HOME LOAN TRUST 2003-HI3


                                     Issuer


                                       AND


                               JPMORGAN CHASE BANK


                                Indenture Trustee


                                    INDENTURE


                         Dated as of September 25, 2003


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

                             HOME LOAN-BACKED NOTES


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




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<TABLE>
<CAPTION>


                                TABLE OF CONTENTS

Section                                                                                   Page


                                          Article I

                                         Definitions
<S>             <C>                                                                         <C>
        Section 1.01. Definitions............................................................2
        Section 1.02. Incorporation by Reference of Trust Indenture Act......................2
        Section 1.03. Rules of Construction..................................................2

                                          Article II

                                  Original Issuance of Notes
        Section 2.01. Form...................................................................4
        Section 2.02. Execution, Authentication and Delivery.................................4

                                         Article III

                                          Covenants
        Section 3.01. Collection of Payments with respect to the Home Loans..................5
        Section 3.02. Maintenance of Office or Agency........................................5
        Section 3.03. Money for Payments To Be Held in Trust; Paying Agent...................5
        Section 3.04. Existence..............................................................6
        Section 3.05. Payment of Principal and Interest; Defaulted Interest..................7
        Section 3.06. Protection of Trust Estate.............................................9
        Section 3.07. Opinions as to Trust Estate...........................................10
        Section 3.08. Performance of Obligations; Servicing Agreement.......................10
        Section 3.09. Negative Covenants....................................................11
        Section 3.10. Annual Statement as to Compliance.....................................11
        Section 3.11. Recording of Assignments..............................................12
        Section 3.12. Representations and Warranties Concerning the Home Loans..............12
        Section 3.13. Assignee of Record of the Home Loans..................................12
        Section 3.14. Master Servicer as Agent and Bailee of the Indenture Trustee..........12
        Section 3.15. Investment Company Act................................................12
        Section 3.16. Issuer May Consolidate, etc...........................................13
        Section 3.17. Successor or Transferee...............................................14
        Section 3.18. No Other Business.....................................................15
        Section 3.19. No Borrowing..........................................................15
        Section 3.20. Guarantees, Loans, Advances and Other Liabilities.....................15
        Section 3.21. Capital Expenditures..................................................15
        Section 3.22. Owner Trustee Not Liable for Certificates or Related Documents........15
        Section 3.23. Restricted Payments...................................................15
        Section 3.24. Notice of Events of Default...........................................16
        Section 3.25. Further Instruments and Acts..........................................16


                                              i

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        Section 3.26. Statements to Noteholders.............................................16
        Section 3.27. Payments under the Credit Enhancement Instrument......................16
        Section 3.28. Reserved..............................................................16
        Section 3.29. Determination of Class A-I-1 Note Rate................................16
        Section 3.30. Liquidation on Final Insured Payment Date.............................16
        Section 3.31. No Recourse...........................................................17
        Section 3.32. Additional UCC Representations and Warranties.........................17

                                          Article IV

                      The Notes; Satisfaction and Discharge of Indenture
        Section 4.01. The Notes.............................................................18
        Section 4.02. Registration of and Limitations on Transfer and Exchange of Notes;
        Appointment of Certificate Registrar................................................18
        Section 4.03. Mutilated, Destroyed, Lost or Stolen Notes............................20
        Section 4.04. Persons Deemed Owners.................................................20
        Section 4.05. Cancellation..........................................................20
        Section 4.06. Book-Entry Notes......................................................21
        Section 4.07. Notices to Depository.................................................22
        Section 4.08. Definitive Notes......................................................22
        Section 4.09. Tax Treatment.........................................................22
        Section 4.10. Satisfaction and Discharge of Indenture...............................22
        Section 4.11. Application of Trust Money............................................24
        Section 4.12. Subrogation and Cooperation...........................................24
        Section 4.13. Repayment of Monies Held by Paying Agent..............................25
        Section 4.14. Temporary Notes.......................................................25

                                          Article V

                                     Default and Remedies
        Section 5.01. Events of Default.....................................................26
        Section 5.02. Acceleration of Maturity; Rescission and Annulment....................26
        Section 5.03. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee
         ...................................................................................27
        Section 5.04. Remedies; Priorities..................................................29
        Section 5.05. Optional Preservation of the Trust Estate.............................30
        Section 5.06. Limitation of Suits...................................................30
        Section 5.07. Rights of Noteholders to Receive Principal and Interest...............31
        Section 5.08. Restoration of Rights and Remedies....................................31
        Section 5.09. Rights and Remedies Cumulative........................................32
        Section 5.10. Delay or Omission Not a Waiver........................................32
        Section 5.11. Control by Noteholders................................................32
        Section 5.12. Waiver of Past Defaults...............................................32
        Section 5.13. Undertaking for Costs.................................................33
        Section 5.14. Waiver of Stay or Extension Laws......................................33
        Section 5.15. Sale of Trust Estate..................................................33


                                              ii

<PAGE>



        Section 5.16. Action on Notes.......................................................35
        Section 5.17. Performance and Enforcement of Certain Obligations....................35

                                          Article VI

                                    The Indenture Trustee
        Section 6.01. Duties of Indenture Trustee...........................................37
        Section 6.02. Rights of Indenture Trustee...........................................38
        Section 6.03. Individual Rights of Indenture Trustee................................38
        Section 6.04. Indenture Trustee's Disclaimer........................................38
        Section 6.05. Notice of Event of Default............................................39
        Section 6.06. Reports by Indenture Trustee to Holders...............................39
        Section 6.07. Compensation and Indemnity............................................39
        Section 6.08. Replacement of Indenture Trustee......................................39
        Section 6.09. Successor Indenture Trustee by Merger.................................40
        Section 6.10. Appointment of Co-Indenture Trustee or Separate Indenture Trustee.....41
        Section 6.11. Eligibility; Disqualification.........................................42
        Section 6.12. Preferential Collection of Claims Against Issuer......................42
        Section 6.13. Representations and Warranties........................................42
        Section 6.14. Directions to Indenture Trustee.......................................43
        Section 6.15. Indenture Trustee May Own Securities..................................43

                                         Article VII

                                Noteholders' Lists and Reports
        Section 7.01. Issuer to Furnish Indenture Trustee Names and Addresses of Noteholders
         ...................................................................................44
        Section 7.02. Preservation of Information; Communications to Noteholders............44
        Section 7.03. Reports by Issuer.....................................................44
        Section 7.04. Reports by Indenture Trustee..........................................45
        Section 7.05. Exchange Act Reporting................................................45

