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

                        RESIDENTIAL FUNDING CORPORATION,
                               as Master Servicer



                            HOME LOAN TRUST 2003-HI3,
                                    as Issuer



                                       and



                               JPMORGAN CHASE BANK
                              as Indenture Trustee



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

                               SERVICING AGREEMENT
                         Dated as of September 25, 2003
                             ----------------------






                                   Home Loans




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<PAGE>

<TABLE>
<CAPTION>


                                TABLE OF CONTENTS

                                                                                          Page

                                    ARTICLE I

Definitions
<S>             <C>                                                                         <C>
        Section 1.01. Definitions............................................................1
        Section 1.02. Other Definitional Provisions..........................................1
        Section 1.03. Interest Calculations..................................................2

                                   ARTICLE II

Representations and Warranties
        Section 2.01. Representations and Warranties Regarding the Master Servicer...........3
        Section 2.02. Representations and Warranties of the Issuer...........................4
        Section 2.03. Enforcement of Representations and Warranties..........................4

                                   ARTICLE III

Administration and Servicing
of Home Loans
        Section 3.01. The Master Servicer....................................................6
        Section 3.02. Collection of Certain Home Loan Payments...............................8
        Section  3.03.Withdrawals from the Custodial Account................................11
        Section 3.04. Maintenance of Hazard Insurance; Property Protection Expenses.........12
        Section 3.05. Modification Agreements; Release or Substitution of Lien..............13
        Section 3.06. Trust Estate; Related Documents.......................................15
        Section 3.07. Realization Upon Defaulted Home Loans; Loss Mitigation................16
        Section 3.08. Issuer and Indenture Trustee to Cooperate.............................18
        Section 3.09. Servicing Compensation; Payment of Certain Expenses by Master Servicer
                ............................................................................19
        Section 3.10. Annual Statement as to Compliance.....................................19
        Section 3.11. Annual Servicing Report...............................................19
        Section 3.12. Access to Certain Documentation and Information Regarding the Home
               Loans........................................................................20
        Section 3.13. Maintenance of Certain Servicing Insurance Policies...................20
        Section 3.14. Information Required by the Internal Revenue Service and Reports of
               Foreclosures and Abandonments of Mortgaged Property..........................20
        Section 3.15. Optional Repurchase of Defaulted Home Loans...........................20
        Section 4.01. Statements to Securityholders.........................................22
        Section 4.02. Tax Reporting.........................................................24
        Section 4.03. Calculation of Adjusted Issue Price...................................24



                                              i

<PAGE>



                                    ARTICLE V

Payment Account
        Section 5.01. Payment Account.......................................................25

                                   ARTICLE VI

The Master Servicer
        Section 6.01. Liability of the Master Servicer......................................26
        Section 6.02. Merger or Consolidation of, or Assumption of the Obligations of, the Master
               Servicer.....................................................................26
        Section 6.03. Limitation on Liability of the Master Servicer and Others.............26
        Section 6.04. Master Servicer Not to Resign.........................................27
        Section 6.05. Delegation of Duties..................................................28

                                   ARTICLE VII

Default
        Section 7.01. Servicing Default.....................................................30
        Section 7.02. Indenture Trustee to Act; Appointment of Successor....................32
        Section 7.03. Notification to Securityholders.......................................33

                                  ARTICLE VIII

Miscellaneous Provisions
        Section 8.01. Amendment.............................................................34
        SECTION 8.02. GOVERNING LAW.........................................................34
        Section 8.03. Notices...............................................................34
        Section 8.04. Severability of Provisions............................................35
        Section 8.05. Third-Party Beneficiaries.............................................35
        Section 8.06. Counterparts..........................................................35
        Section 8.07. Effect of Headings and Table of Contents..............................35
        Section 8.08. Termination Upon Purchase by the Master Servicer or Liquidation of All
               Home Loans; Partial Redemption...............................................35
        Section 8.09. Certain Matters Affecting the Indenture Trustee.......................36
        Section 8.10. Owner Trustee Not Liable for Related Documents........................36


EXHIBIT A-1 - GROUP I LOANS         .......................................................A-1
EXHIBIT A-2 - GROUP II LOANS        .......................................................A-2
EXHIBIT B - POWER OF ATTORNEY       B-1
EXHIBIT C - FORM OF REQUEST FOR RELEASE ...................................................C-1
EXHIBIT D - FORM OF FORM 10-K CERTIFICATE .................................................D-1
</TABLE>


                                       ii

<PAGE>



               This is a Servicing  Agreement,  dated as of  September  25, 2003
(the "Servicing Agreement"),  among Residential Funding Corporation (the "Master
Servicer"),  the Home Loan Trust 2003-HI3 (the "Issuer") and JPMorgan Chase Bank
(the "Indenture Trustee").

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

               WHEREAS,  pursuant  to  the  terms  of  the  Home  Loan  Purchase
Agreement, Residential Funding Corporation (in its capacity as Seller) will sell
to the  Depositor  the Home Loans  together  with the Related  Documents  on the
Closing Date;

               WHEREAS,  the  Depositor  will sell the Home Loans and all of its
rights under the Home Loan Purchase  Agreement to the Issuer,  together with the
Related Documents on the Closing Date;

               WHEREAS, pursuant to the terms of the Trust Agreement, the Issuer
will  issue  and  transfer  to  or  at  the  direction  of  the  Depositor,  the
Certificates;

     WHEREAS,  pursuant to the terms of the Indenture, the Issuer will issue and
transfer to or at the direction of the Depositor, the Notes; and

               WHEREAS,  pursuant to the terms of this Servicing Agreement,  the
Master  Servicer  will  service  the Home Loans  directly or through one or more
Subservicers;

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

                                          ARTICLE I

                                         Definitions

               Section  1.01.  Definitions.  For all purposes of this  Servicing
Agreement,  except as otherwise  expressly provided herein or unless the context
otherwise  requires,  capitalized  terms not otherwise defined herein shall have
the meanings  assigned to such terms in the Definitions  contained in Appendix A
to the Indenture dated September 25, 2003 (the  "Indenture"),  between Home Loan
Trust 2003-HI3, as issuer, and JPMorgan Chase Bank, as indenture trustee,  which
is incorporated by reference  herein.  All other  capitalized  terms used herein
shall have the meanings specified herein.

               Section  1.02.  Other  Definitional  Provisions.  (a)  All  terms
defined in this Servicing Agreement shall have the defined meanings when used in
any  certificate  or other  document  made or delivered  pursuant  hereto unless
otherwise defined therein.

               (b) As used in this Servicing Agreement and in any certificate or
other document made or delivered  pursuant hereto or thereto,  accounting  terms
not defined in this  Servicing  Agreement  or in any such  certificate  or other
document, and accounting terms partly defined in this



<PAGE>



Servicing Agreement or in any such certificate or other document,  to the extent
not defined,  shall have the respective  meanings given to them under  generally
accepted accounting principles. To the extent that the definitions of accounting
terms in this Servicing  Agreement or in any such  certificate or other document
are  inconsistent  with the  meanings  of such terms  under  generally  accepted
accounting principles,  the definitions contained in this Servicing Agreement or
in any such certificate or other document shall control.

               (c) The  words  "hereof,"  "herein,"  "hereunder"  and  words  of
similar  import  when  used in this  Servicing  Agreement  shall  refer  to this
Servicing  Agreement  as a whole  and not to any  particular  provision  of this
Servicing Agreement;  Section and Exhibit references contained in this Servicing
Agreement  are  references  to Sections  and  Exhibits  in or to this  Servicing
Agreement  unless  otherwise  specified;  and the term  "including"  shall  mean
"including without limitation".

               (d) The  definitions  contained in this  Servicing  Agreement are
applicable  to the singular as well as the plural forms of such terms and to the
masculine as well as the feminine and neuter genders of such terms.

               (e) Any agreement,  instrument or statute  defined or referred to
herein or in any  instrument or  certificate  delivered in  connection  herewith
means  such  agreement,  instrument  or  statute  as from time to time  amended,
modified or supplemented and includes (in the case of agreements or instruments)
references to all  attachments  thereto and  instruments  incorporated  therein;
references to a Person are also to its permitted successors and assigns.

               Section 1.03. Interest Calculations. All calculations of interest
hereunder  that are made in respect of the Loan  Balance of a Home Loan shall be
made in accordance  with the Mortgage Note. All  calculations of interest on the
Securities  (other than the Class A-I-1  Notes)  shall be made on the basis of a
30-day month and a year assumed to consist of 360 days.  Calculation of interest
on the Class A-I-1 Notes shall be made on the basis of the actual number of days
in the Interest  Accrual  Period and a year assumed to consist of 360 days.  The
calculation  of the  Servicing  Fee shall be made on the basis of a 30-day month
and a year  assumed  to  consist  of 360 days.  All  dollar  amounts  calculated
hereunder shall be rounded to the nearest penny with one-half of one penny being
rounded up.


                                              2

<PAGE>



                                   ARTICLE II

                         Representations and Warranties

               Section 2.01. Representations and Warranties Regarding the Master
Servicer.  The Master Servicer represents and warrants to the Issuer and for the
benefit  of the  Indenture  Trustee,  as pledgee  of the Home  Loans,  as of the
Cut-off Date:

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

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

               (iii) The Master  Servicer is not  required to obtain the consent
          of any other Person 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 Servicing  Agreement,
          except  for such  consent,  license,  approval  or  authorization,  or
          registration or declaration,  as shall have been obtained or filed, as
          the case may be;

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

               (v) No litigation or  administrative  proceeding of or before any
          court,  tribunal or governmental body is currently pending,  or to the
          knowledge of the Master


                                              3

<PAGE>



        Servicer  threatened,   against  the  Master  Servicer  or  any  of  its
        properties or with respect to this Servicing Agreement or the Securities
        which in the opinion of the Master Servicer has a reasonable  likelihood
        of  resulting  in  a  material   adverse  effect  on  the   transactions
        contemplated by this Servicing Agreement.

               The foregoing  representations  and warranties  shall survive any
termination of the Master Servicer hereunder.

               Section 2.02.  Representations  and Warranties of the Issuer. The
Issuer hereby represents and warrants to the Master Servicer and for the benefit
of the Indenture Trustee, as pledgee of the Home Loans, as of the Cut-off Date:

               (i) The  Issuer is a  statutory  trust  duly  formed  and in good
          standing  under the laws of the State of Delaware  and has full power,
          authority  and legal  right to  execute  and  deliver  this  Servicing
          Agreement  and  to  perform  its  obligations   under  this  Servicing
          Agreement,  and has  taken  all  necessary  action  to  authorize  the
          execution, delivery and performance by it of this Servicing Agreement;
          and

               (ii) The execution  and delivery by the Issuer of this  Servicing
          Agreement and the performance by the Issuer of its  obligations  under
          this Servicing  Agreement will not violate any provision of any law or
          regulation governing the Issuer or any order, writ, judgment or decree
          of  any  court,   arbitrator  or  governmental   authority  or  agency
          applicable  to  the  Issuer  or any of  its  assets.  Such  execution,
          delivery,  authentication  and performance  will not conflict with, or
          result in a breach or violation of, any mortgage, deed of trust, lease
          or other agreement or instrument to which the Issuer is bound.

               Section 2.03. Enforcement of Representations and Warranties.  The
Master  Servicer,  on behalf of and subject to the  direction  of the  Indenture
Trustee,  as  pledgee  of the Home  Loans,  or the  Issuer,  shall  enforce  the
representations  and warranties of the Seller pursuant to the Home Loan Purchase
Agreement. Upon the discovery by the Seller, the Depositor, the Master Servicer,
the Indenture  Trustee,  the Credit Enhancer,  the Issuer, or any Custodian of a
breach  of any of the  representations  and  warranties  made in the  Home  Loan
Purchase  Agreement or of the existence of a Repurchase Event, in respect of any
Home  Loan  which  materially  and  adversely   affects  the  interests  of  the
Securityholders  or the Credit  Enhancer,  the party  discovering such breach or
existence  shall give prompt  written  notice to the other  parties.  The Master
Servicer  shall  promptly  notify the  Seller of such  breach or  existence  and
request  that,  pursuant to the terms of the Home Loan Purchase  Agreement,  the
Seller either (i) cure such breach or Repurchase Event in all material  respects
within 45 days (with respect to a breach of the  representations  and warranties
contained in Section  3.1(a) of the Home Loan  Purchase  Agreement or Repurchase
Event)  or 90  days  (with  respect  to a  breach  of  the  representations  and
warranties contained in Section 3.1(b) of the Home Loan Purchase Agreement) from
the date the Seller was  notified  of such  breach or  Repurchase  Event or (ii)
purchase such Home Loan from the Issuer at the price and in the manner set forth
in Section 3.1(c) of the Home Loan Purchase Agreement;  provided that the Seller
shall,  subject to compliance with all the conditions set forth in the Home Loan
Purchase Agreement, have the option to substitute


                                              4

<PAGE>



an Eligible  Substitute  Loan or Loans for such Home Loan. In the event that the
Seller elects to substitute  one or more Eligible  Substitute  Loans pursuant to
Section 3.1(c) of the Home Loan Purchase Agreement,  the Seller shall deliver to
the Issuer with respect to such Eligible Substitute Loans, the original Mortgage
Note, the Mortgage,  and such other  documents and agreements as are required by
the Home  Loan  Purchase  Agreement.  Payments  due  with  respect  to  Eligible
Substitute  Loans in the month of  substitution  shall not be transferred to the
Issuer and will be retained by the Master  Servicer  and  remitted by the Master
Servicer to the Seller on the next succeeding Payment Date provided a payment at
least equal to the  applicable  Monthly  Payment has been received by the Issuer
for such month in respect of the Home Loan to be  removed.  The Master  Servicer
shall amend or cause to be amended the Home Loan Schedule to reflect the removal
of such Home Loan and the substitution of the Eligible  Substitute Loans and the
Master  Servicer  shall  promptly  deliver the amended Home Loan Schedule to the
Owner Trustee and the Indenture Trustee.

               It is understood  and agreed that the obligation of the Seller to
cure such breach or purchase or substitute for such Home Loan as to which such a
breach  has  occurred  and  is  continuing  shall  constitute  the  sole  remedy
respecting  such breach  available to the Issuer and the Indenture  Trustee,  as
pledgee of the Home Loans,  against the Seller.  In connection with the purchase
of or substitution for any such Home Loan by the Seller, the Issuer shall assign
to the Seller all of its right,  title and  interest in respect of the Home Loan
Purchase Agreement  applicable to such Home Loan. Upon receipt of the Repurchase
Price, or upon completion of such substitution, the Master Servicer shall notify
the  Custodian and then the  Custodian  shall deliver the Mortgage  Files to the
Master  Servicer,  together  with  all  relevant  endorsements  and  assignments
prepared by the Master Servicer which the Indenture Trustee shall execute.




