and the provisions hereof shall
be interpreted consistently with this intention. In furtherance of such
intention, the Trustee shall furnish or cause to be furnished (i) to the Holders
of the Cap Carryover Certificates and (ii) to the Holder of the Class X and
Class N Certificates (if there is a single beneficial owner thereof) or to
itself on behalf of the partnership comprised of the Holders of the Class X and
Class N Certificates (if there are two or more beneficial owners thereof), and
shall file or cause to be filed with the Internal Revenue Service together with
Form 1041 or such other form as may be applicable, indicating their allocable
shares of income with respect to the property held by the Grantor Trust, at the
time or times and in the manner required by the Code.

                                    ARTICLE X

                                   TERMINATION

      Section 10.01 Termination.

            (a) The respective obligations and responsibilities of the Seller,
the Servicer, the Depositor, the Trustee and the Certificate Registrar created
hereby (other than the obligation of the Trustee to make certain payments to
Certificateholders after the final Distribution Date and the obligation of the
Servicer to send certain notices as hereinafter set forth) shall terminate upon
notice to the Trustee upon the earliest of (i) the Distribution Date on which
the Certificate Principal Balance of each Class of Certificates has been reduced
to zero, (ii) the final payment or other liquidation of the last Mortgage Loan
in the Trust Fund, and (iii) the optional purchase by the Servicer of the
Mortgage Loans as described below. Notwithstanding the foregoing, in no event
shall the trust created hereby continue beyond the expiration of 21 years from
the death of the last survivor of the descendants of Joseph P. Kennedy, the late
ambassador of the United States to the Court of St. James, living on the date
hereof.

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      The Servicer (or an Affiliate) may, at its option, terminate the Mortgage
Loans in the Trust Fund and retire the Certificates on the next succeeding
Distribution Date upon which the current Pool Balance is 10% or less of the Pool
Balance of the Mortgage Loans as of the Cut-off Date by purchasing all of the
outstanding (i) Mortgage Loans in the Trust Fund at a price equal to the sum of
the outstanding Principal Balance of the Mortgage Loans and except to the extent
previously advanced by the Servicer, accrued and unpaid interest thereon at the
weighted average of the Mortgage Interest Rates through the end of the
Collection Period preceding the final Distribution Date plus unreimbursed
Servicing Advances, Advances and any unpaid Servicing Fees allocable to such
Mortgage Loans plus any costs or damages incurred by the Trust Fund in
connection with any violation by such Mortgage Loan of any predatory or abusive
lending laws and (ii) REO Properties in the Trust Fund at a price equal to their
fair market value as determined in good faith by the Servicer (the "Termination
Price"). Notwithstanding the foregoing, the Servicer (or an Affiliate) may not
exercise its optional purchase right unless any Reimbursement Amount owed to the
Trust pursuant to Section 2.03 hereof has been paid.

      In connection with any such purchase pursuant to the preceding paragraph,
the Servicer shall deliver to the Trustee for deposit in the Distribution
Account all amounts then on deposit in the Collection Account (less amounts
permitted to be withdrawn by the Servicer pursuant to Section 3.07), which
deposit shall be deemed to have occurred immediately following such purchase.

      Any such purchase shall be accomplished by delivery to the Trustee for
deposit into the Distribution Account as part of Available Funds on the
Determination Date before such Distribution Date of the Termination Price.

            (b) Notice of any termination, specifying the Distribution Date
(which shall be a date that would otherwise be a Distribution Date) upon which
the Certificateholders may surrender their Certificates to the Trustee for
payment of the final distribution and cancellation, shall be given promptly by
the Trustee upon the Trustee receiving notice of such date from the Servicer, by
letter to the Certificateholders mailed not earlier than the 15th day of the
month preceding the month of such final distribution and not later than the 15th
day of the month of such final distribution specifying (1) the Distribution Date
upon which final distribution of the Certificates will be made upon presentation
and surrender of such Certificates at the office or agency of the Trustee
therein designated, (2) the amount of any such final distribution and (3) that
the Record Date otherwise applicable to such Distribution Date is not
applicable, distributions being made only upon presentation and surrender of the
Certificates at the office or agency of the Trustee therein specified. Not less
than five (5) Business Days prior to such Determination Date relating to such
Distribution Date, the Trustee shall notify the Seller of the amount of any
unpaid Reimbursement Amount owed to the Trust.

            (c) Upon presentation and surrender of the Certificates, the Trustee
shall cause to be distributed to the Holders of the Certificates on the
Distribution Date for such final distribution, in proportion to the Percentage
Interests of their respective Class and to the extent that funds are available
for such purpose, an amount equal to the amount required to be distributed to
such Holders in accordance with the provisions of Section 10.02.

            (d) In the event that all Certificateholders shall not surrender
their Certificates for final payment and cancellation on or before such final
Distribution Date, the Trustee shall promptly following such date cause all
funds in the Distribution Account not distributed in final distribution to
Certificateholders to be withdrawn therefrom and credited to the remaining
Certificateholders by depositing such funds in a separate escrow account for the
benefit of such Certificateholders, and the Servicer (if the Servicer has
exercised its right to purchase the Mortgage Loans) or the Trustee (in any other
case) shall give a second written notice to the remaining Certificateholders, to
surrender their Certificates for cancellation and receive the final distribution
with respect thereto. If within nine months

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after the second notice all the Certificates shall not have been surrendered for
cancellation, the Class R Certificateholders shall be entitled to all unclaimed
funds and other assets which remain subject hereto and the Trustee upon transfer
of such funds shall be discharged of any responsibility for such funds, and such
Certificateholders shall look to the Class R Certificateholders for payment.

      Section 10.02 Additional Termination Requirements.

            (a) In the event that the Servicer exercises its purchase option as
provided in Section 10.01, the Trust shall be terminated in accordance with the
following additional requirements, unless the Trustee shall have been furnished
with an Opinion of Counsel to the effect that the failure of the Trust to comply
with the requirements of this Section will not (i) result in the imposition of
taxes on "prohibited transactions" of the Trust as defined in Section 860F of
the Code or (ii) cause any REMIC constituting part of the Trust Fund to fail to
qualify as a REMIC at any time that any Certificates are outstanding:

                  (i) The Trustee shall designate a date within 90 days prior to
the final Distribution Date as the date of adoption of plans of complete
liquidation delivered to it by the Servicer of each of the remaining REMICs
included in the Trust Fund and shall specify such date in the final federal
income tax return of each REMIC;

                  (ii) After the date of adoption of such plans of complete
liquidation and at or prior to the final Distribution Date, the Trustee shall
sell all of the assets of the Trust to the Servicer for cash; and

                  (iii) At the time of the making of the final payment on the
Certificates, the Trustee shall distribute or credit, or cause to be distributed
or credited in the following order of priority (A) (i) to the Holders of each of
the Class AV-1, Class AF-1, Class AF-2, Class AF-3 and Class AF-4 Certificates,
pro rata and (ii) to the Class M-1, Class M-2, Class M-3 Class B-1, Class B-2,
Class B-3 and Class B-4 Certificates, the related Certificate Principal Balance,
as applicable, plus one month's interest thereon at the applicable Pass-Through
Rate, (B) (i) to the Class R Certificates, the Class R Excess Interest Amount of
any remaining Monthly Excess Interest, (ii) any LIBOR Carryover Amounts not
previously distributed and (iii) to the Class N and Class X Certificates in
respect of the Class X/N Interest, the amount of any remaining Monthly Excess
Cash Flow Amounts not previously distributed thereon and not distributed to the
Class R Certificates, (C) to the remaining REMIC Regular Interests the amounts
allocable thereto pursuant to Section 4.08 and (D) to the Class R
Certificateholders, all cash on hand in respect of the related REMIC or REMICs
after such payment (other than cash retained to meet claims) and the Trust shall
terminate at such time.

            (b) By their acceptance of Certificates, the Holders thereof hereby
agree to appoint the Trustee as their attorney in fact to: (i) designate such
date of adoption of plans of complete liquidation and (ii) to take such other
action in connection therewith as may be reasonably required to carry out such
plans of complete liquidation all in accordance with the terms hereof.

                                   ARTICLE XI

                            MISCELLANEOUS PROVISIONS

      Section 11.01 Amendment.

      This Agreement may be amended from time to time by the Seller, the
Depositor, the Servicer and the Trustee; and without the consent of the
Certificateholders, (i) to cure any ambiguity, (ii) to correct or supplement any
provisions herein which may be defective or inconsistent with any other
provisions

                                      117
<PAGE>

herein, (iii) to make any other provisions with respect to matters or questions
arising under this Agreement, which shall not be inconsistent with the
provisions of this Agreement, or (iv) to comply with any requirements imposed by
the Code; provided, however, that any such action listed in clause (i) through
(iv) above shall not adversely affect in any respect the interests of any
Certificateholder, as evidenced by (i) notice in writing to the Depositor, the
Servicer and the Trustee from the Rating Agencies that such action will not
result in the reduction or withdrawal of the rating of any outstanding Class of
Certificates with respect to which it is a Rating Agency, or (ii) an Opinion of
Counsel delivered to the Servicer and the Trustee.

      In addition, this Agreement may be amended from time to time by Seller,
the Depositor, the Servicer and the Trustee, with the consent of the Majority
Certificateholders for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Holders of Certificates; provided,
however, that no such amendment or waiver shall (x) reduce in any manner the
amount of, or delay the timing of, payments on the Certificates which are
required to be made on any Certificate without the consent of the Holder of such
Certificate, (y) adversely affect in any material respect the interests of the
Holders of any Class of Certificates in a manner other than as described in
clause (x) above, without the consent of the Holders of Certificates of such
Class evidencing at least a 66 2/3% Percentage Interest in such Class, or (z)
reduce the percentage of Voting Rights required by clause (y) above without the
consent of the Holders of all Certificates of such Class then outstanding. Upon
approval of an amendment, a copy of such amendment shall be sent to the Rating
Agencies. Prior to the execution of any amendment to this Agreement, the Trustee
shall be entitled to receive and rely upon an Opinion of Counsel (at the expense
of the Person seeking such amendment) stating that the execution of such
amendment is authorized or permitted by this Agreement. 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.

      Notwithstanding any provision of this Agreement to the contrary, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel, delivered by (and at the expense of)
the Person seeking such Amendment, to the effect that such amendment is
permitted hereunder and will not result in the imposition of a tax on any REMIC
constituting part of the Trust Fund pursuant to the REMIC Provisions or cause
any REMIC constituting part of the Trust to fail to qualify as a REMIC at any
time that any Certificates are outstanding and that the amendment is being made
in accordance with the terms hereof.

      Promptly after the execution of any such amendment the Trustee shall
furnish, at the expense of the Person that requested the amendment if such
Person is the Seller or the Servicer (but in no event at the expense of the
Trustee), otherwise at the expense of the Trust, a copy of such amendment and
the Opinion of Counsel referred to in the immediately preceding paragraph to the
Servicer and each Rating Agency.

      It shall not be necessary for the consent of Certificateholders under this
Section 11.01 to approve the particular form of any proposed amendment; instead
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.

      Section 11.02 Recordation of Agreement; Counterparts.

      To the extent permitted by applicable law, this Agreement is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Servicer at the expense of the

                                      118
<PAGE>

Trust, but only upon direction of Certificateholders, accompanied by an Opinion
of Counsel to the effect that such recordation materially and beneficially
affects the interests of the Certificateholders.

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

      Section 11.03 Limitation on Rights of Certificateholders.

      The death or incapacity of any Certificateholder shall not (i) operate to
terminate this Agreement or the Trust, (ii) entitle such Certificateholder's
legal representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust, or (iii)
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.

      Except as expressly provided for herein, no Certificateholder shall have
any right to vote or in any manner otherwise control the operation and
management of the Trust, or the obligations of the parties hereto, nor shall
anything herein set forth or contained in the terms of the Certificates be
construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third person by reason of any action taken by the parties
to this Agreement pursuant to any provision hereof.

      No Certificateholder shall have any right by virtue of any provision of
this Agreement to institute any suit, action or proceeding in equity or at law
upon or under or with respect to this Agreement, unless such Holder previously
shall have given to the Trustee a written notice of default and of the
continuance thereof, as herein provided, and unless also the Holders of
Certificates entitled to at least 25% of the Voting Rights shall have made
written request upon the Trustee to institute such action, suit or proceeding in
its own name as Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee for 15 days after
its receipt of such notice, request and offer of indemnity, shall have neglected
or refused to institute any such action, suit or proceeding. It is understood
and intended, and expressly covenanted by each Certificateholder with every
other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, which priority or
preference is not otherwise provided for herein, or to enforce any right under
this Agreement, except in the manner herein provided and for the equal, ratable
and common benefit of all Certificateholders. For the protection and enforcement
of the provisions of this Section 11.03 each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.

      Section 11.04 Governing Law; Jurisdiction.

      This Agreement shall be construed in accordance with the laws of the State
of New York, and the obligations, rights and remedies of the parties hereunder
shall be determined in accordance with such laws. With respect to any claim
arising out of this Agreement, each party irrevocably submits to the exclusive
jurisdiction of the courts of the State of New York and the United States
District Court located in the Borough of Manhattan in The City of New York, and
each party irrevocably waives any objection which it may have at any time to the
laying of venue of any suit, action or proceeding arising out of or relating
hereto brought in any such courts, irrevocably waives any claim that any such
suit, action or proceeding brought in any such court has been brought in any
inconvenient forum and further irrevocably waives the right to object, with
respect to such claim, suit, action or proceeding brought in any such court,

                                      119
<PAGE>

that such court does not have jurisdiction over such party, provided that
service of process has been made by any lawful means.

      Section 11.05 Notices.

      All directions, demands and notices hereunder shall be in writing and
shall be deemed to have been duly given if personally delivered at or mailed by
first class mail, postage prepaid, or by express delivery service, to (a) in the
case of the Seller, Credit-Based Asset Servicing and Securitization LLC, 335
Madison Avenue, 19th Floor, New York, New York 10017, Attention: Director -
Mortgage Finance (telecopy number (212) 850-7760), or such other address or
telecopy number as may hereafter be furnished to the Depositor and the Trustee
in writing by the Seller, (b) in the case of the Trustee, JPMorgan Chase Bank,
National Association, 4 New York Plaza, 6th Floor, New York, New York
10004-2477, Attention: Institutional Trust Services/Global Debt, C-BASS
2004-CB8, or such other address as may hereafter be furnished to the Depositor,
the Seller and the Servicer in writing by the Trustee, (c) in the case of the
Depositor, Merrill Lynch Mortgage Investors, Inc., 250 Vesey Street, 4 World
Financial Center, 10th Floor, New York, New York 10080, Attention: Asset-Backed
Finance, or such other address as may be furnished to the Seller, the Servicer
and the Trustee in writing by the Depositor, and (d) in the case of the
Servicer, Litton Loan Servicing LP, 4828 Loop Central Drive, Houston, Texas
77081, Attention: Janice McClure, or such other address as may be furnished to
the Seller, the Depositor and the Trustee in writing by the Servicer. Any notice
required or permitted to be mailed to a Certificateholder shall be given by
first class mail, postage prepaid, at the address of such Holder as shown in the
Certificate Register. Notice of any Servicer Event of Termination shall be given
by telecopy and by certified mail. Any notice so mailed within the time
prescribed in this Agreement shall be conclusively presumed to have duly been
given when mailed, whether or not the Certificateholder receives such notice. A
copy of any notice required to be telecopied hereunder shall also be mailed to
the appropriate party in the manner set forth above.

      Section 11.06 Severability of Provisions.

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

      Section 11.07 Article and Section References.

      All article and section references used in this Agreement, unless
otherwise provided, are to articles and sections in this Agreement.

      Section 11.08 Notice to the Rating Agencies.

            (a) Each of the Trustee and the Servicer shall be obligated to use
its best reasonable efforts promptly to provide notice to the Rating Agencies
with respect to each of the following of which a Responsible Officer of the
Trustee or the Servicer, as the case may be, has actual knowledge:

                  (i) any material change or amendment to this Agreement;

                  (ii) the occurrence of any Servicer Event of Termination that
has not been cured or waived;

                                      120
<PAGE>

                  (iii) the resignation or termination of the Servicer or the
Trustee;

                  (iv) the final payment to Holders of the Certificates of any
Class;

                  (v) any change in the location of any Account; and

                  (vi) if the Trustee is acting as successor Servicer pursuant
to Section 7.02 hereof, any event that would result in the inability of the
Trustee to make Advances.

                  (vii) In addition, the Servicer shall promptly furnish to each
Rating Agency copies of the following:

                              (A) each annual statement as to compliance
described in Section 3.19 hereof;

                              (B) each annual independent public accountants'
servicing report described in Section 3.20 hereof; and

                              (C) each notice delivered pursuant to Section
7.01(a) hereof which relates to the fact that the Servicer has not made an
Advance.

      Any such notice pursuant to this Section 11.08 shall be in writing and
shall be deemed to have been duly given if personally delivered or mailed by
first class mail, postage prepaid, or by express delivery service to Moody's
Investors Service, Inc., 99 Church Street, New York, New York 10007, Attention:
Managing Director, Residential Mortgage-Backed Securities; Fitch Ratings, One
State Street Plaza, New York, New York 10004, Attention: Managing Director,
Residential Mortgage-Backed Securities; Standard & Poor's, a division of The
McGraw-Hill Companies, Inc., 55 Water Street, New York, New York 10041,
Attention: Mortgage Surveillance Group; and Dominion Bond Rating Service, 55
Broadway, 15th Floor, New York, NY 10006.

      Section 11.09 Further Assurances.

      Notwithstanding any other provision of this Agreement, neither the Regular
Certificateholders, nor the Trustee shall have any obligation to consent to any
amendment or modification of this Agreement unless they have been provided
reasonable security or indemnity against their out-of-pocket expenses (including
reasonable attorneys' fees) to be incurred in connection therewith.

      Section 11.10 Section 11.10 Benefits of Agreement.

      Nothing in this Agreement or in the Certificates, expressed or implied,
shall give to any Person, other than the Certificateholders and the parties
hereto and their successors hereunder, any benefit or any legal or equitable
right, remedy or claim under this Agreement.

      Section 11.11 Acts of Certificateholders.

            (a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by the
Certificateholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Certificateholders in person or by
agent duly appointed in writing; and such action shall become effective when
such instrument or instruments are delivered to the Trustee, the Seller and the
Servicer. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as

                                      121
<PAGE>

the "act" of the Certificateholders signing such instrument or instruments.
Proof of execution of any such instrument or of a writing appointing any such
agent shall be sufficient for any purpose of this Agreement and conclusive in
favor of the Trustee and the Trust, if made in the manner provided in this
Section 11.11.

            (b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of a notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Whenever
such execution is by a signer acting in a capacity other than his or her
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority.

            (c) Any request, demand, authorization, direction, notice, consent,
waiver or other action by any Certificateholder shall bind every future Holder
of such Certificate and the Holder of every Certificate issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof, in
respect of anything done, omitted or suffered to be done by the Trustee or the
Trust in reliance thereon, whether or not notation of such action is made upon
such Certificate.

                      [SIGNATURE PAGES IMMEDIATELY FOLLOW]

                                      122
<PAGE>

      IN WITNESS WHEREOF, the Seller, the Depositor, the Servicer and the
Trustee have caused their names to be signed hereto by their respective officers
thereunto duly authorized, all as of the day and year first above written.

                          MERRILL LYNCH MORTGAGE INVESTORS, INC.,
                                 as Depositor

                          By:__________________________________
                          Name:  Matthew Whalen
                          Title: President

                          CREDIT-BASED ASSET SERVICING AND
                                SECURITIZATION LLC, as Seller

                          By:__________________________________
                          Name:  Stephanie Sparvero
                          Title: Vice President

                          LITTON LOAN SERVICING LP, as Servicer

                          By:__________________________________
                          Name:  Janice McClure
                          Title: Senior Vice President

                          JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
                          not in its individual
                                 capacity but solely as Trustee for the 2004-CB8
                                 Trust, C-BASS Mortgage Loan Asset-Backed
                                 Certificates, Series 2004-CB8

                          By:__________________________________
                          Name:
                          Title:

<PAGE>

                                   EXHIBIT A-1

                       FORM OF THE CLASS AV-1 CERTIFICATE

      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.

      FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
      BENEFICIAL OWNERSHIP OF 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") AND CERTAIN OTHER PROPERTY.

                 C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
                           SERIES 2004-CB8, CLASS AV-1

evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional fixed-rate and adjustable-rate
one- to four-family first and second lien mortgage loans formed and sold by

                     MERRILL LYNCH MORTGAGE INVESTORS, INC.

<TABLE>
<S>                                               <C>
Series 2004-CB8, Class AV-1                       Original Class Certificate Principal Balance of the
                                                  Class AV-1 Certificates as of the Closing Date:
                                                  $325,739,000.00
Pass-Through Rate:  Variable(1)

Date of Pooling and Servicing Agreement and Cut-  Initial Certificate Principal Balance:
off Date: December 1, 2004                        $325,739,000.00
First Distribution Date:  January 25, 2005        Servicer:  Litton Loan Servicing LP

No.                                               Trustee:  JPMorgan Chase Bank, N.A.

CUSIP: 59020U PL 3                                Closing Date:  January 7, 2005

ISIN: US59020UPL34
</TABLE>

----------
(1) Subject to a cap as described in the Agreement

                                      A-1-1
<PAGE>

      DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
      CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
      OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
      THAN THE AMOUNT SHOWN ABOVE.

      THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
      MERRILL LYNCH MORTGAGE INVESTORS, INC., THE SERVICER, THE TRUSTEE OR ANY
      OF THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
      INSTRUMENTALITY OF THE UNITED STATES.

      This certifies that CEDE & CO. is the registered owner of a Percentage
Interest (obtained by dividing the Initial Certificate Principal Balance of this
Certificate by the Original Class Certificate Principal Balance of the Class
AV-1 Certificates) in that certain beneficial ownership interest evidenced by
all the Class AV-1 Certificates in the Trust Fund created pursuant to a Pooling
and Servicing Agreement, dated as specified above (the "Agreement"), among
Merrill Lynch Mortgage Investors, Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), Credit-Based
Asset Servicing and Securitization LLC (the "Seller"), the Servicer and the
Trustee, a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

      Pursuant to the terms of the Agreement, distributions will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (a "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered on the Business Day immediately preceding such Distribution Date
(the "Record Date"), from funds in the Distribution Account in an amount equal
to the product of the Percentage Interest evidenced by this Certificate and the
amount required to be distributed to the Holders of Class AV-1 Certificates on
such Distribution Date pursuant to the Agreement provided, however, that if any
Class AV-1 Certificate becomes a Definitive Certificate, the Record Date for
such Certificate will be the last Business Day of the month immediately
preceding the month in which the related Distribution Date occurs.

      All distributions to the Holder of this Certificate under the Agreement
will be made or caused to be made by or on behalf of the Trustee by wire
transfer in immediately available funds to the account of the Person entitled
thereto if such Person shall have so notified the Certificate Registrar in
writing at least five Business Days prior to the Record Date immediately prior
to such Distribution Date and is the registered owner of Class AV-1 Certificates
the aggregate Initial Certificate Principal Balance of which is in excess of
$5,000,000, or by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register, provided that the Certificate Registrar may deduct a reasonable wire
transfer fee from any payment made by wire transfer. Notwithstanding the above,
the final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.

                                     A-1-2
<PAGE>

      The Class AV-1 Pass-Through Rate on each Distribution Date will be a rate
per annum equal to the least of (i) LIBOR as of the related LIBOR Determination
Date, plus the Class AV-1 Certificate Margin, (ii) the Group I Available Funds
Cap and (iii) the Group I Maximum Rate Cap.

      This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class AV-1 Certificates.

      The Class AV-1 Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

      The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee, the Seller and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer, the Seller and the Trustee with the consent of the Holders of
Certificates entitled to the Voting Rights identified 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 herefor 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 upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee as provided in the Agreement, duly
endorsed by, or accompanied by an assignment in the form below or other 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 evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

      The Certificates are issuable in fully registered form only without
coupons in Classes and 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 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 of Certificates, but the Certificate Registrar may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.

      The Depositor, the Servicer, the Trustee, any Paying Agent and the
Certificate Registrar and any agent of the Depositor, the Servicer, the Trustee,
any Paying Agent or the Certificate Registrar may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Servicer, the Trustee, the Certificate Registrar, any Paying
Agent nor any such agent shall be affected by notice to the contrary.

                                     A-1-3
<PAGE>

      The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being 10% or
less of the Cut-off Date Aggregate Principal Balance.

      The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.

      Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     A-1-4
<PAGE>

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

Dated: January 7, 2005

                                        JPMORGAN CHASE BANK, NATIONAL
                                        ASSOCIATION,
                                              as Trustee

                                        By:____________________________
                                              Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

      This is one of the Certificates referred to in the within-mentioned
Agreement.

                                        JPMORGAN CHASE BANK, NATIONAL
                                        ASSOCIATION,
                                              as Certificate Registrar

                                        By:____________________________
                                              Authorized Signatory

Date of authentication: January 7, 2005

                                     A-1-5
<PAGE>

                                  ABBREVIATIONS

      The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>
<S>           <C>  <C>                               <C>                  <C>   <C>
TEN COM       -    as tenants in common              UNIF GIFT MIN ACT    -     Custodian
                                                                                (Cust) (Minor)
TEN ENT       -    as tenants by the entireties                                 under Uniform
                                                                                Gifts to Minors
JT TEN        -    as joint tenants with right of                               Act
                   survivorship and not as tenants                              ---------------
                   in common                                                        (State)
</TABLE>

            Additional abbreviations may also be used though not in the above
list.

                                     A-1-6
<PAGE>

                                   ASSIGNMENT

      FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
__________(Please print or typewrite name, address including postal zip code,
and Taxpayer Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

      I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:

________________________________________________________________________________

Dated:

                                    ________________________________________
                                    Signature by or on behalf of assignor

                                    ________________________________________
                                    Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

      The assignee should include the following for purposes of distribution:

      Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
________________________________________________________________________________
______ for the account of _______________________________________, account
number ______________, or, if mailed by check, to ______________________________
_________________________. Applicable statements should be mailed to ___________
_____________________________________ This information is provided by __________
___________________________________________, the assignee named above, or ______
_________________________________, as its agent.

                                     A-1-7
<PAGE>

                                   EXHIBIT A-2

                       FORM OF THE CLASS AF-1 CERTIFICATE

      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.

      FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
      BENEFICIAL OWNERSHIP OF 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").

                 C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
                           SERIES 2004-CB8, CLASS AF-1

evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional fixed-rate and adjustable-rate
one- to four-family first and second lien mortgage loans formed and sold by

                     MERRILL LYNCH MORTGAGE INVESTORS, INC.