                                         Article VIII

                             Accounts, Disbursements and Releases
        Section 8.01. Collection of Money...................................................46
        Section 8.02. Trust Accounts........................................................46
        Section 8.03. Officer's Certificate.................................................46
        Section 8.04. Termination Upon Distribution to Noteholders..........................47
        Section 8.05. Release of Trust Estate...............................................47
        Section 8.06. Surrender of Notes Upon Final Payment.................................47

                                          Article IX

                                   Supplemental Indentures
        Section 9.01. Supplemental Indentures Without Consent of Noteholders................48


                                             iii

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        Section 9.02. Supplemental Indentures With Consent of Noteholders...................49
        Section 9.03. Execution of Supplemental Indentures..................................51
        Section 9.04. Effect of Supplemental Indenture......................................51
        Section 9.05. Conformity with Trust Indenture Act...................................51
        Section 9.06. Reference in Notes to Supplemental Indentures.........................51

                                          Article X

                                        Miscellaneous
        Section 10.01.Compliance Certificates and Opinions, etc.............................52
        Section 10.02.Form of Documents Delivered to Indenture Trustee......................53
        Section 10.03.Acts of Noteholders...................................................54
        Section 10.04.Notices, etc., to Indenture Trustee, Issuer, Credit Enhancer and Rating
        Agencies............................................................................55
        Section 10.05.Notices to Noteholders; Waiver........................................55
        Section 10.06.Alternate Payment and Notice Provisions...............................56
        Section 10.07.Conflict with Trust Indenture Act.....................................56
        Section 10.08.Effect of Headings....................................................56
        Section 10.09.Successors and Assigns................................................56
        Section 10.10.Separability..........................................................56
        Section 10.11.Benefits of Indenture.................................................57
        Section 10.12.Legal Holidays........................................................57
        Section 10.13.GOVERNING LAW.........................................................57
        Section 10.14.Counterparts..........................................................57
        Section 10.15.Recording of Indenture................................................57
        Section 10.16.Issuer Obligation.....................................................57
        Section 10.17.No Petition...........................................................58
        Section 10.18.Inspection............................................................58
</TABLE>


Signatures and Seals
Acknowledgments

EXHIBITS

Exhibit A         Form of Notes

Appendix A        Definitions




                                              iv

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<TABLE>
<CAPTION>



                        RECONCILIATION AND TIE BETWEEN TRUST INDENTURE
                            ACT OF 1939 AND INDENTURE PROVISIONS*

TRUST INDENTURE
ACT SECTION                                                             INDENTURE SECTION
-----------                                                             -----------------
<S>     <C>                                                                       <C>
  310(a)(1)..........................................................             6.11
      (a)2)..........................................................             6.11
     (a)(3)..........................................................             6.10
     (a)(4)..........................................................        Not Applicable
     (a)(5)..........................................................             6.11
        (b)..........................................................          6.08, 6.11
        (c)..........................................................        Not Applicable
     311(a)..........................................................             6.12
        (b)..........................................................             6.12
        (c)..........................................................        Not Applicable
     312(a)..........................................................         7.01, 7.02(a)
        (b)..........................................................            7.02(b)
        (c)..........................................................            7.02(c)
     313(a)..........................................................             7.04
        (b)..........................................................             7.04
        (c)..........................................................      7.03(a)(iii), 7.04
        (d)..........................................................             7.04
     314(a)..........................................................         3.10, 7.03(a)
        (b)..........................................................             3.07
     (c)(1)..........................................................       8.05(c), 10.01(a)
     (c)(2)..........................................................       8.05(c), 10.01(a)
     (c)(3)..........................................................        Not Applicable
     (d)(1)..........................................................       8.05(c), 10.01(b)
     (d)(2)..........................................................       8.05(c), 10.01(b)
     (d)(3)..........................................................       8.05(c), 10.01(b)
        (e)..........................................................           10.01(a)
     315(a)..........................................................            6.01(b)
        (b)..........................................................             6.05
        (c)..........................................................            6.01(a)
        (d)..........................................................            6.01(c)
     (d)(1)..........................................................            6.01(c)
     (d)(2)..........................................................            6.01(c)
     (d)(3)..........................................................            6.01(c)
        (e)..........................................................             5.13
316(a)(1)(A).........................................................             5.11
316(a)(1)(B).........................................................             5.12
  316(a)(2)..........................................................        Not applicable
     316(b)..........................................................             5.07
  317(a)(1)..........................................................             5.04
  317(a)(2)..........................................................            5.03(d)
     317(b)..........................................................            3.03(a)
     318(a)..........................................................             10.07

*This reconciliation and tie shall not, for any purpose, be deemed to be part of
the within indenture.

</TABLE>

                                              v

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                  This is the Indenture, dated as of September 25, 2003, between
HOME LOAN TRUST 2003-HI3,  a Delaware statutory trust, as Issuer (the "Issuer"),
and JPMorgan Chase Bank, as Indenture Trustee (the "Indenture Trustee"),

                                WITNESSETH THAT:

                  Each party  hereto  agrees as follows  for the  benefit of the
other party and for the equal and ratable benefit of the Holders of the Issuer's
Series 2003-HI3 Home Loan-Backed Notes (the "Notes").

                                 GRANTING CLAUSE

                  The  Issuer  hereby  Grants to the  Indenture  Trustee  at the
Closing Date, as trustee for the benefit of the Holders of the Notes, all of the
Issuer's  right,  title and interest in and to whether now existing or hereafter
created  (a) the Home Loans,  (b) all funds on deposit  from time to time in the
Payment  Account  and  in all  proceeds  thereof;  (c)  the  Credit  Enhancement
Instrument and (d) all present and future claims,  demands, causes and choses in
action in respect of any or all of the  foregoing  and all payments on or under,
and all proceeds of every kind and nature  whatsoever  in respect of, any or all
of the  foregoing  and all payments on or under,  and all proceeds of every kind
and nature whatsoever in the conversion thereof, voluntary or involuntary,  into
cash or other liquid property, all cash proceeds, accounts, accounts receivable,
notes, drafts,  acceptances,  checks, deposit accounts, rights to payment of any
and every kind, and other forms of obligations and receivables,  instruments and
other  property  which at any time  constitute all or part of or are included in
the proceeds of any of the foregoing  (collectively,  the "Trust  Estate" or the
"Collateral").

                  The foregoing  Grant is made in trust to secure the payment of
principal  of and interest  on, and any other  amounts  owing in respect of, the
Notes,  equally and ratably without prejudice,  priority or distinction,  and to
secure compliance with the provisions of this Indenture, all as provided in this
Indenture.