                                              5

<PAGE>



                                   ARTICLE III

                          Administration and Servicing
                                  of Home Loans

               Section 3.01. The Master Servicer.  (a) The Master Servicer shall
service  and  administer  the Home  Loans in  accordance  with the terms of this
Servicing  Agreement,  following such  procedures as it would employ in its good
faith business  judgment and which are normal and usual in its general  mortgage
servicing activities,  and shall have full power and authority,  acting alone or
through  a  subservicer,  to do any and  all  things  in  connection  with  such
servicing and administration which it may deem necessary or desirable,  it being
understood,  however,  that  the  Master  Servicer  shall  at all  times  remain
responsible to the Issuer and the Indenture  Trustee for the  performance of its
duties and obligations  hereunder in accordance  with the terms hereof.  Without
limiting the generality of the foregoing,  the Master  Servicer shall  continue,
and is hereby authorized and empowered by the Issuer and the Indenture  Trustee,
as pledgee of the Home Loans, to execute and deliver,  on behalf of itself,  the
Issuer,  the  Indenture  Trustee  or any of  them,  any and all  instruments  of
satisfaction or cancellation,  or of partial or full release or discharge, or of
consent  to  modification  in  connection  with  a  proposed  conveyance,  or of
assignment of any Mortgage and Mortgage Note in connection  with the  repurchase
of a Home Loan and all other  comparable  instruments  with  respect to the Home
Loans and with  respect  to the  Mortgaged  Properties,  or with  respect to the
modification  or  re-recording  of a Mortgage for the purpose of correcting  the
Mortgage,  the  subordination  of the lien of the  Mortgage in favor of a public
utility company or government agency or unit with powers of eminent domain,  the
taking  of a deed in lieu  of  foreclosure,  the  commencement,  prosecution  or
completion  of judicial or  non-judicial  foreclosure,  the  acquisition  of any
property  acquired  by  foreclosure  or  deed in  lieu  of  foreclosure,  or the
management,  marketing and conveyance of any property acquired by foreclosure or
deed  in  lieu  of  foreclosure.  The  Issuer,  the  Indenture  Trustee  and the
Custodian,  as applicable,  shall furnish the Master Servicer with any powers of
attorney  and other  documents  necessary  or  appropriate  to enable the Master
Servicer to carry out its  servicing and  administrative  duties  hereunder.  In
addition,  the Master  Servicer may, at its own  discretion and on behalf of the
Indenture Trustee,  obtain credit information in the form of a Credit Score from
a credit repository. On the Closing Date, the Indenture Trustee shall deliver to
the Master  Servicer a limited  power of attorney  substantially  in the form of
Exhibit B hereto.

               If the  Mortgage  relating  to a Home  Loan  did not  have a lien
senior to the Home Loan on the  related  Mortgaged  Property  as of the  Cut-off
Date, then the Master Servicer, in such capacity, may not consent to the placing
of a lien senior to that of the Mortgage on the related Mortgaged  Property.  If
the  Mortgage  relating to a Home Loan had a lien senior to the Home Loan on the
related Mortgaged Property as of the Cut-off Date, then the Master Servicer,  in
such capacity, may consent to the refinancing of the prior senior lien, provided
that the following requirements are met:

                       (i) (A) the  Mortgagor's  debt-to-income  ratio resulting
        from such refinancing is less than the original  debt-to-income ratio as
        set forth on the  Mortgage  Loan  Schedule  and,  in the event  that the
        resulting Combined Loan-to-Value Ratio ("Combined  Loan-to-Value Ratio")
        of such Home Loan increases by more than 10% above the Combined


                                              6

<PAGE>



        Loan-to-Value Ratio prior to such refinancing, the Master Servicer shall
        obtain the prior consent of the Credit Enhancer, which consent shall not
        be unreasonably withheld;  provided,  however, that in no instance shall
        the resulting Combined  Loan-to-Value  Ratio of such Home Loan be higher
        than that permitted by the Program Guide; or

                       (B) the resulting  Combined  Loan-to-Value  Ratio of such
        Home Loan is no higher than the  Combined  Loan-to-Value  Ratio prior to
        such refinancing; provided, however, if such refinanced mortgage loan is
        a "rate and term" mortgage loan (meaning, the Mortgagor does not receive
        any cash from the  refinancing),  the Combined  Loan-to-Value  Ratio may
        increase  to the extent of either (a) the  reasonable  closing  costs of
        such  refinancing  or (b)  any  decrease  in the  value  of the  related
        Mortgaged  Property,  if the Mortgagor is in good standing as defined by
        the Program Guide;

                (ii) the interest  rate,  or, in the case of an adjustable  rate
        existing senior lien, the maximum interest rate, for the loan evidencing
        the refinanced senior lien is no more than 2.0% higher than the interest
        rate or the  maximum  interest  rate,  as the case  may be,  on the loan
        evidencing  the existing  senior lien  immediately  prior to the date of
        such  refinancing;  provided,  however  (a) if the loan  evidencing  the
        existing  senior lien prior to the date of refinancing has an adjustable
        rate and the loan  evidencing  the  refinanced  senior  lien has a fixed
        rate,  then  the  current  interest  rate  on the  loan  evidencing  the
        refinanced  senior lien may be up to 2.0%  higher than the  then-current
        loan rate of the loan evidencing the existing senior lien and (b) if the
        loan   evidencing  the  existing  senior  lien  prior  to  the  date  of
        refinancing  has a fixed  rate and the loan  evidencing  the  refinanced
        senior lien has an adjustable  rate,  then the maximum  interest rate on
        the loan  evidencing  the  refinanced  senior lien shall be less than or
        equal to (x) the  interest  rate on the  loan  evidencing  the  existing
        senior lien prior to the date of refinancing plus (y) 2.0%; and

                (iii) the loan  evidencing  the  refinanced  senior  lien is not
        subject to negative amortization.

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

               (b) The  Master  Servicer  may  continue  in effect  Subservicing
Agreements  entered into by Residential  Funding and  Subservicers  prior to the
execution  and  delivery  of  this  Servicing  Agreement,  and  may  enter  into
Subservicing  Agreements with Subservicers for the servicing and  administration
of certain of the Home Loans.  Each Subservicer of a Home Loan shall be entitled
to receive and retain, as provided in the related Subservicing  Agreement and in
Section 3.02, the related Subservicing Fee from payments of interest received on
such Home Loan after  payment of all  amounts  required  to be  remitted  to the
Master Servicer in respect of such Home Loan. For any Home Loan not subject to a
Subservicing  Agreement,  the Master  Servicer  shall be entitled to receive and
retain  an amount  equal to the  Subservicing  Fee from  payments  of  interest.
References  in this  Servicing  Agreement to actions taken or to be taken by the
Master Servicer in servicing the Home


                                              7

<PAGE>



Loans include  actions  taken or to be taken by a  Subservicer  on behalf of the
Master  Servicer.  Each  Subservicing  Agreement  will be upon  such  terms  and
conditions  as are not  inconsistent  with this  Servicing  Agreement and as the
Master Servicer and the Subservicer have agreed. With the approval of the Master
Servicer,  a Subservicer  may delegate its servicing  obligations to third-party
servicers,  but such  Subservicers  will  remain  obligated  under  the  related
Subservicing Agreements.  The Master Servicer and the Subservicer may enter into
amendments to the related Subservicing Agreements;  provided,  however, that any
such  amendments  shall not cause the Home Loans to be serviced in a manner that
would be materially  inconsistent with the standards set forth in this Servicing
Agreement.  The Master Servicer shall be entitled to terminate any  Subservicing
Agreement in accordance  with the terms and  conditions  thereof and without any
limitation by virtue of this Servicing Agreement; provided, however, that in the
event of termination of any Subservicing Agreement by the Master Servicer or the
Subservicer,  the Master  Servicer  shall  either act as servicer of the related
Home Loan or enter into a Subservicing  Agreement  with a successor  Subservicer
which  will be bound by the terms of the  related  Subservicing  Agreement.  The
Master Servicer shall be entitled to enter into any agreement with a Subservicer
for  indemnification  of the  Master  Servicer  and  nothing  contained  in this
Servicing Agreement shall be deemed to limit or modify such indemnification.

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

               As  part  of  its  servicing  activities  hereunder,  the  Master
Servicer, for the benefit of the Securityholders and the Credit Enhancer,  shall
use reasonable  efforts to enforce the obligations of each Subservicer under the
related  Subservicing  Agreement,  to the extent that the non-performance of any
such  obligation  would have a  material  adverse  effect on a Home  Loan.  Such
enforcement,  including,  without  limitation,  the legal prosecution of claims,
termination  of  Subservicing  Agreements  and the pursuit of other  appropriate
remedies,  shall be in such form and  carried  out to such an extent and at such
time as the Master Servicer would employ in its good faith business judgment and
which are normal and usual in its general  mortgage  servicing  activities.  The
Master Servicer shall pay the costs of such enforcement at its own expense,  and
shall be reimbursed  therefor only (i) from a general  recovery  resulting  from
such  enforcement to the extent,  if any, that such recovery exceeds all amounts
due in respect of the  related  Home Loan or (ii) from a  specific  recovery  of
costs,   expenses  or  attorneys  fees  against  the  party  against  whom  such
enforcement is directed.

               Section 3.02.  Collection of Certain Home Loan Payments.  (a) The
Master Servicer shall make reasonable efforts to collect all payments called for
under the terms and provisions of the Home Loans,  and shall, to the extent such
procedures  shall be  consistent  with this  Servicing  Agreement  and generally
consistent with any related insurance policy,  follow such collection procedures
as it would employ in its good faith business  judgment and which are normal and
usual  in  its  general  mortgage  servicing  activities.  Consistent  with  the
foregoing, and without limiting the


                                              8

<PAGE>



generality of the foregoing, the Master Servicer may in its discretion waive any
late payment charge,  prepayment  charge or penalty interest or other fees which
may be collected in the ordinary  course of servicing such Home Loan. The Master
Servicer  may  also  extend  the Due  Date  for  payment  due on a Home  Loan in
accordance with the Program Guide,  provided,  however, that the Master Servicer
shall  first  determine  that any such waiver or  extension  will not impair the
coverage of any related insurance policy or materially adversely affect the lien
of the related  Mortgage  (except as  described  below) or the  interests of the
Securityholders  and the  Credit  Enhancer.  Consistent  with the  terms of this
Servicing Agreement, the Master Servicer may also:

               (i) waive, modify or vary any term of any Home Loan;

               (ii) consent to the  postponement  of strict  compliance with any
               such term or in any manner grant indulgence to any Mortgagor;

               (iii)  arrange  with a  Mortgagor  a schedule  for the payment of
               principal and interest due and unpaid;

               (iv) forgive any portion of the amounts  contractually owed under
               the Home Loan;

               (v)  capitalize  past due  amounts  owed  under  the Home Loan by
               adding any amounts in arrearage to the existing principal balance
               of the Home  Loan (a  "Capitalization  Workout")  of  which  will
               result in an increased Monthly Payment amount, provided that: (A)
               the amount  added to the existing  principal  balance of the Home
               Loan (the  "Capitalized  Amount")  shall be no greater  than five
               times the Mortgagor's current Monthly Payment amount; and (B) the
               Master  Servicer  shall not enter into a  Capitalization  Workout
               unless the Combined Loan-to-Value Ratio of the Home Loan prior to
               the  Capitalization   Workout  equals  or  exceeds  80%  and  the
               Mortgagor has qualified for the Capitalization  Workout under the
               Master Servicer's servicing guidelines;

               (vi) reset the due date for the Home Loan, or any  combination of
               the foregoing;

if  in  the  Master   Servicer's   determination   such  waiver,   modification,
postponement or indulgence, arrangement or other action referred to above is not
materially  adverse  to the  interests  of  the  Securityholders  or the  Credit
Enhancer and is generally  consistent with the Master  Servicer's  policies with
respect  to  mortgage  loans  similar  to those in the Home Loan Pool  (meaning,
mortgage  loans  used for home  improvement  or debt  consolidation);  provided,
however,  that the Master  Servicer may not modify or permit any  Subservicer to
modify any Home Loan (including  without  limitation any modification that would
change the Loan Rate,  forgive the payment of any principal or interest  (unless
in connection with the liquidation of the related Home Loan) or extend the final
maturity  date of such Home Loan) unless such Home Loan is in default or, in the
judgment of the Master  Servicer,  such default is reasonably  foreseeable.  The
general  terms of any waiver,  modification,  postponement  or  indulgence  with
respect to any of the Home Loans will be included in the Servicing  Certificate,
and such Home Loans will not be considered  "delinquent" for the purposes of the
Basic Documents


                                              9

<PAGE>



so long as the Mortgagor  complies with the terms of such waiver,  modification,
postponement or indulgence.