<TABLE>
<S>                                                    <C>
Series 2004-CB8, Class AF-1                            Original Class Certificate Principal Balance of the
                                                       Class AF-1 Certificates as of the Closing Date:
                                                       $58,437,000.00
Pass-Through Rate: 3.633(1)

Date of Pooling and Servicing Agreement and Cut-       Initial Certificate Principal Balance:
off Date: December 1, 2004                             $58,437,000.00
First Distribution Date:  January 25, 2005             Servicer:  Litton Loan Servicing LP

No.                                                    Trustee:  JPMorgan Chase Bank, N.A.

CUSIP: 59020U PM 1                                     Closing Date:  January 7, 2005

ISIN: US59020UPM17
</TABLE>

----------
(1) Subject to a cap as described in the Agreement

                                     A-2-1
<PAGE>

      DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
      CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
      OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
      THAN THE AMOUNT SHOWN ABOVE.

      THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
      MERRILL LYNCH MORTGAGE INVESTORS, INC., THE SERVICER, THE TRUSTEE OR ANY
      OF THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
      INSTRUMENTALITY OF THE UNITED STATES.

      This certifies that CEDE & CO. is the registered owner of a Percentage
Interest (obtained by dividing the Initial Certificate Principal Balance of this
Certificate by the Original Class Certificate Principal Balance of the Class
AF-1 Certificates) in that certain beneficial ownership interest evidenced by
all the Class AF-1 Certificates in the Trust Fund created pursuant to a Pooling
and Servicing Agreement, dated as specified above (the "Agreement"), among
Merrill Lynch Mortgage Investors, Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), Credit-Based
Asset Servicing and Securitization LLC (the "Seller"), the Servicer and the
Trustee, a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

      Pursuant to the terms of the Agreement, distributions will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (a "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered on the Business Day immediately preceding such Distribution Date
(the "Record Date"), from funds in the Distribution Account in an amount equal
to the product of the Percentage Interest evidenced by this Certificate and the
amount required to be distributed to the Holders of Class AF-1 Certificates on
such Distribution Date pursuant to the Agreement provided, however, that if any
Class AF-1 Certificate becomes a Definitive Certificate, the Record Date for
such Certificate will be the last Business Day of the month immediately
preceding the month in which the related Distribution Date occurs.

      All distributions to the Holder of this Certificate under the Agreement
will be made or caused to be made by or on behalf of the Trustee by wire
transfer in immediately available funds to the account of the Person entitled
thereto if such Person shall have so notified the Certificate Registrar in
writing at least five Business Days prior to the Record Date immediately prior
to such Distribution Date and is the registered owner of Class AF-1 Certificates
the aggregate Initial Certificate Principal Balance of which is in excess of
$5,000,000, or by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register, provided that the Certificate Registrar may deduct a reasonable wire
transfer fee from any payment made by wire transfer. Notwithstanding the above,
the final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.

      The Class AF-1 Pass-Through Rate on each Distribution Date will be the per
annum rate specified above, subject to increase as provided in the Agreement.
Interest will accrue on the Class AF-1

                                     A-2-2
<PAGE>

Certificates during each Interest Accrual Period at a rate equal to the lesser
of (i) LIBOR as of the related LIBOR Determination Date, plus the Class AF-1
Certificate Margin and (ii) the Group II Net Rate Cap for such Distribution
Date.

      This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class AF-1 Certificates.

      The Class AF-1 Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

      The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee, the Seller and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer, the Seller and the Trustee with the consent of the Holders of
Certificates entitled to the Voting Rights identified 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 herefor 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 upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee as provided in the Agreement, duly
endorsed by, or accompanied by an assignment in the form below or other 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 evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

      The Certificates are issuable in fully registered form only without
coupons in Classes and 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 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 of Certificates, but the Certificate Registrar may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.

      The Depositor, the Servicer, the Trustee, any Paying Agent and the
Certificate Registrar and any agent of the Depositor, the Servicer, the Trustee,
any Paying Agent or the Certificate Registrar may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Servicer, the Trustee, the Certificate Registrar, any Paying
Agent nor any such agent shall be affected by notice to the contrary.

                                     A-2-3
<PAGE>

      The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being 10% or
less of the Cut-off Date Aggregate Principal Balance.

      The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.

      Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     A-2-4
<PAGE>

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

Dated: January 7, 2005

                                           JPMORGAN CHASE BANK, NATIONAL
                                           ASSOCIATION,
                                                as Trustee

                                           By:_______________________________
                                                Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

      This is one of the Certificates referred to in the within-mentioned
Agreement.

                                           JPMORGAN CHASE BANK, NATIONAL
                                           ASSOCIATION,
                                                as Certificate Registrar

                                           By:_______________________________
                                                Authorized Signatory

Date of authentication: January 7, 2005

                                     A-2-5
<PAGE>

                                  ABBREVIATIONS

      The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>
<S>            <C>   <C>                                  <C>                    <C>    <C>
TEN COM        -     as tenants in common                 UNIF GIFT MIN ACT      -      Custodian
                                                                                        (Cust) (Minor)
TEN ENT        -     as tenants by the entireties                                       under Uniform
                                                                                        Gifts to Minors
JT TEN         -     as joint tenants with right of                                     Act
                     survivorship and not as tenants in                                 ---------------
                     common                                                                 (State)
</TABLE>

            Additional abbreviations may also be used though not in the above
list.

                                     A-2-6
<PAGE>

                                   ASSIGNMENT

      FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________ (Please print or typewrite name, address including postal zip code, and
Taxpayer Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

         I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:

________________________________________________________________________________

Dated:

                                    _______________________________________
                                    Signature by or on behalf of assignor

                                    _______________________________________
                                    Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

      The assignee should include the following for purposes of distribution:

      Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
________________________________________________________________________________
______ for the account of__________________________________________, account
number _____________, or, if mailed by check, to _______________________________
______________________________. Applicable statements should be mailed to ______
_________________________________________________ This information is provided
by _____________________________________________________________, the assignee
named above, or__________________________________________________, as its agent.

                                     A-2-7
<PAGE>

                                   EXHIBIT A-3

                         FORM OF CLASS A-F2 CERTIFICATE

      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.

      FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
      BENEFICIAL OWNERSHIP OF 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").

                 C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
                           SERIES 2004-CB8, CLASS AF-2

evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional fixed-rate and adjustable-rate
one- to four-family first and second lien mortgage loans formed and sold by

                     MERRILL LYNCH MORTGAGE INVESTORS, INC.

<TABLE>
<S>                                                    <C>
Series 2004-CB8, Class AF-2                            Original Class Certificate Principal Balance of the
                                                       Class AF-2 Certificates as of the Closing Date:
                                                       $23,344,000.00
Pass-Through Rate:  4.134%(1)

Date of Pooling and Servicing Agreement and Cut-       Initial Certificate Principal Balance:
off Date:  December 1, 2004                            $23,344,000.00
First Distribution Date:  January 25, 2005             Servicer:  Litton Loan Servicing LP

No.                                                    Trustee:  JPMorgan Chase Bank, N.A.

CUSIP: 59020U PN 9                                     Closing Date:  January 7, 2005

ISIN: US59020UPN99
</TABLE>

----------
(1) Subject to a cap as described in the Agreement

                                     A-3-1
<PAGE>

      DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
      CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
      OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
      THAN THE AMOUNT SHOWN ABOVE.

      THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
      MERRILL LYNCH MORTGAGE INVESTORS, INC., THE SERVICER, THE TRUSTEE OR ANY
      OF THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
      INSTRUMENTALITY OF THE UNITED STATES.

      This certifies that CEDE & CO. is the registered owner of a Percentage
Interest (obtained by dividing the Initial Certificate Principal Balance of this
Certificate by the Original Class Certificate Principal Balance of the Class
AF-2 Certificates) in that certain beneficial ownership interest evidenced by
all the Class AF-2 Certificates in the Trust Fund created pursuant to a Pooling
and Servicing Agreement, dated as specified above (the "Agreement"), among
Merrill Lynch Mortgage Investors, Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), Credit-Based
Asset Servicing and Securitization LLC (the "Seller"), the Servicer and the
Trustee, a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

      Pursuant to the terms of the Agreement, distributions will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (a "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered on the Business Day immediately preceding such Distribution Date
(the "Record Date"), from funds in the Distribution Account in an amount equal
to the product of the Percentage Interest evidenced by this Certificate and the
amount required to be distributed to the Holders of Class AF-2 Certificates on
such Distribution Date pursuant to the Agreement provided, however, that if any
Class AF-2 Certificate becomes a Definitive Certificate, the Record Date for
such Certificate will be the last Business Day of the month immediately
preceding the month in which the related Distribution Date occurs.

      All distributions to the Holder of this Certificate under the Agreement
will be made or caused to be made by or on behalf of the Trustee by wire
transfer in immediately available funds to the account of the Person entitled
thereto if such Person shall have so notified the Certificate Registrar in
writing at least five Business Days prior to the Record Date immediately prior
to such Distribution Date and is the registered owner of Class AF-2 Certificates
the aggregate Initial Certificate Principal Balance of which is in excess of
$5,000,000, or by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register, provided that the Certificate Registrar may deduct a reasonable wire
transfer fee from any payment made by wire transfer. Notwithstanding the above,
the final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.

      The Class AF-2 Pass-Through Rate on each Distribution Date will the per
annum rate specified above, subject to increase as provided in the Agreement.
Interest will accrue on the Class AF-2

                                     A-3-2
<PAGE>

Certificates during each Interest Accrual Period at a rate equal to the lesser
of (i) the Class AF-2 Pass-Through Rate and (ii) the Group II Net Rate Cap for
such Distribution Date.

      This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class AF-2 Certificates.

      The Class AF-2 Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

      The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee, the Seller and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer, the Seller and the Trustee with the consent of the Holders of
Certificates entitled to the Voting Rights identified 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 herefor 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 upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee as provided in the Agreement, duly
endorsed by, or accompanied by an assignment in the form below or other 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 evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

      The Certificates are issuable in fully registered form only without
coupons in Classes and 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 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 of Certificates, but the Certificate Registrar may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.

      The Depositor, the Servicer, the Trustee, any Paying Agent and the
Certificate Registrar and any agent of the Depositor, the Servicer, the Trustee,
any Paying Agent or the Certificate Registrar may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Servicer, the Trustee, the Certificate Registrar, any Paying
Agent nor any such agent shall be affected by notice to the contrary.

      The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to

                                     A-3-3
<PAGE>

be paid to them pursuant to the Agreement following the earlier of (i) the final
payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan remaining in the Trust Fund, and (ii) the purchase by the party
designated in the Agreement at a price determined as provided in the Agreement
from the Trust Fund of all Mortgage Loans and all property acquired in respect
of such Mortgage Loans. The Agreement permits, but does not require, the party
designated in the Agreement to purchase from the Trust Fund all Mortgage Loans
and all property acquired in respect of any Mortgage Loan at a price determined
as provided in the Agreement. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Principal Balance of the Mortgage Loans at the time of purchase
being 10% or less of the Cut-off Date Aggregate Principal Balance.

      The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.

      Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     A-3-4
<PAGE>


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

Dated: January 7, 2005

                                              JPMORGAN CHASE BANK, NATIONAL
                                              ASSOCIATION,
                                                    as Trustee

                                              By:______________________________
                                                        Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

      This is one of the Certificates referred to in the within-mentioned
Agreement.

                                              JPMORGAN CHASE BANK, NATIONAL
                                              ASSOCIATION,
                                                    as Certificate Registrar

                                              By:______________________________
                                                        Authorized Signatory

Date of authentication: January 7, 2005

                                     A-3-5
<PAGE>

                                  ABBREVIATIONS

      The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>
<S>        <C>  <C>                                     <C>                   <C>  <C>
TEN COM    -    as tenants in common                    UNIF GIFT MIN ACT     -    Custodian
                                                                                   (Cust) (Minor)
TEN ENT    -    as tenants by the entireties                                       under Uniform
                                                                                   Gifts to  Minors
JT TEN     -    as joint tenants with right of                                     Act
                survivorship and not as tenants in                                 _____________
                common                                                                (State)
</TABLE>

    Additional abbreviations may also be used though not in the above list.

                                     A-3-6
<PAGE>


                                   ASSIGNMENT

      FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

      I (we) further direct the Certificate Registrar to issue a new Certificate
of a like Percentage Interest and Class to the above named assignee and deliver
such Certificate to the following address:

_______________________________________________________________________________

Dated:

                                         _______________________________________
                                         Signature by or on behalf of assignor
                                         _______________________________________
                                         Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

      The assignee should include the following for purposes of distribution:

      Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to______________________________________________________________
________________________________________________________________________________
for the account of ____________, account number__________________ , or, if
mailed by check, to ___________________________________________________________.
Applicable statements should be mailed to _____________________________________
This information is provided by __________________________________________, the
assignee named above, or ________________________________________, as its agent.

                                     A-3-7
<PAGE>

                                   EXHIBIT A-4

                         FORM OF CLASS AF-3 CERTIFICATE

      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.

      FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
      BENEFICIAL OWNERSHIP OF 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").

                 C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
                           SERIES 2004-CB8, CLASS AF-3

evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional fixed-rate and adjustable-rate
one- to four-family first and second lien mortgage loans formed and sold by

                     MERRILL LYNCH MORTGAGE INVESTORS, INC.

<TABLE>
<S>                                                                            <C>
Series 2004-CB8, Class AF-3                                                    Original Class Certificate Principal Balance of the
                                                                               Class AF-3 Certificates as of the Closing Date:
                                                                               $17,798,000.00

Pass-Through Rate:  5.090% (1)

Date of Pooling and Servicing Agreement and Cut-                               Initial Certificate Principal Balance:
off Date:  December 1, 2004                                                    $17,798,000.00
First Distribution Date:  January 25, 2005                                     Servicer:  Litton Loan Servicing LP

No.                                                                            Trustee:  JPMorgan Chase Bank, N.A.

CUSIP: 59020U PP 4                                                             Closing Date:  January 7, 2005

ISIN: US59020UPP48
</TABLE>

----------
(1) Subject to a cap as described in the Agreement

                                     A-4-1
<PAGE>

      DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
      CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
      OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
      THAN THE AMOUNT SHOWN ABOVE.

      THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
      MERRILL LYNCH MORTGAGE INVESTORS, INC., THE SERVICER, THE TRUSTEE OR ANY
      OF THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
      INSTRUMENTALITY OF THE UNITED STATES.

      This certifies that CEDE & CO. is the registered owner of a Percentage
Interest (obtained by dividing the Initial Certificate Principal Balance of this
Certificate by the Original Class Certificate Principal Balance of the Class
AF-3 Certificates) in that certain beneficial ownership interest evidenced by
all the Class AF-3 Certificates in the Trust Fund created pursuant to a Pooling
and Servicing Agreement, dated as specified above (the "Agreement"), among
Merrill Lynch Mortgage Investors, Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), Credit-Based
Asset Servicing and Securitization LLC (the "Seller"), the Servicer and the
Trustee, a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

      Pursuant to the terms of the Agreement, distributions will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (a "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered on the Business Day immediately preceding such Distribution Date
(the "Record Date"), from funds in the Distribution Account in an amount equal
to the product of the Percentage Interest evidenced by this Certificate and the
amount required to be distributed to the Holders of Class AF-3 Certificates on
such Distribution Date pursuant to the Agreement provided, however, that if any
Class AF-3 Certificate becomes a Definitive Certificate, the Record Date for
such Certificate will be the last Business Day of the month immediately
preceding the month in which the related Distribution Date occurs.

      All distributions to the Holder of this Certificate under the Agreement
will be made or caused to be made by or on behalf of the Trustee by wire
transfer in immediately available funds to the account of the Person entitled
thereto if such Person shall have so notified the Certificate Registrar in
writing at least five Business Days prior to the Record Date immediately prior
to such Distribution Date and is the registered owner of Class AF-3 Certificates
the aggregate Initial Certificate Principal Balance of which is in excess of
$5,000,000, or by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register, provided that the Certificate Registrar may deduct a reasonable wire
transfer fee from any payment made by wire transfer. Notwithstanding the above,
the final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.

      The Class AF-3 Pass-Through Rate on each Distribution Date will the per
annum rate specified above, subject to increase as provided in the Agreement.
Interest will accrue on the Class AF-3

                                     A-4-2
<PAGE>

Certificates during each Interest Accrual Period at a rate equal to the lesser
of (i) the Class AF-3 Pass-Through Rate and (ii) the Group II Net Rate Cap for
such Distribution Date.

      This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class AF-3 Certificates.

      The Class AF-3 Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

      The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee, the Seller and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer, the Seller and the Trustee with the consent of the Holders of
Certificates entitled to the Voting Rights identified 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 herefor 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 upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee as provided in the Agreement, duly
endorsed by, or accompanied by an assignment in the form below or other 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 evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

      The Certificates are issuable in fully registered form only without
coupons in Classes and 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 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 of Certificates, but the Certificate Registrar may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.

      The Depositor, the Servicer, the Trustee, any Paying Agent and the
Certificate Registrar and any agent of the Depositor, the Servicer, the Trustee,
any Paying Agent or the Certificate Registrar may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Servicer, the Trustee, the Certificate Registrar, any Paying
Agent nor any such agent shall be affected by notice to the contrary.

      The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to

                                     A-4-3
<PAGE>

be paid to them pursuant to the Agreement following the earlier of (i) the final
payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan remaining in the Trust Fund, and (ii) the purchase by the party
designated in the Agreement at a price determined as provided in the Agreement
from the Trust Fund of all Mortgage Loans and all property acquired in respect
of such Mortgage Loans. The Agreement permits, but does not require, the party
designated in the Agreement to purchase from the Trust Fund all Mortgage Loans
and all property acquired in respect of any Mortgage Loan at a price determined
as provided in the Agreement. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Principal Balance of the Mortgage Loans at the time of purchase
being 10% or less of the Cut-off Date Aggregate Principal Balance.

      The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.

      Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     A-4-4
<PAGE>

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

Dated: January 7, 2005

                                              JPMORGAN CHASE BANK, NATIONAL
                                              ASSOCIATION,
                                                    as Trustee

                                              By:______________________________
                                                        Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

      This is one of the Certificates referred to in the within-mentioned
Agreement.

                                              JPMORGAN CHASE BANK, NATIONAL
                                              ASSOCIATION,
                                                    as Certificate Registrar

                                              By:______________________________
                                                        Authorized Signatory

Date of authentication: January 7, 2005

                                     A-4-5
<PAGE>

                                  ABBREVIATIONS

      The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>
<S>        <C>  <C>                                     <C>                   <C>  <C>
TEN COM    -    as tenants in common                    UNIF GIFT MIN ACT     -    Custodian
                                                                                   (Cust) (Minor)
TEN ENT    -    as tenants by the entireties                                       under Uniform
                                                                                   Gifts to  Minors
JT TEN     -    as joint tenants with right of                                     Act
                survivorship and not as tenants in                                 _____________
                common                                                                (State)
</TABLE>

    Additional abbreviations may also be used though not in the above list.

                                     A-4-6
<PAGE>

                                   ASSIGNMENT

      FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

      I (we) further direct the Certificate Registrar to issue a new Certificate
of a like Percentage Interest and Class to the above named assignee and deliver
such Certificate to the following address:

_______________________________________________________________________________

Dated:

                                         _______________________________________
                                         Signature by or on behalf of assignor
                                         _______________________________________
                                         Signature Guaranteed

                            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-4-7
<PAGE>

                                   EXHIBIT A-5

                         FORM OF CLASS AF-4 CERTIFICATE

      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.

      FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
      BENEFICIAL OWNERSHIP OF 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").

                 C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
                           SERIES 2004-CB8, CLASS AF-4

evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional fixed-rate and adjustable-rate
one- to four-family first and second lien mortgage loans formed and sold by

                     MERRILL LYNCH MORTGAGE INVESTORS, INC.

<TABLE>
<S>                                                              <C>
Series 2004-CB8, Class AF-4                                      Original Class Certificate Principal Balance of the
                                                                 Class AF-4 Certificates as of the Closing Date:
                                                                 $11,064,000.00

Pass-Through Rate:  4.658% (1)

Date of Pooling and Servicing Agreement and Cut-                 Initial Certificate Principal Balance:
off Date:  December 1, 2004                                      $11,064,000.00
First Distribution Date:  January 25, 2005                        Servicer:  Litton Loan Servicing LP

No.                                                              Trustee:  JPMorgan Chase Bank, N.A.

CUSIP: 59020U PQ 2                                               Closing Date:  January 7, 2005

ISIN: US59020UPQ21
</TABLE>

----------
(1) Subject to a cap as described in the agreement.

                                     A-5-1
<PAGE>

      DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
      CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
      OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
      THAN THE AMOUNT SHOWN ABOVE.

      THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
      MERRILL LYNCH MORTGAGE INVESTORS, INC., THE SERVICER, THE TRUSTEE OR ANY
      OF THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
      INSTRUMENTALITY OF THE UNITED STATES.

      This certifies that CEDE & CO. is the registered owner of a Percentage
Interest (obtained by dividing the Initial Certificate Principal Balance of this
Certificate by the Original Class Certificate Principal Balance of the Class
AF-4 Certificates) in that certain beneficial ownership interest evidenced by
all the Class AF-4 Certificates in the Trust Fund created pursuant to a Pooling
and Servicing Agreement, dated as specified above (the "Agreement"), among
Merrill Lynch Mortgage Investors, Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), Credit-Based
Asset Servicing and Securitization LLC (the "Seller"), the Servicer and the
Trustee, a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

      Pursuant to the terms of the Agreement, distributions will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (a "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered on the Business Day immediately preceding such Distribution Date
(the "Record Date"), from funds in the Distribution Account in an amount equal
to the product of the Percentage Interest evidenced by this Certificate and the
amount required to be distributed to the Holders of Class AF-4 Certificates on
such Distribution Date pursuant to the Agreement provided, however, that if any
Class AF-4 Certificate becomes a Definitive Certificate, the Record Date for
such Certificate will be the last Business Day of the month immediately
preceding the month in which the related Distribution Date occurs.

      All distributions to the Holder of this Certificate under the Agreement
will be made or caused to be made by or on behalf of the Trustee by wire
transfer in immediately available funds to the account of the Person entitled
thereto if such Person shall have so notified the Certificate Registrar in
writing at least five Business Days prior to the Record Date immediately prior
to such Distribution Date and is the registered owner of Class AF-4 Certificates
the aggregate Initial Certificate Principal Balance of which is in excess of
$5,000,000, or by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register, provided that the Certificate Registrar may deduct a reasonable wire
transfer fee from any payment made by wire transfer. Notwithstanding the above,
the final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.

      The Class AF-4 Pass-Through Rate on each Distribution Date will the per
annum rate specified above, subject to increase as provided in the Agreement.
Interest will accrue on the Class AF-4

                                     A-5-2
<PAGE>

Certificates during each Interest Accrual Period at a rate equal to the lesser
of (i) the Class AF-4 Pass-Through Rate and (ii) the Group II Net Rate Cap for
such Distribution Date.

      This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class AF-4 Certificates.

      The Class AF-4 Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

      The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee, the Seller and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer, the Seller and the Trustee with the consent of the Holders of
Certificates entitled to the Voting Rights identified 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 herefor 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 upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee as provided in the Agreement, duly
endorsed by, or accompanied by an assignment in the form below or other 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 evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

      The Certificates are issuable in fully registered form only without
coupons in Classes and 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 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 of Certificates, but the Certificate Registrar may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.

      The Depositor, the Servicer, the Trustee, any Paying Agent and the
Certificate Registrar and any agent of the Depositor, the Servicer, the Trustee,
any Paying Agent or the Certificate Registrar may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Servicer, the Trustee, the Certificate Registrar, any Paying
Agent nor any such agent shall be affected by notice to the contrary.

      The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to

                                     A-5-3
<PAGE>

be paid to them pursuant to the Agreement following the earlier of (i) the final
payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan remaining in the Trust Fund, and (ii) the purchase by the party
designated in the Agreement at a price determined as provided in the Agreement
from the Trust Fund of all Mortgage Loans and all property acquired in respect
of such Mortgage Loans. The Agreement permits, but does not require, the party
designated in the Agreement to purchase from the Trust Fund all Mortgage Loans
and all property acquired in respect of any Mortgage Loan at a price determined
as provided in the Agreement. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Principal Balance of the Mortgage Loans at the time of purchase
being 10% or less of the Cut-off Date Aggregate Principal Balance.

      The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.

      Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     A-5-4
<PAGE>

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

Dated: January 7, 2005

                                              JPMORGAN CHASE BANK, NATIONAL
                                              ASSOCIATION,
                                                    as Trustee

                                              By:______________________________
                                                        Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

      This is one of the Certificates referred to in the within-mentioned
Agreement.

                                              JPMORGAN CHASE BANK, NATIONAL
                                              ASSOCIATION,
                                                    as Certificate Registrar

                                              By:______________________________
                                                        Authorized Signatory

Date of authentication: January 7, 2005

                                     A-5-5
<PAGE>

                                  ABBREVIATIONS

      The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>
<S>        <C>  <C>                                     <C>                   <C>  <C>
TEN COM    -    as tenants in common                    UNIF GIFT MIN ACT     -    Custodian
                                                                                   (Cust) (Minor)
TEN ENT    -    as tenants by the entireties                                       under Uniform
                                                                                   Gifts to  Minors
JT TEN     -    as joint tenants with right of                                     Act
                survivorship and not as tenants in                                 _____________
                common                                                                (State)
</TABLE>

    Additional abbreviations may also be used though not in the above list.

                                     A-5-6
<PAGE>

                                   ASSIGNMENT

      FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

      I (we) further direct the Certificate Registrar to issue a new Certificate
of a like Percentage Interest and Class to the above named assignee and deliver
such Certificate to the following address:

_______________________________________________________________________________

Dated:

                                         _______________________________________
                                         Signature by or on behalf of assignor
                                         _______________________________________
                                         Signature Guaranteed

                            DISTRIBUTION INSTRUCTIONS

      The assignee should include the following for purposes of distribution:

      Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to______________________________________________________________
________________________________________________________________________________
for the account of ____________, account number__________________ , or, if
mailed by check, to ___________________________________________________________.
Applicable statements should be mailed to _____________________________________
This information is provided by __________________________________________, the
assignee named above, or ________________________________________, as its agent.

                                     A-5-7
<PAGE>

                                   EXHIBIT B-1

                          FORM OF CLASS B-1 CERTIFICATE

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

THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A, CLASS M-1,
CLASS M-2 AND CLASS M-3 CERTIFICATES AS DESCRIBED IN THE AGREEMENT REFERRED TO
HEREIN.