                  The  foregoing  Grant shall inure to the benefit of the Credit
Enhancer  in  respect of draws made on the  Credit  Enhancement  Instrument  and
amounts owing from time to time pursuant to the Insurance Agreement  (regardless
of whether such amounts relate to the Notes or the Certificates), and such Grant
shall  continue in full force and effect for the benefit of the Credit  Enhancer
until all such amounts owing to it have been repaid in full.

                  The Indenture Trustee,  as trustee on behalf of the Holders of
the Notes,  acknowledges  such Grant,  accepts the trust under this Indenture in
accordance  with the  provisions  hereof  and  agrees to  perform  its duties as
Indenture Trustee as required herein.


                                              1

<PAGE>



                                    Article I

                                   Definitions

        Section 1.01. Definitions. For all purposes of this Indenture, 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  attached  hereto  as  Appendix  A which  is
incorporated by reference herein.  All other capitalized terms used herein shall
have the meanings specified herein.

        Section  1.02.  Incorporation  by  Reference  of  Trust  Indenture  Act.
Whenever this  Indenture  refers to a provision of the Trust  Indenture Act (the
"TIA"),  the provision is  incorporated  by reference in and made a part of this
Indenture.  The  following TIA terms used in this  Indenture  have the following
meanings:

                  "Commission" means the Securities and Exchange Commission.

                  "indenture securities" means the Notes.

                  "indenture security holder" means a Noteholder.

                  "indenture to be qualified" means this Indenture.

     "indenture trustee" or "institutional trustee" means the Indenture Trustee.

               "obligor" on the  indenture  securities  means the Issuer and any
          other obligor on the indenture securities.

                  All other TIA terms used in this Indenture that are defined by
        the TIA,  defined  by TIA  reference  to  another  statute or defined by
        Commission rule have the meaning assigned to them by such definitions.

     Section 1.03. Rules of Construction. Unless the context otherwise requires:

                      (i) a term has the meaning assigned to it;

                      (ii) an  accounting  term not  otherwise  defined  has the
        meaning assigned to it in accordance with generally accepted  accounting
        principles as in effect from time to time;

                      (iii) "or" is not exclusive;

                      (iv) "including" means including without limitation;

                      (v) words in the singular  include the plural and words in
        the plural include the singular; and



                                              2

<PAGE>



                      (vi) 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.



                                              3

<PAGE>



                                   Article II

                           Original Issuance of Notes

        Section 2.01.  Form.  The Notes,  together with the Indenture  Trustee's
certificate of  authentication,  shall be in substantially the form set forth in
Exhibit A, with such appropriate insertions, omissions,  substitutions and other
variations  as are  required or permitted  by this  Indenture  and may have such
letters,   numbers  or  other  marks  of  identification  and  such  legends  or
endorsements placed thereon as may, consistently  herewith, be determined by the
officers executing such Notes, as evidenced by their execution of the Notes. Any
portion of the text of any Note may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Note.

        The Notes shall be  typewritten,  printed,  lithographed  or engraved or
produced by any  combination  of these methods  (with or without steel  engraved
borders),  all as determined by the Authorized Officers executing such Notes, as
evidenced by their execution of such Notes.  The terms of the Notes set forth in
Exhibit A are part of the terms of this Indenture.

        Section 2.02. Execution, Authentication and Delivery. The Notes shall be
executed  on  behalf  of the  Issuer  by any of  its  Authorized  Officers.  The
signature  of any  such  Authorized  Officer  on the  Notes  may  be  manual  or
facsimile.

        Notes bearing the manual or facsimile  signature of individuals who were
at  any  time  Authorized   Officers  of  the  Issuer  shall  bind  the  Issuer,
notwithstanding  that such  individuals  or any of them have ceased to hold such
offices prior to the  authentication  and delivery of such Notes or did not hold
such offices at the date of such Notes.

        The Indenture Trustee shall upon Issuer Request authenticate and deliver
Notes for original issue in an aggregate initial principal amount of $37,040,000
with  respect to the Class A-I-1  Notes,  $13,953,000  with respect to the Class
A-I-2 Notes, $22,482,000 with respect to the Class A-I-3 Notes, $25,474,000 with
respect to the Class A-I-4 Notes, $27,801,000,  with respect to the Class A- I-5
Notes and $126,750,000 with respect to the Class A-II Notes.

        The  Notes  shall be dated the date of their  authentication.  The Notes
shall be  issuable  as  registered  Notes and the Notes shall be issuable in the
minimum  initial  Note  Balances of $25,000 and in integral  multiples  of $1 in
excess thereof.

        No Note shall be  entitled  to any benefit  under this  Indenture  or be
valid or  obligatory  for any  purpose,  unless  there  appears  on such  Note a
certificate  of  authentication  substantially  in the form  provided for herein
executed  by  the  Indenture  Trustee  by  the  manual  signature  of one of its
authorized  signatories,  and such certificate upon any Note shall be conclusive
evidence, and the only evidence,  that such Note has been duly authenticated and
delivered hereunder.


                                              4

<PAGE>



                                   Article III

                                    Covenants

        Section 3.01. Collection of Payments with respect to the Home Loans. The
Indenture  Trustee shall  establish and maintain with itself the Payment Account
in which the Indenture  Trustee shall,  subject to the terms of this  paragraph,
deposit,  on the  same day as it is  received  from the  Master  Servicer,  each
remittance received by the Indenture Trustee with respect to the Home Loans. The
Indenture  Trustee  shall make all  payments of principal of and interest on the
Notes,  subject to Section  3.03, as provided in Section 3.05 herein from monies
on deposit in the Payment Account.

        Section 3.02.  Maintenance of Office or Agency. The Issuer will maintain
in the City of New York, an office or agency where,  subject to  satisfaction of
conditions  set forth  herein,  Notes may be  surrendered  for  registration  of
transfer  or  exchange,  and where  notices and demands to or upon the Issuer in
respect  of the  Notes and this  Indenture  may be  served.  The  Issuer  hereby
initially appoints the Indenture Trustee to serve as its agent for the foregoing
purposes.  If at any time the Issuer  shall fail to maintain  any such office or
agency or shall fail to furnish the Indenture  Trustee with the address thereof,
such  surrenders,  notices and  demands  may be made or served at the  Corporate
Trust Office,  and the Issuer hereby appoints the Indenture Trustee as its agent
to receive all such surrenders, notices and demands.