               (b) The Master  Servicer  shall  establish a  Custodial  Account,
which shall be an Eligible Account in which the Master Servicer shall deposit or
cause to be  deposited  any amounts  representing  payments and  collections  in
respect of the Home Loans  received by it  subsequent to the Cut-off Date (other
than in respect of the payments  referred to in the following  paragraph) within
one  Business Day  following  receipt  thereof (or  otherwise on or prior to the
Closing Date), including the following payments and collections received or made
by it (without duplication):

                       (i) all  payments  of  principal  or interest on the Home
        Loans received by the Master  Servicer from the respective  Subservicer,
        net of any portion of the interest  thereof  retained by the Subservicer
        as Subservicing Fees;

                       (ii) the  aggregate  Repurchase  Price of the Home  Loans
        purchased  by the Master  Servicer  pursuant  to Section  3.15 or by the
        Limited Repurchase Price Holder pursuant to Section 3.16;

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

                       (iv) all  proceeds of any Home Loans  repurchased  by the
        Seller   pursuant  to  the  Home  Loan  Purchase   Agreement,   and  all
        Substitution  Adjustment  Amounts required to be deposited in connection
        with the  substitution  of an Eligible  Substitute  Loan pursuant to the
        Home Loan Purchase Agreement;

                       (v)  Insurance  Proceeds,   other  than  Net  Liquidation
        Proceeds,  resulting from any insurance policy maintained on a Mortgaged
        Property; and

                       (vi) amounts  required to be paid by the Master  Servicer
        pursuant to Sections 3.04 and 8.08 and any  prepayments  or  collections
        constituting prepayment charges.

provided,  however,  that with  respect to each  Collection  Period,  the Master
Servicer  shall be permitted  to retain from  payments in respect of interest on
the Home  Loans,  the  Master  Servicing  Fee for such  Collection  Period.  The
foregoing  requirements   respecting  deposits  to  the  Custodial  Account  are
exclusive,  it being  understood  that,  without  limiting the generality of the
foregoing, the Master Servicer need not deposit in the Custodial Account amounts
representing  Foreclosure  Profits,  fees (including annual fees) or late charge
penalties  payable by  Mortgagors  (such  amounts to be retained  as  additional
servicing  compensation  in  accordance  with Section 3.09  hereof),  or amounts
received by the Master  Servicer for the accounts of Mortgagors for  application
towards the payment of taxes, insurance premiums, assessments and similar items.
In the event any amount not required to be deposited in the Custodial Account is
so deposited,  the Master Servicer may at any time withdraw such amount from the
Custodial  Account,  any provision herein to the contrary  notwithstanding.  The
Custodial  Account  may  contain  funds that  belong to one or more trust  funds
created for the notes or  certificates  of other  series and may  contain  other
funds respecting payments


                                       10

<PAGE>



on other mortgage loans  belonging to the Master  Servicer or serviced or master
serviced by it on behalf of others.  Notwithstanding  such commingling of funds,
the Master  Servicer  shall keep  records that  accurately  reflect the funds on
deposit  in the  Custodial  Account  that  have been  identified  by it as being
attributable  to the Home Loans and shall hold all  collections in the Custodial
Account  to the  extent  they  represent  collections  on the Home Loans for the
benefit of the Trust, the  Securityholders  and the Indenture Trustee,  as their
interests may appear.  The Master Servicer shall retain all Foreclosure  Profits
as additional servicing compensation.

        The Master Servicer may cause the institution  maintaining the Custodial
Account to invest any funds in the  Custodial  Account in Permitted  Investments
(including obligations of the Master Servicer or any of its Affiliates,  if such
obligations otherwise qualify as Permitted Investments),  which shall mature not
later than the Business Day  preceding the next Payment Date and which shall not
be sold or disposed of prior to its  maturity.  Except as  provided  above,  all
income and gain realized from any such investment  shall inure to the benefit of
the Master Servicer and shall be subject to its withdrawal or order from time to
time.  The amount of any losses  incurred in respect of the principal  amount of
any such investments  shall be deposited in the Custodial  Account by the Master
Servicer out of its own funds immediately as realized.

        (c) The Master Servicer will require each  Subservicer to hold all funds
constituting  collections on the Home Loans,  pending  remittance thereof to the
Master Servicer, in one or more accounts meeting the requirements of an Eligible
Account, and invested in Permitted Investments.

        Section 3.03.Withdrawals from the Custodial Account. The Master Servicer
shall, from time to time as provided herein, make withdrawals from the Custodial
Account  of  amounts  on  deposit  therein  pursuant  to  Section  3.02 that are
attributable to the Home Loans for the following purposes:

                       (i) to remit  to the  Paying  Agent  for  deposit  in the
        Payment  Account,  on the Business Day prior to each  Payment  Date,  an
        amount  equal to the  Interest  Collections  and  Principal  Collections
        required to be  distributed  on such  Payment  Date and any  payments or
        collections  constituting prepayment charges received during the related
        Prepayment Period;

                       (ii) to the extent deposited to the Custodial Account, to
        reimburse itself or the related Subservicer for previously  unreimbursed
        expenses incurred in maintaining  individual insurance policies pursuant
        to Section 3.04, or Liquidation Expenses,  paid pursuant to Section 3.07
        or  otherwise  reimbursable  pursuant  to the  terms  of this  Servicing
        Agreement  (to the extent not payable  pursuant to Section  3.09),  such
        withdrawal  right being limited to amounts  received on particular  Home
        Loans  (other  than any  Repurchase  Price  in  respect  thereof)  which
        represent  late  recoveries of the payments for which such advances were
        made,  or from  related  Liquidation  Proceeds  or the  proceeds  of the
        purchase of such Home Loan;

                       (iii) to pay to itself out of each  payment  received  on
        account of interest on a Home Loan as  contemplated  by Section 3.09, an
        amount equal to the related Master


                                       11

<PAGE>



        Servicing Fee (to the extent not retained pursuant to Section 3.02), and
        to pay to any Subservicer any Subservicing Fees not previously  withheld
        by the Subservicer;

                       (iv) to the extent deposited in the Custodial  Account to
        pay to itself as  additional  servicing  compensation  any  interest  or
        investment income earned on funds deposited in the Custodial Account and
        Payment  Account  that it is entitled  to withdraw  pursuant to Sections
        3.02(b) and 5.01;

                       (v) to the extent deposited in the Custodial Account,  to
        pay to itself  as  additional  servicing  compensation  any  Foreclosure
        Profits;

                       (vi) to pay to itself or the Seller,  with respect to any
        Home  Loan or  property  acquired  in  respect  thereof  that  has  been
        purchased or otherwise  transferred to the Seller,  the Master Servicer,
        the  Limited  Repurchase  Right  Holder  or other  entity,  all  amounts
        received  thereon and not required to be distributed to  Securityholders
        as of the date on which the related  Purchase Price or Repurchase  Price
        is determined;

                       (vii) to clear and terminate  the Custodial  Account upon
        the termination of this Agreement; and

                       (viii)to  withdraw  any  other  amount  deposited  in the
        Custodial Account that was not required to be deposited therein pursuant
        to Section 3.02.

        Since, in connection with withdrawals  pursuant to clauses (ii),  (iii),
(v)  and  (vi),  the  Master  Servicer's   entitlement  thereto  is  limited  to
collections or other  recoveries on the related Home Loan,  the Master  Servicer
shall keep and maintain separate accounting,  on a Home Loan by Home Loan basis,
for the purpose of justifying any withdrawal from the Custodial Account pursuant
to  such  clauses.   Notwithstanding  any  other  provision  of  this  Servicing
Agreement,  the Master  Servicer  shall be entitled to reimburse  itself for any
previously  unreimbursed expenses incurred pursuant to Section 3.07 or otherwise
reimbursable  pursuant to the terms of this Servicing  Agreement that the Master
Servicer determines to be otherwise  nonrecoverable  (except with respect to any
Home Loan as to which the Repurchase  Price has been paid),  by withdrawal  from
the Custodial  Account of amounts on deposit  therein  attributable  to the Home
Loans on any Business Day prior to the Payment Date  succeeding the date of such
determination.

        Section  3.04.  Maintenance  of Hazard  Insurance;  Property  Protection
Expenses.  The Master  Servicer  shall cause to be maintained for each Home Loan
hazard insurance naming the Master Servicer or related Subservicer as loss payee
thereunder  providing  extended coverage in an amount which is at least equal to
at  least  100%  of  the  insurable  value  of  the   improvements   (guaranteed
replacement)  or the sum of the unpaid  principal  balance of the first mortgage
loan and the Home Loan  amount.  The  Master  Servicer  shall  also  cause to be
maintained  on  property  acquired  upon   foreclosure,   or  deed  in  lieu  of
foreclosure,  of any Home Loan,  fire  insurance  with  extended  coverage in an
amount which is at least equal to the amount  necessary to avoid the application
of any  coinsurance  clause  contained in the related hazard  insurance  policy.
Amounts collected by the Master


                                       12

<PAGE>



Servicer  under any such  policies  (other  than  amounts  to be  applied to the
restoration  or  repair of the  related  Mortgaged  Property  or  property  thus
acquired or amounts  released to the  Mortgagor  in  accordance  with the Master
Servicer's  normal  servicing  procedures)  shall be deposited in the  Custodial
Account  to the  extent  called  for by  Section  3.02.  In cases  in which  any
Mortgaged  Property  is located at any time  during the life of a Home Loan in a
federally  designated  flood area, the hazard insurance to be maintained for the
related Home Loan shall include flood insurance (to the extent  available).  All
such flood  insurance  shall be in amounts equal to the lesser of (i) the amount
required to  compensate  for any loss or damage to the  Mortgaged  Property on a
replacement  cost basis and (ii) the maximum amount of such insurance  available
for the related  Mortgaged  Property under the national flood insurance  program
(assuming  that  the  area in  which  such  Mortgaged  Property  is  located  is
participating in such program). The Master Servicer shall be under no obligation
to require that any Mortgagor maintain earthquake or other additional  insurance
and  shall  be  under no  obligation  itself  to  maintain  any such  additional
insurance on property acquired in respect of a Home Loan, other than pursuant to
such  applicable  laws and  regulations  as shall at any time be in force and as
shall require such additional insurance. If the Master Servicer shall obtain and
maintain  a  blanket  policy  consistent  with its  general  mortgage  servicing
activities  insuring  against  hazard losses on all of the Home Loans,  it shall
conclusively  be deemed to have  satisfied its  obligations  as set forth in the
first  sentence of this Section 3.04, it being  understood  and agreed that such
blanket  policy  may  contain a  deductible  clause,  in which  case the  Master
Servicer  shall,  in the event that there shall not have been  maintained on the
related  Mortgaged  Property a policy  complying with the first sentence of this
Section  3.04 and there shall have been a loss which would have been  covered by
such policy,  deposit in the Custodial  Account the amount not otherwise payable
under the blanket policy because of such deductible  clause. Any such deposit by
the Master  Servicer  shall be made on the last  Business Day of the  Collection
Period in the month in which  payments  under any such  policy  would  have been
deposited  in the  Custodial  Account.  In  connection  with its  activities  as
servicer of the Home Loans, the Master Servicer agrees to present,  on behalf of
itself,  the Issuer and the  Indenture  Trustee,  claims  under any such blanket
policy.

        Section 3.05. Modification Agreements;  Release or Substitution of Lien.
(a) The Master Servicer or the related Subservicer, as the case may be, shall be
entitled  to  (A)  execute  assumption  agreements,   modification   agreements,
substitution  agreements,  and instruments of satisfaction or cancellation or of
partial or full release or discharge, or any other document contemplated by this
Servicing  Agreement and other  comparable  instruments with respect to the Home
Loans and with respect to the Mortgaged Properties subject to the Mortgages (and
the Issuer  and the  Indenture  Trustee  each shall  promptly  execute  any such
documents on request of the Master  Servicer) and (B) approve the granting of an
easement thereon in favor of another Person, any alteration or demolition of the
related  Mortgaged  Property or other  similar  matters,  in each case if it has
determined, exercising its good faith business judgment in the same manner as it
would if it were the owner of the related Home Loan,  that the security for, and
the timely and full  collectability  of,  such Home Loan would not be  adversely
affected  thereby.  A partial  release  pursuant to this  Section  3.05 shall be
permitted only if the Combined Loan-to-Value Ratio for such Home Loan after such
partial release does not exceed the Combined  Loan-to-Value  Ratio for such Home
Loan as of the Cut-off  Date.  Any fee  collected by the Master  Servicer or the
related  Subservicer  for processing such request will be retained by the Master
Servicer or such Subservicer as additional servicing compensation.


                                       13

<PAGE>



        (b) The Master  Servicer may enter into an agreement with a Mortgagor to
release  the  lien  on the  Mortgaged  Property  relating  to a Home  Loan  (the
"Existing  Lien"),  if at the time of such agreement the Home Loan is current in
payment of principal and interest, under any of the following circumstances:

                (i) in any case in which, simultaneously with the release of the
        Existing  Lien,  the  Mortgagor  executes  and  delivers  to the  Master
        Servicer a Mortgage on a substitute  Mortgaged  Property,  provided that
        the Combined  Loan-to-Value  Ratio of the Home Loan (calculated based on
        the Appraised Value of the substitute Mortgaged Property) is not greater
        than the Combined  Loan-to-Value  Ratio prior to releasing  the Existing
        Lien;

                (ii) in any case in which,  simultaneously  with the  release of
        the Existing  Lien,  the  Mortgagor  executes and delivers to the Master
        Servicer a Mortgage on a substitute  Mortgaged Property,  provided that:
        (A) the Combined  Loan-to-Value Ratio of the Home Loan (calculated based
        on the  Appraised  Value of the  substitute  Mortgaged  Property) is not
        greater  than  the  lesser  of (1)  125%  and (2)  105% of the  Combined
        Loan-to-Value  Ratio prior to releasing the Existing  Lien;  and (B) the
        Master Servicer  determines  that at least two appropriate  compensating
        factors  are  present   (compensating   factors  may  include,   without
        limitation,  an increase in the Mortgagor's monthly cash flow after debt
        service,  the Mortgagor's  debt-to-income  ratio has not increased since
        origination, or an increase in the Mortgagor's credit score); or

                (iii)  in any  case in  which,  at the  time of  release  of the
        Existing Lien, the Mortgagor does not provide the Master Servicer with a
        Mortgage on a substitute  Mortgaged Property (any Home Loan that becomes
        and remains unsecured in accordance with this subsection,  an "Unsecured
        Loan"),  provided that: (A) the Mortgagor,  in addition to being current
        in payment of  principal  and  interest  on the  related  Home Loan,  is
        current in payment of  principal  and interest on any loan senior to the
        Home Loan; (B) the Mortgagor's Credit Score, as determined by the Master
        Servicer at the time of the  request  for  release of lien,  is not less
        than 640; (C) the Mortgagor  makes a cash  contribution  in reduction of
        the outstanding  principal  balance of the Home Loan,  which may include
        any net proceeds from the sale of the original  Mortgaged  Property,  of
        not less than 20% of the unpaid principal  balance of the Home Loan; and
        (D) the Mortgagor signs a  reaffirmation  agreement  acknowledging  that
        they must continue to pay in  accordance  with the terms of the original
        Mortgage Note.

                (iv) If the above  conditions  (iii)(A) through (iii)(D) are not
        met,  the Master  Servicer  may still enter into an agreement to release
        the Existing  Lien,  provided  that:  (A) the Master  Servicer shall not
        permit the release of an Existing Lien under this clause (iv) as to more
        than 200 Home  Loans in any  calendar  year;  (B) at no time  shall  the
        aggregate  Principal  Balance of  Unsecured  Loans exceed 5% of the then
        Pool  Balance;  (C) the Mortgagor  agrees to an automatic  debit payment
        plan;  and (D) the Master  Servicer  shall provide notice to each Rating
        Agency that has requested notice of such releases.