EXCEPT AS PROVIDED IN SECTION 5.02(D) OF THE AGREEMENT REFERRED TO HEREIN, NO
TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED UNLESS THE TRUSTEE AND THE
CERTIFICATE REGISTRAR SHALL HAVE RECEIVED (A) A REPRESENTATION FROM THE
TRANSFEREE OF THIS CERTIFICATE TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN
EMPLOYEE BENEFIT PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), A PLAN SUBJECT TO
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") OR A
PLAN SUBJECT TO STATE, LOCAL OR OTHER FEDERAL LAW SUBSTANTIVELY SIMILAR TO THE
FOREGOING PROVISIONS OF ERISA OR THE CODE ("SIMILAR LAW") (COLLECTIVELY, A
"PLAN"), AND IS NOT DIRECTLY OR INDIRECTLY ACQUIRING THIS CERTIFICATE FOR, ON
BEHALF OF OR WITH ANY ASSETS OF ANY SUCH PLAN, (B) A REPRESENTATION THAT THE
TRANSFEREE IS AN INSURANCE COMPANY THAT IS ACQUIRING THE CERTIFICATE WITH ASSETS
OF AN "INSURANCE COMPANY GENERAL ACCOUNT" AS DEFINED IN SECTION V(E) OF
PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 95-60, AND THE ACQUISITION AND
HOLDING OF THE CERTIFICATE ARE COVERED AND EXEMPT UNDER SECTIONS I AND III OF
PTCE 95-60, OR (C) SOLELY IN THE CASE OF A DEFINITIVE CERTIFICATE, AN OPINION OF
COUNSEL SATISFACTORY TO THE TRUSTEE AND THE CERTIFICATE REGISTRAR, AND UPON
WHICH THE TRUSTEE AND THE CERTIFICATE REGISTRAR SHALL BE ENTITLED TO RELY, TO
THE EFFECT THAT THE ACQUISITION AND HOLDING OF THIS CERTIFICATE BY THE
TRANSFEREE WILL NOT RESULT IN A NONEXEMPT PROHIBITED TRANSACTION UNDER TITLE I
OF ERISA OR SECTION 4975 OF THE CODE, OR A VIOLATION OF SIMILAR LAW, AND WILL
NOT SUBJECT THE CERTIFICATE REGISTRAR, THE DEPOSITOR, THE SERVICER OR

                                     B-1-1
<PAGE>

THE TRUSTEE TO ANY OBLIGATION IN ADDITION TO THOSE UNDERTAKEN BY SUCH ENTITIES
IN THE AGREEMENT REFERRED TO HEREIN, WHICH OPINION OF COUNSEL SHALL NOT BE AN
EXPENSE OF THE CERTIFICATE REGISTRAR, THE DEPOSITOR, THE SERVICER OR THE
TRUSTEE.

FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS BENEFICIAL
OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF
THE CODE AND CERTAIN OTHER PROPERTY.

                                     B-1-2
<PAGE>

                 C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
                           SERIES 2004-CB8, CLASS B-1

evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional fixed-rate and adjustable-rate
one- to four-family first and second lien mortgage loans formed and sold by

                     MERRILL LYNCH MORTGAGE INVESTORS, INC.

<TABLE>
<S>                                                              <C>
Series 2004-CB8, Class B-1                                       Original Class Certificate Principal Balance of the
                                                                 Class B-1 Certificates as of the Closing Date:
                                                                 $7,665,000.00

Pass-Through Rate:  Variable(1)

Date of Pooling and Servicing Agreement and Cut-                 Initial Certificate Principal Balance: $7,665,000.00
off Date:  December 1, 2004
First Distribution Date:  December 25, 2005                      Servicer:  Litton Loan Servicing LP

No.                                                              Trustee:  JPMorgan Chase Bank, N.A.

CUSIP: 59020U PU3                                                Closing Date:  January 7, 2005

ISIN: US59020UPU33
</TABLE>

      DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
      CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
      OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
      THAN THE AMOUNT SHOWN ABOVE.

      THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
      MERRILL LYNCH MORTGAGE INVESTORS, INC., THE SERVICER, THE TRUSTEE OR ANY
      OF THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
      INSTRUMENTALITY OF THE UNITED STATES.

      This certifies that CEDE & CO. is the registered owner of a Percentage
Interest (obtained by dividing the Initial Certificate Principal Balance of this
Certificate by the Original Class Certificate Principal Balance of the Class B-1
Certificates) in that certain beneficial ownership interest evidenced by all the
Class B-1 Certificates in the Trust Fund created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Merrill
Lynch Mortgage Investors, Inc. (hereinafter called the "Depositor," which term
includes any successor entity under the Agreement), Credit-Based Asset Servicing
and Securitization LLC (the "Seller"), the Servicer and the Trustee, a summary
of certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.

----------
(1) Subject to a cap as described in the Agreement

                                     B-1-3
<PAGE>

      Pursuant to the terms of the Agreement, distributions will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (a "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered on the Business Day immediately preceding such Distribution Date
(the "Record Date"), from funds in the Distribution Account in an amount equal
to the product of the Percentage Interest evidenced by this Certificate and the
amount required to be distributed to the Holders of Class B-1 Certificates on
such Distribution Date pursuant to the Agreement provided, however, that if any
Class B-1 Certificate becomes a Definitive Certificate, the Record Date for such
Certificate will be the last Business Day of the month immediately preceding the
month in which the related Distribution Date occurs.

      All distributions to the Holder of this Certificate under the Agreement
will be made or caused to be made by or on behalf of the Trustee by wire
transfer in immediately available funds to the account of the Person entitled
thereto if such Person shall have so notified the Certificate Registrar in
writing at least five Business Days prior to the Record Date immediately prior
to such Distribution Date and is the registered owner of Class B-1 Certificates
the aggregate Initial Certificate Principal Balance of which is in excess of
$5,000,000, or by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register, provided that the Certificate Registrar may deduct a reasonable wire
transfer fee from any payment made by wire transfer. Notwithstanding the above,
the final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.

      The Class B-1 Pass-Through Rate on each Distribution Date will be a rate
per annum equal to the least of (i) LIBOR as of the related LIBOR Determination
Date, plus the Class B-1 Certificate Margin, (ii) the Subordinate Rate Cap and
(iii) the Subordinate Maximum Rate Cap.

      This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class B-1 Certificates.

      The Class B-1 Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

      This Certificate is subordinated in right of payment to the Class A, Class
M-1, Class M-2 and Class M-3 Certificates as described in the Agreement.

      The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee, the Seller and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer, the Seller and the Trustee with the consent of the Holders of
Certificates entitled to the Voting Rights identified 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 herefor 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.

                                     B-1-4
<PAGE>

      As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee as provided in the Agreement, duly
endorsed by, or accompanied by an assignment in the form below or other 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 evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

      The Certificates are issuable in fully registered form only without
coupons in Classes and 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 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 of Certificates, but the Certificate Registrar may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.

      The Depositor, the Servicer, the Trustee, any Paying Agent and the
Certificate Registrar and any agent of the Depositor, the Servicer, the Trustee,
any Paying Agent or the Certificate Registrar may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Servicer, the Trustee, the Certificate Registrar, any Paying
Agent nor any such agent shall be affected by notice to the contrary.

      The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being 10% or
less of the Cut-off Date Aggregate Principal Balance.

      The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.

      Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     B-1-5
<PAGE>

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

Dated: January 7, 2005

                                              JPMORGAN CHASE BANK, NATIONAL
                                              ASSOCIATION,
                                                    as Trustee

                                              By:______________________________
                                                        Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

      This is one of the Certificates referred to in the within-mentioned
Agreement.

                                              JPMORGAN CHASE BANK, NATIONAL
                                              ASSOCIATION,
                                                    as Certificate Registrar

                                              By:______________________________
                                                        Authorized Signatory

Date of authentication: January 7, 2005

                                     B-1-6
<PAGE>


                                  ABBREVIATIONS

      The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>
<S>        <C>  <C>                                     <C>                   <C>  <C>
TEN COM    -    as tenants in common                    UNIF GIFT MIN ACT     -    Custodian
                                                                                   (Cust) (Minor)
TEN ENT    -    as tenants by the entireties                                       under Uniform
                                                                                   Gifts to  Minors
JT TEN     -    as joint tenants with right of                                     Act
                survivorship and not as tenants in                                 _____________
                common                                                                (State)
</TABLE>

    Additional abbreviations may also be used though not in the above list.

                                     B-1-7
<PAGE>

                                   ASSIGNMENT

      FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

      I (we) further direct the Certificate Registrar to issue a new Certificate
of a like Percentage Interest and Class to the above named assignee and deliver
such Certificate to the following address:

_______________________________________________________________________________

Dated:

                                         _______________________________________
                                         Signature by or on behalf of assignor
                                         _______________________________________
                                         Signature Guaranteed

                            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.

                                     B-1-8
<PAGE>

                                   EXHIBIT B-2

                          FORM OF CLASS B-2 CERTIFICATE

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

THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A, CLASS M-1,
CLASS M-2, CLASS M-3 AND CLASS B-1 CERTIFICATES AS DESCRIBED IN THE AGREEMENT
REFERRED TO HEREIN.

EXCEPT AS PROVIDED IN SECTION 5.02(D) OF THE AGREEMENT REFERRED TO HEREIN, NO
TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED UNLESS THE TRUSTEE AND THE
CERTIFICATE REGISTRAR SHALL HAVE RECEIVED (A) A REPRESENTATION FROM THE
TRANSFEREE OF THIS CERTIFICATE TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN
EMPLOYEE BENEFIT PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), A PLAN SUBJECT TO
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") OR A
PLAN SUBJECT TO STATE, LOCAL OR OTHER FEDERAL LAW SUBSTANTIVELY SIMILAR TO THE
FOREGOING PROVISIONS OF ERISA OR THE CODE ("SIMILAR LAW") (COLLECTIVELY, A
"PLAN"), AND IS NOT DIRECTLY OR INDIRECTLY ACQUIRING THIS CERTIFICATE FOR, ON
BEHALF OF OR WITH ANY ASSETS OF ANY SUCH PLAN, (B) A REPRESENTATION THAT THE
TRANSFEREE IS AN INSURANCE COMPANY THAT IS ACQUIRING THE CERTIFICATE WITH ASSETS
OF AN "INSURANCE COMPANY GENERAL ACCOUNT" AS DEFINED IN SECTION V(E) OF
PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 95-60, AND THE ACQUISITION AND
HOLDING OF THE CERTIFICATE ARE COVERED AND EXEMPT UNDER SECTIONS I AND III OF
PTCE 95-60, OR (C) SOLELY IN THE CASE OF A DEFINITIVE CERTIFICATE, AN OPINION OF
COUNSEL SATISFACTORY TO THE TRUSTEE AND THE CERTIFICATE REGISTRAR, AND UPON
WHICH THE TRUSTEE AND THE CERTIFICATE REGISTRAR SHALL BE ENTITLED TO RELY, TO
THE EFFECT THAT THE ACQUISITION AND HOLDING OF THIS CERTIFICATE BY THE
TRANSFEREE WILL NOT RESULT IN A NONEXEMPT PROHIBITED TRANSACTION UNDER TITLE I
OF ERISA OR SECTION 4975 OF THE

                                     B-2-1
<PAGE>

CODE, OR A VIOLATION OF SIMILAR LAW, AND WILL NOT SUBJECT THE CERTIFICATE
REGISTRAR, THE DEPOSITOR, THE SERVICER OR THE TRUSTEE TO ANY OBLIGATION IN
ADDITION TO THOSE UNDERTAKEN BY SUCH ENTITIES IN THE AGREEMENT REFFERED TO
HEREIN, WHICH OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE CERTIFICATE
REGISTRAR, THE DEPOSITOR, THE SERVICER OR THE TRUSTEE.

FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS BENEFICIAL
OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF
THE CODE AND CERTAIN OTHER PROPERTY.

                                     B-2-2
<PAGE>

                 C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
                           SERIES 2004-CB8, CLASS B-2

evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional fixed-rate and adjustable-rate
one- to four-family first and second lien mortgage loans formed and sold by

                     MERRILL LYNCH MORTGAGE INVESTORS, INC.

<TABLE>
<S>                                                                  <C>
Series 2004-CB8, Class B-2                                           Original Class Certificate Principal Balance of the
                                                                     Class B-2 Certificates as of the Closing Date:
                                                                     $6,296,000.00
Pass-Through Rate:  Variable(1)

Date of Pooling and Servicing Agreement and Cut-                     Initial Certificate Principal Balance: $6,296,000.00
off Date:  December 1, 2004
First Distribution Date:  January 25, 2005                           Servicer:  Litton Loan Servicing LP

No.                                                                  Trustee:  JPMorgan Chase Bank, N.A.

CUSIP: 59020U PV 1                                                   Closing Date:  January 7, 2005

ISIN: US59020UPV16
</TABLE>

      DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
      CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
      OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
      THAN THE AMOUNT SHOWN ABOVE.

      THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
      MERRILL LYNCH MORTGAGE INVESTORS, INC., THE SERVICER, THE TRUSTEE OR ANY
      OF THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
      INSTRUMENTALITY OF THE UNITED STATES.

      This certifies that CEDE & CO. is the registered owner of a Percentage
Interest (obtained by dividing the Initial Certificate Principal Balance of this
Certificate by the Original Class Certificate Principal Balance of the Class B-2
Certificates) in that certain beneficial ownership interest evidenced by all the
Class B-2 Certificates in the Trust Fund created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Merrill
Lynch Mortgage Investors, Inc. (hereinafter called the "Depositor," which term
includes any successor entity under the Agreement), Credit-Based Asset Servicing
and Securitization LLC (the "Seller"), the Servicer and the Trustee, a summary
of certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.

----------
(1) Subject to a cap as described in the agreement.

                                     B-2-3
<PAGE>

      Pursuant to the terms of the Agreement, distributions will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (a "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered on the Business Day immediately preceding such Distribution Date
(the "Record Date"), from funds in the Distribution Account in an amount equal
to the product of the Percentage Interest evidenced by this Certificate and the
amount required to be distributed to the Holders of Class B-2 Certificates on
such Distribution Date pursuant to the Agreement provided, however, that if any
Class B-2 Certificate becomes a Definitive Certificate, the Record Date for such
Certificate will be the last Business Day of the month immediately preceding the
month in which the related Distribution Date occurs.

      All distributions to the Holder of this Certificate under the Agreement
will be made or caused to be made by or on behalf of the Trustee by wire
transfer in immediately available funds to the account of the Person entitled
thereto if such Person shall have so notified the Certificate Registrar in
writing at least five Business Days prior to the Record Date immediately prior
to such Distribution Date and is the registered owner of Class B-2 Certificates
the aggregate Initial Certificate Principal Balance of which is in excess of
$5,000,000, or by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register, provided that the Certificate Registrar may deduct a reasonable wire
transfer fee from any payment made by wire transfer. Notwithstanding the above,
the final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.

      The Class B-2 Pass-Through Rate on each Distribution Date will be a rate
per annum equal to the least of (i) LIBOR as of the related LIBOR Determination
Date, plus the Class B-2 Certificate Margin, (ii) the Subordinate Rate Cap and
(iii) the Subordinate Maximum Rate Cap.

      This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class B-2 Certificates.

      The Class B-2 Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

      This Certificate is subordinated in right of payment to the Class A, Class
M-1, Class M-2, Class M-3 and Class B-1 Certificates as described in the
Agreement.

      The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee, the Seller and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer, the Seller and the Trustee with the consent of the Holders of
Certificates entitled to the Voting Rights identified 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 herefor 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.

                                     B-2-4
<PAGE>

      As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee as provided in the Agreement, duly
endorsed by, or accompanied by an assignment in the form below or other 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 evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

      The Certificates are issuable in fully registered form only without
coupons in Classes and 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 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 of Certificates, but the Certificate Registrar may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.

      The Depositor, the Servicer, the Trustee, any Paying Agent and the
Certificate Registrar and any agent of the Depositor, the Servicer, the Trustee,
any Paying Agent or the Certificate Registrar may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Servicer, the Trustee, the Certificate Registrar, any Paying
Agent nor any such agent shall be affected by notice to the contrary.

      The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being 10% or
less of the Cut-off Date Aggregate Principal Balance.

      The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.

      Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     B-2-5
<PAGE>


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

Dated: January 7, 2005

                                              JPMORGAN CHASE BANK, NATIONAL
                                              ASSOCIATION,
                                                    as Trustee

                                              By:______________________________
                                                        Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

      This is one of the Certificates referred to in the within-mentioned
Agreement.

                                              JPMORGAN CHASE BANK, NATIONAL
                                              ASSOCIATION,
                                                    as Certificate Registrar

                                              By:______________________________
                                                        Authorized Signatory

Date of authentication: January 7, 2005

                                     B-2-6
<PAGE>


                                  ABBREVIATIONS

      The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>
<S>        <C>  <C>                                     <C>                   <C>  <C>
TEN COM    -    as tenants in common                    UNIF GIFT MIN ACT     -    Custodian
                                                                                   (Cust) (Minor)
TEN ENT    -    as tenants by the entireties                                       under Uniform
                                                                                   Gifts to  Minors
JT TEN     -    as joint tenants with right of                                     Act
                survivorship and not as tenants in                                 _____________
                common                                                                (State)
</TABLE>

    Additional abbreviations may also be used though not in the above list.

                                     B-2-7
<PAGE>

                                   ASSIGNMENT

      FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

      I (we) further direct the Certificate Registrar to issue a new Certificate
of a like Percentage Interest and Class to the above named assignee and deliver
such Certificate to the following address:

_______________________________________________________________________________

Dated:

                                         _______________________________________
                                         Signature by or on behalf of assignor
                                         _______________________________________
                                         Signature Guaranteed

                            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.

                                     B-2-8
<PAGE>

                                   EXHIBIT B-3

                          FORM OF CLASS B-3 CERTIFICATE

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

THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A, CLASS M-1,
CLASS M-2, CLASS M-3, CLASS B-1 AND CLASS B-2 CERTIFICATES AS DESCRIBED IN THE
AGREEMENT REFERRED TO HEREIN.

EXCEPT AS PROVIDED IN SECTION 5.02(D) OF THE AGREEMENT REFERRED TO HEREIN, NO
TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED UNLESS THE TRUSTEE AND THE
CERTIFICATE REGISTRAR SHALL HAVE RECEIVED (A) A REPRESENTATION FROM THE
TRANSFEREE OF THIS CERTIFICATE TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN
EMPLOYEE BENEFIT PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), A PLAN SUBJECT TO
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") OR A
PLAN SUBJECT TO STATE, LOCAL OR OTHER FEDERAL LAW SUBSTANTIVELY SIMILAR TO THE
FOREGOING PROVISIONS OF ERISA OR THE CODE ("SIMILAR LAW") (COLLECTIVELY, A
"PLAN"), AND IS NOT DIRECTLY OR INDIRECTLY ACQUIRING THIS CERTIFICATE FOR, ON
BEHALF OF OR WITH ANY ASSETS OF ANY SUCH PLAN, (B) A REPRESENTATION THAT THE
TRANSFEREE IS AN INSURANCE COMPANY THAT IS ACQUIRING THE CERTIFICATE WITH ASSETS
OF AN "INSURANCE COMPANY GENERAL ACCOUNT" AS DEFINED IN SECTION V(E) OF
PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 95-60, AND THE ACQUISITION AND
HOLDING OF THE CERTIFICATE ARE COVERED AND EXEMPT UNDER SECTIONS I AND III OF
PTCE 95-60, OR (C) SOLELY IN THE CASE OF A DEFINITIVE CERTIFICATE, AN OPINION OF
COUNSEL SATISFACTORY TO THE TRUSTEE AND THE CERTIFICATE REGISTRAR, AND UPON
WHICH THE TRUSTEE AND THE CERTIFICATE REGISTRAR SHALL BE ENTITLED TO RELY, TO
THE EFFECT THAT THE ACQUISITION AND HOLDING OF THIS CERTIFICATE BY THE
TRANSFEREE WILL NOT RESULT IN A NONEXEMPT PROHIBITED TRANSACTION UNDER TITLE I
OF ERISA OR SECTION 4975 OF THE

                                     B-3-1
<PAGE>

CODE, OR A VIOLATION OF SIMILAR LAW, AND WILL NOT SUBJECT THE CERTIFICATE
REGISTRAR, THE DEPOSITOR, THE SERVICER OR THE TRUSTEE TO ANY OBLIGATION IN
ADDITION TO THOSE UNDERTAKEN BY SUCH ENTITIES IN THE AGREEMENT REFERRED TO
HEREIN, WHICH OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE CERTIFICATE
REGISTRAR, THE DEPOSITOR, THE SERVICER OR THE TRUSTEE.

FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS BENEFICIAL
OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF
THE CODE AND CERTAIN OTHER PROPERTY.

                                     B-3-2
<PAGE>

                 C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
                           SERIES 2004-CB8, CLASS B-3

evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional fixed-rate and adjustable-rate
one- to four-family first and second lien mortgage loans formed and sold by

                     MERRILL LYNCH MORTGAGE INVESTORS, INC.

<TABLE>
<S>                                                                  <C>
Series 2004-CB8, Class B-3                                           Original Class Certificate Principal Balance of the
                                                                     Class B-3 Certificates as of the Closing Date:
                                                                     $5,475,000.00
Pass-Through Rate:  Variable (1)

Date of Pooling and Servicing Agreement and Cut-                     Initial Certificate Principal Balance: $5,475,000.00
off Date:  December 1, 2004
First Distribution Date:  January 25, 2005                           Servicer:  Litton Loan Servicing LP

No.                                                                  Trustee: JPMorgan Chase Bank, N.A.

CUSIP: 59020U PW 9                                                   Closing Date:  January 7, 2005

ISIN: US59020UPW98
</TABLE>

      DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
      CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
      OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
      THAN THE AMOUNT SHOWN ABOVE.

      THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
      MERRILL LYNCH MORTGAGE INVESTORS, INC., THE SERVICER, THE TRUSTEE OR ANY
      OF THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
      INSTRUMENTALITY OF THE UNITED STATES.

      This certifies that CEDE & CO. is the registered owner of a Percentage
Interest (obtained by dividing the Initial Certificate Principal Balance of this
Certificate by the Original Class Certificate Principal Balance of the Class B-3
Certificates) in that certain beneficial ownership interest evidenced by all the
Class B-3 Certificates in the Trust Fund created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Merrill
Lynch Mortgage Investors, Inc. (hereinafter called the "Depositor," which term
includes any successor entity under the Agreement), Credit-Based Asset Servicing
and Securitization LLC (the "Seller"), the Servicer and the Trustee, a summary
of certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.

----------
(1) Subject to a cap as described in the Agreement

                                     B-3-3
<PAGE>

      Pursuant to the terms of the Agreement, distributions will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (a "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered on the Business Day immediately preceding such Distribution Date
(the "Record Date"), from funds in the Distribution Account in an amount equal
to the product of the Percentage Interest evidenced by this Certificate and the
amount required to be distributed to the Holders of Class B-3 Certificates on
such Distribution Date pursuant to the Agreement provided, however, that if any
Class B-3 Certificate becomes a Definitive Certificate, the Record Date for such
Certificate will be the last Business Day of the month immediately preceding the
month in which the related Distribution Date occurs.

      All distributions to the Holder of this Certificate under the Agreement
will be made or caused to be made by or on behalf of the Trustee by wire
transfer in immediately available funds to the account of the Person entitled
thereto if such Person shall have so notified the Certificate Registrar in
writing at least five Business Days prior to the Record Date immediately prior
to such Distribution Date and is the registered owner of Class B-3 Certificates
the aggregate Initial Certificate Principal Balance of which is in excess of
$5,000,000, or by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register, provided that the Certificate Registrar may deduct a reasonable wire
transfer fee from any payment made by wire transfer. Notwithstanding the above,
the final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.

      The Class B-3 Pass-Through Rate on each Distribution Date will be a rate
per annum equal to the least of (i) LIBOR as of the related LIBOR Determination
Date, plus the Class B-3 Certificate Margin, (ii) the Subordinate Rate Cap and
(iii) the Subordinate Maximum Rate Cap.

      This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class B-3 Certificates.

      The Class B-3 Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

      This Certificate is subordinated in right of payment to the Class A, Class
M-1, Class M-2, Class M-3, Class B-1 and Class B-2 Certificates as described in
the Agreement.

      The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee, the Seller and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer, the Seller and the Trustee with the consent of the Holders of
Certificates entitled to the Voting Rights identified 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 herefor 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.

                                     B-3-4
<PAGE>

      As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee as provided in the Agreement, duly
endorsed by, or accompanied by an assignment in the form below or other 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 evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

      The Certificates are issuable in fully registered form only without
coupons in Classes and 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 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 of Certificates, but the Certificate Registrar may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.

      The Depositor, the Servicer, the Trustee, any Paying Agent and the
Certificate Registrar and any agent of the Depositor, the Servicer, the Trustee,
any Paying Agent or the Certificate Registrar may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Servicer, the Trustee, the Certificate Registrar, any Paying
Agent nor any such agent shall be affected by notice to the contrary.

      The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being 10% or
less of the Cut-off Date Aggregate Principal Balance.

      The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.

      Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     B-3-5
<PAGE>

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

Dated: January 7, 2005

                                              JPMORGAN CHASE BANK, NATIONAL
                                              ASSOCIATION,
                                                    as Trustee

                                              By:______________________________
                                                        Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

      This is one of the Certificates referred to in the within-mentioned
Agreement.

                                              JPMORGAN CHASE BANK, NATIONAL
                                              ASSOCIATION,
                                                    as Certificate Registrar

                                              By:______________________________
                                                        Authorized Signatory

Date of authentication: January 7, 2005

                                     B-3-6
<PAGE>

                                  ABBREVIATIONS

      The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>
<S>        <C>  <C>                                     <C>                   <C>  <C>
TEN COM    -    as tenants in common                    UNIF GIFT MIN ACT     -    Custodian
                                                                                   (Cust) (Minor)
TEN ENT    -    as tenants by the entireties                                       under Uniform
                                                                                   Gifts to  Minors
JT TEN     -    as joint tenants with right of                                     Act
                survivorship and not as tenants in                                 _____________
                common                                                                (State)
</TABLE>

    Additional abbreviations may also be used though not in the above list.

                                     B-3-7
<PAGE>

                                   ASSIGNMENT

      FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

      I (we) further direct the Certificate Registrar to issue a new Certificate
of a like Percentage Interest and Class to the above named assignee and deliver
such Certificate to the following address:

_______________________________________________________________________________

Dated:

                                         _______________________________________
                                         Signature by or on behalf of assignor
                                         _______________________________________
                                         Signature Guaranteed

                            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.