        Section 3.03. Money for Payments To Be Held in Trust;  Paying Agent. (a)
As  provided in Section  3.01,  all  payments  of amounts  due and payable  with
respect to any Notes that are to be made from amounts withdrawn from the Payment
Account  pursuant  to Section  3.01 shall be made on behalf of the Issuer by the
Indenture  Trustee or by the Paying Agent,  and no amounts so withdrawn from the
Payment Account for payments of Notes shall be paid over to the Issuer except as
provided in this  Section  3.03.  The Issuer will cause each Paying  Agent other
than the Indenture  Trustee to execute and deliver to the  Indenture  Trustee an
instrument  in which such Paying  Agent shall agree with the  Indenture  Trustee
(and if the Indenture Trustee acts as Paying Agent it hereby so agrees), subject
to the provisions of this Section 3.03, that such Paying Agent will:

                      (i) hold all sums held by it for the  payment  of  amounts
        due with  respect to the Notes in trust for the  benefit of the  Persons
        entitled  thereto  until  such  sums  shall be paid to such  Persons  or
        otherwise  disposed  of as  herein  provided  and pay such  sums to such
        Persons as herein provided;

                      (ii) give the  Indenture  Trustee and the Credit  Enhancer
        written  notice of any  default  by the  Issuer  of which it has  actual
        knowledge in the making of any payment  required to be made with respect
        to the Notes;

                      (iii)  at any  time  during  the  continuance  of any such
        default,  upon the written request of the Indenture  Trustee,  forthwith
        pay to the  Indenture  Trustee  all sums so held in trust by such Paying
        Agent;



                                              5

<PAGE>



                      (iv) immediately  resign as Paying Agent and forthwith pay
        to the Indenture Trustee all sums held by it in trust for the payment of
        Notes if at any time it ceases to meet the standards  required to be met
        by a Paying Agent at the time of its appointment;

                      (v) comply with all  requirements of the Code with respect
        to the  withholding  from any  payments  made by it on any  Notes of any
        applicable  withholding  taxes  imposed  thereon and with respect to any
        applicable reporting requirements in connection therewith; and

                      (vi) deliver to the Indenture Trustee a copy of the report
        to Noteholders  prepared with respect to each Payment Date by the Master
        Servicer pursuant to Section 4.01 of the Servicing Agreement.

        The  Issuer  may  at  any  time,   for  the  purpose  of  obtaining  the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Request direct any Paying Agent to pay to the Indenture Trustee all sums held in
trust by such Paying Agent,  such sums to be held by the Indenture  Trustee upon
the same trusts as those upon which the sums were held by such Paying Agent; and
upon such  payment by any Paying  Agent to the  Indenture  Trustee,  such Paying
Agent shall be released from all further liability with respect to such money.

        Subject to applicable  laws with respect to escheat of funds,  any money
held by the  Indenture  Trustee or any Paying  Agent in trust for the payment of
any amount due with  respect to any Note and  remaining  unclaimed  for one year
after such amount has become due and payable shall be discharged from such trust
and be paid to the Issuer on Issuer  Request;  and the Holder of such Note shall
thereafter,  as an  unsecured  general  creditor,  look only to the  Issuer  for
payment  thereof  (but only to the extent of the amounts so paid to the Issuer),
and all liability of the Indenture  Trustee or such Paying Agent with respect to
such trust money shall thereupon cease;  provided,  however,  that the Indenture
Trustee or such Paying Agent,  before being required to make any such repayment,
shall at the expense and direction of the Issuer cause to be published  once, in
an  Authorized  Newspaper,  notice that such money  remains  unclaimed and that,
after a date  specified  therein,  which shall not be less than 30 days from the
date of such  publication,  any unclaimed  balance of such money then  remaining
will be repaid to the Issuer.  The Indenture  Trustee may also adopt and employ,
at the  expense  and  direction  of the Issuer,  any other  reasonable  means of
notification of such repayment (including, but not limited to, mailing notice of
such  repayment  to  Holders  whose  Notes  have been  called  but have not been
surrendered  for  redemption  or whose  right to or  interest  in monies due and
payable  but not  claimed is  determinable  from the  records  of the  Indenture
Trustee  or of any  Paying  Agent,  at the last  address of record for each such
Holder).

        Section  3.04.  Existence.  The  Issuer  will  keep in full  effect  its
existence,  rights and  franchises  as a  statutory  trust under the laws of the
State of Delaware  (unless it becomes,  or any successor  Issuer hereunder is or
becomes,  organized under the laws of any other state or of the United States of
America, in which case the Issuer will keep in full effect its existence, rights
and franchises  under the laws of such other  jurisdiction)  and will obtain and
preserve its  qualification  to do business in each  jurisdiction  in which such
qualification   is  or  shall  be   necessary   to  protect  the   validity  and
enforceability  of this  Indenture,  the  Notes,  the Home  Loans and each other
instrument or agreement included in the Trust Estate.


                                              6

<PAGE>




        Section 3.05. Payment of Principal and Interest; Defaulted Interest. (a)
On each Payment Date from amounts on deposit in the Payment  Account (other than
amounts deposited  constituting  prepayment charges), the Paying Agent shall pay
to  the   Noteholders,   the   Certificate   Paying  Agent,  on  behalf  of  the
Certificateholders, and to other Persons the amounts to which they are entitled,
as set forth in the statements  delivered to the Indenture  Trustee  pursuant to
Section 4.01 of the  Servicing  Agreement,  as set forth below in the  following
order of priority:

                      (i) to the Noteholders,  interest at the related Note Rate
        for the related  Interest  Accrual  Period on the related  Note  Balance
        immediately  prior to such Payment Date,  on a pro rata basis,  based on
        the amount of  interest  accrued  during the  related  Interest  Accrual
        Period;

                      (ii) to the  Noteholders  as principal  on the Notes,  the
        Principal  Collection  Distribution Amount for such Payment Date, in the
        order  described  in  Section  3.05(b)  below,  until the Note  Balances
        thereof have been reduced to zero;

                      (iii) to the  Noteholders  as principal on the Notes,  the
        Liquidation  Loss  Distribution  Amount  for such  Payment  Date and any
        Excess Loss Amount  included  in the Credit  Enhancement  Draw Amount on
        such Payment  Date,  in the order  described in Section  3.05(b)  below,
        until the Note Balances thereof have been reduced to zero;

                      (iv) to the Credit  Enhancer,  the Premium  Amount for the
        Credit Enhancement  Instrument,  plus any unpaid Premium Amount from any
        prior Payment Date (with  interest  thereon as provided in the Insurance
        Agreement);