                                       14

<PAGE>



        In connection  with any Unsecured  Loan, the Master Servicer may require
the Mortgagor to enter into an agreement  under which:  (i) the Loan Rate may be
increased  effective until a substitute  Mortgage meeting the criteria under (i)
or (ii) above is  provided;  or (ii) any other  provision  may be made which the
Master  Servicer  considers to be appropriate.  Thereafter,  the Master Servicer
shall determine in its discretion whether to accept any proposed Mortgage on any
substitute  Mortgaged  Property  as security  for the Home Loan,  and the Master
Servicer may require the Mortgagor to agree to any further  conditions which the
Master  Servicer  considers  appropriate in connection  with such  substitution,
which may include a  reduction  of the Loan Rate (but not below the Loan Rate in
effect  at the  Closing  Date).  Any  Home  Loan  as to  which a  Mortgage  on a
substitute  Mortgaged  Property  is provided in  accordance  with the  preceding
sentence shall no longer be deemed to be an Unsecured Loan.

        Section 3.06. Trust Estate; Related Documents.  (a) When required by the
provisions of this  Servicing  Agreement,  the Issuer or the  Indenture  Trustee
shall  execute  instruments  to  release  property  from the  terms of the Trust
Agreement,  Indenture  or  Custodial  Agreement,  as  applicable,  or convey the
Issuer's or the Indenture  Trustee's interest in the same, in a manner and under
circumstances  which are not inconsistent  with the provisions of this Servicing
Agreement.  No party  relying upon an  instrument  executed by the Issuer or the
Indenture  Trustee as provided in this  Section 3.06 shall be bound to ascertain
the Issuer's or the Indenture Trustee's authority, inquire into the satisfaction
of any conditions precedent or see to the application of any monies.

        (b) If from  time to time  the  Master  Servicer  shall  deliver  to the
Custodian copies of any written assurance,  assumption agreement or substitution
agreement or other similar  agreement  pursuant to Section  3.05,  the Custodian
shall check that each of such documents purports to be an original executed copy
(or a copy of the original  executed  document if the original executed copy has
been  submitted for recording and has not yet been  returned)  and, if so, shall
file such  documents,  and upon receipt of the original  executed  copy from the
applicable  recording  office or  receipt  of a copy  thereof  certified  by the
applicable  recording  office shall file such originals or certified copies with
the Related Documents. If any such documents submitted by the Master Servicer do
not meet the above qualifications,  such documents shall promptly be returned by
the  Custodian  to  the  Master  Servicer  pursuant  to  the  related  Custodial
Agreement,  with a  direction  to the Master  Servicer  to forward  the  correct
documentation.

        (c) Upon receipt of a Request for Release from the Master  Servicer,  to
the  effect  that a Home  Loan has  been the  subject  of a final  payment  or a
prepayment  in full  and the  related  Home  Loan has  been  terminated  or that
substantially all Liquidation  Proceeds which have been determined by the Master
Servicer  in  its  reasonable  judgment  to be  finally  recoverable  have  been
recovered,  and upon  deposit to the  Custodial  Account  of such final  monthly
payment,  prepayment in full  together  with accrued and unpaid  interest to the
date of such  payment  with  respect  to  such  Home  Loan  or,  if  applicable,
Liquidation Proceeds, the Custodian shall promptly release the Related Documents
to the Master Servicer  pursuant to the related Custodial  Agreement,  which the
Indenture  Trustee  shall  execute,  along  with such  documents  as the  Master
Servicer or the Mortgagor may request to evidence  satisfaction and discharge of
such Home Loan, upon request of the Master Servicer. If from time to time and as
appropriate for the servicing or foreclosure of any Home Loan, the Master


                                       15

<PAGE>



Servicer requests the Custodian to release the Related Documents and delivers to
the  Custodian a trust  receipt  reasonably  satisfactory  to the  Custodian and
signed by a Responsible  Officer of the Master  Servicer,  the  Custodian  shall
release the Related  Documents  to the Master  Servicer  pursuant to the related
Custodial  Agreement.  If such Home Loans shall be liquidated  and the Custodian
receives a certificate  from the Master Servicer as provided  above,  then, upon
request of the Master Servicer, the Custodian shall release the trust receipt to
the Master Servicer pursuant to the related Custodial Agreement.

        Section 3.07.  Realization  Upon Defaulted Home Loans;  Loss Mitigation.
With respect to such of the Home Loans as come into and continue in default, the
Master  Servicer  will  decide  whether  to (i)  foreclose  upon  the  Mortgaged
Properties securing such Home Loans, (ii) write off the unpaid principal balance
of the Home Loans as bad debt,  (iii) take a deed in lieu of  foreclosure,  (iv)
accept a short sale (a payoff of the Home Loan for an amount less than the total
amount  contractually  owed in  order  to  facilitate  a sale  of the  Mortgaged
Property by the  Mortgagor) or permit a short  refinancing (a payoff of the Home
Loan for an amount  less than the total  amount  contractually  owed in order to
facilitate refinancing transactions by the Mortgagor not involving a sale of the
Mortgaged  Property),  (v)  arrange  for  a  repayment  plan,  (vi)  agree  to a
modification  in  accordance  with this  Servicing  Agreement,  or (vii) take an
unsecured  note,  in  connection  with a  negotiated  release of the lien of the
Mortgage in order to facilitate a settlement  with the  Mortgagor;  in each case
subject  to the  rights of any  related  first  lien  holder;  provided  that in
connection with the foregoing if the Master  Servicer has actual  knowledge that
any  Mortgaged  Property is affected by hazardous or toxic wastes or  substances
and that the  acquisition of such Mortgaged  Property would not be  commercially
reasonable,  then the Master Servicer will not cause the Issuer or the Indenture
Trustee to acquire title to such Mortgaged  Property in a foreclosure or similar
proceeding.  In connection with such decision,  the Master Servicer shall follow
such  practices  (including,  in the case of any  default  on a  related  senior
mortgage  loan,  the  advancing of funds to correct such default if deemed to be
appropriate by the Master Servicer) and procedures as it shall deem necessary or
advisable  and as shall be normal and usual in its  general  mortgage  servicing
activities and as shall be required or permitted by the Program Guide;  provided
that the Master  Servicer  shall not be liable in any respect  hereunder  if the
Master Servicer is acting in connection  with any such  foreclosure or attempted
foreclosure  which is not  completed  or other  conversion  in a manner  that is
consistent  with the  provisions of this Servicing  Agreement.  The foregoing is
subject to the proviso that the Master  Servicer shall not be required to expend
its own funds in connection with any foreclosure or attempted  foreclosure which
is not completed or towards the  correction  of any default on a related  senior
mortgage loan or restoration of any property unless it shall determine that such
expenditure  will  increase  Net  Liquidation   Proceeds.  In  the  event  of  a
determination by the Master Servicer that any such  expenditure  previously made
pursuant to this  Section  3.07 will not be  reimbursable  from Net  Liquidation
Proceeds, the Master Servicer shall be entitled to reimbursement of its funds so
expended pursuant to Section 3.03.

        Notwithstanding any provision of this Servicing  Agreement,  a Home Loan
may be deemed to be finally  liquidated if substantially all amounts expected by
the Master Servicer to be received in connection with the related defaulted Home
Loan have been received;  provided, however, the Master Servicer shall treat any
Home Loan that is 180 days or more delinquent as having been finally


                                       16

<PAGE>



liquidated.  Any subsequent collections with respect to any such Home Loan shall
be deposited to the Custodial Account. For purposes of determining the amount of
any  Liquidation   Proceeds  or  Insurance   Proceeds,   or  other   unscheduled
collections,  the  Master  Servicer  may take into  account  minimal  amounts of
additional  receipts  expected  to  be  received  or  any  estimated  additional
liquidation  expenses  expected to be incurred  in  connection  with the related
defaulted Home Loan.

        In the  event  that  title to any  Mortgaged  Property  is  acquired  in
foreclosure or by deed in lieu of  foreclosure,  the deed or certificate of sale
shall be issued to the Indenture  Trustee,  who shall hold the same on behalf of
the Issuer in accordance with Section 3.13 of the Indenture. Notwithstanding any
such  acquisition  of title and  cancellation  of the  related  Home Loan,  such
Mortgaged  Property  shall (except as otherwise  expressly  provided  herein) be
considered to be an  outstanding  Home Loan held as an asset of the Issuer until
such time as such property shall be sold.

        Any proceeds  from the purchase or  repurchase of any Home Loan pursuant
to the terms of this Servicing Agreement  (including without limitation Sections
2.03, 3.15 and 3.16) will be applied in the following order of priority:  first,
to the Master  Servicer or the related  Subservicer,  all Servicing Fees payable
therefrom  to the Payment  Date on which such amounts are to be deposited in the
Payment Account; second, as Interest Collections, accrued and unpaid interest on
the related  Home Loan,  at the Net Loan Rate to the Payment  Date on which such
amounts are to be  deposited  in the Payment  Account;  and third,  as Principal
Collections, as a recovery of principal on the Home Loan.

        Liquidation  Proceeds  with  respect to a  Liquidated  Home Loan will be
applied in the  following  order of priority:  first,  to  reimburse  the Master
Servicer or the related Subservicer in accordance with this Section 3.07 for any
Liquidation Expenses; second, to the Master Servicer or the related Subservicer,
all unpaid  Servicing Fees through the date of receipt of the final  Liquidation
Proceeds;  third,  as Principal  Collections,  as a recovery of principal on the
Home Loan,  up to an amount  equal to the Loan  Balance of the related Home Loan
immediately  prior to the date it became a  Liquidated  Home  Loan;  fourth,  as
Interest  Collections,  accrued and unpaid  interest on the related Home Loan at
the Net Loan Rate through the date of receipt of the final Liquidation Proceeds;
and fifth, to Foreclosure Profits.

        Proceeds  and  other  recoveries  from a Home  Loan  after it  becomes a
Liquidated Home Loan will be applied in the following order of priority:  first,
to reimburse the Master  Servicer or the related  Subservicer in accordance with
this Section  3.07 for any expenses  previously  unreimbursed  from  Liquidation
Proceeds  or  otherwise;   second,   to  the  Master  Servicer  or  the  related
Subservicer,  all unpaid  Servicing  Fees  payable  thereto  through the date of
receipt of the proceeds  previously  unreimbursed  from Liquidation  Proceeds or
otherwise;  third, as Interest Collections,  up to an amount equal to the sum of
(a) the Loan Balance of the related Home Loan  immediately  prior to the date it
became a Liquidated  Home Loan,  less any Net  Liquidation  Proceeds  previously
received  with respect to such Home Loan and applied as a recovery of principal,
and (b)  accrued and unpaid  interest  on the related  Home Loan at the Net Loan
Rate through the date of receipt of the  proceeds;  and fourth,  to  Foreclosure
Profits.



                                       17

<PAGE>



        Section 3.08.  Issuer and Indenture  Trustee to Cooperate.  On or before
each Payment Date, the Master Servicer will notify the Indenture  Trustee or the
Custodian,  with a copy to the Issuer,  of the  termination of or the payment in
full and the  termination  of any Home  Loan  during  the  preceding  Collection
Period.  Upon receipt of payment in full,  the Master  Servicer is authorized to
execute,  pursuant  to the  authorization  contained  in  Section  3.01,  if the
assignments  of Mortgage  have been  recorded  if  required  under the Home Loan
Purchase  Agreement,   an  instrument  of  satisfaction  regarding  the  related
Mortgage,  which  instrument  of  satisfaction  shall be  recorded by the Master
Servicer if required by applicable  law and be delivered to the Person  entitled
thereto.  It is understood  and agreed that any expenses  incurred in connection
with such  instrument  of  satisfaction  or transfer  shall be  reimbursed  from
amounts deposited in the Custodial Account. From time to time and as appropriate
for the servicing or foreclosure of any Home Loan, the Indenture  Trustee or the
Custodian  shall,  upon  request  of the Master  Servicer  and  delivery  to the
Indenture  Trustee or  Custodian,  with a copy to the  Issuer,  of a Request for
Release,  signed by a Servicing  Officer,  release or cause to be  released  the
related Mortgage File to the Master Servicer and the Issuer or Indenture Trustee
shall  promptly  execute  such  documents,  in the forms  provided by the Master
Servicer,  as shall be necessary for the prosecution of any such  proceedings or
the taking of other  servicing  actions.  Such trust receipt shall  obligate the
Master  Servicer to return the  Mortgage  File to the  Indenture  Trustee or the
Custodian  (as  specified in such  receipt) when the need therefor by the Master
Servicer no longer  exists  unless the Home Loan shall be  liquidated,  in which
case,  upon  receipt of a  certificate  of a Servicing  Officer  similar to that
hereinabove  specified,  the  trust  receipt  shall be  released  to the  Master
Servicer.

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

        In connection  with the Issuer's  obligation to cooperate as provided in
this Section 3.08 and all other provisions of this Servicing Agreement requiring
the Issuer to  authorize  or permit any actions to be taken with  respect to the
Home Loans, the Indenture Trustee,  as pledgee of the Home Loans and as assignee
of record of the Home Loans on behalf of the Issuer  pursuant to Section 3.13 of
the  Indenture,  expressly  agrees,  on behalf of the  Issuer,  to take all such
actions  on  behalf  of the  Issuer  and to  promptly  execute  and  return  all
instruments  reasonably required by the Master Servicer in connection therewith;
provided that if the Master  Servicer shall request a signature of the Indenture
Trustee,  on behalf of the  Issuer,  the  Master  Servicer  will  deliver to the
Indenture Trustee


                                       18

<PAGE>



an Officer's Certificate stating that such signature is necessary or appropriate
to enable the Master  Servicer  to carry out its  servicing  and  administrative
duties under this Servicing Agreement.

        Section 3.09.  Servicing  Compensation;  Payment of Certain  Expenses by
Master  Servicer.  The Master  Servicer  shall be entitled to receive the Master
Servicing Fee in accordance with Sections 3.02 and 3.03 as compensation  for its
services in  connection  with  servicing  the Home Loans.  Moreover,  additional
servicing compensation in the form of late payment charges, investment income on
amounts in the Custodial  Account or the Payment  Account and other receipts not
required to be deposited in the  Custodial  Account as specified in Section 3.02
shall be retained by the Master Servicer.  The Master Servicer shall be required
to pay all expenses  incurred by it in connection with its activities  hereunder
(including payment of all other fees and expenses not expressly stated hereunder
to be for the account of the Securityholders, including, without limitation, the
fees and expenses of the Owner Trustee, Indenture Trustee and any Custodian) and
shall not be entitled to reimbursement therefor.