                                     B-3-8
<PAGE>

                                  EXHIBIT B-4-1

                      FORM OF CLASS B-4 (144A) CERTIFICATE

SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS 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.

THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN MERRILL
LYNCH MORTGAGE INVESTORS, INC. ("MLMI"), THE TRUSTEE OR ANY SERVICER REFERRED TO
BELOW OR ANY OF THEIR AFFILIATES. NEITHER THIS CERTIFICATE, THE REMIC REGULAR
INTEREST REPRESENTED HEREBY NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR
INSURED BY MLMI, THE TRUSTEE, ANY SERVICER OR BY ANY OF THEIR AFFILIATES OR BY
ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.

FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE OF
THIS CERTIFICATE MAY BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE BY
INQUIRY OF THE TRUSTEE.

THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 , AS
AMENDED (THE "1933 ACT") OR ANY STATE SECURITIES LAWS. NEITHER THIS CERTIFICATE
NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION, UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
REGISTRATION.

THE HOLDER OF THIS CERTIFICATE BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER SUCH CERTIFICATE ONLY (A) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE 1933 ACT OR (B) TO A
PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN
RULE 144A UNDER THE 1933 ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, SUBJECT TO THE TRUSTEE'S RIGHT
PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER TO REQUIRE THE DELIVERY OF A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING IN THE POOLING AND SERVICING
AGREEMENT.

EXCEPT AS PROVIDED IN SECTION 5.02(D) OF THE AGREEMENT REFERRED TO HEREIN, NO
TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED UNLESS THE TRUSTEE AND THE
CERTIFICATE REGISTRAR SHALL HAVE RECEIVED (A) A REPRESENTATION FROM THE
TRANSFEREE OF THIS CERTIFICATE TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN
EMPLOYEE BENEFIT PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), A PLAN SUBJECT TO
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") OR A
PLAN SUBJECT TO STATE, LOCAL OR OTHER FEDERAL LAW SUBSTANTIVELY SIMILAR TO THE
FOREGOING

                                    B-4-1-1
<PAGE>

PROVISIONS OF ERISA OR THE CODE ("SIMILAR LAW") (COLLECTIVELY, A "PLAN"), AND IS
NOT DIRECTLY OR INDIRECTLY ACQUIRING THIS CERTIFICATE FOR, ON BEHALF OF OR WITH
ANY ASSETS OF ANY SUCH PLAN, (B) A REPRESENTATION THAT THE TRANSFEREE IS AN
INSURANCE COMPANY THAT IS ACQUIRING THE CERTIFICATE WITH ASSETS OF AN "INSURANCE
COMPANY GENERAL ACCOUNT" AS DEFINED IN SECTION V(E) OF PROHIBITED TRANSACTION
CLASS EXEMPTION ("PTCE") 95-60, AND THE ACQUISITION AND HOLDING OF THE
CERTIFICATE ARE COVERED AND EXEMPT UNDER SECTIONS I AND III OF PTCE 95-60, OR
(C) SOLELY IN THE CASE OF A DEFINITIVE CERTIFICATE, AN OPINION OF COUNSEL
SATISFACTORY TO THE TRUSTEE AND THE CERTIFICATE REGISTRAR, AND UPON WHICH THE
TRUSTEE AND THE CERTIFICATE REGISTRAR SHALL BE ENTITLED TO RELY, TO THE EFFECT
THAT THE ACQUISITION AND HOLDING OF THIS CERTIFICATE BY THE TRANSFEREE WILL NOT
RESULT IN A NONEXEMPT PROHIBITED TRANSACTION UNDER TITLE I OF ERISA OR SECTION
4975 OF THE CODE, OR A VIOLATION OF SIMILAR LAW, AND WILL NOT SUBJECT THE
CERTIFICATE REGISTRAR, THE DEPOSITOR, THE SERVICER OR THE TRUSTEE TO ANY
OBLIGATION IN ADDITION TO THOSE UNDERTAKEN BY SUCH ENTITIES IN THE AGREEMENT
REFERRED TO HEREIN, WHICH OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE
CERTIFICATE REGISTRAR, THE DEPOSITOR, THE SERVICER OR THE TRUSTEE.

                                    B-4-1-2
<PAGE>

                 C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
                           SERIES 2004-CB8, CLASS B-4

                                   (RULE 144A)

evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional fixed-rate and adjustable-rate
one- to four-family first and second lien mortgage loans formed and sold by

                     MERRILL LYNCH MORTGAGE INVESTORS, INC.

<TABLE>
<S>                                                                  <C>
Series 2004-CB8, Class B-4                                           Original Class Certificate Principal Balance of the
                                                                     Class B-4 Certificates as of the Closing Date:
                                                                     $10,950,000.00
Pass-Through Rate:  6.000% (1)

Date of Pooling and Servicing Agreement and Cut-                     Initial Certificate Principal Balance: $10,950,000.00
off Date:  December 1, 2004
First Distribution Date:  January 25, 2005                           Servicer:  Litton Loan Servicing LP

No.                                                                  Trustee: JPMorgan Chase Bank, N.A.

CUSIP: 59020U PX 7                                                   Closing Date:  January 7, 2005

ISIN: US59020UPX71
</TABLE>

      DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
      CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
      OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
      THAN THE AMOUNT SHOWN ABOVE.

      THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
      MERRILL LYNCH MORTGAGE INVESTORS, INC., THE SERVICER, THE TRUSTEE OR ANY
      OF THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
      INSTRUMENTALITY OF THE UNITED STATES.

      This certifies that CEDE & CO. is the registered owner of a Percentage
Interest (obtained by dividing the Initial Certificate Principal Balance of this
Certificate by the Original Class Certificate Principal Balance of the Class B-4
Certificates) in that certain beneficial ownership interest evidenced by all the
Class B-4 Certificates in the Trust Fund created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Merrill
Lynch Mortgage Investors, Inc. (hereinafter called the "Depositor," which term
includes any successor entity under the Agreement), Credit-Based Asset Servicing
and Securitization LLC (the "Seller"), the Servicer and the Trustee, a summary
of certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.

----------
(1) Subject to a cap as described in the Agreement

                                    B-4-1-3
<PAGE>

      Pursuant to the terms of the Agreement, distributions will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (a "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered on the Business Day immediately preceding such Distribution Date
(the "Record Date"), from funds in the Distribution Account in an amount equal
to the product of the Percentage Interest evidenced by this Certificate and the
amount required to be distributed to the Holders of Class B-4 Certificates on
such Distribution Date pursuant to the Agreement provided, however, that if any
Class B-4 Certificate becomes a Definitive Certificate, the Record Date for such
Certificate will be the last Business Day of the month immediately preceding the
month in which the related Distribution Date occurs.

      All distributions to the Holder of this Certificate under the Agreement
will be made or caused to be made by or on behalf of the Trustee by wire
transfer in immediately available funds to the account of the Person entitled
thereto if such Person shall have so notified the Certificate Registrar in
writing at least five Business Days prior to the Record Date immediately prior
to such Distribution Date and is the registered owner of Class B-4 Certificates
the aggregate Initial Certificate Principal Balance of which is in excess of
$5,000,000, or by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register, provided that the Certificate Registrar may deduct a reasonable wire
transfer fee from any payment made by wire transfer. Notwithstanding the above,
the final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.

      The Class B-4 Pass-Through Rate on each Distribution Date will be a rate
per annum equal to the least of (i) the Class B-4 Pass-Through Rate (ii) the
Subordinate Rate Cap and (iii) the Subordinate Maximum Rate Cap.

      This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class B-4 Certificates.

      The Class B-4 Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

      This Certificate is subordinated in right of payment to the Class A, Class
M-1, Class M-2, Class M-3, Class B-1, Class B-2 and Class B-3 Certificates as
described in the Agreement.

      The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee, the Seller and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer, the Seller and the Trustee with the consent of the Holders of
Certificates entitled to the Voting Rights identified 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 herefor 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.

                                    B-4-1-4
<PAGE>

      As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee as provided in the Agreement, duly
endorsed by, or accompanied by an assignment in the form below or other 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 evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

      The Certificates are issuable in fully registered form only without
coupons in Classes and 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 evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.

      No transfer of this Certificate shall be made unless that transfer is made
pursuant to an effective registration statement under the 1933 Act and effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that a transfer is to be made without registration or qualification
(i) the Certificateholder desiring to effect the transfer and such
Certificateholder's prospective transferee shall each execute a representation
letter in the form described by the Agreement certifying to the Certificate
Registrar the facts surrounding the transfer, and (ii) unless such transfer is
made in reliance upon Rule 144A under the 1933 Act, the Depositor and the
Certificate Registrar may require an Opinion of Counsel satisfactory to them
that such transfer may be made without such registration or qualification, which
Opinion of Counsel shall not be an expense of the Depositor, the Trustee or the
Certificate Registrar, in their respective capacities as such. None of the
Depositor, the Certificate Registrar or the Trustee is obligated to register or
qualify the Class of Certificates specified on the face hereof under the 1933
Act or any other securities law or to take any action not otherwise required
under the Agreement to permit the transfer of such Certificates without
registration or qualification. Any such Certificateholder desiring to effect
such transfer shall, and does hereby agree to, indemnify the Trustee, the
Depositor, the Certificate Registrar and the Servicer 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. Each Person who acquires this Certificate or an
interest therein shall be deemed to have made the representations required by
the representation letter referred to in this paragraph, unless such Person
shall have provided such representation letter referred to in this paragraph to
the Certificate Registrar.

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

      The Depositor, the Servicer, the Trustee, any Paying Agent and the
Certificate Registrar and any agent of the Depositor, the Servicer, the Trustee,
any Paying Agent or the Certificate Registrar may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Servicer, the Trustee, the Certificate Registrar, any Paying
Agent nor any such agent shall be affected by notice to the contrary.

      The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the

                                    B-4-1-5
<PAGE>

Agreement from the Trust Fund of all Mortgage Loans and all property acquired in
respect of such Mortgage Loans. The Agreement permits, but does not require, the
party designated in the Agreement to purchase from the Trust Fund all Mortgage
Loans and all property acquired in respect of any Mortgage Loan at a price
determined as provided in the Agreement. The exercise of such right will effect
early retirement of the Certificates; however, such right to purchase is subject
to the aggregate Principal Balance of the Mortgage Loans at the time of purchase
being 10% or less of the Cut-off Date Aggregate Principal Balance.

      The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.

      Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                    B-4-1-6
<PAGE>

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

Dated: January 7, 2005

                            JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
                                     as Trustee

                            By:________________________________________________
                                       Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

      This is one of the Certificates referred to in the within-mentioned
Agreement.

                            JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
                                     as Certificate Registrar

                            By: _______________________________________________
                                      Authorized Signatory

Date of authentication: January 7, 2005

                                    B-4-1-7

<PAGE>

                                  ABBREVIATIONS

      The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>
<S>       <C>  <C>                                 <C>                  <C>  <C>
TEN COM   -    as tenants in common                UNIF GIFT MIN ACT    -    Custodian
                                                                             (Cust) (Minor)
TEN ENT   -    as tenants by the entireties                                  under Uniform
                                                                             Gifts to Minors
JT TEN    -    as joint tenants with right of                                Act
               survivorship and not as tenants                              _________________
               in common                                                         (State)
</TABLE>

     Additional abbreviations may also be used though not in the above list.

                                    B-4-1-8

<PAGE>

                                   ASSIGNMENT

      FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
_________________________________________________________________________(Please
print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

      I (we) further direct the Certificate Registrar to issue a new Certificate
of a like Percentage Interest and Class to the above named assignee and deliver
such Certificate to the following address:

________________________________________________________________________________

Dated:

                                        ________________________________________
                                         Signature by or on behalf of assignor

                                        ________________________________________
                                        Signature Guaranteed

                            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.

                                    B-4-1-9

<PAGE>

                                  EXHIBIT B-4-2

                      FORM OF CLASS B-4 (REG S) CERTIFICATE

SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS 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.

THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN MERRILL
LYNCH MORTGAGE INVESTORS, INC. ("MLMI"), THE TRUSTEE OR ANY SERVICER REFERRED TO
BELOW OR ANY OF THEIR AFFILIATES. NEITHER THIS CERTIFICATE, THE REMIC REGULAR
INTEREST REPRESENTED HEREBY NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR
INSURED BY MLMI, THE TRUSTEE, ANY SERVICER OR BY ANY OF THEIR AFFILIATES OR BY
ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.

FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE OF
THIS CERTIFICATE MAY BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW.
ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE BY
INQUIRY OF THE TRUSTEE.

THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "1933 ACT") OR ANY STATE SECURITIES LAWS. NEITHER THIS CERTIFICATE
NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF WITHIN THE UNITED
STATES (AS DEFINED IN RULES 901 THROUGH 905 OF THE 1933 ACT ("REGULATION S")) OR
TO, OR FOR THE ACCOUNT OR BENEFIT OF, A U.S. PERSON (AS DEFINED IN REGULATION
S), IN THE ABSENCE OF SUCH REGISTRATION, UNLESS SUCH TRANSACTION IS EXEMPT FROM,
OR NOT SUBJECT TO, REGISTRATION.

THE HOLDER OF THIS CERTIFICATE BY ITS ACCEPTANCE HEREOF AGREES (A) THAT, UNTIL
THE EXPIRATION OF THE APPLICABLE "DISTRIBUTION COMPLIANCE PERIOD" WITHIN THE
MEANING OF REGULATION S, ANY OFFER, SALE, PLEDGE OR OTHER TRANSFER OF THIS
CERTIFICATE SHALL NOT BE MADE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, ANY U.S. PERSON (EACH AS DEFINED IN REGULATION S) AND (B) TO OFFER,
SELL, PLEDGE OR OTHERWISE TRANSFER THIS CERTIFICATE WITHIN THE UNITED STATES OR
TO, OR FOR THE ACCOUNT OR BENEFIT OF, A U.S. PERSON (EACH AS DEFINED IN
REGULATION S) ONLY (1) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE 1933 ACT OR (2) TO A PERSON IT REASONABLY BELIEVES
IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE 1933 ACT
THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, SUBJECT TO THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER,
SALE OR TRANSFER TO REQUIRE THE DELIVERY OF A CERTIFICATE OF TRANSFER IN THE
FORM APPEARING IN THE POOLING AND SERVICING AGREEMENT.

                                    B-4-2-1
<PAGE>

EXCEPT AS PROVIDED IN SECTION 5.02(D) OF THE AGREEMENT REFERRED TO HEREIN, NO
TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED UNLESS THE TRUSTEE AND THE
CERTIFICATE REGISTRAR SHALL HAVE RECEIVED (A) A REPRESENTATION FROM THE
TRANSFEREE OF THIS CERTIFICATE TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN
EMPLOYEE BENEFIT PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), A PLAN SUBJECT TO
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") OR A
PLAN SUBJECT TO STATE, LOCAL OR OTHER FEDERAL LAW SUBSTANTIVELY SIMILAR TO THE
FOREGOING PROVISIONS OF ERISA OR THE CODE ("SIMILAR LAW") (COLLECTIVELY, A
"PLAN"), AND IS NOT DIRECTLY OR INDIRECTLY ACQUIRING THIS CERTIFICATE FOR, ON
BEHALF OF OR WITH ANY ASSETS OF ANY SUCH PLAN, (B) A REPRESENTATION THAT THE
TRANSFEREE IS AN INSURANCE COMPANY THAT IS ACQUIRING THE CERTIFICATE WITH ASSETS
OF AN "INSURANCE COMPANY GENERAL ACCOUNT" AS DEFINED IN SECTION V(E) OF
PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 95-60, AND THE ACQUISITION AND
HOLDING OF THE CERTIFICATE ARE COVERED AND EXEMPT UNDER SECTIONS I AND III OF
PTCE 95-60, OR (C) SOLELY IN THE CASE OF A DEFINITIVE CERTIFICATE, AN OPINION OF
COUNSEL SATISFACTORY TO THE TRUSTEE AND THE CERTIFICATE REGISTRAR, AND UPON
WHICH THE TRUSTEE AND THE CERTIFICATE REGISTRAR SHALL BE ENTITLED TO RELY, TO
THE EFFECT THAT THE ACQUISITION AND HOLDING OF THIS CERTIFICATE BY THE
TRANSFEREE WILL NOT RESULT IN A NONEXEMPT PROHIBITED TRANSACTION UNDER TITLE I
OF ERISA OR SECTION 4975 OF THE CODE, OR A VIOLATION OF SIMILAR LAW, AND WILL
NOT SUBJECT THE CERTIFICATE REGISTRAR, THE DEPOSITOR, THE SERVICER OR THE
TRUSTEE TO ANY OBLIGATION IN ADDITION TO THOSE UNDERTAKEN BY SUCH ENTITIES IN
THE AGREEMENT REFERRED TO HEREIN, WHICH OPINION OF COUNSEL SHALL NOT BE AN
EXPENSE OF THE CERTIFICATE REGISTRAR, THE DEPOSITOR, THE SERVICER OR THE
TRUSTEE.

                                    B-4-2-2
<PAGE>

                 C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
                           SERIES 2004-CB8, CLASS B-4

                                 (REGULATION S)

evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional fixed-rate and adjustable-rate
one- to four-family first and second lien mortgage loans formed and sold by

                     MERRILL LYNCH MORTGAGE INVESTORS, INC.

<TABLE>
<S>                                                          <C>
Series 2004-CB8, Class B-4                                   Original Class Certificate Principal Balance
                                                             of the Class B-4 Certificates as of
                                                             the Closing Date:
                                                             $10,950,000.00

Pass-Through Rate:  6.000%(1)

Date of Pooling and Servicing Agreement and Cut-off Date:    Initial Certificate Principal Balance:
December 1, 2004                                             $0.00
First Distribution Date:  January 25, 2005                   Servicer:  Litton Loan Servicing LP

No.                                                          Trustee: JPMorgan Chase Bank, N.A.

CUSIP: U5910E EM 2                                           Closing Date:  January 7, 2005

ISIN: USU5910EEM2
</TABLE>

      DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
      CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
      OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
      THAN THE AMOUNT SHOWN ABOVE.

      THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
      MERRILL LYNCH MORTGAGE INVESTORS, INC., THE SERVICER, THE TRUSTEE OR ANY
      OF THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
      INSTRUMENTALITY OF THE UNITED STATES.

      This certifies that CEDE & CO. is the registered owner of a Percentage
Interest (obtained by dividing the Initial Certificate Principal Balance of this
Certificate by the Original Class Certificate Principal Balance of the Class B-4
Certificates) in that certain beneficial ownership interest evidenced by all the
Class B-4 Certificates in the Trust Fund created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Merrill
Lynch Mortgage Investors, Inc. (hereinafter called the "Depositor," which term
includes any successor entity under the Agreement), Credit-Based Asset Servicing
and Securitization LLC (the "Seller"), the Servicer and the Trustee, a summary
of certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.

-------------------
(1) Subject to a cap as described in the Agreement

                                    B-4-2-3
<PAGE>

      Pursuant to the terms of the Agreement, distributions will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (a "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered on the Business Day immediately preceding such Distribution Date
(the "Record Date"), from funds in the Distribution Account in an amount equal
to the product of the Percentage Interest evidenced by this Certificate and the
amount required to be distributed to the Holders of Class B-4 Certificates on
such Distribution Date pursuant to the Agreement provided, however, that if any
Class B-4 Certificate becomes a Definitive Certificate, the Record Date for such
Certificate will be the last Business Day of the month immediately preceding the
month in which the related Distribution Date occurs.

      All distributions to the Holder of this Certificate under the Agreement
will be made or caused to be made by or on behalf of the Trustee by wire
transfer in immediately available funds to the account of the Person entitled
thereto if such Person shall have so notified the Certificate Registrar in
writing at least five Business Days prior to the Record Date immediately prior
to such Distribution Date and is the registered owner of Class B-4 Certificates
the aggregate Initial Certificate Principal Balance of which is in excess of
$5,000,000, or by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register, provided that the Certificate Registrar may deduct a reasonable wire
transfer fee from any payment made by wire transfer. Notwithstanding the above,
the final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.

      The Class B-4 Pass-Through Rate on each Distribution Date will be a rate
per annum equal to the least of (i) the Class B-4 Pass-Through Rate, (ii) the
Subordinate Rate Cap and (iii) the Subordinate Maximum Rate Cap.

      This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class B-4 Certificates.

      The Class B-4 Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

      This Certificate is subordinated in right of payment to the Class A, Class
M-1, Class M-2, Class M-3, Class B-1, Class B-2 and Class B-3 Certificates as
described in the Agreement.

      The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee, the Seller and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer, the Seller and the Trustee with the consent of the Holders of
Certificates entitled to the Voting Rights identified 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 herefor 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.

                                    B-4-2-4
<PAGE>

      As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee as provided in the Agreement, duly
endorsed by, or accompanied by an assignment in the form below or other 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 evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

      The Certificates are issuable in fully registered form only without
coupons in Classes and 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 evidencing the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.

      No transfer of this Certificate shall be made unless that transfer is made
pursuant to an effective registration statement under the 1933 Act and effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that a transfer is to be made without registration or qualification
(i) the Certificateholder desiring to effect the transfer and such
Certificateholder's prospective transferee shall each execute a representation
letter in the form described by the Agreement certifying to the Certificate
Registrar the facts surrounding the transfer, and (ii) unless such transfer is
made in reliance upon Rule 144A under the 1933 Act, the Depositor and the
Certificate Registrar may require an Opinion of Counsel satisfactory to them
that such transfer may be made without such registration or qualification, which
Opinion of Counsel shall not be an expense of the Depositor, the Trustee or the
Certificate Registrar, in their respective capacities as such. None of the
Depositor, the Certificate Registrar or the Trustee is obligated to register or
qualify the Class of Certificates specified on the face hereof under the 1933
Act or any other securities law or to take any action not otherwise required
under the Agreement to permit the transfer of such Certificates without
registration or qualification. Any such Certificateholder desiring to effect
such transfer shall, and does hereby agree to, indemnify the Trustee, the
Depositor, the Certificate Registrar and the Servicer 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. Each Person who acquires this Certificate or an
interest therein shall be deemed to have made the representations required by
the representation letter referred to in this paragraph, unless such Person
shall have provided such representation letter referred to in this paragraph to
the Certificate Registrar.

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

      The Depositor, the Servicer, the Trustee, any Paying Agent and the
Certificate Registrar and any agent of the Depositor, the Servicer, the Trustee,
any Paying Agent or the Certificate Registrar may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Servicer, the Trustee, the Certificate Registrar, any Paying
Agent nor any such agent shall be affected by notice to the contrary.

      The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the

                                    B-4-2-5
<PAGE>

Agreement from the Trust Fund of all Mortgage Loans and all property acquired in
respect of such Mortgage Loans. The Agreement permits, but does not require, the
party designated in the Agreement to purchase from the Trust Fund all Mortgage
Loans and all property acquired in respect of any Mortgage Loan at a price
determined as provided in the Agreement. The exercise of such right will effect
early retirement of the Certificates; however, such right to purchase is subject
to the aggregate Principal Balance of the Mortgage Loans at the time of purchase
being 10% or less of the Cut-off Date Aggregate Principal Balance.

      The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.

      Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                    B-4-2-6
<PAGE>

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

Dated:  January 7, 2005

                            JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
                                     as Trustee

                            By:________________________________________
                                     Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

      This is one of the Certificates referred to in the within-mentioned
Agreement.

                            JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
                                    as Certificate Registrar

                            By:_______________________________________
                                      Authorized Signatory

Date of authentication: January 7, 2005

                                    B-4-2-7
<PAGE>

                                  ABBREVIATIONS

      The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>
<S>           <C>   <C>                              <C>                   <C>    <C>
TEN COM       -     as tenants in common             UNIF GIFT MIN ACT     -      Custodian
                                                                                  (Cust) (Minor)
TEN ENT       -     as tenants by the entireties                                  under Uniform
                                                                                  Gifts to Minors Act
JT TEN        -     as joint tenants with right of                                ____________________
                    survivorship and not as tenants                                 (State)
                    in common
</TABLE>

     Additional abbreviations may also be used though not in the above list.

                                    B-4-2-8
<PAGE>

                                   ASSIGNMENT

      FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto________________________________________________________________
________________________________________________________________________________
______(Please print or typewrite name, address including postal zip
code, and Taxpayer Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

      I (we) further direct the Certificate Registrar to issue a new Certificate
of a like Percentage Interest and Class to the above named assignee and deliver
such Certificate to the following address:

________________________________________________________________________________

Dated:                                    ______________________________________
                                          Signature by or on behalf of assignor

                                          ______________________________________
                                          Signature Guaranteed

                            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.

                                    B-4-2-9
<PAGE>

                                  EXHIBIT C-1-1

                           FORM OF CLASS R CERTIFICATE

      THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON-UNITED STATES PERSON.

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

      THIS CLASS R CERTIFICATE IS SUBORDINATE TO THE OFFERED CERTIFICATES OF
      THIS SERIES TO THE EXTENT DESCRIBED HEREIN AND IN THE AGREEMENT REFERRED
      TO HEREIN.

      THIS CLASS R CERTIFICATE WILL NOT BE ENTITLED TO PAYMENTS UNTIL SUCH TIME
      AS DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.

      THIS CLASS R CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES
      LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
      CERTIFICATE WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN
      A TRANSACTION THAT DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND
      IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE AGREEMENT
      REFERRED TO HEREIN.

      NO TRANSFER OF THIS CLASS R CERTIFICATE SHALL BE REGISTERED UNLESS THE
      TRUSTEE AND THE CERTIFICATE REGISTRAR SHALL HAVE RECEIVED A REPRESENTATION
      FROM THE TRANSFEREE OF THIS CERTIFICATE TO THE EFFECT THAT SUCH TRANSFEREE
      IS NOT AN EMPLOYEE BENEFIT PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE
      EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), A
      PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO STATE, LOCAL
      OR OTHER FEDERAL LAW SUBSTANTIVELY SIMILAR TO THE FOREGOING PROVISIONS OF
      ERISA OR THE CODE (COLLECTIVELY, A "PLAN"), AND IS NOT DIRECTLY OR
      INDIRECTLY ACQUIRING THIS CERTIFICATE FOR, ON BEHALF OF OR WITH ANY ASSETS
      OF ANY SUCH PLAN.

      ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CLASS R CERTIFICATE MAY
      BE MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (1) AN AFFIDAVIT TO THE
      CERTIFICATE REGISTRAR THAT SUCH TRANSFEREE IS NOT (A) THE UNITED STATES,
      ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY
      INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE
      FOREGOING, (B) ANY

                                    C-1-1-1
<PAGE>
      ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED IN SECTION 521 OF THE
      CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS
      SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE
      CODE, (C) ANY ORGANIZATION DESCRIBED IN SECTION 1381(A)(2)(C) OF THE CODE
      (ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B) OR (C) BEING
      HEREINAFTER REFERRED TO AS A "DISQUALIFIED ORGANIZATION"), OR (D) AN AGENT
      OF A DISQUALIFIED ORGANIZATION AND (2) NO PURPOSE OF SUCH TRANSFER IS TO
      IMPEDE THE ASSESSMENT OR COLLECTION OF TAX, AND (3) SUCH TRANSFEREE
      SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL
      CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN
      THE CERTIFICATE REGISTER OR ANY TRANSFER, SALE OR OTHER DISPOSITION OF
      THIS CLASS R CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT OF A
      DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO
      LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE
      A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED
      TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF A
      CLASS R CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE SHALL BE DEEMED TO
      HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH AND THE PROVISIONS OF
      SECTION 5.02(D) OF THE AGREEMENT REFERRED TO HEREIN. ANY PERSON THAT IS A
      DISQUALIFIED ORGANIZATION IS PROHIBITED FROM ACQUIRING BENEFICIAL
      OWNERSHIP OF THIS CLASS R CERTIFICATE.

                                    C-1-1-2
<PAGE>

                 C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
                            SERIES 2004-CB8, CLASS R

evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional fixed-rate and adjustable-rate
one- to four-family first and second lien mortgage loans formed and sold by

                     MERRILL LYNCH MORTGAGE INVESTORS, INC.

<TABLE>
<S>                                                          <C>
Series 2004-CB8, Class R                                     Servicer:  Litton Loan Servicing LP

Date of Pooling and Servicing Agreement and Cut-off Date:    Trustee:  JPMorgan Chase Bank, N.A.
December 1, 2004
First Distribution Date:  January 25, 2005                   Closing Date:  January 7, 2005

No.                                                          CUSIP: 59020U QB 4

Percentage Interest:  100%                                   ISIN: US59020UQB43
</TABLE>

      THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
      MERRILL LYNCH MORTGAGE INVESTORS, INC., THE SERVICER, THE TRUSTEE OR ANY
      OF THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
      INSTRUMENTALITY OF THE UNITED STATES.

      This certifies that CMI Investors 2, LP is the registered owner of a
Percentage Interest set forth above in that certain beneficial ownership
interest evidenced by all the Class R Certificates in the Trust Fund created
pursuant to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Merrill Lynch Mortgage Investors, Inc. (hereinafter called
the "Depositor," which term includes any successor entity under the Agreement),
Credit-Based Asset Servicing and Securitization LLC (the "Seller"), the Servicer
and the Trustee, a summary of certain of the pertinent provisions of which is
set forth hereafter. To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

      Pursuant to the terms of the Agreement, distributions will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (a "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered on the last Business Day of the month immediately preceding the
month in which the related Distribution Date occurs (the "Record Date"), from
funds in the Distribution Account in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to the Holders of Class R Certificates on such Distribution Date
pursuant to the Agreement.

      All distributions to the Holder of this Certificate under the Agreement
will be made or caused to be made by or on behalf of the Trustee by wire
transfer in immediately available funds to the account of the Person entitled
thereto if such Person shall have so notified the Certificate Registrar in
writing at least five Business Days prior to the Record Date immediately prior
to such Distribution Date and is the registered owner of Class R Certificates
the aggregate Percentage Interest of which is in excess of a 66% Percentage
Interest of the Class R Certificates, or by check mailed by first class mail to
the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register, provided that

                                    C-1-1-3
<PAGE>

the Certificate Registrar may deduct a reasonable wire transfer fee from any
payment made by wire transfer. Notwithstanding the above, the final distribution
on this Certificate will be made after due notice by the Trustee of the pendency
of such distribution and only upon presentation and surrender of this
Certificate at the office or agency appointed by the Trustee for that purpose as
provided in the Agreement.

      This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
the Percentage Interest specified on the face hereof.

      The Class R Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

      The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee, the Seller and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer, the Seller and the Trustee with the consent of the Holders of
Certificates entitled to the Voting Rights identified 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 herefor 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 upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee as provided in the Agreement, duly
endorsed by, or accompanied by an assignment in the form below or other 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 evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

      The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests 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 evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

      No transfer of this Certificate shall be made unless that transfer is made
pursuant to an effective registration statement under the 1933 Act and effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that a transfer is to be made without registration or qualification
(i) the Certificateholder desiring to effect the transfer and such
Certificateholder's prospective transferee shall each execute a representation
letter in the form described by the Agreement certifying to the Certificate
Registrar the facts surrounding the transfer, and (ii) unless such transfer is
made in reliance upon Rule 144A under the 1933 Act, the Depositor and the
Certificate Registrar may require an Opinion of Counsel satisfactory to them
that such transfer may be made without such registration or qualification, which
Opinion of Counsel shall not be an expense of the Depositor, the Trustee or the
Certificate Registrar, in their respective capacities as such.

                                    C-1-1-4
<PAGE>

None of the Depositor, the Certificate Registrar or the Trustee is obligated to
register or qualify the Class of Certificates specified on the face hereof under
the 1933 Act or any other securities law or to take any action not otherwise
required under the Agreement to permit the transfer of such Certificates without
registration or qualification. Any such Certificateholder desiring to effect
such transfer shall, and does hereby agree to, indemnify the Trustee, the
Depositor, the Certificate Registrar and the Servicer against any liability that
may result if the transfer is not so exempt or is not made in accordance with
such federal and state laws.

      No transfer of a Certificate or any interest therein may be made to
employee benefit plans and certain other retirement plans and arrangements,
including individual retirement accounts and annuities, Keogh plans and
collective investment funds and separate accounts in which such plans, accounts
or arrangements are invested that are subject to the fiduciary responsibility
provisions of ERISA and Section 4975 of the Code ("Plans") or any person who is
directly or indirectly purchasing the Certificate or interest therein on behalf
of, as named fiduciary of, as trustee of, or with assets of a Plan.

      The Holder of this Certificate, by its acceptance hereof, shall be deemed
for all purposes to have consented to the provisions of Section 5.02 of the
Agreement and to any amendment of the Agreement deemed necessary by counsel of
the Depositor to ensure that the transfer of this Certificate to any Person
other than a Permitted Transferee or any other Person will not cause any REMIC
provided for in the Trust Agreement to cease to qualify as a REMIC or cause the
imposition of a tax upon the Trust.

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

      The Depositor, the Servicer, the Trustee, any Paying Agent and the
Certificate Registrar and any agent of the Depositor, the Servicer, the Trustee,
any Paying Agent or the Certificate Registrar may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Servicer, the Trustee, the Certificate Registrar, any Paying
Agent nor any such agent shall be affected by notice to the contrary.

      The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being 10% or
less of the Cut-off Date Aggregate Principal Balance.

      The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.

      Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                    C-1-1-5
<PAGE>

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

Dated:  January 7, 2005

                                     JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
                                                     as Trustee

                                     By:______________________________
                                            Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

      This is one of the Certificates referred to in the within-mentioned
Agreement.

                                     JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
                                              as Certificate Registrar

                                     By: ____________________________
                                             Authorized Signatory

Date of authentication: January 7, 2005

                                    C-1-1-6
<PAGE>

                                  ABBREVIATIONS

      The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>
<S>                   <C>  <C>                               <C>                             <C>  <C>
TEN COM               -    as tenants in common              UNIF GIFT MIN ACT               -    Custodian
                                                                                                  (Cust) (Minor)
TEN ENT               -    as tenants by the entireties                                           under Uniform
                                                                                                  Gifts to Minors Act
JT TEN                -    as joint tenants with right of                                         ____________________
                           survivorship and not as tenants                                              (State)
                           in common
</TABLE>

     Additional abbreviations may also be used though not in the above list.

                                    C-1-1-7
<PAGE>

                                   ASSIGNMENT

      FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
___________(Please print or typewrite name, address including postal zip code,
and Taxpayer Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

      I (we) further direct the Certificate Registrar to issue a new Certificate
of a like Percentage Interest and Class to the above named assignee and deliver
such Certificate to the following address:

________________________________________________________________________________

Dated:
                                          ______________________________________
                                          Signature by or on behalf of assignor

                                          ______________________________________
                                          Signature Guaranteed

                            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.

                                    C-1-1-8
<PAGE>

                                  EXHIBIT C-1-2

                          FORM OF CLASS R-X CERTIFICATE

      THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON-UNITED STATES PERSON.

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

      THIS CLASS R-X CERTIFICATE IS SUBORDINATE TO THE OFFERED CERTIFICATES OF
      THIS SERIES TO THE EXTENT DESCRIBED HEREIN AND IN THE AGREEMENT REFERRED
      TO HEREIN.

      THIS CLASS R-X CERTIFICATE WILL NOT BE ENTITLED TO PAYMENTS UNTIL SUCH
      TIME AS DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.

      THIS CLASS R-X CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES
      LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
      CERTIFICATE WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN
      A TRANSACTION THAT DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND
      IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE AGREEMENT
      REFERRED TO HEREIN.

      NO TRANSFER OF THIS CLASS R-X CERTIFICATE SHALL BE REGISTERED UNLESS THE
      TRUSTEE AND THE CERTIFICATE REGISTRAR SHALL HAVE RECEIVED A REPRESENTATION
      FROM THE TRANSFEREE OF THIS CERTIFICATE TO THE EFFECT THAT SUCH TRANSFEREE
      IS NOT AN EMPLOYEE BENEFIT PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE
      EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), A
      PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO STATE, LOCAL
      OR OTHER FEDERAL LAW SUBSTANTIVELY SIMILAR TO THE FOREGOING PROVISIONS OF
      ERISA OR THE CODE (COLLECTIVELY, A "PLAN"), AND IS NOT DIRECTLY OR
      INDIRECTLY ACQUIRING THIS CERTIFICATE FOR, ON BEHALF OF OR WITH ANY ASSETS
      OF ANY SUCH PLAN.

      ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CLASS R-X CERTIFICATE
      MAY BE MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (1) AN AFFIDAVIT TO
      THE CERTIFICATE REGISTRAR THAT SUCH TRANSFEREE IS NOT (A) THE UNITED
      STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN
      GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR

                                    C-1-2-1
<PAGE>

      INSTRUMENTALITY OF ANY OF THE FOREGOING, (B) ANY ORGANIZATION (OTHER THAN
      A COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) WHICH IS EXEMPT FROM
      THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH ORGANIZATION IS
      SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE, (C) ANY
      ORGANIZATION DESCRIBED IN SECTION 1381(A)(2)(C) OF THE CODE (ANY SUCH
      PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B) OR (C) BEING
      HEREINAFTER REFERRED TO AS A "DISQUALIFIED ORGANIZATION"), OR (D) AN AGENT
      OF A DISQUALIFIED ORGANIZATION AND (2) NO PURPOSE OF SUCH TRANSFER IS TO
      IMPEDE THE ASSESSMENT OR COLLECTION OF TAX, AND (3) SUCH TRANSFEREE
      SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL
      CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN
      THE CERTIFICATE REGISTER OR ANY TRANSFER, SALE OR OTHER DISPOSITION OF
      THIS CLASS R-X CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT OF A
      DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO
      LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE
      A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED
      TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF A
      CLASS R-X CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE SHALL BE DEEMED TO
      HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH AND THE PROVISIONS OF
      SECTION 5.02(D) OF THE AGREEMENT REFERRED TO HEREIN. ANY PERSON THAT IS A
      DISQUALIFIED ORGANIZATION IS PROHIBITED FROM ACQUIRING BENEFICIAL
      OWNERSHIP OF THIS CLASS R-X CERTIFICATE.

                                    C-1-2-2
<PAGE>

                 C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
                           SERIES 2004-CB8, CLASS R-X

evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional fixed-rate and adjustable-rate
one- to four-family first and second lien mortgage loans formed and sold by

                     MERRILL LYNCH MORTGAGE INVESTORS, INC.

<TABLE>
<S>                                                          <C>
Series 2004-CB8, Class R-X                                   Servicer:  Litton Loan Servicing LP

Date of Pooling and Servicing Agreement and Cut-off Date:    Trustee:  JPMorgan Chase Bank, N.A.
December 1, 2004
First Distribution Date:  January 25, 2005                   Closing Date:  January 7, 2005

No.                                                          CUSIP: 59020U QA 6

Percentage Interest:  100%                                   ISIN: US59020UQA69
</TABLE>

      THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
      MERRILL LYNCH MORTGAGE INVESTORS, INC., THE SERVICER, THE TRUSTEE OR ANY
      OF THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
      INSTRUMENTALITY OF THE UNITED STATES.

      This certifies that Robert Weinstein is the registered owner of a
Percentage Interest set forth above in that certain beneficial ownership
interest evidenced by all the Class R-X Certificates in the Trust Fund created
pursuant to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Merrill Lynch Mortgage Investors, Inc. (hereinafter called
the "Depositor," which term includes any successor entity under the Agreement),
Credit-Based Asset Servicing and Securitization LLC (the "Seller"), the Servicer
and the Trustee, a summary of certain of the pertinent provisions of which is
set forth hereafter. To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

      Pursuant to the terms of the Agreement, distributions will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (a "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered on the last Business Day of the month immediately preceding the
month in which the related Distribution Date occurs (the "Record Date"), from
funds in the Distribution Account in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to the Holders of Class R-X Certificates on such Distribution Date
pursuant to the Agreement.

      All distributions to the Holder of this Certificate under the Agreement
will be made or caused to be made by or on behalf of the Trustee by wire
transfer in immediately available funds to the account of the Person entitled
thereto if such Person shall have so notified the Certificate Registrar in
writing at least five Business Days prior to the Record Date immediately prior
to such Distribution Date and is the registered owner of Class R-X Certificates
the aggregate Percentage Interest of which is in excess of a 66% Percentage
Interest of the Class R-X Certificates, or by check mailed by first class mail
to the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register,

                                    C-1-2-3
<PAGE>

provided that the Certificate Registrar may deduct a reasonable wire transfer
fee from any payment made by wire transfer. Notwithstanding the above, the final
distribution on this Certificate will be made after due notice by the Trustee of
the pendency of such distribution and only upon presentation and surrender of
this Certificate at the office or agency appointed by the Trustee for that
purpose as provided in the Agreement.

      This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
the Percentage Interest specified on the face hereof.

      The Class R-X Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

      The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee, the Seller and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer, the Seller and the Trustee with the consent of the Holders of
Certificates entitled to the Voting Rights identified 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 herefor 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 upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee as provided in the Agreement, duly
endorsed by, or accompanied by an assignment in the form below or other 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 evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

      The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests 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 evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

      No transfer of this Certificate shall be made unless that transfer is made
pursuant to an effective registration statement under the 1933 Act and effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that a transfer is to be made without registration or qualification
(i) the Certificateholder desiring to effect the transfer and such
Certificateholder's prospective transferee shall each execute a representation
letter in the form described by the Agreement certifying to the Certificate
Registrar the facts surrounding the transfer, and (ii) unless such transfer is
made in reliance upon Rule 144A under the 1933 Act, the Depositor and the
Certificate Registrar may require an Opinion of Counsel satisfactory to them
that such transfer may be made without such registration or qualification, which
Opinion of Counsel shall not be an

                                    C-1-2-4
<PAGE>

expense of the Depositor, the Trustee or the Certificate Registrar, in their
respective capacities as such. None of the Depositor, the Certificate Registrar
or the Trustee is obligated to register or qualify the Class of Certificates
specified on the face hereof under the 1933 Act or any other securities law or
to take any action not otherwise required under the Agreement to permit the
transfer of such Certificates without registration or qualification. Any such
Certificateholder desiring to effect such transfer shall, and does hereby agree
to, indemnify the Trustee, the Depositor, the Certificate Registrar and the
Servicer against any liability that may result if the transfer is not so exempt
or is not made in accordance with such federal and state laws.

      No transfer of a Certificate or any interest therein may be made to
employee benefit plans and certain other retirement plans and arrangements,
including individual retirement accounts and annuities, Keogh plans and
collective investment funds and separate accounts in which such plans, accounts
or arrangements are invested that are subject to the fiduciary responsibility
provisions of ERISA and Section 4975 of the Code ("Plans") or any person who is
directly or indirectly purchasing the Certificate or interest therein on behalf
of, as named fiduciary of, as trustee of, or with assets of a Plan.

      The Holder of this Certificate, by its acceptance hereof, shall be deemed
for all purposes to have consented to the provisions of Section 5.02 of the
Agreement and to any amendment of the Agreement deemed necessary by counsel of
the Depositor to ensure that the transfer of this Certificate to any Person
other than a Permitted Transferee or any other Person will not cause any REMIC
provided for in the Trust Agreement to cease to qualify as a REMIC or cause the
imposition of a tax upon the Trust.

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

      The Depositor, the Servicer, the Trustee, any Paying Agent and the
Certificate Registrar and any agent of the Depositor, the Servicer, the Trustee,
any Paying Agent or the Certificate Registrar may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Servicer, the Trustee, the Certificate Registrar, any Paying
Agent nor any such agent shall be affected by notice to the contrary.

      The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being 10% or
less of the Cut-off Date Aggregate Principal Balance.

      The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.

      Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                    C-1-2-5
<PAGE>

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

Dated:  January 7, 2005

                                     JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
                                                as Trustee

                                     By: _______________________________________
                                                 Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

      This is one of the Certificates referred to in the within-mentioned
Agreement.

                                     JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
                                                 as Certificate Registrar

                                     By: _______________________________________
                                              Authorized Signatory

Date of authentication: January 7, 2005

                                    C-1-2-6
<PAGE>

                                  ABBREVIATIONS

      The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>
<S>        <C>  <C>                               <C>                             <C>  <C>
TEN COM    -    as tenants in common              UNIF GIFT MIN ACT               -    Custodian
                                                                                       (Cust) (Minor)
TEN ENT    -    as tenants by the entireties                                           under Uniform
                                                                                       Gifts to Minors Act
JT TEN     -    as joint tenants with right of                                         __________________
                survivorship and not as tenants                                              (State)
                in common
</TABLE>

     Additional abbreviations may also be used though not in the above list.

                                    C-1-2-7
<PAGE>

                                   ASSIGNMENT

      FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
_______________________________________________________________________(Please
print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

      I (we) further direct the Certificate Registrar to issue a new Certificate
of a like Percentage Interest and Class to the above named assignee and deliver
such Certificate to the following address:

________________________________________________________________________________

Dated:
                                     ___________________________________________
                                     Signature by or on behalf of assignor
                                     ___________________________________________
                                     Signature Guaranteed

                            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.

                                    C-1-2-8
<PAGE>

                                   EXHIBIT C-2

                          FORM OF CLASS M-1 CERTIFICATE

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

      THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
      CERTIFICATES AS DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.

      EXCEPT AS PROVIDED IN SECTION 5.02(D) OF THE AGREEMENT REFERRED TO HEREIN,
      NO TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED UNLESS THE TRUSTEE AND
      THE CERTIFICATE REGISTRAR SHALL HAVE RECEIVED (A) A REPRESENTATION FROM
      THE TRANSFEREE OF THIS CERTIFICATE TO THE EFFECT THAT SUCH TRANSFEREE IS
      NOT AN EMPLOYEE BENEFIT PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE
      EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), A
      PLAN SUBJECT TO SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS
      AMENDED (THE "CODE") OR A PLAN SUBJECT TO STATE, LOCAL OR OTHER FEDERAL
      LAW SUBSTANTIVELY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE
      ("SIMILAR LAW") (COLLECTIVELY, A "PLAN"), AND IS NOT DIRECTLY OR
      INDIRECTLY ACQUIRING THIS CERTIFICATE FOR, ON BEHALF OF OR WITH ANY ASSETS
      OF ANY SUCH PLAN, (B) A REPRESENTATION THAT THE TRANSFEREE IS AN INSURANCE
      COMPANY THAT IS ACQUIRING THE CERTIFICATE WITH ASSETS OF AN "INSURANCE
      COMPANY GENERAL ACCOUNT" AS DEFINED IN SECTION V(E) OF PROHIBITED
      TRANSACTION CLASS EXEMPTION ("PTCE") 95-60, AND THE ACQUISITION AND
      HOLDING OF THE CERTIFICATE ARE COVERED AND EXEMPT UNDER SECTIONS I AND III
      OF PTCE 95-60, OR (C) SOLELY IN THE CASE OF A DEFINITIVE CERTIFICATE, AN
      OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE AND THE CERTIFICATE
      REGISTRAR, AND UPON WHICH THE TRUSTEE AND THE CERTIFICATE REGISTRAR SHALL
      BE ENTITLED TO RELY, TO THE EFFECT THAT THE ACQUISITION AND HOLDING OF
      THIS CERTIFICATE BY THE TRANSFEREE WILL NOT RESULT IN A NONEXEMPT
      PROHIBITED TRANSACTION UNDER TITLE I OF ERISA OR SECTION 4975 OF THE CODE,
      OR A VIOLATION OF SIMILAR LAW, AND WILL NOT SUBJECT

                                     C-2-1
<PAGE>

      THE CERTIFICATE REGISTRAR, THE DEPOSITOR, THE SERVICER OR THE TRUSTEE TO
      ANY OBLIGATION IN ADDITION TO THOSE UNDERTAKEN BY SUCH ENTITIES IN THE
      AGREEMENT REFERRED TO HEREIN, WHICH OPINION OF COUNSEL SHALL NOT BE AN
      EXPENSE OF THE CERTIFICATE REGISTRAR, THE DEPOSITOR, THE SERVICER OR THE
      TRUSTEE.

      FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
      BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
      INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
      860G AND 860D OF THE CODE AND CERTAIN OTHER PROPERTY.

                                     C-2-2
<PAGE>

                 C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
                           SERIES 2004-CB8, CLASS M-1

evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional fixed-rate and adjustable-rate
one- to four-family first and second lien mortgage loans formed and sold by

                     MERRILL LYNCH MORTGAGE INVESTORS, INC.

<TABLE>
<S>                                                          <C>
Series 2004-CB8, Class M-1                                   Original Class Certificate
                                                             Principal Balance of the Class M-1
                                                             Certificates as of the Closing Date:
                                                             $34,220,000.00

Pass-Through Rate:  Variable(1)

Date of Pooling and Servicing Agreement and Cut-off Date:    Initial Certificate Principal Balance: $34,220,000.00
December 1, 2004
First Distribution Date:  January 25, 2005                   Servicer:  Litton Loan Servicing LP

No.                                                          Trustee:  JPMorgan Chase Bank, N.A.

CUSIP: 59020U PR 0                                           Closing Date:  January 7, 2005

ISIN: US59020UPR04
</TABLE>

      DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
      CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
      OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
      THAN THE AMOUNT SHOWN ABOVE.

      THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
      MERRILL LYNCH MORTGAGE INVESTORS, INC., THE SERVICER, THE TRUSTEE OR ANY
      OF THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
      INSTRUMENTALITY OF THE UNITED STATES.

      This certifies that CEDE & CO. is the registered owner of a Percentage
Interest (obtained by dividing the Initial Certificate Principal Balance of this
Certificate by the Original Class Certificate Principal Balance of the Class M-1
Certificates) in that certain beneficial ownership interest evidenced by all the
Class M-1 Certificates in the Trust Fund created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Merrill
Lynch Mortgage Investors, Inc. (hereinafter called the "Depositor," which term
includes any successor entity under the Agreement), Credit-Based Asset Servicing
and Securitization LLC (the "Seller"), the Servicer and the Trustee, a summary
of certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.

---------------------
(1) Subject to a cap as described in the Agreement

                                     C-2-3

<PAGE>

      Pursuant to the terms of the Agreement, distributions will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (a "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered on the last Business Day of the month immediately preceding the
month in which the related Distribution Date occurs (the "Record Date"), from
funds in the Distribution Account in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to the Holders of Class M-1 Certificates on such Distribution Date
pursuant to the Agreement.

      All distributions to the Holder of this Certificate under the Agreement
will be made or caused to be made by or on behalf of the Trustee by wire
transfer in immediately available funds to the account of the Person entitled
thereto if such Person shall have so notified the Certificate Registrar in
writing at least five Business Days prior to the Record Date immediately prior
to such Distribution Date and is the registered owner of Class M-1 Certificates
the aggregate Initial Certificate Principal Balance of which is in excess of
$5,000,000, or by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register, provided that the Certificate Registrar may deduct a reasonable wire
transfer fee from any payment made by wire transfer. Notwithstanding the above,
the final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.

      The Class M-1 Pass-Through Rate on each Distribution Date will be a rate
per annum equal to the least of (i) LIBOR as of the related LIBOR Determination
Date, plus the Class M-1 Certificate Margin, (ii) the Subordinate Rate Cap and
(iii) the Subordinate Maximum Rate Cap.

      This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class M-1 Certificates.

      The Class M-1 Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

      This Certificate is subordinated in right of payment to the Class A
Certificates as described in the Agreement.

      The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee, the Seller and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer, the Seller and the Trustee with the consent of the Holders of
Certificates entitled to the Voting Rights identified 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 herefor 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 upon surrender of this Certificate for registration

                                     C-2-4
<PAGE>

of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other 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 evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.

      The Certificates are issuable in fully registered form only without
coupons in Classes and 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 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 of Certificates, but the Certificate Registrar may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.

      The Depositor, the Servicer, the Trustee, any Paying Agent and the
Certificate Registrar and any agent of the Depositor, the Servicer, the Trustee,
any Paying Agent or the Certificate Registrar may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Servicer, the Trustee, the Certificate Registrar, any Paying
Agent nor any such agent shall be affected by notice to the contrary.

      The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being 10% or
less of the Cut-off Date Aggregate Principal Balance.

      The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.

      Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     C-2-5
<PAGE>

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

Dated:  January 7, 2005

                                     JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
                                                as Trustee

                                     By:________________________________________
                                               Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

      This is one of the Certificates referred to in the within-mentioned
Agreement.

                                     JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
                                               as Certificate Registrar

                                     By: ______________________________________
                                               Authorized Signatory

Date of authentication: January 7, 2005

                                     C-2-6
<PAGE>

                                  ABBREVIATIONS

      The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>
<S>        <C>  <C>                               <C>                             <C>  <C>
TEN COM    -    as tenants in common              UNIF GIFT MIN ACT               -    Custodian
                                                                                       (Cust) (Minor)
TEN ENT    -    as tenants by the entireties                                           under Uniform
                                                                                       Gifts to Minors Act
JT TEN     -    as joint tenants with right of                                         ____________________
                survivorship and not as tenants                                              (State)
                in common
</TABLE>

     Additional abbreviations may also be used though not in the above list.