                      (v) to the  Credit  Enhancer,  to  reimburse  it for prior
        draws made on the Credit  Enhancement  Instrument (with interest thereon
        as provided in the Insurance  Agreement),  except for draws attributable
        to Excess Loss Amounts;

                      (vi) to the  Noteholders  as principal  on the Notes,  the
        Reserve Increase Amount for such Payment Date, in the order described in
        Section 3.05(b) below, until the Note Balances thereof have been reduced
        to zero;

                      (vii) to the Credit  Enhancer,  any other  amounts owed to
        the Credit Enhancer pursuant to the Insurance Agreement;

                      (viii) to the Indenture Trustee,  any amounts owing to the
        Indenture Trustee pursuant to Section 6.07 remaining unpaid; and

                      (ix) any  remaining  amount and any  amounts  constituting
        prepayment  charges to the  Certificate  Paying Agent,  on behalf of the
        holders of the Certificates.

provided, however, in the event that on a Payment Date a Credit Enhancer Default
shall have  occurred  and be  continuing,  (a) no  payments  will be made to the
Credit Enhancer pursuant to clause (iv) above until all Credit  Enhancement Draw
Amounts that are due and required to be paid by the


                                              7

<PAGE>



Credit Enhancer on the Notes on such Payment Date or were due and required to be
paid by the Credit  Enhancer on any prior  Payment  Date have been paid in full,
(b) any  amounts  payable to the Credit  Enhancer  pursuant  to clause (v) shall
instead be paid pursuant to clause (vii) and (c) any Excess Loss Amounts will be
allocated  on a pro rata  basis to the  Notes  based on their  outstanding  Note
Balances,  in reduction of the Note  Balances  thereof,  until the Note Balances
thereof have been reduced to zero.  In addition,  on the Final  Insured  Payment
Date or other final  Payment  Date  (including  the Payment Date  following  any
purchase by the Master  Servicer of the Home Loans  pursuant to Section  8.08 of
the  Servicing  Agreement),  the amount to be paid pursuant to clause (ii) above
shall be equal to the aggregate Note Balance of the Notes  immediately  prior to
such Payment Date.

        Interest payments in the amounts described above will be payable on each
Payment Date to the Class A-I Notes and the Class A-II Notes  concurrently  from
the following amounts: first, from Interest Collections derived from the related
Loan Group;  second, from Interest Collections derived from the non-related Loan
Group after taking into account any payments in respect of interest on the other
class or classes  of Notes  made in first;  third,  from  Principal  Collections
derived  from the related Loan Group;  and fourth,  from  Principal  Collections
derived from the  non-related  Loan Group after taking into account any payments
in respect of interest on the other class or classes of Notes made in third.

        On each Payment Date, the Certificate  Paying Agent shall deposit in the
Certificate  Distribution  Account  all  amounts it  received  pursuant  to this
Section   3.05   for  the   purpose   of   distributing   such   funds   to  the
Certificateholders.

        The amounts paid to Noteholders shall be paid to the Notes in accordance
with the  applicable  percentage as set forth in paragraph  (b) below.  Interest
will accrue on the Notes  (other  than the Class A-I-1  Notes) on the basis of a
360-day year  consisting  of twelve 30-day  months.  Interest will accrue on the
Class A-I-1 Notes on the basis of a 360-day  year and the actual  number of days
in the related Interest Accrual Period.

        Any  installment of interest or principal,  if any,  payable on any Note
that is  punctually  paid or duly  provided for by the Issuer on the  applicable
Payment  Date shall,  if such Holder  holds Notes of an  aggregate  initial Note
Balance  of at  least  $1,000,000,  be paid  to each  Holder  of  record  on the
preceding  Record Date, by wire  transfer to an account  specified in writing by
such Holder reasonably satisfactory to the Indenture Trustee as of the preceding
Record Date or in all other cases or if no such instructions have been delivered
to the Indenture  Trustee,  by check or money order to such Noteholder mailed to
such Holder's  address as it appears in the Note Register the amount required to
be  distributed  to such Holder on such Payment Date  pursuant to such  Holder's
Securities;  provided, however, that the Indenture Trustee shall not pay to such
Holders any amount  required to be withheld from a payment to such Holder by the
Code.

        (b) Any payments to the Notes pursuant to clauses 3.05(a)(ii), (iii) and
(vi) above plus amounts drawn on the Credit Enhancement Instrument in respect of
principal  shall be distributed  concurrently  to (i) the Class A-I Notes in the
aggregate  and (ii) the Class A-II Notes,  in each case in proportion to the pro
rata  percentage  of the sum of (i) the Principal  Collections  derived from the
related  Loan  Group on that  Payment  Date and (ii)  the  aggregate  amount  of
Liquidation Loss


                                              8

<PAGE>



Amounts  incurred on the Home Loans in the related  Loan Group for that  Payment
Date,  in each case until the Note Balances of the Class A-I Notes or Class A-II
Notes have been reduced to zero in accordance  with the priorities  described in
this clause (b) below.  After either the Class A-I Notes in the aggregate or the
Class A-II Notes are reduced to zero, all principal payments will be distributed
to the remaining Class or Classes of Notes until the Note Balances  thereof have
been  reduced to zero,  in  accordance  with the  priorities  in this clause (b)
immediately below.

        Any payments of principal allocable to the Class A-I Notes shall be paid
to the Class A-I-1  Notes,  Class A-I-2 Notes,  Class A-I-3  Notes,  Class A-I-4
Notes and Class A-I-5 Notes,  in that order,  in each case until the outstanding
Note Balances thereof have been reduced to zero.

        Any  payments of principal  allocable to the Class A-II Notes,  shall be
paid to the Class A-II Notes until the Note Balance thereof is reduced to zero.