        Section 3.10. Annual Statement as to Compliance.
                      ---------------------------------

        (a) The Master  Servicer  will deliver to the  Depositor,  the Indenture
Trustee and the Credit Enhancer on or before the earlier of (a) March 31 of each
year,  beginning  with the first March 31 that occurs at least six months  after
the Cut-off  Date,  or (b) with  respect to any  calendar  year during which the
Depositor's  annual  report on Form 10-K is required  to be filed in  accordance
with the Exchange Act and the rules and regulations of the Commission,  the date
on which the  Depositor's  annual report on Form 10-K is required to be filed in
accordance with the Exchange Act and the rules and regulations of the Commission
(or, in each case, if such day is not a Business Day, the immediately  preceding
Business Day), an Officers' Certificate stating, as to each signer thereof, that
(i) a review of the  activities  of the Master  Servicer  during  the  preceding
calendar year related to its servicing of mortgage loans and of its  performance
under servicing  agreements,  including this Servicing Agreement,  has been made
under such officers' supervision,  (ii) to the best of such officers' knowledge,
based on such review,  the Master Servicer has complied in all material respects
with the minimum servicing standards set forth in the Uniform Single Attestation
Program for Mortgage  Bankers and has fulfilled all of its material  obligations
in all material  respects  throughout  such year, or, if there has been material
noncompliance  with such servicing  standards or a default in the fulfillment in
all  material  respects  of any  such  obligation  relating  to  this  Servicing
Agreement,  such statement shall include a description of such  noncompliance or
specify  each such  default,  as the case may be,  known to such officer and the
nature and status  thereof  and (iii) to the best of such  officers'  knowledge,
each  Subservicer  has  complied  in all  material  respects  with  the  minimum
servicing  standards  set forth in the Uniform  Single  Attestation  Program for
Mortgage  Bankers and has  fulfilled all of its material  obligations  under its
Subservicing  Agreement in all material  respects  throughout  such year,  or if
there  has been  material  noncompliance  with  such  servicing  standards  or a
material  default  in the  fulfillment  of  such  obligations  relating  to this
Agreement,  specifying  such  statement  shall  include  a  description  of such
noncompliance  or specify each such  default,  as the case may be, known to such
officer and the nature and status thereof.



                                       19

<PAGE>



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

        Section 3.11. Annual Independent Public Accountants' Servicing Report.
                      -------------------------------------------------------

        On or before the  earlier of (a) March 31 of each year,  beginning  with
the first March 31 that occurs at least six months  after the Cut-off  Date,  or
(b) with respect to any calendar year during which the Depositor's annual report
on Form 10-K is required to be filed in accordance with the Exchange Act and the
rules and  regulations  of the  Commission,  the date on which  the  Depositor's
annual  report  on Form  10-K is  required  to be filed in  accordance  with the
Exchange Act and the rules and  regulations of the Commission (or, in each case,
if such day is not a Business Day, the immediately  preceding Business Day), the
Master  Servicer  at its  expense  shall  cause  a firm  of  independent  public
accountants which shall be members of the American Institute of Certified Public
Accountants  to furnish a report to the Depositor,  the Credit  Enhancer and the
Indenture  Trustee  stating its  opinion  that,  on the basis of an  examination
conducted by such firm substantially in accordance with standards established by
the American  Institute of Certified  Public  Accountants,  the assertions  made
pursuant  to  Section  3.10  regarding  compliance  with the  minimum  servicing
standards  set forth in the Uniform  Single  Attestation  Program  for  Mortgage
Bankers  during the  preceding  calendar  year are fairly stated in all material
respects,  subject to such  exceptions  and other  qualifications  that,  in the
opinion of such  firm,  such  accounting  standards  require  it to  report.  In
rendering  such  statement,  such firm may rely,  as to matters  relating to the
direct servicing of mortgage loans by Subservicers,  upon comparable  statements
for examinations  conducted by independent public  accountants  substantially in
accordance  with standards  established  by the American  Institute of Certified
Public Accountants  (rendered within one year of such statement) with respect to
such Subservicers.

        Section 3.12. Access to Certain  Documentation and Information Regarding
the Home Loans. Whenever required by statute or regulation,  the Master Servicer
shall provide to the Credit Enhancer, any Securityholder upon reasonable request
(or a regulator  for a  Securityholder)  or the  Indenture  Trustee,  reasonable
access to the documentation  regarding the Home Loans such access being afforded
without charge but only upon reasonable request and during normal business hours
at the  offices  of the Master  Servicer.  Nothing  in this  Section  3.12 shall
derogate from the  obligation of the Master  Servicer to observe any  applicable
law  prohibiting  disclosure of  information  regarding the  Mortgagors  and the
failure of the Master  Servicer to provide  access as  provided in this  Section
3.12 as a result  of such  obligation  shall  not  constitute  a breach  of this
Section 3.12.

        Section 3.13.  Maintenance of Certain Servicing Insurance Policies.  The
Master  Servicer  shall  during the term of its service as servicer  maintain in
force (i) a policy or policies of insurance covering errors and omissions in the
performance of its obligations as master servicer  hereunder and (ii) a fidelity
bond in respect  of its  officers,  employees  or  agents.  Each such  policy or
policies and bond shall be at least equal to the coverage that would be required
by FNMA or FHLMC, whichever


                                       20

<PAGE>



is greater, for Persons performing servicing for loans similar to the Home Loans
purchased by such entity.

        Section 3.14.  Information  Required by the Internal Revenue Service and
Reports of  Foreclosures  and  Abandonments  of Mortgaged  Property.  The Master
Servicer  shall  prepare and deliver all federal and state  information  reports
when and as required by all  applicable  state and federal  income tax laws.  In
particular,  with respect to the requirement  under Section 6050J of the Code to
the effect  that the  Master  Servicer  or  Subservicer  shall  make  reports of
foreclosures and abandonments of any mortgaged  property for each year beginning
in 2003, the Master Servicer or Subservicer  shall file reports relating to each
instance  occurring  during  the  previous  calendar  year in which  the  Master
Servicer  (i) on behalf of the Issuer,  acquires  an  interest in any  Mortgaged
Property through  foreclosure or other comparable  conversion in full or partial
satisfaction  of a Home  Loan,  or (ii)  knows or has  reason  to know  that any
Mortgaged  Property has been abandoned.  The reports from the Master Servicer or
Subservicer  shall be in form and  substance  sufficient  to meet the  reporting
requirements  imposed by Section  6050J and Section 6050H  (reports  relating to
mortgage interest received) of the Code.

        Section   3.15.   Optional   Repurchase   of   Defaulted   Home   Loans.
Notwithstanding  any  provision  in  Section  3.07 to the  contrary,  the Master
Servicer, at its option and in its sole discretion, may repurchase any Home Loan
delinquent in payment for a period of 90 days or longer for a price equal to the
Repurchase Price.

        Section 3.16. Limited Home Loan Repurchase Right.
                      ----------------------------------

        The Limited  Repurchase Right Holder will have the irrevocable option at
any time to  purchase  any of the Home Loans at the  Repurchase  Price,  up to a
maximum of five Home Loans. In the event that this option is exercised as to any
five Home Loans in the aggregate,  this option will thereupon  terminate.  If at
any time the Limited  Repurchase  Right Holder makes a payment to the  Custodial
Account  covering the amount of the  Repurchase  Price for such a Home Loan, and
the  Limited  Repurchase  Right  Holder  provides  to the  Indenture  Trustee  a
certification  signed by a  Servicing  Officer  stating  that the amount of such
payment has been deposited in the Custodial Account, then, at the request of the
Limited  Repurchase  Right  Holder,  the  Indenture  Trustee  shall  execute the
assignment of such Home Loan, without recourse,  to the Limited Repurchase Right
Holder  which shall  succeed to all the  Indenture  Trustee's  right,  title and
interest  in and to such Home Loan,  and all  security  and  documents  relative
thereto.  Such assignment shall be an assignment  outright and not for security.
The Limited  Repurchase  Right Holder will thereupon own such Mortgage,  and all
such  security and  documents,  free of any further  obligation to the Indenture
Trustee with respect thereto.


                                       21

<PAGE>



                                   ARTICLE IV

                              Servicing Certificate

        Section 4.01.  Statements to  Securityholders.  (a) With respect to each
Payment Date, on the Business Day following the related  Determination  Date (or
with respect to any Payment Date for which a Credit  Enhancement  Draw Amount or
Dissolution Draw will occur, no later than 12:00 P.M. New York City time, on the
second Business Day prior to the applicable  Payment Date),  the Master Servicer
shall forward to the Indenture  Trustee and the  Indenture  Trustee  pursuant to
Section 3.26 of the Indenture  shall forward or cause to be forwarded by mail or
otherwise  make  available   electronically  at   www.jpmorgan.com/sfr  to  each
Certificateholder,  Noteholder,  the Credit Enhancer,  the Depositor,  the Owner
Trustee,  the  Certificate  Paying  Agent and each  Rating  Agency,  a statement
setting forth the following information (the "Servicing  Certificate") as to the
Notes and Certificates, to the extent applicable:

                (i)  the  aggregate  amount  of (a)  Interest  Collections,  (b)
        Principal Collections and (c) Substitution Adjustment Amounts;

                (ii)  the  amount  of  such  distribution  as  principal  to the
        Noteholders;

                (iii)  the  amount  of  such  distribution  as  interest  to the
        Noteholders,  separately  stating  the  portion  thereof  in  respect of
        overdue accrued interest;

                (iv) the number and Pool Balance of the Home Loans as of the end
        of the related Collection Period;

                (v)  the  amount  of  any  Credit  Enhancement  Draw  Amount  or
        Dissolution Draw, if any, for such Payment Date and the aggregate amount
        of prior draws thereunder not yet reimbursed;

                (vi) the number and aggregate Loan Balances of Home Loans (a) as
        to which the Monthly  Payment is Delinquent  for 30-59 days,  60-89 days
        and 90 or more days,  respectively,  (b) that are  foreclosed,  (c) that
        have become REO, and (d) that have been finally  liquidated due to being
        180 days or more  delinquent,  in each case as of the end of the related
        Collection Period; provided,  however, that such information will not be
        provided on the statements relating to the first Payment Date;

                (vii) the weighted average Loan Rate for the related  Collection
        Period;

                (viii)the aggregate Liquidation Loss Amounts with respect to the
        related   Collection   Period,   the  amount  of  any  Liquidation  Loss
        Distribution Amounts with respect to the Notes, and the aggregate of the
        Liquidation  Loss Amounts from all Collection  Periods to date expressed
        as  dollars  and as a  percentage  of the  aggregate  Cut-off  Date Loan
        Balance;



                                       22

<PAGE>



                (ix) the  aggregate  Excess  Loss  Amounts  with  respect to the
        related  Collection  Period and the aggregate of the Excess Loss Amounts
        from all Collection Periods to date;

                (x) the Note Balance of the Notes and the Certificate  Principal
        Balance of the  Certificates  after giving effect to the distribution of
        principal on such Payment Date;

                (xi) the  aggregate  Servicing  Fees for the related  Collection
        Period;

                (xii) the  Outstanding  Reserve  Amount and the  Reserve  Amount
        Target immediately following such Payment Date;

                (xiii)(a) the number and principal amount of release  agreements
        pursuant to Section  3.05(b)(iv)  entered into during the calendar  year
        and since the Closing Date, stated  separately,  for the Home Loans and,
        the aggregate  outstanding  principal amount of such release  agreements
        expressed as a percentage of the Pool Balance with information  provided
        separately  with respect to all  Unsecured  Loans and (b) the number and
        principal  amount  of   Capitalization   Workouts  pursuant  to  Section
        3.02(a)(v) entered into since the Closing Date;

                (xiv)  the  aggregate   amount   recovered  during  the  related
        Collection  Period  consisting of all subsequent  recoveries on any Home
        Loan that was 180 days or more delinquent; and

                (xv) the amount, if any, to be paid by a Derivative Counterparty
        under a Derivative Contract.

        In the case of information  furnished pursuant to clauses (ii) and (iii)
above,  the amounts shall be expressed as an aggregate dollar amount per Note or
Certificate, as applicable, with a $1,000 denomination.

        (b) In addition,  with respect to each Payment Date, on the Business Day
following the related  Determination  Date, the Master Servicer shall forward to
the Credit Enhancer and the Rating  Agencies the following  information for each
Capitalization Workout entered into during the related Collection Period:

                (i) the original Home Loan amount;

                (ii) the Home Loan amount after the Capitalization Workout;

                (iii) the original Monthly Payment amount;

                (iv)  the  Monthly  Payment  amount  after  the   Capitalization
Workout;

                (v) the  Capitalized  Amount as defined  in  Section  3.02(a)(v)
herein;



                                       23

<PAGE>



                (vi)   the   Combined   Loan-to-Value   Ratio   prior   to   the
Capitalization Workout;

                (vii) the Combined  Loan-to-Value Ratio after the Capitalization
Workout; and

                (viii)if  an  appraisal  was used in  determining  the  Combined
        Loan-to-Value  Ratio  referred to in (vii)  above,  the type and date of
        appraisal.

        The Master  Servicer  shall also  forward to the  Indenture  Trustee any
other  information  reasonably  requested by the Indenture  Trustee necessary to
make distributions pursuant to Section 3.05 of the Indenture. Prior to the close
of business on the Business Day next  succeeding  each  Determination  Date, the
Master  Servicer  shall furnish a written  statement to the  Certificate  Paying
Agent and the Indenture  Trustee setting forth the aggregate amounts required to
be withdrawn from the Custodial  Account and deposited into the Payment  Account
on the Business Day preceding the related Payment Date pursuant to Section 3.03.
The  determination  by the Master Servicer of such amounts shall, in the absence
of  obvious  error,  be  presumptively  deemed to be  correct  for all  purposes
hereunder  and the Owner  Trustee and  Indenture  Trustee  shall be protected in
relying  upon  the same  without  any  independent  check  or  verification.  In
addition,  upon the Issuer's written request, the Master Servicer shall promptly
furnish  information  reasonably  requested  by the  Issuer  that is  reasonably
available to the Master Servicer to enable the Issuer to perform its federal and
state income tax reporting obligations.

        The Master Servicer shall also forward to the Credit Enhancer and/or its
designees any additional  information,  including without  limitation,  loss and
delinquency  information  requested by the Credit Enhancer,  with respect to the
Home Loans.

        Section 4.02. Tax  Reporting.  So long as 100% of the  Certificates  are
owned by the same person,  then no separate federal and state income tax returns
and information returns or reports will be filed with respect to the Issuer, and
the  Issuer   will  be  treated   as  an  entity   disregarded   from  the  100%
Certificateholder.

        Section 4.03.  Calculation of Adjusted Issue Price.  The Master Servicer
shall  calculate  the  Adjusted  Issue  Price for  purposes of  calculating  the
Termination Price.