                                     C-2-7
<PAGE>

                                   ASSIGNMENT

      FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto________________________________________________________________
_______________________________________________________________________ (Please
print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

      I (we) further direct the Certificate Registrar to issue a new Certificate
of a like Percentage Interest and Class to the above named assignee and deliver
such Certificate to the following address:

________________________________________________________________________________

Dated:

                                     ___________________________________________
                                     Signature by or on behalf of assignor
                                     ___________________________________________
                                     Signature Guaranteed

                            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.

                                     C-2-8
<PAGE>

                                   EXHIBIT C-3

                          FORM OF CLASS M-2 CERTIFICATE

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

      THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A AND
      CLASS M-1 CERTIFICATES AS DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.

      EXCEPT AS PROVIDED IN SECTION 5.02(D) OF THE AGREEMENT REFERRED TO HEREIN,
      NO TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED UNLESS THE TRUSTEE AND
      THE CERTIFICATE REGISTRAR SHALL HAVE RECEIVED (A) A REPRESENTATION FROM
      THE TRANSFEREE OF THIS CERTIFICATE TO THE EFFECT THAT SUCH TRANSFEREE IS
      NOT AN EMPLOYEE BENEFIT PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE
      EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), A
      PLAN SUBJECT TO SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS
      AMENDED (THE "CODE") OR A PLAN SUBJECT TO STATE, LOCAL OR OTHER FEDERAL
      LAW SUBSTANTIVELY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE
      ("SIMILAR LAW") (COLLECTIVELY, A "PLAN"), AND IS NOT DIRECTLY OR
      INDIRECTLY ACQUIRING THIS CERTIFICATE FOR, ON BEHALF OF OR WITH ANY ASSETS
      OF ANY SUCH PLAN, (B) A REPRESENTATION THAT THE TRANSFEREE IS AN INSURANCE
      COMPANY THAT IS ACQUIRING THE CERTIFICATE WITH ASSETS OF AN "INSURANCE
      COMPANY GENERAL ACCOUNT" AS DEFINED IN SECTION V(E) OF PROHIBITED
      TRANSACTION CLASS EXEMPTION ("PTCE") 95-60, AND THE ACQUISITION AND
      HOLDING OF THE CERTIFICATE ARE COVERED AND EXEMPT UNDER SECTIONS I AND III
      OF PTCE 95-60, OR (C) SOLELY IN THE CASE OF A DEFINITIVE CERTIFICATE, AN
      OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE AND THE CERTIFICATE
      REGISTRAR, AND UPON WHICH THE TRUSTEE AND THE CERTIFICATE REGISTRAR SHALL
      BE ENTITLED TO RELY, TO THE EFFECT THAT THE ACQUISITION AND HOLDING OF
      THIS CERTIFICATE BY THE TRANSFEREE WILL NOT RESULT IN A NONEXEMPT
      PROHIBITED TRANSACTION UNDER TITLE I OF ERISA OR SECTION 4975 OF THE CODE,
      OR A VIOLATION OF SIMILAR LAW, AND WILL NOT SUBJECT

                                     C-3-1
<PAGE>

      THE CERTIFICATE REGISTRAR, THE DEPOSITOR, THE SERVICER OR THE TRUSTEE TO
      ANY OBLIGATION IN ADDITION TO THOSE UNDERTAKEN BY SUCH ENTITIES IN THE
      AGREEMENT REFERRED TO HEREIN, WHICH OPINION OF COUNSEL SHALL NOT BE AN
      EXPENSE OF THE CERTIFICATE REGISTRAR, THE DEPOSITOR, THE SERVICER OR THE
      TRUSTEE.

      FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
      BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
      INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
      860G AND 860D OF THE CODE AND CERTAIN OTHER PROPERTY.

                 C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
                           SERIES 2004-CB8, CLASS M-2

evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional fixed-rate and adjustable-rate
one- to four-family first and second lien mortgage loans formed and sold by

                     MERRILL LYNCH MORTGAGE INVESTORS, INC.

<TABLE>
<S>                                          <C>
Series 2004-CB8, Class M-2                   Original Class Certificate Principal Balance of the
                                             Class M-2 Certificates as of the Closing Date:
                                             $28,197,000.00

Pass-Through Rate: Variable(1)

Date of Pooling and Servicing Agreement      Initial Certificate Principal Balance:
and Cut-off Date:  December 1, 2004          $28,197,000.00

First Distribution Date: January 25, 2005    Servicer: Litton Loan Servicing LP

No.                                          Trustee: JPMorgan Chase Bank, N.A.

CUSIP: 59020U PS 8                           Closing Date: January 7, 2005

ISIN: US59020UPS86
</TABLE>

      DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
      CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
      OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
      THAN THE AMOUNT SHOWN ABOVE.

      THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
      MERRILL LYNCH MORTGAGE INVESTORS, INC., THE SERVICER, THE TRUSTEE OR ANY
      OF THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
      INSTRUMENTALITY OF THE UNITED STATES.

----------
(1) Subject to a cap as described in the Agreement

                                     C-3-2
<PAGE>

      This certifies that CEDE & CO. is the registered owner of a Percentage
Interest (obtained by dividing the Initial Certificate Principal Balance of this
Certificate by the Original Class Certificate Principal Balance of the Class M-2
Certificates) in that certain beneficial ownership interest evidenced by all the
Class M-2 Certificates in the Trust Fund created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Merrill
Lynch Mortgage Investors, Inc. (hereinafter called the "Depositor," which term
includes any successor entity under the Agreement), Credit-Based Asset Servicing
and Securitization LLC (the "Seller"), the Servicer and the Trustee, a summary
of certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.

      Pursuant to the terms of the Agreement, distributions will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (a "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered on the last Business Day of the month immediately preceding the
month in which the related Distribution Date occurs (the "Record Date"), from
funds in the Distribution Account in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to the Holders of Class M-2 Certificates on such Distribution Date
pursuant to the Agreement.

      All distributions to the Holder of this Certificate under the Agreement
will be made or caused to be made by or on behalf of the Trustee by wire
transfer in immediately available funds to the account of the Person entitled
thereto if such Person shall have so notified the Certificate Registrar in
writing at least five Business Days prior to the Record Date immediately prior
to such Distribution Date and is the registered owner of Class M-2 Certificates
the aggregate Initial Certificate Principal Balance of which is in excess of
$5,000,000, or by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register, provided that the Certificate Registrar may deduct a reasonable wire
transfer fee from any payment made by wire transfer. Notwithstanding the above,
the final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.

      The Class M-2 Pass-Through Rate on each Distribution Date will be a rate
per annum equal to the least of (i) LIBOR as of the related LIBOR Determination
Date, plus the Class M-2 Certificate Margin, (ii) the Subordinate Rate Cap and
(iii) the Subordinate Maximum Rate Cap.

      This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class M-2 Certificates.

      The Class M-2 Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

      This Certificate is subordinated in right of payment to the Class A and
Class M-1 Certificates as described in the Agreement.

                                     C-3-3
<PAGE>

      The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee, the Seller and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer, the Seller and the Trustee with the consent of the Holders of
Certificates entitled to the Voting Rights identified 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 herefor 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 upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee as provided in the Agreement, duly
endorsed by, or accompanied by an assignment in the form below or other 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 evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

      The Certificates are issuable in fully registered form only without
coupons in Classes and 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 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 of Certificates, but the Certificate Registrar may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.

      The Depositor, the Servicer, the Trustee, any Paying Agent and the
Certificate Registrar and any agent of the Depositor, the Servicer, the Trustee,
any Paying Agent or the Certificate Registrar may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Servicer, the Trustee, the Certificate Registrar, any Paying
Agent nor any such agent shall be affected by notice to the contrary.

      The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being 10% or
less of the Cut-off Date Aggregate Principal Balance.

      The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.

                                     C-3-4
<PAGE>

      Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     C-3-5
<PAGE>

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

Dated: January 7, 2005

                                             JPMORGAN CHASE BANK, NATIONAL
                                             ASSOCIATION,
                                                    as Trustee

                                             By:_______________________________
                                                    Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

      This is one of the Certificates referred to in the within-mentioned
Agreement.

                                             JPMORGAN CHASE BANK, NATIONAL
                                             ASSOCIATION,
                                                    as Certificate Registrar

                                             By:_______________________________
                                                    Authorized Signatory

Date of authentication: January 7, 2005

                                     C-3-6
<PAGE>

                                  ABBREVIATIONS

      The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>
<S>       <C>  <C>                               <C>                    <C>     <C>
TEN COM   -    as tenants in common              UNIF GIFT MIN ACT      -       Custodian
                                                                                (Cust) (Minor)
TEN ENT   -    as tenants by the entireties                                     under Uniform
                                                                                Gifts to Minors
JT TEN    -    as joint tenants with right of                                   Act
               survivorship and not as                                          _______________
               tenants in common                                                (State)

</TABLE>

     Additional abbreviations may also be used though not in the above list.

                                      C-3-7
<PAGE>

                                   ASSIGNMENT

      FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ______________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

      I (we) further direct the Certificate Registrar to issue a new Certificate
of a like Percentage Interest and Class to the above named assignee and deliver
such Certificate to the following address:

_______________________________________________________________________________

Dated:

                                        _______________________________________
                                        Signature by or on behalf of assignor

                                        _______________________________________
                                        Signature Guaranteed

                            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.

                                     C-3-8
<PAGE>

                                   EXHIBIT C-4

                         FORM OF CLASS M-3 CERTIFICATES

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

      THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A, CLASS
      M-1 AND CLASS M-2 CERTIFICATES AS DESCRIBED IN THE AGREEMENT REFERRED TO
      HEREIN.

      EXCEPT AS PROVIDED IN SECTION 5.02(D) OF THE AGREEMENT REFERRED TO HEREIN,
      NO TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED UNLESS THE TRUSTEE AND
      THE CERTIFICATE REGISTRAR SHALL HAVE RECEIVED (A) A REPRESENTATION FROM
      THE TRANSFEREE OF THIS CERTIFICATE TO THE EFFECT THAT SUCH TRANSFEREE IS
      NOT AN EMPLOYEE BENEFIT PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE
      EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), A
      PLAN SUBJECT TO SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS
      AMENDED (THE "CODE") OR A PLAN SUBJECT TO STATE, LOCAL OR OTHER FEDERAL
      LAW SUBSTANTIVELY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE
      ("SIMILAR LAW") (COLLECTIVELY, A "PLAN"), AND IS NOT DIRECTLY OR
      INDIRECTLY ACQUIRING THIS CERTIFICATE FOR, ON BEHALF OF OR WITH ANY ASSETS
      OF ANY SUCH PLAN, (B) A REPRESENTATION THAT THE TRANSFEREE IS AN INSURANCE
      COMPANY THAT IS ACQUIRING THE CERTIFICATE WITH ASSETS OF AN "INSURANCE
      COMPANY GENERAL ACCOUNT" AS DEFINED IN SECTION V(E) OF PROHIBITED
      TRANSACTION CLASS EXEMPTION ("PTCE") 95-60, AND THE ACQUISITION AND
      HOLDING OF THE CERTIFICATE ARE COVERED AND EXEMPT UNDER SECTIONS I AND III
      OF PTCE 95-60, OR (C) SOLELY IN THE CASE OF A DEFINITIVE CERTIFICATE, AN
      OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE AND THE CERTIFICATE
      REGISTRAR, AND UPON WHICH THE TRUSTEE AND THE CERTIFICATE REGISTRAR SHALL
      BE ENTITLED TO RELY, TO THE EFFECT THAT THE ACQUISITION AND HOLDING OF
      THIS CERTIFICATE BY THE TRANSFEREE WILL NOT RESULT IN A NONEXEMPT
      PROHIBITED TRANSACTION UNDER TITLE I OF ERISA OR SECTION 4975 OF THE CODE,
      OR A VIOLATION OF SIMILAR LAW, AND WILL NOT SUBJECT

                                     C-4-1
<PAGE>

      THE CERTIFICATE REGISTRAR, THE DEPOSITOR, THE SERVICER OR THE TRUSTEE TO
      ANY OBLIGATION IN ADDITION TO THOSE UNDERTAKEN BY SUCH ENTITIES IN THE
      AGREEMENT REFERRED TO HEREIN, WHICH OPINION OF COUNSEL SHALL NOT BE AN
      EXPENSE OF THE CERTIFICATE REGISTRAR, THE DEPOSITOR, THE SERVICER OR THE
      TRUSTEE.

      FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
      BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
      INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
      860G AND 860D OF THE CODE AND CERTAIN OTHER PROPERTY.

                 C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
                           SERIES 2004-CB8, CLASS M-3

evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional fixed-rate and adjustable-rate
one- to four-family first and second lien mortgage loans formed and sold by

                     MERRILL LYNCH MORTGAGE INVESTORS, INC.

<TABLE>
<S>                                          <C>
Series 2004-CB8, Class M-3                   Original Class Certificate Principal Balance of the
                                             Class M-3 Certificates as of the Closing Date:
                                             $7,939,000.00

Pass-Through Rate: Variable(1)

Date of Pooling and Servicing Agreement and  Initial Certificate Principal Balance: $7,939,000.00
Cut-off Date: December 1, 2004

First Distribution Date: January 25, 2005    Servicer: Litton Loan Servicing LP

No.                                          Trustee: JPMorgan Chase Bank, N.A.

CUSIP: 59020U PT 6                           Closing Date: January 7, 2005

ISIN: US59020UPT69
</TABLE>

      DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
      CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
      OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
      THAN THE AMOUNT SHOWN ABOVE.

      THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
      MERRILL LYNCH MORTGAGE INVESTORS, INC., THE SERVICER, THE TRUSTEE OR ANY
      OF THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
      INSTRUMENTALITY OF THE UNITED STATES.

----------
(1) Subject to a cap as described in the Agreement

                                     C-4-2
<PAGE>

      This certifies that CEDE & CO. is the registered owner of a Percentage
Interest (obtained by dividing the Initial Certificate Principal Balance of this
Certificate by the Original Class Certificate Principal Balance of the Class M-3
Certificates) in that certain beneficial ownership interest evidenced by all the
Class M-3 Certificates in the Trust Fund created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Merrill
Lynch Mortgage Investors, Inc. (hereinafter called the "Depositor," which term
includes any successor entity under the Agreement), Credit-Based Asset Servicing
and Securitization LLC (the "Seller"), the Servicer and the Trustee, a summary
of certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.

      Pursuant to the terms of the Agreement, distributions will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (a "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered on the last Business Day of the month immediately preceding the
month in which the related Distribution Date occurs (the "Record Date"), from
funds in the Distribution Account in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to the Holders of Class M-3 Certificates on such Distribution Date
pursuant to the Agreement.

      All distributions to the Holder of this Certificate under the Agreement
will be made or caused to be made by or on behalf of the Trustee by wire
transfer in immediately available funds to the account of the Person entitled
thereto if such Person shall have so notified the Certificate Registrar in
writing at least five Business Days prior to the Record Date immediately prior
to such Distribution Date and is the registered owner of Class M-3 Certificates
the aggregate Initial Certificate Principal Balance of which is in excess of
$5,000,000, or by check mailed by first class mail to the address of the Person
entitled thereto, as such name and address shall appear on the Certificate
Register, provided that the Certificate Registrar may deduct a reasonable wire
transfer fee from any payment made by wire transfer. Notwithstanding the above,
the final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.

      The Class M-3 Pass-Through Rate on each Distribution Date will be a rate
per annum equal to the least of (i) LIBOR as of the related LIBOR Determination
Date, plus the Class M-3 Certificate Margin, (ii) the Subordinate Rate Cap and
(iii) the Subordinate Maximum Rate Cap.

      This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
a Percentage Interest in the Class M-3 Certificates.

      The Class M-3 Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

      This Certificate is subordinated in right of payment to the Class A, Class
M-1 and Class M-2 Certificates as described in the Agreement.

                                     C-4-3
<PAGE>

      The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee, the Seller and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer, the Seller and the Trustee with the consent of the Holders of
Certificates entitled to the Voting Rights identified 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 herefor 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 upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee as provided in the Agreement, duly
endorsed by, or accompanied by an assignment in the form below or other 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 evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

      The Certificates are issuable in fully registered form only without
coupons in Classes and 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 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 of Certificates, but the Certificate Registrar may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.

      The Depositor, the Servicer, the Trustee, any Paying Agent and the
Certificate Registrar and any agent of the Depositor, the Servicer, the Trustee,
any Paying Agent or the Certificate Registrar may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Servicer, the Trustee, the Certificate Registrar, any Paying
Agent nor any such agent shall be affected by notice to the contrary.

      The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being 10% or
less of the Cut-off Date Aggregate Principal Balance.

      The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.

                                     C-4-4
<PAGE>

      Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     C-4-5
<PAGE>

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

Dated:  January 7, 2005

                                             JPMORGAN CHASE BANK, NATIONAL
                                             ASSOCIATION,
                                                    as Trustee

                                             By: ______________________________
                                                    Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

      This is one of the Certificates referred to in the within-mentioned
Agreement.

                                             JPMORGAN CHASE BANK, NATIONAL
                                             ASSOCIATION,
                                                    as Certificate Registrar

                                             By: ______________________________
                                                    Authorized Signatory

Date of authentication: January 7, 2005

                                     C-4-6
<PAGE>

                                  ABBREVIATIONS

      The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>
<S>       <C>  <C>                               <C>                    <C>     <C>
TEN COM   -    as tenants in common              UNIF GIFT MIN ACT      -       Custodian
                                                                                (Cust) (Minor)
TEN ENT   -    as tenants by the entireties                                     under Uniform
                                                                                Gifts to Minors
JT TEN    -    as joint tenants with right of                                   Act
               survivorship and not as                                          _______________
               tenants in common                                                (State)

</TABLE>

     Additional abbreviations may also be used though not in the above list.

                                      C-4-7
<PAGE>

                                   ASSIGNMENT

      FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ______________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

      I (we) further direct the Certificate Registrar to issue a new Certificate
of a like Percentage Interest and Class to the above named assignee and deliver
such Certificate to the following address:

_______________________________________________________________________________

Dated:

                                        _______________________________________
                                        Signature by or on behalf of assignor

                                        _______________________________________
                                        Signature Guaranteed

                            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.

                                     C-4-8
<PAGE>

                                   EXHIBIT C-5

                           FORM OF CLASS X CERTIFICATE

      FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A DIRECT
      OR INDIRECT BENEFICIAL INTEREST IN 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") AND THE OBLIGATION TO MAKE CERTAIN PAYMENTS.

      THIS CLASS X CERTIFICATE IS SUBORDINATE TO THE OFFERED CERTIFICATES OF
      THIS SERIES TO THE EXTENT DESCRIBED HEREIN AND IN THE AGREEMENT REFERRED
      TO HEREIN.

      THIS CLASS X CERTIFICATE WILL NOT BE ENTITLED TO PAYMENTS UNTIL SUCH TIME
      AS DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.

      THIS CLASS X CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES
      LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
      CERTIFICATE WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN
      A TRANSACTION THAT DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND
      IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE AGREEMENT
      REFERRED TO HEREIN.

      EXCEPT AS PROVIDED IN SECTION 5.02(D) OF THE AGREEMENT REFERRED TO HEREIN,
      NO TRANSFER OF THIS CLASS X CERTIFICATE SHALL BE REGISTERED UNLESS THE
      TRUSTEE AND THE CERTIFICATE REGISTRAR SHALL HAVE RECEIVED A REPRESENTATION
      FROM THE TRANSFEREE OF THIS CERTIFICATE TO THE EFFECT THAT SUCH TRANSFEREE
      IS NOT AN EMPLOYEE BENEFIT PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE
      EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), A
      PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO STATE, LOCAL
      OR OTHER FEDERAL LAW SUBSTANTIVELY SIMILAR TO THE FOREGOING PROVISIONS OF
      ERISA OR THE CODE (COLLECTIVELY, A "PLAN"), AND IS NOT DIRECTLY OR
      INDIRECTLY ACQUIRING THIS CERTIFICATE FOR, ON BEHALF OF OR WITH ANY ASSETS
      OF ANY SUCH PLAN.

                                     C-5-1
<PAGE>

                 C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES
                            SERIES 2004-CB8, CLASS X

evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional fixed-rate and adjustable-rate
one- to four-family first and second lien mortgage loans formed and sold by

                     MERRILL LYNCH MORTGAGE INVESTORS, INC.

<TABLE>
<S>                                          <C>
Series 2004-CB8, Class X                     Servicer: Litton Loan Servicing LP

Date of Pooling and Servicing Agreement and  Trustee: JPMorgan Chase Bank, N.A.
Cut-off Date: December 1, 2004

First Distribution Date: January 25, 2005    Closing Date: January 7, 2005

CUSIP: 59020U PZ 2
ISIN: US59020UPZ20
Percentage Interest: 100%
</TABLE>

      THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
      MERRILL LYNCH MORTGAGE INVESTORS, INC., THE SERVICER, THE TRUSTEE OR ANY
      OF THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
      INSTRUMENTALITY OF THE UNITED STATES.

      This certifies that Merrill Lynch, Pierce, Fenner & Smith Incorporated is
the registered owner of a Percentage Interest set forth above in that certain
beneficial ownership interest evidenced by all the Class X Certificates in the
Trust Fund created pursuant to a Pooling and Servicing Agreement, dated as
specified above (the "Agreement"), among Merrill Lynch Mortgage Investors, Inc.
(hereinafter called the "Depositor," which term includes any successor entity
under the Agreement), Credit-Based Asset Servicing and Securitization LLC (the
"Seller"), the Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.

      Pursuant to the terms of the Agreement, distributions will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (a "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered on the last Business Day of the month immediately preceding the
month in which the related Distribution Date occurs (the "Record Date"), from
funds in the Distribution Account in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to be
distributed to the Holders of Class X Certificates on such Distribution Date
pursuant to the Agreement.

      All distributions to the Holder of this Certificate under the Agreement
will be made or caused to be made by or on behalf of the Trustee by wire
transfer in immediately available funds to the account of the Person entitled
thereto if such Person shall have so notified the Certificate Registrar in
writing at least five Business Days prior to the Record Date immediately prior
to such Distribution Date and is the registered owner of Class X Certificates
the aggregate Initial Certificate Principal Balance of which is in excess of a
66% Percentage Interest of the Class X Certificates, or by check mailed by first
class mail to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate

                                     C-5-2
<PAGE>

Register, provided that the Certificate Registrar may deduct a reasonable wire
transfer fee from any payment made by wire transfer. Notwithstanding the above,
the final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose as provided in the Agreement.

      This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
the Percentage Interest specified on the face hereof.

      The Class X Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

      The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee, the Seller and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer, the Seller and the Trustee with the consent of the Holders of
Certificates entitled to the Voting Rights identified 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 herefor 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 upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee as provided in the Agreement, duly
endorsed by, or accompanied by an assignment in the form below or other 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 evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

      The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests 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 evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

      No transfer of this Certificate shall be made unless that transfer is made
pursuant to an effective registration statement under the 1933 Act and effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that a transfer is to be made without registration or qualification
(i) the Certificateholder desiring to effect the transfer and such
Certificateholder's prospective transferee shall each execute a representation
letter in the form described by the Agreement certifying to the Certificate
Registrar the facts surrounding the transfer, and (ii) unless such transfer is
made in reliance upon Rule 144A under the 1933 Act, the Depositor and the
Certificate Registrar may require an Opinion of Counsel satisfactory to them
that such transfer may be made without such registration or qualification, which
Opinion of Counsel shall not be an

                                     C-5-3
<PAGE>

expense of the Depositor, the Trustee or the Certificate Registrar, in their
respective capacities as such. None of the Depositor, the Certificate Registrar
or the Trustee is obligated to register or qualify the Class of Certificates
specified on the face hereof under the 1933 Act or any other securities law or
to take any action not otherwise required under the Agreement to permit the
transfer of such Certificates without registration or qualification. Any such
Certificateholder desiring to effect such transfer shall, and does hereby agree
to, indemnify the Trustee, the Depositor, the Certificate Registrar and the
Servicer against any liability that may result if the transfer is not so exempt
or is not made in accordance with such federal and state laws.

      No transfer of a Certificate or any interest therein may be made to
employee benefit plans and certain other retirement plans and arrangements,
including individual retirement accounts and annuities, Keogh plans and
collective investment funds and separate accounts in which such plans, accounts
or arrangements are invested that are subject to the fiduciary responsibility
provisions of ERISA and Section 4975 of the Code ("Plans") or any person who is
directly or indirectly purchasing the Certificate or interest therein on behalf
of, as named fiduciary of, as trustee of, or with assets of a Plan.

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

      The Depositor, the Servicer, the Trustee, any Paying Agent and the
Certificate Registrar and any agent of the Depositor, the Servicer, the Trustee,
any Paying Agent or the Certificate Registrar may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Servicer, the Trustee, the Certificate Registrar, any Paying
Agent nor any such agent shall be affected by notice to the contrary.

      The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being 10% or
less of the Cut-off Date Aggregate Principal Balance.

      The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.

      Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      C-5-4
<PAGE>

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

Dated: January 7, 2005

                                             JPMORGAN CHASE BANK, NATIONAL
                                             ASSOCIATION,
                                                    as Trustee

                                             By: ______________________________
                                                    Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

      This is one of the Certificates referred to in the within-mentioned
Agreement.

                                             JPMORGAN CHASE BANK, NATIONAL
                                             ASSOCIATION,
                                                    as Certificate Registrar

                                             By:_______________________________
                                                    Authorized Signatory

Date of authentication: January 7, 2005

                                     C-5-5
<PAGE>

                                  ABBREVIATIONS

      The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>
<S>       <C>  <C>                               <C>                    <C>     <C>
TEN COM   -    as tenants in common              UNIF GIFT MIN ACT      -       Custodian
                                                                                (Cust) (Minor)
TEN ENT   -    as tenants by the entireties                                     under Uniform
                                                                                Gifts to Minors
JT TEN    -    as joint tenants with right of                                   Act
               survivorship and not as                                          _______________
               tenants in common                                                (State)

</TABLE>

     Additional abbreviations may also be used though not in the above list.

                                     C-5-6
<PAGE>

                                   ASSIGNMENT

      FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ______________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

      I (we) further direct the Certificate Registrar to issue a new Certificate
of a like Percentage Interest and Class to the above named assignee and deliver
such Certificate to the following address:

_______________________________________________________________________________

Dated:

                                        _______________________________________
                                        Signature by or on behalf of assignor

                                        _______________________________________
                                        Signature Guaranteed

                            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.