        (c) The  principal  of each Note shall be due and payable in full on the
Final Insured  Payment Date as provided in the form of Note set forth in Exhibit
A. All principal payments on the Notes shall be made to the Noteholders entitled
thereto in accordance with the Percentage  Interests  represented by such Notes.
Upon  written  notice to the  Indenture  Trustee by the Issuer (or by the Master
Servicer on behalf of the Issuer,  pursuant to Section  8.08(e) of the Servicing
Agreement)  of the  Final  Insured  Payment  Date for the  Notes or other  final
Payment Date,  the Indenture  Trustee  shall notify the related  Noteholders  of
record of the Final Insured Payment Date or other final Payment Date, by mail or
facsimile,  no later than five Business Days prior to the Final Insured  Payment
Date or other final Payment Date and shall specify:

                      (i) that the  Record  Date  otherwise  applicable  to such
        Payment Date is not applicable;

                      (ii) that payment of the principal amount and any interest
        due with respect to such Note at the Final Insured Payment Date or other
        final Payment Date will be payable only upon  presentation and surrender
        of such Note to the Indenture  Trustee or the Paying Agent in accordance
        with Section 3.03 of this  Indenture  and shall  specify the place where
        such Note may be presented and surrendered for such final payment; and

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

        Section 3.06.  Protection of Trust Estate. (a) The Issuer will from time
to time execute and deliver all such  supplements and amendments  hereto and all
such  financing  statements,  continuation  statements,  instruments  of further
assurance and other  instruments,  and will take such other action  necessary or
advisable to:

                      (i) maintain or preserve  the lien and  security  interest
        (and  the  priority  thereof)  of  this  Indenture  or  carry  out  more
        effectively the purposes hereof;

                      (ii) perfect, publish notice of or protect the validity of
        any Grant made or to be made by this Indenture;



                                              9

<PAGE>



                      (iii) cause the Trust to enforce any of the Home Loans; or

                      (iv) preserve and defend title to the Trust Estate and the
        rights of the Indenture Trustee and the Noteholders in such Trust Estate
        against the claims of all persons and parties.

        (b)  Except as  otherwise  provided  in this  Indenture,  the  Indenture
Trustee  shall not remove any portion of the Trust Estate that consists of money
or is  evidenced  by an  instrument,  certificate  or  other  writing  from  the
jurisdiction  in which it was held at the  date of the most  recent  Opinion  of
Counsel delivered pursuant to Section 3.07 (or from the jurisdiction in which it
was held as  described  in the Opinion of Counsel  delivered at the Closing Date
pursuant to Section  3.07(a),  if no Opinion of Counsel  has yet been  delivered
pursuant to Section  3.07(b))  unless the Trustee  shall have first  received an
Opinion of Counsel to the effect that the lien and security  interest created by
this  Indenture  with respect to such  property  will  continue to be maintained
after giving effect to such action or actions.  The Issuer hereby designates the
Indenture  Trustee  its agent and  attorney-in-fact  to  execute  any  financing
statement,  continuation  statement or other instrument  required to be executed
pursuant to this Section 3.06.

        Section 3.07.  Opinions as to Trust Estate. (a) On the Closing Date, the
Issuer shall furnish to the  Indenture  Trustee and the Owner Trustee an Opinion
of Counsel at the expense of the Issuer  either  stating that, in the opinion of
such  counsel,  such  action has been taken with  respect to the  recording  and
filing of this  Indenture,  any indentures  supplemental  hereto,  and any other
requisite  documents,  and with  respect  to the  execution  and  filing  of any
financing  statements and continuation  statements,  as are necessary to perfect
and make effective the lien and security interest in the Home Loans and reciting
the details of such action, or stating that, in the opinion of such counsel,  no
such action is necessary to make such lien and security interest effective.

        (b) On or before December 31st in each calendar year, beginning in 2003,
the Issuer shall furnish to the  Indenture  Trustee an Opinion of Counsel at the
expense of the Issuer either stating that, in the opinion of such counsel,  such
action has been taken with respect to the  recording,  filing,  rerecording  and
refiling of this  Indenture,  any indentures  supplemental  hereto and any other
requisite  documents  and  with  respect  to the  execution  and  filing  of any
financing statements and continuation statements as is necessary to maintain the
lien and  security  interest in the Home Loans and  reciting the details of such
action  or  stating  that in the  opinion  of such  counsel  no such  action  is
necessary to maintain such lien and security  interest.  Such Opinion of Counsel
shall also describe the  recording,  filing,  re-recording  and refiling of this
Indenture,  any indentures supplemental hereto and any other requisite documents
and the  execution  and  filing of any  financing  statements  and  continuation
statements  that will, in the opinion of such  counsel,  be required to maintain
the lien and  security  interest  in the Home  Loans  until  December  31 in the
following calendar year.

        Section 3.08. Performance of Obligations;  Servicing Agreement.  (a) The
Issuer will punctually perform and observe all of its obligations and agreements
contained in this  Indenture,  the Basic  Documents and in the  instruments  and
agreements included in the Trust Estate.



                                              10

<PAGE>



        (b)  The  Issuer  may  contract  with  other  Persons  to  assist  it in
performing its duties under this  Indenture,  and any performance of such duties
by a Person identified to the Indenture  Trustee in an Officer's  Certificate of
the Issuer shall be deemed to be action taken by the Issuer.

        (c) The Issuer will not take any action or permit any action to be taken
by others which would release any Person from any of such Person's  covenants or
obligations  under any of the documents  relating to the Home Loans or under any
instrument included in the Trust Estate, or which would result in the amendment,
hypothecation,  subordination,  termination  or  discharge  of,  or  impair  the
validity or effectiveness of, any of the documents relating to the Home Loans or
any such  instrument,  except such  actions as the Master  Servicer is expressly
permitted to take in the Servicing Agreement.

        (d) The Issuer may retain an administrator  and may enter into contracts
with other Persons for the  performance of the Issuer's  obligations  hereunder,
and  performance  of such  obligations  by such  Persons  shall be  deemed to be
performance of such obligations by the Issuer.

        Section 3.09. Negative Covenants.  So long as any Notes are Outstanding,
the Issuer shall not:

                      (i) except as expressly permitted by this Indenture, sell,
        transfer,  exchange or  otherwise  dispose of the Trust  Estate,  unless
        directed to do so by the Indenture Trustee;

                      (ii) claim any credit on, or make any  deduction  from the
        principal  or  interest  payable in respect  of, the Notes  (other  than
        amounts  properly  withheld from such payments under the Code) or assert
        any claim  against  any  present or former  Noteholder  by reason of the
        payment  of the  taxes  levied  or  assessed  upon any part of the Trust
        Estate;

                      (iii) (A) permit the  validity  or  effectiveness  of this
        Indenture  to be  impaired,  or permit the lien of this  Indenture to be
        amended, hypothecated, subordinated, terminated or discharged, or permit
        any Person to be released from any covenants or obligations with respect
        to the Notes under this Indenture  except as may be expressly  permitted
        hereby,  permit any lien,  charge,  excise,  claim,  security  interest,
        mortgage or other encumbrance (other than the lien of this Indenture) to
        be created on or extend to or  otherwise  arise upon or burden the Trust
        Estate or any part  thereof  or any  interest  therein  or the  proceeds
        thereof or (B) permit the lien of this  Indenture  not to  constitute  a
        valid first priority security interest in the Trust Estate; or

                      (iv) waive or impair,  or fail to assert  rights under the
        Home  Loans,  or cause to be  impaired  the Home  Loans or the  Issuer's
        interest in the Home Loans,  the Home Loan Purchase  Agreement or in any
        Basic Document, if any such action would materially and adversely affect
        the interests of the Noteholders.