        Section 4.04.  Exchange Act Reporting.  The Master  Servicer  shall,  on
behalf of the Depositor and in respect of the Trust  Estate,  prepare,  sign and
cause to be filed with the Commission any periodic  reports required to be filed
under the  provisions of the Exchange Act, and the rules and  regulations of the
Commission  thereunder.  Neither the Master  Servicer nor the Indenture  Trustee
shall  have any  liability  with  respect to the  Master  Servicer's  failure to
properly prepare or file such periodic reports resulting from or relating to the
Master  Servicer's  inability or failure to obtain any information not resulting
from the Master Servicer's own negligence or willful  misconduct.  Any Form 10-K
filed with the  Commission in connection  with this Section 4.04 shall include a
certification, signed by the senior officer in charge of the servicing functions
of the Master  Servicer,  in the form attached as Exhibit D hereto or such other
form  as may  be  required  or  permitted  by the  Commission  (the  "Form  10-K
Certification"), in compliance with Rule 13a-14 and 15d-14 under the


                                       24

<PAGE>



Exchange Act and any additional directives of the Commission.  This Section 4.04
may be amended in accordance  with the  provisions of this  Servicing  Agreement
without the consent of the Securityholders.



                                       25

<PAGE>



                                    ARTICLE V

                                 Payment Account

        Section 5.01. Payment Account. The Indenture Trustee shall establish and
maintain a Payment Account titled  "JPMorgan  Chase Bank, as Indenture  Trustee,
for the benefit of the  Securityholders,  the  Certificate  Paying Agent and the
Credit  Enhancer  pursuant to the  Indenture,  dated as of  September  25, 2003,
between Home Loan Trust 2003-HI3 and JPMorgan Chase Bank".  The Payment  Account
shall be an Eligible  Account.  On each Payment Date,  amounts on deposit in the
Payment Account will be distributed by the Indenture  Trustee in accordance with
Section 3.05 of the Indenture. The Indenture Trustee shall, upon written request
from the  Master  Servicer,  invest or cause  the  institution  maintaining  the
Payment  Account  to  invest  the  funds in the  Payment  Account  in  Permitted
Investments  designated in the name of the Indenture Trustee, which shall mature
not later than the Business Day next  preceding the Payment Date next  following
the date of such  investment  (except that (i) any investment in the institution
with  which  the  Payment  Account  is  maintained  or a  fund  for  which  such
institution  serves as  custodian  may mature on such  Payment Date and (ii) any
other investment may mature on such Payment Date if the Indenture  Trustee shall
advance funds on such Payment Date to the Payment  Account in the amount payable
on such  investment on such Payment Date,  pending receipt thereof to the extent
necessary  to make  distributions  on the  Securities)  and shall not be sold or
disposed  of prior to  maturity.  All  income  and gain  realized  from any such
investment  shall be for the benefit of the Master Servicer and shall be subject
to its withdrawal or order from time to time. The amount of any losses  incurred
in respect of any such investments  shall be deposited in the Payment Account by
the Master Servicer out of its own funds immediately as realized.


                                       26

<PAGE>



                                   ARTICLE VI

                               The Master Servicer

        Section  6.01.  Liability of the Master  Servicer.  The Master  Servicer
shall be liable in  accordance  herewith  only to the extent of the  obligations
specifically imposed upon and undertaken by the Master Servicer herein.

        Section  6.02.   Merger  or  Consolidation  of,  or  Assumption  of  the
Obligations  of,  the Master  Servicer.  Any  corporation  into which the Master
Servicer may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger,  conversion or consolidation to which the
Master Servicer shall be a party, or any corporation  succeeding to the business
of  the  Master  Servicer,  shall  be the  successor  of  the  Master  Servicer,
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.

        The Master  Servicer  may assign its rights and  delegate its duties and
obligations under this Servicing  Agreement;  provided that the Person accepting
such  assignment or  delegation  shall be a Person which is qualified to service
mortgage  loans similar to those in the Trust Estate  (meaning,  mortgage  loans
used for home improvement or debt consolidation),  is reasonably satisfactory to
the Indenture Trustee (as pledgee of the Home Loans),  the Issuer and the Credit
Enhancer,  is willing to service the Home Loans and executes and delivers to the
Indenture Trustee and the Issuer an agreement,  in form and substance reasonably
satisfactory to the Credit Enhancer, the Indenture Trustee and the Issuer, which
contains an  assumption by such Person of the due and punctual  performance  and
observance  of each  covenant  and  condition to be performed or observed by the
Master  Servicer  under this  Servicing  Agreement;  provided  further that each
Rating  Agency's  rating of the Securities in effect  immediately  prior to such
assignment  and  delegation  will not be qualified,  reduced,  or withdrawn as a
result of such  assignment  and  delegation  (as  evidenced  by a letter to such
effect from each Rating  Agency),  if  determined  without  regard to the Credit
Enhancement Instrument;  and provided further that the Owner Trustee receives an
Opinion of Counsel to the effect that such  assignment or  delegation  shall not
cause the Owner Trust to be treated as a corporation for federal or state income
tax purposes.

        Section 6.03. Limitation on Liability of the Master Servicer and Others.
Neither the Master Servicer nor any of the directors or officers or employees or
agents of the Master  Servicer  shall be under any liability to the Issuer,  the
Owner Trustee, the Indenture Trustee or the Securityholders for any action taken
or for  refraining  from the taking of any action in good faith pursuant to this
Servicing Agreement,  provided,  however,  that this provision shall not protect
the Master  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 its  duties  hereunder  or by  reason of its
reckless disregard of its obligations and duties hereunder.  The Master Servicer
and any director or officer or employee or agent of the Master 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 Master
Servicer and any director or officer or employee or agent of the Master


                                       27

<PAGE>



Servicer shall be indemnified by the Issuer and held harmless  against any loss,
liability or expense  incurred in connection  with any legal action  relating to
this  Servicing  Agreement or the  Securities,  including any amount paid to the
Owner Trustee or the Indenture  Trustee pursuant to Section 6.06(b),  other than
any loss,  liability or expense  incurred by reason of its willful  misfeasance,
bad faith or gross  negligence in the performance of its duties  hereunder or by
reason of its reckless  disregard of its obligations and duties  hereunder.  The
Master  Servicer  shall not be under any  obligation to appear in,  prosecute or
defend any legal  action  which is not  incidental  to its duties to service the
Home Loans in accordance with this Servicing Agreement, and which in its opinion
may involve it in any expense or liability;  provided,  however, that the Master
Servicer may in its sole discretion  undertake any such action which it may deem
necessary or desirable in respect of this  Servicing  Agreement,  and the rights
and duties of the parties  hereto and the interests of the  Securityholders.  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
Issuer, and the Master Servicer shall be entitled to be reimbursed therefor. The
Master  Servicer's right to indemnity or reimbursement  pursuant to this Section
6.03 shall  survive  any  resignation  or  termination  of the  Master  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).

        Section 6.04.  Master Servicer Not to Resign.  Subject to the provisions
of Section 6.02, the Master  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 Master Servicer so causing such a conflict being of a type and
nature carried on by the Master  Servicer or its  subsidiaries  or Affiliates at
the date of this Servicing  Agreement or (ii) upon satisfaction of the following
conditions:  (a) the Master  Servicer has  proposed a successor  servicer to the
Issuer and the Indenture Trustee in writing and such proposed successor servicer
is  reasonably  acceptable to the Issuer,  the Indenture  Trustee and the Credit
Enhancer;  (b) each Rating  Agency shall have  delivered a letter to the Issuer,
the Credit  Enhancer and the Indenture  Trustee prior to the  appointment of the
successor  servicer  stating that the  proposed  appointment  of such  successor
servicer  as Master  Servicer  hereunder  will not  result in the  reduction  or
withdrawal of the then current rating of the Securities,  if determined  without
regard to the Credit  Enhancement  Instrument;  and (c) such proposed  successor
servicer is  reasonably  acceptable  to the Credit  Enhancer,  as evidenced by a
letter to the Issuer and the Indenture Trustee; provided,  however, that no such
resignation by the Master  Servicer shall become  effective until such successor
servicer or, in the case of (i) above, the Indenture Trustee,  as pledgee of the
Home  Loans,  shall have  assumed  the Master  Servicer's  responsibilities  and
obligations  hereunder or the Indenture  Trustee,  as pledgee of the Home Loans,
shall have designated a successor  servicer in accordance with Section 7.02. Any
such resignation shall not relieve the Master 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  Master  Servicer.  Any  such
determination  permitting  the  resignation  of the  Master  Servicer  shall  be
evidenced  by an Opinion of Counsel to such effect  delivered  to the  Indenture
Trustee and the Credit Enhancer.



                                       28

<PAGE>



        Section 6.05.  Delegation of Duties. In the ordinary course of business,
the Master 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 with which the Master  Servicer
complies  pursuant to Section 3.01. Such delegation shall not relieve the Master
Servicer of its liabilities and responsibilities with respect to such duties and
shall not constitute a resignation within the meaning of Section 6.04.

        Section  6.06.  Master  Servicer to Pay  Indenture  Trustee's  and Owner
Trustee's Fees and Expenses; Indemnification.  (a) The Master Servicer covenants
and agrees to pay to the Owner Trustee, the Indenture Trustee and any co-trustee
of the Indenture  Trustee or the Owner Trustee from time to time,  and the Owner
Trustee,  the Indenture  Trustee and any such  co-trustee  shall be entitled to,
reasonable  compensation  (which shall not be limited by any provision of law in
regard to the  compensation  of a trustee of an express  trust) for all services
rendered by each of them in the execution of the trusts  created under the Trust
Agreement and the Indenture  and in the exercise and  performance  of any of the
powers and duties under the Trust  Agreement or the  Indenture,  as the case may
be, of the Owner  Trustee,  the Indenture  Trustee and any  co-trustee,  and the
Master  Servicer will pay or reimburse the Indenture  Trustee and any co-trustee
upon request for all reasonable expenses, disbursements and advances incurred or
made by the Indenture  Trustee or any  co-trustee in accordance  with any of the
provisions of this Servicing Agreement except any such expense,  disbursement or
advance as may arise from its negligence, wilful misfeasance or bad faith.

        (b) The Master  Servicer  agrees to indemnify the Indenture  Trustee and
the Owner Trustee for, and to hold the Indenture  Trustee and the Owner Trustee,
as the case may be, harmless  against,  any loss,  liability or expense incurred
without negligence, bad faith or willful misconduct on the part of the Indenture
Trustee  or the  Owner  Trustee,  as the  case  may be,  arising  out of,  or in
connection with, the acceptance and  administration of the Issuer and the assets
thereof,  including the costs and expenses (including  reasonable legal fees and
expenses) of defending the Indenture  Trustee or the Owner Trustee,  as the case
may be, against any claim in connection  with the exercise or performance of any
of its powers or duties under any Basic Document (including, without limitation,
any claim  against  the  Indenture  Trustee  or the  Owner  Trustee  alleging  a
violation of the  Homeownership  and Equity Protection Act of 1994, as amended),
provided that:

                       (i) with respect to any such claim, the Indenture Trustee
        or Owner  Trustee,  as the case may be,  shall  have  given  the  Master
        Servicer written notice thereof promptly after the Indenture  Trustee or
        Owner Trustee, as the case may be, shall have actual knowledge thereof;

                       (ii) while maintaining control over its own defense,  the
        Issuer,  the  Indenture  Trustee or Owner  Trustee,  as the case may be,
        shall  cooperate and consult fully with the Master Servicer in preparing
        such defense; and

                       (iii)   notwithstanding   anything   in  this   Servicing
        Agreement to the contrary,  the Master  Servicer shall not be liable for
        settlement of any claim by the Indenture Trustee


                                       29

<PAGE>



        or the Owner Trustee, as the case may be, entered into without the prior
        consent of the Master Servicer.

No termination of this Servicing  Agreement shall affect the obligations created
by this Section 6.06 of the Master  Servicer to indemnify the Indenture  Trustee
and the Owner Trustee under the conditions and to the extent set forth herein.

        Notwithstanding  the  foregoing,  the  indemnification  provided  by the
Master Servicer in this Section 6.06(b) shall not pertain to any loss, liability
or expense of the Indenture  Trustee or the Owner  Trustee,  including the costs
and expenses of defending itself against any claim,  incurred in connection with
any actions taken by the Indenture Trustee or the Owner Trustee at the direction
of the  Noteholders or  Certificateholders,  as the case may be, pursuant to the
terms of this Servicing Agreement.




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<PAGE>



                                   ARTICLE VII

                                     Default

     Section  7.01.  Servicing  Default.  If any  one of  the  following  events
("Servicing Default") shall occur and be continuing:

                       (i) Any failure by the Master  Servicer to deposit in the
        Custodial  Account  or to remit to the Paying  Agent for  deposit in the
        Payment Account any deposit  required to be made under the terms of this
        Servicing  Agreement  which  continues  unremedied  for a period of five
        Business Days after the date upon which  written  notice of such failure
        shall  have  been  given to the  Master  Servicer  by the  Issuer or the
        Indenture  Trustee,  or to the  Master  Servicer,  the  Issuer  and  the
        Indenture Trustee by the Credit Enhancer; or

                       (ii) Failure on the part of the Master  Servicer  duly to
        observe  or perform  in any  material  respect  any other  covenants  or
        agreements of the Master Servicer set forth in the Securities or in this
        Servicing  Agreement,  which  failure,  in  each  case,  materially  and
        adversely  affects  the  interests  of  Securityholders  or  the  Credit
        Enhancer and which  continues  unremedied  for a period of 45 days after
        the date on which written notice of such failure,  requiring the same to
        be  remedied,  and  stating  that such  notice is a "Notice of  Default"
        hereunder, shall have been given to the Master Servicer by the Issuer or
        the Indenture  Trustee,  or to the Master  Servicer,  the Issuer and the
        Indenture Trustee by the Credit Enhancer; or

                       (iii) The entry  against the Master  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
        undischarged  or unstayed  and in effect for a period of 60  consecutive
        days; or

                       (iv)  The  Master  Servicer  shall  voluntarily  go  into
        liquidation,  consent to the  appointment  of a  conservator,  receiver,
        liquidator or similar person in any  insolvency,  readjustment  of debt,
        marshalling  of assets  and  liabilities  or similar  proceedings  of or
        relating   to  the  Master   Servicer  or  of  or  relating  to  all  or
        substantially  all of its  property,  or a  decree  or order of a court,
        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 Master Servicer and
        such decree or order shall have remained in force undischarged, unbonded
        or unstayed for a period of 60 days; or the Master  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


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<PAGE>



        insolvency or reorganization statute, make an assignment for the benefit
        of its creditors or voluntarily suspend payment of its obligations.