                                     C-5-7
<PAGE>

                                   EXHIBIT C-6

                           FORM OF CLASS N CERTIFICATE

      FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A DIRECT
      OR INDIRECT BENEFICIAL INTEREST IN 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") AND THE OBLIGATION TO MAKE CERTAIN PAYMENTS.

      THIS CLASS N CERTIFICATE IS SUBORDINATE TO THE OFFERED CERTIFICATES OF
      THIS SERIES TO THE EXTENT DESCRIBED HEREIN AND IN THE AGREEMENT REFERRED
      TO HEREIN.

      THIS CLASS N CERTIFICATE WILL NOT BE ENTITLED TO PAYMENTS UNTIL SUCH TIME
      AS DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.

      THIS CLASS N CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES
      LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
      CERTIFICATE WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN
      A TRANSACTION THAT DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION AND
      IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE AGREEMENT
      REFERRED TO HEREIN.

      EXCEPT AS PROVIDED IN SECTION 5.02(D) OF THE AGREEMENT REFERRED TO HEREIN,
      NO TRANSFER OF THIS CLASS N CERTIFICATE SHALL BE REGISTERED UNLESS THE
      TRUSTEE AND THE CERTIFICATE REGISTRAR SHALL HAVE RECEIVED A REPRESENTATION
      FROM THE TRANSFEREE OF THIS CERTIFICATE TO THE EFFECT THAT SUCH TRANSFEREE
      IS NOT AN EMPLOYEE BENEFIT PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE
      EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), A
      PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO STATE, LOCAL
      OR OTHER FEDERAL LAW SUBSTANTIVELY SIMILAR TO THE FOREGOING PROVISIONS OF
      ERISA OR THE CODE (COLLECTIVELY, A "PLAN"), AND IS NOT DIRECTLY OR
      INDIRECTLY ACQUIRING THIS CERTIFICATE FOR, ON BEHALF OF OR WITH ANY ASSETS
      OF ANY SUCH PLAN.

                                     C-6-1
<PAGE>

      C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES SERIES 2004-CB8, CLASS N

evidencing a beneficial ownership interest in a portion of a Trust Fund
consisting primarily of a pool of conventional fixed-rate and adjustable-rate
one- to four-family first and second lien mortgage loans formed and sold by

                     MERRILL LYNCH MORTGAGE INVESTORS, INC.

<TABLE>
<S>                                          <C>
Series 2004-CB8, Class N                     Original Class Certificate Notional Balance of the
                                             Class N Certificates as of the Closing Date:
                                             $22,000,000.00

Pass-Through Rate: 8.00%                     Initial Notional Amount: $22,000,000.00

Date of Pooling and Servicing Agreement and  Servicer: Litton Loan Servicing LP
Cut-off Date:  December 1, 2004

First Distribution Date: January 25, 2005    Trustee: JPMorgan Chase Bank, N.A.

CUSIP: 59020U PY5                            Closing Date: January 7, 2005

ISIN: US59020UPY54
</TABLE>

      THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
      MERRILL LYNCH MORTGAGE INVESTORS, INC., THE SERVICER, THE TRUSTEE OR ANY
      OF THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR
      INSTRUMENTALITY OF THE UNITED STATES.

      This certifies that Merrill Lynch, Pierce, Fenner & Smith Incorporated is
the registered owner of a Percentage Interest (obtained by dividing the Initial
Notional Amount of this Certificate by the Original Class N Notional Amount) in
that certain beneficial ownership interest evidenced by all the Class N
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Merrill Lynch
Mortgage Investors, Inc. (hereinafter called the "Depositor," which term
includes any successor entity under the Agreement), Credit-Based Asset Servicing
and Securitization LLC (the "Seller"), the Servicer and the Trustee, a summary
of certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.

      Pursuant to the terms of the Agreement, distributions will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (a "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered on the last Business Day of the month immediately preceding the
month in which the related Distribution Date occurs or the Closing Date in the
case of the first Distribution Date (the "Record Date"), from funds in the
Distribution Account in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be distributed
to the Holders of Class N Certificates on such Distribution Date pursuant to the
Agreement.

      All distributions to the Holder of this Certificate under the Agreement
will be made or caused to be made by or on behalf of the Trustee by wire
transfer in immediately available funds to the account of the Person entitled
thereto if such Person shall have so notified the Certificate Registrar in
writing at least five Business Days prior to the Record Date immediately prior
to such Distribution Date and is the

                                     C-6-2
<PAGE>

registered owner of Class N Certificates the aggregate Initial Certificate
Principal Balance of which is in excess of a 66% Percentage Interest of the
Class N Certificates, or by check mailed by first class mail to the address of
the Person entitled thereto, as such name and address shall appear on the
Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose as provided in the Agreement.

      The Pass-Through Rate for this Class N Certificates on each Distribution
Date will be the per annum rate specified above.

      This Certificate is one of a duly authorized issue of Certificates
designated as C-BASS Mortgage Loan Asset-Backed Certificates of the Series
specified on the face hereof (herein called the "Certificates") and representing
the Percentage Interest specified on the face hereof.

      The Class N Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

      The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee, the Seller and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer, the Seller and the Trustee with the consent of the Holders of
Certificates entitled to the Voting Rights identified 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 herefor 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 upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee as provided in the Agreement, duly
endorsed by, or accompanied by an assignment in the form below or other 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 evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.

      The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests 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 evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

      No transfer of this Certificate shall be made unless that transfer is made
pursuant to an effective registration statement under the 1933 Act and effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the

                                     C-6-3
<PAGE>

event that a transfer is to be made without registration or qualification (i)
the Certificateholder desiring to effect the transfer and such
Certificateholder's prospective transferee shall each execute a representation
letter in the form described by the Agreement certifying to the Certificate
Registrar the facts surrounding the transfer, and (ii) unless such transfer is
made in reliance upon Rule 144A under the 1933 Act, the Depositor and the
Certificate Registrar may require an Opinion of Counsel satisfactory to them
that such transfer may be made without such registration or qualification, which
Opinion of Counsel shall not be an expense of the Depositor, the Trustee or the
Certificate Registrar, in their respective capacities as such. None of the
Depositor, the Certificate Registrar or the Trustee is obligated to register or
qualify the Class of Certificates specified on the face hereof under the 1933
Act or any other securities law or to take any action not otherwise required
under the Agreement to permit the transfer of such Certificates without
registration or qualification. Any such Certificateholder desiring to effect
such transfer shall, and does hereby agree to, indemnify the Trustee, the
Depositor, the Certificate Registrar and the Servicer against any liability that
may result if the transfer is not so exempt or is not made in accordance with
such federal and state laws.

      No transfer of a Certificate or any interest therein may be made to
employee benefit plans and certain other retirement plans and arrangements,
including individual retirement accounts and annuities, Keogh plans and
collective investment funds and separate accounts in which such plans, accounts
or arrangements are invested that are subject to the fiduciary responsibility
provisions of ERISA and Section 4975 of the Code ("Plans") or any person who is
directly or indirectly purchasing the Certificate or interest therein on behalf
of, as named fiduciary of, as trustee of, or with assets of a Plan.

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

      The Depositor, the Servicer, the Trustee, any Paying Agent and the
Certificate Registrar and any agent of the Depositor, the Servicer, the Trustee,
any Paying Agent or the Certificate Registrar may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and none of
the Depositor, the Servicer, the Trustee, the Certificate Registrar, any Paying
Agent nor any such agent shall be affected by notice to the contrary.

      The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by or on behalf of the Trustee and required to be paid to them pursuant to
the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at a price determined as provided in
the Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate
Principal Balance of the Mortgage Loans at the time of purchase being 10% or
less of the Cut-off Date Aggregate Principal Balance.

      The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.

      Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     C-6-4
<PAGE>

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

Dated: January 7, 2005

                                             JPMORGAN CHASE BANK, NATIONAL
                                             ASSOCIATION,
                                                    as Trustee

                                             By: ______________________________
                                                    Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

      This is one of the Certificates referred to in the within-mentioned
Agreement.

                                             JPMORGAN CHASE BANK, NATIONAL
                                             ASSOCIATION,
                                                    as Certificate Registrar

                                             By: ______________________________
                                                    Authorized Signatory

Date of authentication: January 7, 2005

                                     C-6-5
<PAGE>

                                  ABBREVIATIONS

      The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>
<S>       <C>  <C>                               <C>                    <C>     <C>
TEN COM   -    as tenants in common              UNIF GIFT MIN ACT      -       Custodian
                                                                                (Cust) (Minor)
TEN ENT   -    as tenants by the entireties                                     under Uniform
                                                                                Gifts to Minors
JT TEN    -    as joint tenants with right of                                   Act
               survivorship and not as                                          _______________
               tenants in common                                                (State)

</TABLE>

     Additional abbreviations may also be used though not in the above list.

                                     C-6-6
<PAGE>

                                   ASSIGNMENT

      FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ______________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

      I (we) further direct the Certificate Registrar to issue a new Certificate
of a like Percentage Interest and Class to the above named assignee and deliver
such Certificate to the following address:

_______________________________________________________________________________

Dated:

                                        _______________________________________
                                        Signature by or on behalf of assignor

                                        _______________________________________
                                        Signature Guaranteed

                            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.

                                     C-6-7
<PAGE>

                                   EXHIBIT D-1

                MORTGAGE LOAN SCHEDULE FOR GROUP I MORTGAGE LOANS

                            [INTENTIONALLY OMITTED]

                                      D-1
<PAGE>

                                   EXHIBIT D-2

               MORTGAGE LOAN SCHEDULE FOR GROUP II MORTGAGE LOANS

                            [INTENTIONALLY OMITTED]

                                      D-2
<PAGE>

                                    EXHIBIT E

                    FORM OF REQUEST FOR RELEASE OF DOCUMENTS

To:   JPMorgan Chase Bank, N.A.
      Structured Finance Services
      4 New York Plaza, 6th Floor
      New York, NY 10004-2477
      [and/or its designee]

Re:   Pooling and Servicing Agreement dated as of December 1, 2004 among Merrill
      Lynch Mortgage Investors, Inc., as depositor, Credit-Based Asset Servicing
      and Securitization LLC, JPMorgan Chase Bank, N.A., as trustee and Litton
      Loan Servicing LP, as servicer, relating to C-BASS Mortgage Loan
      Asset-Backed Certificates, Series 2004-CB8

      In connection with the administration of the Mortgage Loans held by you,
as Trustee, pursuant to the above-captioned Pooling and Servicing Agreement, we
request the release, and hereby acknowledge receipt, of the Mortgage File for
the Mortgage Loan described below, for the reason indicated.

Mortgage Loan Number:

Mortgagor Name, Address & Zip Code:

Reason for Requesting Documents (check one):

_____ 1.    Mortgage Paid in Full

_____ 2.    Foreclosure

_____ 3.    Substitution

_____ 4.    Other Liquidation (Repurchases, etc.)

_____ 5.    Nonliquidation

Address to which the Trustee should deliver the Mortgage File:

                                             By: ______________________________
                                                 (authorized signer)

                                             Address: __________________________

                                             Date: _____________________________

If box 1 or 2 above is checked, and if all or part of the Mortgage File was
previously released to us, please release to us our previous receipt on file
with you, as well as any additional documents in your possession relating to the
above specified Mortgage Loan.

                                      E-1
<PAGE>

If box 3, 4, 5 or 6 above is checked, upon our return of all of the above
documents to you as Trustee, please acknowledge your receipt by signing in the
space indicated below, and returning this form.

Please acknowledge the execution of the above request by your signature and date
below:

JPMorgan Chase Bank, N.A., as Trustee

By: ___________________________________      ___________________________________
    Signature                                Date

Documents returned to Trustee:

By: ___________________________________      ___________________________________
    Signature                                Date

                                      E-2
<PAGE>

                                   EXHIBIT F-1

                    FORM OF CUSTODIAN'S INITIAL CERTIFICATION

                                                                            Date

Merrill Lynch Mortgage Investors, Inc.
4 World Financial Center, 10th Floor
New York, New York 10080

Litton Loan Servicing LP
4828 Loop Central Drive
Houston, Texas 77081

      Re:   Pooling and Servicing Agreement (the "Pooling and Servicing
            Agreement"), dated as of December 1, 2004 among Merrill Lynch
            Mortgage Investors, Inc., as depositor, Credit-Based Asset Servicing
            and Securitization LLC, as seller, Litton Loan Servicing LP, as
            servicer, and JPMorgan Chase Bank, N.A., as trustee with respect to
            C-BASS Mortgage Loan Asset-Backed Certificates, Series 2004-CB8

Ladies and Gentlemen:

      In accordance with Section 2.02 of the Pooling and Servicing Agreement,
the undersigned, as Custodian, hereby certifies that it received the documents
listed in Section 2.01 of the Pooling and Servicing Agreement for each Mortgage
File pertaining to each Mortgage Loan listed on Exhibit D-1 and Exhibit D-2, to
the Pooling and Servicing Agreement, subject to any exceptions noted on Schedule
I hereto.

      Capitalized words and phrases used herein and not otherwise defined herein
shall have the respective meanings assigned to them in the Pooling and Servicing
Agreement. This Certificate is subject in all respects to the terms of Section
2.02 of the Pooling and Servicing Agreement and the Pooling and Servicing
Agreement sections cross-referenced therein.

                                             THE BANK OF NEW YORK TRUST COMPANY,
                                             N.A.,
                                                  as Custodian

                                             By: ______________________________
                                             Name:
                                             Title:

                                      F-1
<PAGE>

                                   EXHIBIT F-2

                     FORM OF CUSTODIAN'S FINAL CERTIFICATION

                                                                          [Date]

Merrill Lynch Mortgage Investors, Inc.
4 World Financial Center, 10th Floor
New York, New York 10080

Litton Loan Servicing LP
4828 Loop Central Drive
Houston, Texas 77081

Re:   Pooling and Servicing Agreement (the "Pooling and Servicing Agreement"),
      dated as of December 1, 2004 among Merrill Lynch Mortgage Investors, Inc.,
      as depositor, Credit-Based Asset Servicing and Securitization LLC, as
      seller, Litton Loan Servicing LP, as servicer, and JPMorgan Chase Bank,
      N.A., as trustee with respect to C-BASS Mortgage Loan Asset-Backed
      Certificates, Series 2004-CB8

Ladies and Gentlemen:

      In accordance with Section 2.02 of the Pooling and Servicing Agreement,
the undersigned, as Custodian, hereby certifies that as to each Mortgage Loan
listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full
or listed on Schedule I hereto) it has received the applicable documents listed
in Section 2.01 of the Pooling and Servicing Agreement.

      The undersigned hereby certifies that as to each Mortgage Loan identified
on the Mortgage Loan Schedule, other than any Mortgage Loan listed on Schedule I
hereto, it has reviewed the documents listed above and has determined that each
such document appears to be complete and, based on an examination of such
documents, the information set forth in the Mortgage Loan Schedule is correct.

      Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement. This
Certificate is qualified in all respects by the terms of said Pooling and
Servicing Agreement.

                                             THE BANK OF NEW YORK TRUST COMPANY,
                                             N.A.,
                                                  as Custodian

                                             By: _______________________________
                                             Name:
                                             Title:

                                      F-2
<PAGE>

                                   EXHIBIT F-3

                        FORM OF RECEIPT OF MORTGAGE NOTE

                                                                            Date

Merrill Lynch Mortgage Investors, Inc.
4 World Financial Center, 10th Floor
New York, New York 10080

      Re:   C-BASS Mortgage Loan Asset-Backed Certificates, Series 2004-CB8

Ladies and Gentlemen:

      Pursuant to Section 2.01 of the Pooling and Servicing Agreement, dated as
of December 1, 2004, among Merrill Lynch Mortgage Investors, Inc., as depositor,
Credit-Based Asset Servicing and Securitization LLC, as seller, Litton Loan
Servicing LP, as servicer, and JPMorgan Chase Bank, N.A., as trustee, we hereby
acknowledge the receipt of the original Mortgage Note (a copy of which is
attached hereto as Exhibit 1) with any exceptions thereto listed on Exhibit 2.

                                             THE BANK OF NEW YORK TRUST COMPANY,
                                             N.A.,
                                                  as Trustee

                                             By: _______________________________
                                             Name:
                                             Title:

                                      F-3
<PAGE>

                                    EXHIBIT G

                        MORTGAGE LOAN PURCHASE AGREEMENT

                            [INTENTIONALLY OMITTED]

                                      G-1
<PAGE>

                                    EXHIBIT H

                           FORM OF LOST NOTE AFFIDAVIT

      Personally appeared before me the undersigned authority to administer
oaths, ______________________ who first being duly sworn deposes and says:
Deponent is ______________________ of ______________________________, successor
by merger to _________________________________________ ("Seller") and who has
personal knowledge of the facts set out in this affidavit.

      On ___________________, _________________________ did execute and deliver
a promissory note in the principal amount of $__________.

      That said note has been misplaced or lost through causes unknown and is
presently lost and unavailable after diligent search has been made. Seller's
records show that an amount of principal and interest on said note is still
presently outstanding, due, and unpaid, and Seller is still owner and holder in
due course of said lost note.

      Seller executes this Affidavit for the purpose of inducing JPMorgan Chase
Bank, N.A., as trustee on behalf of C-BASS Mortgage Loan Asset-Backed
Certificates, Series 2004-CB8 to accept the transfer of the above described loan
from Seller.

      Seller agrees to indemnify and hold harmless JPMorgan Chase Bank, N.A. and
Merrill Lynch Mortgage Investors, Inc. for any losses, liabilities, costs and
expenses incurred by such parties resulting from the above described promissory
note having been lost or misplaced.

                                             By:

STATE OF    )
            ) SS:
COUNTY OF   )

      On this ____ day of _______ 20__, before me, a Notary Public, in and for
said County and State, appeared ________________________, who acknowledged the
extension of the foregoing and who, having been duly sworn, states that any
representations therein contained are true.

      Witness my hand and Notarial Seal this ____ day of _______ 20__.

My commission expires _____________________.

                                      H-1
<PAGE>

                                    EXHIBIT I

                          FORM OF ERISA REPRESENTATION

                                                                            Date

JPMorgan Chase Bank, N.A.
Structured Finance Services
4 New York Plaza, 6th Floor
New York, New York 10004-2477

Merrill Lynch Mortgage Investors, Inc.
4 World Financial Center, 10th Floor
New York, New York 10080

      Re:   C-BASS Mortgage Loan Asset-Backed Certificates, Series 2004-CB8

Ladies and Gentlemen:

      1. [The undersigned is the ______________________ of (the "Transferee") a
[corporation duly organized] and existing under the laws of __________, on
behalf of which he makes this affidavit.] [The undersigned, ___________________,
is the transferee (the "Transferee").]

      2. The Transferee hereby acknowledges that under the terms of the Pooling
and Servicing Agreement (the "Agreement") among Merrill Lynch Mortgage
Investors, Inc., as depositor (the "Depositor"), Credit-Based Asset Servicing
and Securitization LLC, as seller, Litton Loan Servicing LP, as servicer, and
JPMorgan Chase Bank, N.A., as trustee (the "Trustee"), no transfer of the
ERISA-Restricted Certificates (other than the Class R and Class R-X
Certificates) shall be permitted to be made to any person unless the Depositor
and the Certificate Registrar (as defined in the Agreement) have received a
certificate from such transferee in the form hereof.

      3. The Transferee (i) is not an employee benefit plan or arrangement
subject to Title I of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), a plan subject to Section 4975 of the Internal Revenue Code
of 1986, as amended (the "Code") or a plan subject to any state, local, federal,
non-U.S. or other law substantively similar to the foregoing provisions of ERISA
or the Code ("Similar Law") (collectively, a "Plan"), and is not directly or
indirectly acquiring the Certificate for, on behalf of or with any assets of any
such Plan, (ii) if the Certificate has been the subject of an ERISA-Qualifying
Underwriting, is an insurance company that is acquiring the Certificate with
assets of an "insurance company general account" as defined in Section V(e) of
Prohibited Transaction Class Exemption ("PTCE") 95-60 and the acquisition and
holding of the Certificate are covered and exempt under Sections I and III of
PTCE 95-60, or (iii) solely in the case of a Definitive Certificate, will
deliver herewith an Opinion of Counsel satisfactory to the Trustee and the
Certificate Registrar, and upon which the Trustee and the Certificate Registrar
shall be entitled to rely, to the effect that the acquisition and holding of
such Certificate by the transferee will not result in a nonexempt prohibited
transaction under Title I of ERISA or Section 4975 of the Code, or a violation
of Similar Law, and will not subject the Certificate Registrar, the Depositor,
the Servicer or the Trustee to any obligation in addition to those undertaken by
such entities in the Pooling and Servicing Agreement, which Opinion of Counsel
shall not be an expense of the Certificate Registrar, the Depositor, the
Servicer or the Trustee.

      Capitalized terms used but not defined herein shall have the meanings
ascribed to such terms in

                                      I-1
<PAGE>

the Agreement.

      IN WITNESS WHEREOF, the Transferee has executed this certificate.

                                             [Transferee]

                                             By: ______________________________
                                             Name:
                                             Title:

                                      I-2
<PAGE>

                                    EXHIBIT J

                          FORMS OF INVESTMENT LETTERS


                   FORM OF INVESTMENT LETTER [NON-RULE 144A]

                                                                          [DATE]

Merrill Lynch Mortgage Investors, Inc.
4 World Financial Center, 10th Floor
New York, New York 10080

JPMorgan Chase Bank, N.A.
Structured Finance Services
4 New York Plaza, 6th Floor
New York, New York 10004-2477

      Re:   C-BASS Mortgage Loan Asset-Backed Certificates, Series 2004-CB8

Ladies and Gentlemen:

      In connection with our acquisition of the C-BASS Mortgage Loan
Asset-Backed Certificates, Series 2004-CB8 (the "Certificates"), we certify that
(a) we understand that the Certificates are not being registered under the
Securities Act of 1933, as amended (the "Act"), or any state securities laws and
are being transferred to us in a transaction that is exempt from the
registration requirements of the Act and any such laws, (b) we are an
"accredited investor," as defined in Regulation D under the Act, and have such
knowledge and experience in financial and business matters that we are capable
of evaluating the merits and risks of investments in the Certificates, (c) we
have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) we are acquiring the Certificates for investment
for our own account and not with a view to any distribution of such Certificates
(but without prejudice to our right at all times to sell or otherwise dispose of
the Certificates in accordance with clause (g) below), (e) we agree that the
Certificates must be held indefinitely by us and we acknowledge that we are able
to bear the economic risk of investment in the Certificates, (f) we have not
offered or sold any Certificates to, or solicited offers to buy any Certificates
from, any person, or otherwise approached or negotiated with any person with
respect thereto, or taken any other action which would result in a violation of
Section 5 of the Act, (g) we will not sell, transfer or otherwise dispose of any
Certificates unless (1) such sale, transfer or other disposition is made
pursuant to an effective registration statement under the Act or is exempt from
such registration requirements, and if requested, we will at our expense provide
an opinion of counsel satisfactory to the addressees of this Certificate that
such sale, transfer or other disposition may be made pursuant to an exemption
from the Act, (2) the purchaser or transferee of such Certificate has executed
and delivered to you a certificate to substantially the same effect as this
certificate, and (3) the purchaser or transferee has otherwise complied with any
conditions for transfer set forth in the Pooling and Servicing Agreement and (h)
we acknowledge that the Certificates will bear a legend setting forth the
applicable restrictions on transfer.

                                             Very truly yours,

                                             [NAME OF TRANSFEREE]

                                             By: ______________________________
                                                     Authorized Officer

                                      J-1
<PAGE>

                     FORM OF INVESTMENT LETTER [RULE 144A]

                                                                          [DATE]

Merrill Lynch Mortgage Investors, Inc.
4 World Financial Center, 10th Floor
New York, New York 10080

JPMorgan Chase Bank, N.A.
Structured Finance Services
4 New York Plaza, 6th Floor
New York, New York 10004-2477

      Re:   C-BASS Mortgage Loan Asset-Backed Certificates, Series 2004-CB8

Ladies and Gentlemen:

      In connection with our acquisition of the C-BASS Mortgage Loan
Asset-Backed Certificates, Series 2004-CB8 (the "Certificates"), we certify that
(a) we understand that the Certificates are not being registered under the
Securities Act of 1933, as amended (the "Act"), or any state securities laws and
are being transferred to us in a transaction that is exempt from the
registration requirements of the Act and any such laws, (b) we have had the
opportunity to ask questions of and receive answers from the Depositor
concerning the purchase of the Certificates and all matters relating thereto or
any additional information deemed necessary to our decision to purchase the
Certificates, (c) we have not, nor has anyone acting on our behalf offered,
transferred, pledged, sold or otherwise disposed of the Certificates, any
interest in the Certificates or any other similar security to, or solicited any
offer to buy or accept a transfer, pledge or other disposition of the
Certificates, any interest in the Certificates or any other similar security
from, or otherwise approached or negotiated with respect to the Certificates,
any interest in the Certificates or any other similar security with, any person
in any manner, or made any general solicitation by means of general advertising
or in any other manner, or taken any other action, that would constitute a
distribution of the Certificates under the Securities Act or that would render
the disposition of the Certificates a violation of Section 5 of the Securities
Act or require registration pursuant thereto, nor will act, nor has authorized
or will authorize any person to act, in such manner with respect to the
Certificates, (d) we are a "qualified institutional buyer" as that term is
defined in Rule 144A under the Securities Act and have completed either of the
forms of certification to that effect attached hereto as Annex 1 or Annex 2. We
are aware that the sale to us is being made in reliance on Rule 144A. We are
acquiring the Certificates for our own account or for resale pursuant to Rule
144A and further, understand that such Certificates may be resold, pledged or
transferred only (i) to a person reasonably believed to be a qualified
institutional buyer that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A, or (ii) pursuant to another
exemption from registration under the Securities Act.

                                             Very truly yours,

                                             [NAME OF TRANSFEREE]

                                             By: ______________________________
                                                     Authorized Officer

                                      J-2
<PAGE>

                                                            ANNEX 1 TO EXHIBIT J

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

          [For Transferees Other Than Registered Investment Companies]

      The undersigned (the "Buyer") hereby certifies as follows to the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates with respect to the Certificates described therein:

      1. As indicated below, the undersigned is the President, Chief Financial
Officer, Senior Vice President or other executive officer of the Buyer.

      2. In connection with purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned and/or
invested on a discretionary basis $_____(1) in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A and (ii)
the Buyer satisfies the criteria in the category marked below.