        Section 3.10. Annual Statement as to Compliance. The Issuer will deliver
to the Indenture  Trustee,  within 120 days after the end of each fiscal year of
the Issuer  (commencing  with the fiscal year 2003),  an  Officer's  Certificate
stating, as to the Authorized Officer signing such Officer's Certificate, that:


                                              11

<PAGE>




                      (i) a review of the  activities  of the Issuer during such
        year and of its performance under this Indenture and the Trust Agreement
        has been made under such Authorized Officer's supervision; and

                      (ii) to the best of such Authorized  Officer's  knowledge,
        based on such review,  the Issuer has complied with all  conditions  and
        covenants under this Indenture and the provisions of the Trust Agreement
        throughout  such year, or, if there has been a default in its compliance
        with any such condition or covenant,  specifying each such default known
        to such Authorized Officer and the nature and status thereof.

        Section  3.11.  Recording of  Assignments.  The Issuer shall enforce the
obligation  of the Seller  under the Home Loan  Purchase  Agreement to submit or
cause to be submitted for recording all Assignments of Mortgages  within 60 days
of receipt of recording information by the Master Servicer.

        Section 3.12.  Representations and Warranties Concerning the Home Loans.
The  Indenture  Trustee,  as pledgee of the Home  Loans,  has the benefit of the
representations  and warranties made by the Seller in Section 3.1(a) and Section
3.1(b) of the Home Loan  Purchase  Agreement  concerning  the Home Loans and the
right to enforce the remedies against the Seller provided in such Section 3.1(a)
or  Section  3.1(b)  to the same  extent  as  though  such  representations  and
warranties were made directly to the Indenture Trustee.

        Section  3.13.  Assignee of Record of the Home Loans.  The Issuer hereby
directs and  authorizes  the Indenture  Trustee to hold record title to the Home
Loans by being  named as payee in the  endorsements  of the  Mortgage  Notes and
assignee in the  Assignments of Mortgage to be recorded under Section 2.1 of the
Home Loan  Purchase  Agreement.  Except as  expressly  provided in the Home Loan
Purchase  Agreement or in the Servicing  Agreement  with respect to any specific
Home Loan, the Indenture Trustee shall not execute any endorsement or assignment
or  otherwise  release or transfer  such  record  title to any of the Home Loans
until such time as the  remaining  Trust  Estate  may be  released  pursuant  to
Section 8.05(b).  The Indenture  Trustee's holding of such record title shall in
all  respects  be  subject  to its  fiduciary  obligations  to  the  Noteholders
hereunder.

        Section  3.14.  Master  Servicer  as Agent and  Bailee of the  Indenture
Trustee.  Solely for purposes of  perfection  under Section 9-305 of the Uniform
Commercial Code or other similar applicable law, rule or regulation of the state
in which  such  property  is held by the  Master  Servicer,  the  Issuer and the
Indenture Trustee hereby acknowledge that the Master Servicer is acting as agent
and  bailee of the  Indenture  Trustee  in  holding  amounts  on  deposit in the
Custodial  Account pursuant to Section 3.02 of the Servicing  Agreement that are
allocable  to the Home  Loans,  as well as its agent and bailee in  holding  any
Related Documents released to the Master Servicer pursuant to Section 3.06(c) of
the Servicing  Agreement,  and any other items  constituting a part of the Trust
Estate which from time to time come into the possession of the Master  Servicer.
It is intended that, by the Master Servicer's acceptance of such agency pursuant
to Section 3.02 of the Servicing Agreement,  the Indenture Trustee, as a pledgee
of the Home Loans, will be deemed to have possession of such Related  Documents,
such  monies and such other items for  purposes of Section  9-305 of the Uniform
Commercial  Code of the  state  in which  such  property  is held by the  Master
Servicer.


                                              12

<PAGE>




        Section  3.15.  Investment  Company  Act. The Issuer shall not become an
"investment  company" or "controlled by" an investment company as such terms are
defined in the  Investment  Company Act of 1940, as amended (or any successor or
amendatory  statute),  and the rules and  regulations  thereunder  (taking  into
account not only the general  definition  of the term  "investment  company" but
also any available  exceptions to such general definition);  provided,  however,
that the Issuer shall be in  compliance  with this Section 3.15 if it shall have
obtained an order  exempting it from  regulation as an  "investment  company" so
long as it is in compliance with the conditions imposed in such order.

        Section  3.16.  Issuer May  Consolidate,  etc.  (a) The Issuer shall not
consolidate or merge with or into any other Person, unless:

                      (i) the  Person (if other  than the  Issuer)  formed by or
        surviving such  consolidation  or merger shall be a Person organized and
        existing  under the laws of the United States of America or any state or
        the District of Columbia  and shall  expressly  assume,  by an indenture
        supplemental hereto, executed and delivered to the Indenture Trustee, in
        form  reasonably  satisfactory  to the  Indenture  Trustee,  the due and
        punctual  payment of the  principal  of and interest on all Notes and to
        the Certificate  Paying Agent, on behalf of the  Certificateholders  and
        the  performance  or observance of every  agreement and covenant of this
        Indenture on the part of the Issuer to be performed or observed,  all as
        provided herein;

                      (ii) immediately  after giving effect to such transaction,
        no Event of Default shall have occurred and be continuing;

                      (iii) the Issuer  receives  consent of the Credit Enhancer
        and the Rating  Agencies  shall have notified the Issuer (with a copy to
        the Indenture  Trustee) that such transaction shall not cause the rating
        of the Notes or the  Certificates to be reduced,  suspended or withdrawn
        or to be considered by either Rating Agency to be below investment grade
        without taking into account the Credit Enhancement Instrument;

                      (iv) the Issuer shall have  received an Opinion of Counsel
        (and shall have delivered  copies  thereof to the Indenture  Trustee and
        the Credit  Enhancer) to the effect that such  transaction will not have
        any material  adverse tax  consequence to the Issuer,  any Noteholder or
        any Certificateholder;

                      (v) any action that is  necessary to maintain the lien and
        security interest created by this Indenture shall have been taken; and

                      (vi) the Issuer  shall  have  delivered  to the  Indenture
        Trustee an Officer's  Certificate and an Opinion of Counsel each stating
        that such consolidation or merger and such supplemental indenture comply
        with this Article III and that all conditions  precedent herein provided
        for relating to such  transaction have been complied with (including any
        filing required by the Exchange Act).