Then, and in every such case, so long as a Servicing Default shall not have been
remedied by the Master  Servicer,  either the Issuer or the  Indenture  Trustee,
with the consent of the Credit Enhancer,  or the Credit Enhancer, by notice then
given in  writing to the Master  Servicer  (and to the Issuer and the  Indenture
Trustee if given by the Credit  Enhancer)  may  terminate  all of the rights and
obligations of the Master  Servicer as servicer  under this Servicing  Agreement
other  than  its  right to  receive  servicing  compensation  and  expenses  for
servicing the Home Loans  hereunder  during any period prior to the date of such
termination  and the Issuer or the  Indenture  Trustee,  with the consent of the
Credit Enhancer,  or the Credit Enhancer may exercise any and all other remedies
available at law or equity. Any such notice to the Master Servicer shall also be
given to each Rating Agency, the Credit Enhancer and the Issuer. On or after the
receipt by the Master Servicer of such written  notice,  all authority and power
of the Master Servicer under this Servicing  Agreement,  whether with respect to
the  Securities or the Home Loans or  otherwise,  shall pass to and be vested in
the Indenture  Trustee as successor Master Servicer,  pursuant to and under this
Section  7.01;  and,  without  limitation,   the  Indenture  Trustee  is  hereby
authorized  and  empowered  to  execute  and  deliver,  on behalf of the  Master
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 Home Loan and related  documents,
or otherwise. The Master Servicer agrees to cooperate with the Indenture Trustee
in effecting the  termination of the  responsibilities  and rights of the Master
Servicer hereunder, including, without limitation, the transfer to the Indenture
Trustee for the  administration  by it of all cash amounts  relating to the Home
Loans that shall at the time be held by the Master  Servicer and to be deposited
by it in the  Custodial  Account,  or that have  been  deposited  by the  Master
Servicer in the Custodial Account or thereafter  received by the Master Servicer
with respect to the Home Loans.  All reasonable  costs and expenses  (including,
but not limited to,  attorneys'  fees) incurred in connection with amending this
Servicing  Agreement to reflect such succession as Master  Servicer  pursuant to
this Section 7.01 shall be paid by the  predecessor  Master  Servicer (or if the
predecessor  Master  Servicer  is the  Indenture  Trustee,  the  initial  Master
Servicer)  upon  presentation  of  reasonable  documentation  of such  costs and
expenses.

        Notwithstanding any termination of the activities of the Master Servicer
hereunder,  the Master  Servicer  shall be entitled to receive,  out of any late
collection  of a  payment  on a Home  Loan  which  was due  prior to the  notice
terminating the Master Servicer's rights and obligations  hereunder and received
after such  notice,  that portion to which the Master  Servicer  would have been
entitled  pursuant to Sections 3.03 and 3.09 as well as its Master Servicing Fee
in  respect  thereof,  and any other  amounts  payable  to the  Master  Servicer
hereunder  the  entitlement  to  which  arose  prior to the  termination  of its
activities hereunder.

        Notwithstanding  the  foregoing,  a delay in or failure  of  performance
under  Section  7.01(i) or under Section  7.01(ii)  after the  applicable  grace
periods specified in such Sections,  shall not constitute a Servicing Default if
such delay or failure  could not be  prevented  by the  exercise  of  reasonable
diligence by the Master  Servicer and such delay or failure was caused by an act
of God


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<PAGE>



or the public  enemy,  acts of  declared or  undeclared  war,  public  disorder,
rebellion or  sabotage,  epidemics,  landslides,  lightning,  fire,  hurricanes,
earthquakes,  floods or similar causes. The preceding sentence shall not relieve
the Master  Servicer  from using  reasonable  efforts to perform its  respective
obligations  in a timely manner in accordance  with the terms of this  Servicing
Agreement  and the Master  Servicer  shall provide the  Indenture  Trustee,  the
Credit Enhancer and the Securityholders  with notice of such failure or delay by
it,  together with a description  of its efforts to so perform its  obligations.
The Master Servicer shall immediately notify the Indenture  Trustee,  the Credit
Enhancer and the Owner Trustee in writing of any Servicing Default.

        Section 7.02. Indenture Trustee to Act; Appointment of Successor. (a) On
and after the time the Master Servicer receives a notice of termination pursuant
to Section  7.01 or sends a notice  pursuant  to  Section  6.04,  the  Indenture
Trustee  shall be the  successor in all  respects to the Master  Servicer in its
capacity as servicer under this  Servicing  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 Master  Servicer by the
terms and provisions hereof. Nothing in this Servicing Agreement or in the Trust
Agreement  shall be construed to permit or require the Indenture  Trustee to (i)
succeed to the  responsibilities,  duties and  liabilities of the initial Master
Servicer in its capacity as Seller under the Home Loan Purchase Agreement,  (ii)
be  responsible or  accountable  for any act or omission of the Master  Servicer
prior to the issuance of a notice of  termination  hereunder,  (iii)  require or
obligate the Indenture Trustee, in its capacity as successor Master Servicer, to
purchase,  repurchase or substitute  any Home Loan,  (iv) fund any losses on any
Permitted Investment directed by any other Master Servicer or (v) be responsible
for the representations  and warranties of the Master Servicer.  As compensation
therefor,  the Indenture  Trustee shall be entitled to such  compensation as the
Master  Servicer  would have been  entitled  to  hereunder  if no such notice of
termination  had been given.  Notwithstanding  the above,  (i) if the  Indenture
Trustee  is  unwilling  to act as  successor  Master  Servicer,  or  (ii) if the
Indenture Trustee is legally unable so to act, the Indenture Trustee may (in the
situation  described  in clause  (i)) or shall (in the  situation  described  in
clause (ii))  appoint or petition a court of competent  jurisdiction  to appoint
any  established  housing and home finance  institution,  bank or other mortgage
loan  or  home  equity  loan  servicer  having  a net  worth  of not  less  than
$10,000,000 as the successor to the Master Servicer  hereunder in the assumption
of all or any part of the responsibilities,  duties or liabilities of the Master
Servicer  hereunder;  provided that any such successor  Master Servicer shall be
acceptable to the Credit Enhancer,  as evidenced by the Credit  Enhancer's prior
written  consent which consent shall not be  unreasonably  withheld and provided
further that the  appointment  of any such  successor  Master  Servicer will not
result in the qualification,  reduction or withdrawal of the ratings assigned to
the  Securities  by the Rating  Agencies,  if determined  without  regard to the
Credit Enhancement Instrument.  Pending appointment of a successor to the Master
Servicer  hereunder,  unless the Indenture  Trustee is prohibited by law from so
acting,  the  Indenture  Trustee  shall act in such  capacity  as  herein  above
provided.  In connection with such  appointment  and  assumption,  the successor
Master  Servicer  shall be entitled to receive  compensation  out of payments on
Home Loans in an amount  equal to the  compensation  which the  Master  Servicer
would  otherwise  have  received  pursuant  to  Section  3.09  (or  such  lesser
compensation  as the Indenture  Trustee and such  successor  shall  agree).  The
appointment of a successor Master Servicer shall not affect any liability of the
predecessor Master Servicer which may have arisen under this Servicing Agreement
prior to its


                                       33

<PAGE>



termination as Master Servicer (including, without limitation, the obligation to
purchase Home Loans  pursuant to Section 3.01,  to pay any  deductible  under an
insurance policy pursuant to Section 3.04 or to indemnify the Indenture  Trustee
pursuant to Section 6.06), nor shall any successor Master Servicer be liable for
any acts or omissions of the  predecessor  Master  Servicer or for any breach by
such  Master  Servicer of any of its  representations  or  warranties  contained
herein or in any related document or agreement.  The Indenture  Trustee and such
successor shall take such action,  consistent with this Servicing Agreement,  as
shall be necessary to effectuate any such succession.

        (b) Any  successor,  including  the  Indenture  Trustee,  to the  Master
Servicer  as  servicer  shall  during the term of its  service as  servicer  (i)
continue  to  service  and  administer  the Home  Loans for the  benefit  of the
Securityholders,  (ii)  maintain  in force a policy  or  policies  of  insurance
covering  errors and omissions in the  performance of its  obligations as Master
Servicer hereunder and a fidelity bond in respect of its officers, employees and
agents to the same  extent as the Master  Servicer  is so  required  pursuant to
Section 3.13 and (iii) be bound by the terms of the Insurance Agreement.

        (c) Any successor  Master  Servicer,  including  the Indenture  Trustee,
shall not be deemed in default or to have  breached its duties  hereunder if the
predecessor  Master  Servicer shall fail to deliver any required  deposit to the
Custodial Account or otherwise cooperate with any required servicing transfer or
succession hereunder.

        Section 7.03.  Notification to Securityholders.  Upon any termination of
or  appointment of a successor to the Master  Servicer  pursuant to this Article
VII or Section 6.04,  the Indenture  Trustee  shall give prompt  written  notice
thereof to the Securityholders,  the Credit Enhancer, the Issuer and each Rating
Agency.

        Section 7.04. Servicing Trigger; Removal of Master Servicer.
                      ---------------------------------------------

               (a) Upon  determination  by the Credit  Enhancer that a Servicing
Trigger has occurred,  the Credit  Enhancer  shall give notice of such Servicing
Trigger to the Master Servicer, the Depositor, the Indenture Trustee and to each
Rating Agency.

               (b) At any time after such  determination  and while a  Servicing
Trigger is continuing,  the Credit Enhancer may direct the Indenture  Trustee to
remove the Master Servicer if the Credit Enhancer makes a determination that the
manner  of  master  servicing  was a  factor  contributing  to the  size  of the
delinquencies or losses incurred in the Trust Estate.

               (c) Upon  receipt of  directions  to remove  the Master  Servicer
pursuant to the  preceding  clause (b), the  Indenture  Trustee shall notify the
Master  Servicer that it has been  terminated  and the Master  Servicer shall be
terminated in the same manner as specified in Sections 7.01 and 7.02.

               (d) After notice of  occurrence  of a Servicing  Trigger has been
given and while a Servicing  Trigger is continuing,  until and unless the Master
Servicer  has been  removed as  provided  in clause  (b),  the  Master  Servicer
covenants and agrees to act as the Master Servicer for a term from


                                       34

<PAGE>



the  occurrence of the Servicing  Trigger to the end of the calendar  quarter in
which such Servicing  Trigger  occurs,  which term may at the Credit  Enhancer's
discretion be extended by notice to the Indenture  Trustee for successive  terms
of three (3) calendar  months each,  until the  termination of the Trust Estate.
The Master  Servicer will,  upon the receipt of each such notice of extension (a
"Master  Servicer  Extension  Notice") become bound for the duration of the term
covered by such Master Servicer  Extension Notice to continue as Master Servicer
subject to and in accordance with this Agreement. If, as of the fifteenth (15th)
day  prior to the last day of any term as the  Master  Servicer,  the  Indenture
Trustee shall not have received any Master  Servicer  Extension  Notice from the
Credit  Enhancer,  the Indenture  Trustee  shall,  within five (5) Business Days
thereafter,  give written notice of such  nonreceipt to the Credit  Enhancer and
the  Master  Servicer.  If any such  term  expires  without  a  Master  Servicer
Extension  Notice  then the  Indenture  Trustee  shall act as  successor  Master
Servicer as provided in Section 7.02.

               (e) No  provision  of this  Section 7.04 shall have the effect of
limiting the rights of the Depositor, the Indenture Trustee, the Securityholders
or the Credit Enhancer under Section 7.01.


                                       35

<PAGE>



                                  ARTICLE VIII

                            Miscellaneous Provisions

        Section 8.01.  Amendment.  This Servicing  Agreement may be amended from
time to time by the parties  hereto,  provided that any amendment be accompanied
by a letter from the Rating  Agencies that the amendment  will not result in the
downgrading  or  withdrawal of the rating then  assigned to the  Securities,  if
determined without regard to the Credit Enhancement Instrument,  and the consent
of the Credit Enhancer and the Indenture  Trustee.  Promptly after the execution
by the Master Servicer, the Issuer and the Indenture Trustee of any amendment of
this Servicing  Agreement  pursuant to this Section 8.01, the Indenture  Trustee
shall  provide the Custodian  with written  copies  thereof.  Any failure of the
Indenture  Trustee  to mail such  notice,  or any  defect  therein,  shall  not,
however, in any way impair or affect the validity of any such amendment.

        SECTION 8.02.        GOVERNING LAW. THIS SERVICING AGREEMENT SHALL
BE  CONSTRUED  IN  ACCORDANCE  WITH  THE  LAWS OF THE  STATE OF NEW YORK AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.

        Section 8.03. Notices. All demands, notices and communications hereunder
shall be in writing  and shall be deemed to have been duly  given if  personally
delivered at or mailed by certified mail,  return receipt  requested,  to (a) in
the case of the Master Servicer,  2255 North Ontario Street, Suite 400, Burbank,
California 91504-3120,  Attention: Addition Director - Bond Administration,  (b)
in the case of the  Credit  Enhancer,  Ambac  Assurance  Corporation,  One State
Street  Plaza,  19th  Floor,  New  York,  New York  10004,  Attention:  Consumer
Asset-Backed  Securities  Group, (c) in the case of Moody's,  Home Mortgage Loan
Monitoring Group, 99 Church Street,  4th Floor, New York, New York 10007, (d) in
the case of Standard & Poor's,  55 Water Street - 41st Floor, New York, New York
10041,  Attention:  Residential Mortgage  Surveillance Group, (e) in the case of
the Owner Trustee,  Wilmington  Trust Company,  Rodney Square North,  1100 North
Market Street,  Wilmington,  Delaware  19890-0001,  Attention:  Corporate  Trust
Administration,  (f) in the case of the Issuer, to Home Loan Trust 2003-HI3, c/o
Owner Trustee,  Wilmington Trust Company, Rodney Square North, 1100 North Market
Street,   Wilmington,   Delaware   19890-0001,    Attention:   Corporate   Trust
Administration, (g) in the case of the Indenture Trustee, JPMorgan Chase Bank, 4
New York Plaza,  6th Floor, New York, New York 10004,  Attention:  Institutional
Trust Services/Structured Finance Services - Home Loan Trust 2003-HI3 and (h) in
the case of the  Underwriters  c/o the  Representative,  at Bear,  Stearns & Co.
Inc., 383 Madison  Avenue,  New York, New York 10179;  or, as to each party,  at
such other address as shall be  designated by such party in a written  notice to
each  other  party.  Any  notice  required  or  permitted  to  be  mailed  to  a
Securityholder  shall be given by first  class  mail,  postage  prepaid,  at the
address of such  Securityholder  as shown in the Register.  Any notice so mailed
within the time  prescribed in this Servicing  Agreement  shall be  conclusively
presumed to have been duly  given,  whether or not the  Securityholder  receives
such notice.  Any notice or other document required to be delivered or mailed by
the  Indenture  Trustee  to any  Rating  Agency  shall be given on a  reasonable
efforts  basis  and only as a  matter  of  courtesy  and  accommodation  and the
Indenture Trustee shall have no liability for failure to delivery such notice or
document to any Rating Agency.