            ___ Corporation, etc. The Buyer is a corporation (other than a bank,
            savings and loan association or similar institution), Massachusetts
            or similar business trust, partnership, or charitable organization
            described in Section 501(c)(3) of the Internal Revenue Code of 1986,
            as amended.

            ___ Bank. The Buyer (a) is a national bank or banking institution
            organized under the laws of any State, territory or the District of
            Columbia, the business of which is substantially confined to banking
            and is supervised by the State or territorial banking commission or
            similar official or is a foreign bank or equivalent institution, and
            (b) has an audited net worth of at least $25,000,000 as demonstrated
            in its latest annual financial statements, a copy of which is
            attached hereto.

            ___ Savings and Loan. The Buyer (a) is a savings and loan
            association, building and loan association, cooperative bank,
            homestead association or similar institution, which is supervised
            and examined by a State or Federal authority having supervision over
            any such institutions or is a foreign savings and loan association
            or equivalent institution and (b) has an audited net worth of at
            least $25,000,000 as demonstrated in its latest annual financial
            statements, a copy of which is attached hereto.

            ___ Broker-dealer. The Buyer is a dealer registered pursuant to
            Section 15 of the Securities Exchange Act of 1934.

            ___ Insurance Company. The Buyer is an insurance company whose
            primary and predominant business activity is the writing of
            insurance or the reinsuring of risks underwritten by insurance
            companies and which is subject to supervision by the

----------
(1)   Buyer must own and/or invest on a discretionary basis at least $______ in
      securities unless Buyer is a dealer, and, in that case, Buyer must own
      and/or invest on a discretionary basis at least $______ in securities.

                                       J-3
<PAGE>

            insurance commissioner or a similar official or agency of a State,
            territory or the District of Columbia.

            ___ State or Local Plan. The Buyer is a plan established and
            maintained by a State, its political subdivisions, or any agency or
            instrumentality of the State or its political subdivisions, for the
            benefit of its employees.

            ___ ERISA Plan. The Buyer is an employee benefit plan within the
            meaning of Title I of the Employee Retirement Income Security Act of
            1974.

            ___ Investment Advisor. The Buyer is an investment advisor
            registered under the Investment Advisors Act of 1940.

            ___ Small Business Investment Company. Buyer is a small business
            investment company licensed by the U.S. Small Business
            Administration under Section 301(c) or (d) of the Small Business
            Investment Act of 1958.

            ___ Business Development Company. Buyer is a business development
            company as defined in Section 202(a)(22) of the Investment Advisors
            Act of 1940.

      3. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer, (ii) securities that are part of an
unsold allotment to or subscription by the Buyer, if the Buyer is a dealer,
(iii) securities issued or guaranteed by the U.S. or any instrumentality
thereof, (iv) bank deposit notes and certificates of deposit, (v) loan
participations, (vi) repurchase agreements, (vii) securities owned but subject
to a repurchase agreement and (viii) currency, interest rate and commodity
swaps.

      4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.

      5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.

      6. Until the date of purchase of the Rule 144A Securities, the Buyer will
notify each of the parties to which this certification is made of any changes in
the information and conclusions herein. Until such notice is given, the Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.

                                      J-4
<PAGE>

                                             Print Name of Buyer

                                             By: ______________________________
                                             Name:
                                             Title:

                                             Date: ____________________________

                                      J-5
<PAGE>

                                                            ANNEX 2 TO EXHIBIT J

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

           [For Transferees That are Registered Investment Companies]

      The undersigned (the "Buyer") hereby certifies as follows to the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates with respect to the Certificates described therein:

      1. As indicated below, the undersigned is the President, Chief Financial
Officer or Senior Vice President of the Buyer or, if the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A") because Buyer is part of a Family of
Investment Companies (as defined below), is such an officer of the Adviser.

      2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.

            ___ The Buyer owned $______ in securities (other than the excluded
            securities referred to below) as of the end of the Buyer's most
            recent fiscal year (such amount being calculated in accordance with
            Rule 144A).

            ___ The Buyer is part of a Family of Investment Companies which
            owned in the aggregate $______ in securities (other than the
            excluded securities referred to below) as of the end of the Buyer's
            most recent fiscal year (such amount being calculated in accordance
            with Rule 144A).

      3. The term "Family of Investment Companies" as used herein means two or
more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).

      4. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer or are part of the Buyer's Family of
Investment Companies, (ii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iii) bank deposit notes and certificates of deposit,
(iv) loan participations, (v) repurchase agreements, (vi) securities owned but
subject to a repurchase agreement and (vii) currency, interest rate and
commodity swaps.

      5. The Buyer is familiar with Rule 144A and understands that the parties
listed in the Rule 144A Transferee Certificate to which this certification
relates are relying and will continue to rely on the statements made herein
because one or more sales to the Buyer will be in reliance on Rule 144A. In
addition, the Buyer will only purchase for the Buyer's own account.

      6. Until the date of purchase of the Certificates, the undersigned will
notify the parties listed

                                      J-6
<PAGE>

in the Rule 144A Transferee Certificate to which this certification relates of
any changes in the information and conclusions herein. Until such notice is
given, the Buyer's purchase of the Certificates will constitute a reaffirmation
of this certification by the undersigned as of the date of such purchase.

                                             Print Name of Buyer or Adviser

                                             By: ______________________________
                                             Name:
                                             Title:

                                             IF AN ADVISER:

                                             Print Name of Buyer

                                             Date: ____________________________

                                      J-7
<PAGE>

                                    EXHIBIT K

                 FORM OF RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT

         C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2004-CB8

STATE OF    )
            ) ss.:
COUNTY OF   )

      The undersigned, being first duly sworn, deposes and says as follows:

      1. The undersigned is [an officer of] ______________, the proposed
Transferee of an Ownership Interest in a [Class R and/or Class R-X Certificates]
(the "Residual Certificate") issued pursuant to the Pooling and Servicing
Agreement, (the "Agreement"), relating to the above-referenced Certificates,
among Merrill Lynch Mortgage Investors, Inc., as depositor, Credit-Based Asset
Servicing and Securitization LLC, as seller, Litton Loan Servicing LP, as
servicer, and JPMorgan Chase Bank, N.A., as trustee (the "Trustee"). Capitalized
terms used, but not defined herein shall have the meanings ascribed to such
terms in the Agreement. The Transferee has authorized the undersigned to make
this affidavit on behalf of the Transferee.

      2. The Transferee is, as of the date hereof, and will be, as of the date
of the transfer, a Permitted Transferee. The Transferee is acquiring the
Residual Certificate either (i) for its own account or (ii) as nominee, trustee
or agent for another Person who is a Permitted Transferee and has attached
hereto an affidavit from such Person in substantially the same form as this
affidavit. The Transferee has no knowledge that any such affidavit is false.

      3. The Transferee has been advised of, and understands that (i) a tax will
be imposed on Transfers of the Residual Certificate to Persons that are not
Permitted Transferees; (ii) such tax will be imposed on the transferor, or, if
such transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent Transferee furnished to such Person an affidavit that
such subsequent Transferee is a Permitted Transferee and, at the time of
transfer, such Person does not have actual knowledge that the affidavit is
false.

      4. The Transferee has been advised of, and understands that a tax will be
imposed on a "pass-through entity" holding the Certificate if at any time during
the taxable year of the pass-through entity a Person that is not a Permitted
Transferee is the record Holder of an interest in such entity. The Transferee
understands that, other than in the case of an "electing large partnership"
under Section 775 of the Code, such tax will not be imposed for any period with
respect to which the record Holder furnishes to the pass-through entity an
affidavit that such record Holder is a Permitted Transferee and the pass-through
entity does not have actual knowledge that such affidavit is false. (For this
purpose, a "pass-through entity" includes a regulated investment company, a real
estate investment trust or common trust fund, a partnership, trust or estate,
and certain cooperatives and, except as may be provided in Treasury Regulations,
persons holding interests in pass-through entities as a nominee for another
Person.)

      5. The Transferee has reviewed the provisions of Section 5.02 of the
Agreement and understands the legal consequences of the acquisition of the
Residual Certificate including, without limitation, the restrictions on
subsequent Transfers and the provisions regarding voiding the transfer and
mandatory sales. The Transferee expressly agrees to be bound by and to abide by
the provisions of

                                      K-1
<PAGE>

Section 5.02 of the Agreement and the restrictions noted on the face of the
Certificate. The Transferee understands and agrees that any breach of any of the
representations included herein shall render the transfer to the Transferee
contemplated hereby null and void.

      6. The Transferee agrees to require a transfer affidavit in the form of
this Affidavit from any Person to whom the Transferee attempts to transfer the
Residual Certificate, and in connection with any transfer by a Person for whom
the Transferee is acting as nominee, trustee or agent, and the Transferee will
not transfer the Residual Certificate or cause the Residual Certificate to be
transferred to any Person that the Transferee knows is not a Permitted
Transferee.

      7. The Transferee historically has paid its debts as they have become due.

      8. The Transferee does not have the intention to impede the assessment or
collection of any tax legally required to be paid with respect to the Residual
Certificate.

      9. The taxpayer identification number of the Transferee's nominee is
___________.

      10. The Transferee is a U.S. Person as defined in Code Section
7701(a)(30).

      11. The Transferee is aware that the Residual Certificate may be a
"noneconomic residual interest" within the meaning of Treasury Regulations
promulgated pursuant to the Code and that the transferor of a noneconomic
residual interest will remain liable for any taxes due with respect to the
income on such residual interest, unless no significant purpose of the transfer
was to impede the assessment or collection of tax.

      12. The Transferee will not cause income from the Residual Certificate to
be attributable to a foreign permanent establishment or fixed base, within the
meaning of an applicable income tax treaty, of the Transferee or any other
person.

      13. If the Transferee is purchasing the Residual Certificate in a transfer
intended to meet the safe harbor provisions of Treasury Regulations Sections
1.860E-1(c), the Transferee has executed and attached Attachment A hereto.

      14. The Transferee is not an employee benefit plan or arrangement subject
to Title I of ERISA, a plan subject to Section 4975 of the Code or a plan
subject to any state, local or other federal law substantively similar to the
foregoing provisions of ERISA or the Code (collectively, a "Plan"), and is not
directly or indirectly acquiring this Certificate for, on behalf of or with any
assets of any such Plan.

                                      * * *

                                      K-2
<PAGE>

      IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer this _____ day of ________________, ____.

                                             Print Name of Transferee

                                             By: ______________________________
                                             Name:
                                             Title:

      Personally appeared before me the above-named _________________________,
known or proved to me to be the same person who executed the foregoing
instrument and to be the _______________________ of the Transferee, and
acknowledged that he executed the same as his free act and deed and the free act
and deed of the Transferee.

      Subscribed and sworn before me this _____ day of ___________________, ____

                                                     NOTARY PUBLIC

                                             My Commission expires the ___day of
                                             _____________,______

                                      K-3
<PAGE>

                                  ATTACHMENT A

                                       to
    AFFIDAVIT PURSUANT TO SECTION 860E(E)(4) OF THE INTERNAL REVENUE CODE OF
                  1986, AS AMENDED, AND FOR NON-ERISA INVESTORS

Check the appropriate box:

[ ]   The consideration paid to the Transferee to acquire the Residual
      Certificate equals or exceeds the excess of (a) the present value of the
      anticipated tax liabilities over (b) the present value of the anticipated
      savings associated with holding such Residual Certificate, in each case
      calculated in accordance with U.S. Treasury Regulations Sections
      1.860E-1(c)(7) and (8), computing present values using a discount rate
      equal to the short-term Federal rate prescribed by Section 1274(d) of the
      Code and the compounding period used by the Transferee.

                                       OR

[ ]   The transfer of the Residual Certificate complies with U.S. Treasury
      Regulations Sections 1.860E-1(c)(5) and (6) and, accordingly:

      (i)   the Transferee is an "eligible corporation," as defined in U.S.
            Treasury Regulations Section 1.860E-1(c)(6)(i), as to which income
            from Residual Certificate will only be taxed in the United States;

      (ii)  at the time of the transfer, and at the close of the Transferee's
            two fiscal years preceding the year of the transfer, the Transferee
            had gross assets for financial reporting purposes (excluding any
            obligation of a person related to the Transferee within the meaning
            of U.S. Treasury Regulations Section 1.860E-1(c)(6)(ii)) in excess
            of $100 million and net assets in excess of $10 million;

      (iii) the Transferee will transfer the Residual Certificate only to
            another "eligible corporation," as defined in U.S. Treasury
            Regulations Section 1.860E-1(c)(6)(i), in a transaction that
            satisfies the requirements of Sections 1.860E-1(c)(4)(i), (ii) and
            (iii) and Section 1.860E-1(c)(5) of the U.S. Treasury Regulations;

      (iv)  the Transferee has determined the consideration paid to it to
            acquire the Residual Certificate based on reasonable market
            assumptions (including, but not limited to, borrowing and investment
            rates, prepayment and loss assumptions, expense and reinvestment
            assumptions, tax rates and other factors specific to the Transferee)
            that it has determined in good faith; and

      (v)   in the event of any transfer of the Residual Certificate by the
            Transferee, the Transferee will require its transferee to complete a
            representation in the form of this Attachment A as a condition of
            such transferee's purchase of the Residual Certificate.

                                      K-4
<PAGE>

                                    EXHIBIT L

                         FORM OF TRANSFEROR CERTIFICATE

                                                                          [DATE]

Merrill Lynch Mortgage Investors, Inc.
4 World Financial Center, 10th Floor
New York, New York 10080

JPMorgan Chase Bank, N.A.
Structured Finance Services
4 New York Plaza, 6th Floor
New York, New York 10004-2477

      Re:   C-BASS Mortgage Loan Asset-Backed Certificates, Series 2004-CB8

Ladies and Gentlemen:

      In connection with our disposition of the C-BASS Mortgage Loan
Asset-Backed Certificates, Series 2004-CB8 (the "Certificates"), we certify that
(a) we understand that the Certificates have not been registered under the
Securities Act of 1933, as amended (the "Act"), and are being disposed by us in
a transaction that is exempt from the registration requirements of the Act, (b)
we have not offered or sold any Certificates to, or solicited offers to buy any
Certificates from, any person, or otherwise approached or negotiated with any
person with respect thereto, in a manner that would be deemed, or taken any
other action which would result in, a violation of Section 5 of the Act, (c) to
the extent we are disposing of a Class [ ] Certificate, we have no knowledge the
Transferee is not a Permitted Transferee and (d) no purpose of the proposed
disposition of a Class [ ] Certificate is to impede the assessment or collection
of tax.

                                             Very truly yours,

                                             [____________________]

                                             By: ______________________________

                                      L-1
<PAGE>

                                    EXHIBIT M

                    MONTHLY INFORMATION DELIVERED BY SERVICER

1.    With respect to the Mortgage Pool and each Loan Group, the number and
      Principal Balances of all Mortgage Loans which were the subject of
      Principal Prepayments during the related Prepayment Period.

2.    With respect to the Mortgage Pool and each Loan Group, the amount of all
      partial Principal Prepayments received by the Servicer during the related
      Prepayment Period.

3.    With respect to the Mortgage Pool and each Loan Group, the aggregate
      amount of principal portion of all Monthly Payments received during the
      related Collection Period.

4.    With respect to the Mortgage Pool and each Loan Group, the amount of
      interest received on the Mortgage Loans during the related Collection
      Period.

5.    With respect to the Mortgage Pool and each Loan Group, the aggregate
      amount of the Advances made and recovered with respect to such
      Distribution Date.

6.    With respect to the Mortgage Pool and each Loan Group, the delinquency and
      foreclosure information and the amount of Mortgage Loan Losses as of the
      close of business of the last day of the preceding Collection Period.

7.    With respect to the Mortgage Pool and each Loan Group, the weighted
      average maturity, the weighted average Mortgage Interest Rate and the
      weighted average Net Mortgage Interest Rate as of the last day of the
      preceding Collection Period preceding of the related Interest Accrual
      Period.

8.    The Servicing Fees paid and Servicing Fees accrued during the related
      Collection Period.

9.    The amount of all payments or reimbursements to the Servicer paid or to be
      paid since the prior Distribution Date (or in the case of the first
      Distribution Date, since the Closing Date).

10.   The Pool Balance and aggregate Principal Balance for each Loan Group.

11.   With respect to the Mortgage Pool and each Loan Group, the number of
      Mortgage Loans outstanding at the beginning and at the end of the related
      Collection Period.

12.   The aggregate interest accrued on the Mortgage Loans at their respective
      Mortgage Interest Rates for the related Collection Period.

13.   The amount deposited in the Collection Account which may not be withdrawn
      therefrom pursuant to an order of a United States Bankruptcy Court of
      competent jurisdiction imposing a stay pursuant to Section 362 of JPMorgan
      Chase Bankruptcy Code.

14.   The aggregate Realized Losses since the Cut-off Date as of the end of the
      related Collection Period.

                                      M-1
<PAGE>

                                    EXHIBIT N

               FORM OF CERTIFICATION TO BE PROVIDED WITH FORM 10-K

                                 2004-CB8 TRUST,
         C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2004-CB8

I, [identify the certifying individual], certify that:

1.    I have reviewed this annual report on Form 10-K, and all reports on Form
      8-K containing a copy of the monthly statement to certificateholders set
      forth in Section 4.06 of the Pooling and Servicing Agreement, dated as of
      December 1, 2004 (the "Agreement"), among Merrill Lynch Mortgage
      Investors, Inc., as depositor (the "Depositor"), Credit-Based Asset
      Servicing and Securitization LLC, as seller (the "Seller"), Litton Loan
      Servicing LP, as servicer (the "Servicer"), and JPMorgan Chase Bank, N.A.,
      as trustee (the "Trustee"), filed in respect of periods included in the
      year covered by this annual report, of the 2004-CB8 Trust (the "Trust");

2.    Based on my knowledge, the information in these reports, taken as a whole,
      does not contain any untrue statement of a material fact or omit to state
      a material fact necessary to make the statements made, in light of the
      circumstances under which such statements were made, not misleading as of
      the last day of the period covered by this annual report;

3.    Based on my knowledge, the distribution or servicing information required
      to be provided to the Trustee by the Servicer under the Agreement for
      inclusion in these reports is included in these reports;

4.    I am responsible for reviewing the activities performed by the Servicer
      under the Agreement and based upon my knowledge and the annual compliance
      review required under the Agreement, and except as disclosed in the
      reports, the Servicer has fulfilled its obligations under the Agreement;
      and

5.    The reports disclose all significant deficiencies relating to the
      Servicer's compliance with the minimum servicing standards based upon the
      report provided by an independent public accountant, after conducting a
      review in compliance with the Uniform Single Attestation Program for
      Mortgage Bankers or similar procedure, as set forth in the Agreement, that
      is included in these reports.

6.    In giving the certifications above, I have reasonably relied on
      information provided to me by the following unaffiliated parties: JPMorgan
      Chase Bank, N.A..

                                             By: ______________________________
                                             Name:
                                             Title:

                                      N-1
<PAGE>

                                    EXHIBIT O

       FORM OF CERTIFICATION TO BE PROVIDED BY THE TRUSTEE TO THE SERVICER

                                 2004-CB8 TRUST,
         C-BASS MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2004-CB8

      Reference is made to the Pooling and Servicing Agreement, dated as of
December 1, 2004 (the "Pooling Agreement"), by and among JPMorgan Chase Bank,
N.A. (the "Trustee"), Credit-Based Asset Servicing and Securitization LLC, as
seller, Litton Loan Servicing LP, as servicer (the "Servicer") and Merrill Lynch
Mortgage Investors, Inc., as depositor (the "Depositor"). The Trustee hereby
certifies to the Servicer and its officers, directors and affiliates, and with
the knowledge and intent that they will rely upon this certification, that:

      (i)   The Trustee has reviewed the annual report on Form 10-K for the
            fiscal year [ ], and all reports on Form 8-K containing distribution
            reports filed in respect of periods included in the year covered by
            that annual report, relating to the above-referenced trust;

      (ii)  Subject to paragraph (iv), the distribution information in the
            distribution reports contained in all Monthly Form 8-K's included in
            the year covered by the annual report on Form 10-K for the calendar
            year [___], taken as a whole, does not contain any untrue statement
            of a material fact or omit to state a material fact required by the
            Pooling Agreement to be included therein and necessary to make the
            statements made, in light of the circumstances under which such
            statements were made, not misleading as of the last day of the
            period covered by that annual report;

      (iii) The distribution information required to be provided by the Trustee
            under the Pooling Agreement is included in these reports.

      (iv)  In compiling the distribution information and making the foregoing
            certifications, the Trustee has relied upon information furnished to
            it by the Servicer under the Agreement. The Trustee shall have no
            responsibility or liability for any inaccuracy in such reports
            resulting from information so provided by the Servicer.

Date:

                                           JPMorgan Chase Bank, N.A., as Trustee

                                           By: ________________________________
                                           Name: ______________________________
                                           Title: _____________________________

                                      O-1
<PAGE>

                                    EXHIBIT P

                                   [RESERVED]

                                      P-1
<PAGE>

                                    EXHIBIT Q

                            FORM OF POWER OF ATTORNEY

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO
LITTON LOAN SERVICING LP
4828 Loop Central Drive
Houston, Texas 77081

Attn: _________________________________

                            LIMITED POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that _______________________, having its
principal place of business at _____________________, as Trustee (the "Trustee")
pursuant to that Pooling and Servicing Agreement among ___________________(the
"Depositor"), Litton Loan Servicing LP (the "Servicer"), and the Trustee, dated
as of _________1, 200__ (the "Pooling and Servicing Agreement"), hereby
constitutes and appoints the Servicer, by and through the Servicer's officers,
the Trustee's true and lawful Attorney-in-Fact, in the Trustee's name, place and
stead and for the Trustee's benefit, in connection with all mortgage loans
serviced by the Servicer pursuant to the Pooling and Servicing Agreement for the
purpose of performing all acts and executing all documents in the name of the
Trustee as may be customarily and reasonably necessary and appropriate to
effectuate the following enumerated transactions in respect of any of the
mortgages or deeds of trust (the "Mortgages" and the "Deeds of Trust",
respectively) and promissory notes secured thereby (the "Mortgage Notes") for
which the undersigned is acting as Trustee for various certificateholders
(whether the undersigned is named therein as mortgagee or beneficiary or has
become mortgagee by virtue of endorsement of the Mortgage Note secured by any
such Mortgage or Deed of Trust) and for which the Servicer is acting as
servicer, all subject to the terms of the Pooling and Servicing Agreement.

This appointment shall apply to the following enumerated transactions only:

1.    The modification or re-recording of a Mortgage or Deed of Trust, where
      said modification or re-recordings is for the purpose of correcting the
      Mortgage or Deed of Trust to conform same to the original intent of the
      parties thereto or to correct title errors discovered after such title
      insurance was issued and said modification or re-recording, in either
      instance, does not adversely affect the lien of the Mortgage or Deed of
      Trust as insured.

2.    The subordination of the lien of a Mortgage or Deed of Trust to an
      easement in favor of a public utility company of a government agency or
      unit with powers of eminent domain; this section shall include, without
      limitation, the execution of partial satisfactions/releases, partial
      reconveyances or the execution or requests to trustees to accomplish same.

3.    The conveyance of the properties to the mortgage insurer, or the closing
      of the title to the property to be acquired as real estate owned, or
      conveyance of title to real estate owned.

4.    The completion of loan assumption agreements.

                                      Q-1
<PAGE>

5.    The full satisfaction/release of a Mortgage or Deed of Trust or full
      conveyance upon payment and discharge of all sums secured thereby,
      including, without limitation, cancellation of the related Mortgage Note.

6.    The assignment of any Mortgage or Deed of Trust and the related Mortgage
      Note, in connection with the repurchase of the mortgage loan secured and
      evidenced thereby.

7.    The full assignment of a Mortgage or Deed of Trust upon payment and
      discharge of all sums secured thereby in conjunction with the refinancing
      thereof, including, without limitation, the assignment of the related
      Mortgage Note.

8.    With respect to a Mortgage or Deed of Trust, the foreclosure, the taking
      of a deed in lieu of foreclosure, or the completion of judicial or
      non-judicial foreclosure or termination, cancellation or rescission of any
      such foreclosure, including, without limitation, any and all of the
      following acts:

      a.    the substitution of trustee(s) serving under a Deed of Trust, in
            accordance with state law and the Deed of Trust;

      b.    the preparation and issuance of statements of breach or
            non-performance;

      c.    the preparation and filing of notices of default and/or notices of
            sale;

      d.    the cancellation/rescission of notices of default and/or notices of
            sale;

      e.    the taking of a deed in lieu of foreclosure; and

      f.    the preparation and execution of such other documents and
            performance of such other actions as may be necessary under the
            terms of the Mortgage, Deed of Trust or state law to expeditiously
            complete said transactions in paragraphs 8.a. through 8.e., above.

                                      Q-2
<PAGE>

The undersigned gives said Attorney-in-Fact full power and authority to execute
such instruments and to do and perform all and every act and thing necessary and
proper to carry into effect the power or powers granted by or under this Limited
Power of Attorney as fully as the undersigned might or could do, and hereby does
ratify and confirm to all that said Attorney-in-Fact shall lawfully do or cause
to be done by authority hereof.

Third parties without actual notice may rely upon the exercise of the power
granted under this Limited Power of attorney; and may be satisfied that this
Limited Power of Attorney shall continue in full force and effect and has not
been revoked unless an instrument of revocation has been made in writing by the
undersigned.

                                      Q-3
<PAGE>

IN WITNESS WHEREOF, ______________________ as Trustee pursuant to that Pooling
and Servicing Agreement among the Depositor, the Servicer, and the Trustee,
dated as of _____________ 1, 200__ (___________________ Mortgage Loan Asset
Backed Certificates, Series 200__-___), has caused its corporate seal to be
hereto affixed and these presents to be signed and acknowledged in its name and
behalf by ______________________ its duly elected and authorized Vice President
this_____ day of________, 200__.

                                        as Trustee for _____ Mortgage Loan Asset
                                           Backed Certificates, Series 200__-___

                                     By _______________________________________

STATE OF

COUNTY OF

On _______________, 200__, before me, the undersigned, a Notary Public in and
for said state, personally appeared ___________________, Vice President of
___________________ as Trustee for ____________ Mortgage Loan Asset Backed
Certificates, Series 200__-___, personally known to me to be the person whose
name is subscribed to the within instrument and acknowledged to me that he/she
executed that same in his/her authorized capacity, and that by his/her signature
on the instrument the entity upon behalf of which the person acted and executed
the instrument.

WITNESS my hand and official seal.

        (SEAL)

                                             __________________________________
                                                                  Notary Public
                                     My Commission Expires _____________________

                                      Q-4