                                       36

<PAGE>



        Section  8.04.  Severability  of  Provisions.  If any one or more of the
covenants, agreements,  provisions or terms of this Servicing Agreement shall be
for any  reason  whatsoever  held  invalid,  then  such  covenants,  agreements,
provisions  or terms shall be deemed  severable  from the  remaining  covenants,
agreements,  provisions or terms of this Servicing Agreement and shall in no way
affect the validity or  enforceability of the other provisions of this Servicing
Agreement or of the Securities or the rights of the Securityholders thereof.

        Section 8.05. Third-Party  Beneficiaries.  This Servicing Agreement will
inure  to  the  benefit  of  and  be  binding  upon  the  parties  hereto,   the
Securityholders,  the Credit  Enhancer,  the Owner Trustee and their  respective
successors and permitted assigns. Except as otherwise provided in this Servicing
Agreement, no other Person will have any right or obligation hereunder.

        Section  8.06.  Counterparts.  This  instrument  may be  executed in any
number  of  counterparts,  each of which so  executed  shall be  deemed to be an
original,  but all such counterparts  shall together  constitute but one and the
same instrument.

        Section 8.07. Effect of Headings and Table of Contents.  The Article and
Section  headings herein and the Table of Contents are for convenience  only and
shall not affect the construction hereof.

        Section  8.08.  Termination  Upon  Purchase  by the Master  Servicer  or
Liquidation  of  All  Home  Loans;   Partial  Redemption.   (a)  The  respective
obligations  and  responsibilities  of the Master  Servicer,  the Issuer and the
Indenture  Trustee  created hereby shall terminate upon the last action required
to be taken by the Issuer  pursuant to the Trust  Agreement and by the Indenture
Trustee pursuant to the Indenture following the earlier of:

               (i) the date on or before which the Indenture or Trust  Agreement
        is terminated, or

                (ii) the purchase by the Master  Servicer from the Issuer of all
        Home Loans and all  property  acquired  in respect of any Home Loan at a
        price equal to the Termination Price.

The right of the Master  Servicer to purchase the assets of the Issuer  pursuant
to clause (ii) above on any Payment  Date is  conditioned  upon the Pool Balance
(after applying payments received in the related  Collection  Period) as of such
Payment  Date being less than ten percent of the  aggregate  of the Cut-off Date
Loan  Balances  of the Home  Loans.  If such  right is  exercised  by the Master
Servicer,  the Master  Servicer shall deposit the Termination  Price  calculated
pursuant to clause  (ii) above with the  Indenture  Trustee  pursuant to Section
4.10 of the  Indenture  and,  upon the receipt of such  deposit,  the  Indenture
Trustee or Custodian shall release to the Master Servicer,  the files pertaining
to the Home Loans being purchased.

        (b) The Master  Servicer,  at its expense,  shall prepare and deliver to
the  Indenture  Trustee  for  execution,  at the time the Home  Loans  are to be
released to the Master Servicer, appropriate


                                       37

<PAGE>



documents assigning each such Home Loan from the Indenture Trustee or the Issuer
to the Master Servicer or the appropriate party.

        (c) The Master  Servicer shall give the Indenture  Trustee not less than
seven  Business  Days' prior  written  notice of the  Payment  Date on which the
Master  Servicer  anticipates  that  the  final  distribution  will  be  made to
Noteholders. Notice of any termination, specifying the anticipated Final Insured
Payment Date or other  Payment Date (which shall be a date that would  otherwise
be a Payment Date) upon which the  Noteholders  may surrender their Notes to the
Indenture  Trustee (if so required by the terms hereof) for payment of the final
distribution and cancellation, shall be given promptly by the Master Servicer to
the Indenture Trustee specifying:

                (i) the anticipated  Final Insured Payment Date or other Payment
        Date upon which  final  payment of the Notes is  anticipated  to be made
        upon  presentation and surrender of Notes at the office or agency of the
        Indenture Trustee therein designated; and

                (ii) the amount of any such final payment, if known.

        Section 8.09. Certain Matters Affecting the Indenture  Trustee.  For all
purposes of this Servicing Agreement, in the performance of any of its duties or
in the exercise of any of its powers  hereunder,  the Indenture Trustee shall be
subject to and entitled to the benefits of Article VI of the Indenture.

        Section  8.10.  Owner  Trustee  Not Liable for  Related  Documents.  The
recitals contained herein shall be taken as the statements of the Depositor, and
the Owner Trustee assumes no  responsibility  for the correctness  thereof.  The
Owner Trustee makes no representations as to the validity or sufficiency of this
Servicing  Agreement,  of any Basic Document or of the Certificates  (other than
the signatures of the Owner Trustee on the Certificates) or the Notes, or of any
Related Documents. The Owner Trustee shall at no time have any responsibility or
liability  with  respect to the  sufficiency  of the Owner  Trust  Estate or its
ability to generate the payments to be distributed to  Certificateholders  under
the Trust  Agreement or the  Noteholders  under the  Indenture,  including,  the
compliance  by the  Depositor or the Seller with any warranty or  representation
made under any Basic Document or in any related  document or the accuracy of any
such warranty or representation,  or any action of the Certificate Paying Agent,
the  Certificate  Registrar or the  Indenture  Trustee  taken in the name of the
Owner Trustee.




                                       38

<PAGE>



        IN WITNESS WHEREOF,  the Master Servicer,  the Indenture Trustee and the
Issuer  have  caused  this  Servicing  Agreement  to be duly  executed  by their
respective  officers or  representatives  all as of the day and year first above
written.

RESIDENTIAL FUNDING CORPORATION,
        as Master Servicer

By:     /s/ Julie Steinhagen
        ----------------------------------------------------------
Name:   Julie Steinhagen
Title:  Director


                            HOME LOAN TRUST 2003-HI3


By:     Wilmington Trust Company, not in its
        individual capacity but solely as Owner
        Trustee


By:     /s/
        ------------------------------------------------------------------
Name:
Title:


JPMORGAN CHASE BANK, as Indenture Trustee


By:     /s/
        -------------------------------------
Name:
Title:




<PAGE>




               IN WITNESS WHEREOF,  the Master Servicer,  the Indenture  Trustee
and the Issuer have caused this Servicing Agreement to be duly executed by their
respective  officers or  representatives  all as of the day and year first above
written.

RESIDENTIAL FUNDING CORPORATION,
        as Master Servicer

By:     ___________________________________
Name:   Michael Mead
Title:  Associate


HOME LOAN TRUST 2003-HI3

By:     Wilmington Trust Company, not in its
        individual capacity but solely as Owner
        Trustee


By:     ___________________________________
Name:
Title:


JPMORGAN CHASE BANK, as Indenture Trustee


By:     ___________________________________
Name:
Title:




<PAGE>



                                   EXHIBIT A-1

                               HOME LOAN SCHEDULE



<PAGE>



                                          EXHIBIT B
                                  LIMITED POWER OF ATTORNEY

KNOW ALL MEN BY THESE PREMISES:

That  JPMorgan  Chase Bank,  as  Indenture  Trustee (the  "Trustee"),  under the
Indenture (the "Indenture") among  ________________________________________  and
the Indenture  Trustee,  a national banking  association  organized and existing
under the laws of the State of New York, and having its principal office located
at 4 New York  Plaza,  in the City of New York in the  State of New  York,  hath
made, constituted and appointed, and does by these presents make, constitute and
appoint Residential Funding  Corporation,  a corporation  organized and existing
under the laws of the State of Delaware,  its true and lawful  Attorney-in-Fact,
with full power and authority to sign, execute,  acknowledge,  deliver, file for
record, and record any instrument on its behalf and to perform such other act or
acts  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)  creating  a trust  or  second  lien or an  estate  in fee  simple
interest in real  property  securing a Home Loan and  promissory  notes  secured
thereby (the "Mortgage  Notes") for which the undersigned is acting as Indenture
Trustee for various Securityholders (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
Residential  Funding  Corporation  is acting as master  servicer  pursuant  to a
Servicing Agreement, dated as of September 25, 2003 (the "Servicing Agreement").
This  appointment  shall  apply  only  to  transactions  which  the  Trustee  is
authorized to enter into under the Indenture, but in no event shall apply to any
transactions other than the following enumerated transactions only:

        1.     The  modification or re-recording of a Mortgage or Deed of Trust,
               where said  modification  or  re-recording  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 or 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 of
               requests to trustees to accomplish same.

        3.     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:




<PAGE>



               a.     The  substitution  of  trustee(s)  serving under a Deed of
                      Trust, in accordance with state law and the Deed of Trust;

               b.     Statements of breach or non-performance;

               c.     Notices of default;

               d.     Cancellations/rescissions  of notices  of  default  and/or
                      notices of sale;

               e.     The taking of a deed in lieu of foreclosure; and

               f.     Such other documents and actions as may be necessary under
                      the terms of the  Mortgage,  Deed of Trust or state law to
                      expeditiously complete said transactions.

         4.    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.

        5.     The completion of loan assumption agreements.

        6.     The full  satisfaction/release  of a Mortgage or Deed of Trust or
               full  reconveyance upon payment and discharge of all sums secured
               thereby,  including,  without  limitation,  cancellation  of  the
               related Mortgage Note.

        7.     The  assignment  of any Mortgage or Deed of Trust and the related
               Mortgage Note, in connection with the repurchase of the Home Loan
               secured and evidenced  thereby  pursuant to the requirements of a
               Residential Funding Corporation Seller Contract.

        8.     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
               endorsement of the related Mortgage Note.

        9.     The  modification or re-recording of a Mortgage or Deed of Trust,
               where said modification or re-recording is for the purpose of any
               modification pursuant to Section 3.01 of the Servicing Agreement.

        10.    The  subordination  of the lien of a  Mortgage  or Deed of Trust,
               where said  subordination  is in connection with any modification
               pursuant  to Section  3.01 of the  Servicing  Agreement,  and the
               execution of partial  satisfactions/releases  in connection  with
               such same Section 3.01.

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



<PAGE>



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.





<PAGE>



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 has not been
revoked  unless an  instrument  of  revocation  has been made in  writing by the
undersigned.





                                                JPMORGAN  CHASE BANK, not in its
                                                individual capacity,  but solely
                                                as Indenture  Trustee  under the
                                                Servicing   Agreement   and  the
                                                Indenture

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

Name: ______________________________            Name: ______________________
Title: _______________________________          Title: ______________________




<PAGE>



STATE OF                     )
                             SS.
COUNTY OF                    )


        On this __ day of  _______________,  2003,  before  me the  undersigned,
Notary Public of said State, personally appeared _______________________________
personally  known to me to be duly  authorized  officers of JPMorgan  Chase Bank
that executed the within instrument and personally known to me to be the persons
who  executed  the within  instrument  on behalf of JPMorgan  Chase Bank therein
named,  and  acknowledged  to me such  JPMorgan  Chase Bank  executed the within
instrument pursuant to its by-laws.


                                            WITNESS my hand and official seal.


                                            -------------------------------
                                            Notary Public in and for the
                                            State of ___________________



After recording, please mail to:
=============================
-----------------------------
Attn:  ________________________





<PAGE>



                                          EXHIBIT C

                                 FORM OF REQUEST FOR RELEASE


DATE:

TO:

RE:            REQUEST FOR RELEASE OF DOCUMENTS

In connection with your administration of the Home Loans, we request the release
of the Mortgage File described below.

Servicing Agreement Dated:
Series #:
Account #:
Pool #:
Loan #:
Borrower Name(s):
Reason for Document Request: (circle one)   Home Loan     Prepaid in Full

                                                          Home Loan Repurchased

"We hereby  certify  that all amounts  received or to be received in  connection
with such  payments  which are required to be deposited  have been or will be so
deposited as provided in the Servicing Agreement."

-------------------------------------
Residential Funding Corporation
Authorized Signature
******************************************************************
TO CUSTODIAN/INDENTURE  TRUSTEE:  Please acknowledge this request, and check off
documents  being  enclosed with a copy of this form. You should retain this form
for your files in accordance with the terms of the Servicing Agreement.

        Enclosed Documents:         [ ]     Promissory Note
                                    [ ]     Mortgage or Deed of Trust
                                    [ ]     Assignment(s) of Mortgage or
                                            Deed of Trust
                                    [ ]     Title Insurance Policy
                                    [ ]     Other: ___________________________

-----------------
Name
-----------------
Title
-----------------
Date



<PAGE>


                                          EXHIBIT D

                                FORM OF FORM 10-K CERTIFICATE


        I, [identify the certifying individual], certify that:

        1. I have  reviewed  the annual  report on Form 10-K for the fiscal year
[___], and all reports on Form 8-K containing  distribution or servicing reports
filed in respect of periods  included in the year covered by that annual report,
of the trust (the "Trust")  created  pursuant to the Amended and Restated  Trust
Agreement dated September 25, 2003 (the "Trust Agreement")  between  Residential
Funding  Mortgage  Securities  II, Inc. (the  "Company")  and  Wilmington  Trust
Company (the "Owner Trustee");

        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 that annual report;

        3. Based on my  knowledge,  the  servicing  information  required  to be
provided to by the Master Servicer under the Servicing  Agreement is included in
these reports;

        4. I am responsible for reviewing the activities performed by the Master
Servicer under the Servicing  Agreement and based upon the review required under
the  Servicing  Agreement,  and except as  disclosed  in the report,  the Master
Servicer has fulfilled its obligations under the Servicing Agreement; and

        5. I have disclosed to the Company's  certified  public  accountants all
significant  deficiencies  relating the Master  Servicer's  compliance  with the
minimum servicing  standards in accordance with a review conducted in compliance
with the Uniform Single Attestation Program for Mortgage Bankers as set forth in
the Servicing Agreement.

        In  giving  the  certifications  above,  I  have  reasonably  relied  on
information provided tome by the following unaffiliated parties.

Date:____________


                                                   By:________________________
                                                   Name:______________________
                                                   Company:___________________
                                                   Title:_____________________



<PAGE>