                                              13

<PAGE>



        (b) The Issuer  shall not convey or transfer  any of its  properties  or
assets, including those included in the Trust Estate, to any Person, unless:

                      (i) the Person that acquires by conveyance or transfer the
        properties  and assets of the Issuer the conveyance or transfer of which
        is hereby  restricted  shall (A) be a United States  citizen or a Person
        organized and existing under the laws of the United States of America or
        any state, (B) expressly  assume, by an indenture  supplemental  hereto,
        executed and delivered to the Indenture Trustee, in form satisfactory to
        the Indenture Trustee,  the due and punctual payment of the principal of
        and interest on all Notes and the  performance  or  observance  of every
        agreement and covenant of this Indenture on the part of the Issuer to be
        performed or observed,  all as provided  herein,  (C) expressly agree by
        means of such supplemental  indenture that all right, title and interest
        so  conveyed or  transferred  shall be subject  and  subordinate  to the
        rights of Holders of the Notes,  (D) unless  otherwise  provided in such
        supplemental  indenture,  expressly agree to indemnify,  defend and hold
        harmless  the Issuer  against  and from any loss,  liability  or expense
        arising  under  or  related  to this  Indenture  and the  Notes  and (E)
        expressly agree by means of such supplemental indenture that such Person
        (or if a group of Persons,  then one  specified  Person)  shall make all
        filings with the Commission (and any other appropriate  Person) required
        by the Exchange Act in connection with the Notes;

                      (ii) immediately  after giving effect to such transaction,
        no Default or Event of Default shall have occurred and be continuing;

                      (iii) the Issuer  receives  consent of the Credit Enhancer
        and the Rating  Agencies  shall have notified the Issuer (with a copy to
        the Indenture  Trustee) that such transaction shall not cause the rating
        of the Notes, without regard to the Credit Enhancement Instrument, to be
        reduced, suspended or withdrawn;

                      (iv) the Issuer shall have  received an Opinion of Counsel
        (and shall have delivered  copies  thereof to the Indenture  Trustee) to
        the effect that such  transaction will not have any material adverse tax
        consequence to the Issuer or any Noteholder;

                      (v) any action that is  necessary to maintain the lien and
        security interest created by this Indenture shall have been taken; and

                      (vi) the Issuer  shall  have  delivered  to the  Indenture
        Trustee an Officer's  Certificate and an Opinion of Counsel each stating
        that such conveyance or transfer and such supplemental  indenture comply
        with this Article III and that all conditions  precedent herein provided
        for relating to such  transaction have been complied with (including any
        filing required by the Exchange Act).

        Section 3.17.  Successor or Transferee.  (a) Upon any  consolidation  or
merger of the Issuer in accordance with Section 3.16(a), the Person formed by or
surviving such  consolidation or merger (if other than the Issuer) shall succeed
to, and be  substituted  for,  and may  exercise  every  right and power of, the
Issuer  under this  Indenture  with the same  effect as if such  Person had been
named as the Issuer herein.


                                              14

<PAGE>




        (b) Upon a conveyance  or transfer of all the assets and  properties  of
the Issuer pursuant to Section  3.16(b),  the Issuer will be released from every
covenant and agreement of this Indenture to be observed or performed on the part
of the Issuer with respect to the Notes immediately upon the delivery of written
notice to the Indenture Trustee of such conveyance or transfer.

        Section  3.18.  No Other  Business.  The Issuer  shall not engage in any
business other than financing,  purchasing,  owning and selling and managing the
Home  Loans  and the  issuance  of the  Notes  and  Certificates  in the  manner
contemplated  by this  Indenture  and the  Basic  Documents  and all  activities
incidental thereto.

        Section 3.19. No Borrowing.  The Issuer shall not issue, incur,  assume,
guarantee  or  otherwise  become  liable,   directly  or  indirectly,   for  any
indebtedness except for the Notes.

        Section 3.20. Guarantees, Loans, Advances and Other Liabilities.  Except
as contemplated by this Indenture or the Basic  Documents,  the Issuer shall not
make any loan or advance or credit to, or guarantee  (directly or  indirectly or
by an instrument having the effect of assuring  another's payment or performance
on any obligation or capability of so doing or otherwise),  endorse or otherwise
become  contingently  liable,  directly or  indirectly,  in connection  with the
obligations, stocks or dividends of, or own, purchase, repurchase or acquire (or
agree contingently to do so) any stock, obligations, assets or securities of, or
any other interest in, or make any capital contribution to, any other Person.

        Section  3.21.  Capital  Expenditures.  The  Issuer  shall  not make any
expenditure  (by long-term or operating  lease or otherwise)  for capital assets
(either realty or personalty).

        Section  3.22.  Owner  Trustee  Not Liable for  Certificates  or 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  Indenture,  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  this
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.

        Section 3.23.  Restricted  Payments.  The Issuer shall not,  directly or
indirectly,  (i) pay any  dividend or make any  distribution  (by  reduction  of
capital or otherwise),  whether in cash,  property,  securities or a combination
thereof,  to the Owner  Trustee  or any owner of a  beneficial  interest  in the
Issuer or otherwise with respect to any ownership or equity interest or security
in or of the Issuer,  (ii) redeem,  purchase,  retire or  otherwise  acquire for
value any such  ownership  or equity  interest or security or (iii) set aside or
otherwise segregate any amounts for any such purpose;  provided,  however,  that
the Issuer may make, or cause to be made, (x) distributions to the Owner Trustee
and


                                              15

<PAGE>



the Certificateholders as contemplated by, and to the extent funds are available
for such  purpose  under the Trust  Agreement,  and (y)  payments  to the Master
Servicer pursuant to the terms of the Servicing Agreement.  The Issuer will not,
directly or  indirectly,  make payments to or  distributions  from the Custodial
Account except in accordance with this Indenture and the Basic Documents.

        Section  3.24.  Notice of Events of Default.  The Issuer  shall give the
Indenture  Trustee,  the Credit  Enhancer and the Rating Agencies prompt written
notice of each Event of Default hereunder and under the Trust Agreement.

        Section  3.25.  Further  Instruments  and  Acts.  Upon  request  of  the
Indenture Trustee,  the Issuer will execute and deliver such further instruments
and do such further acts as may be  reasonably  necessary or proper to carry out
more effectively the purpose of this Indenture.

        Section 3.26.  Statements  to  Noteholders.  On each Payment  Date,  the
Indenture  Trustee  and  the  Certificate  Registrar  shall  forward  by mail or
otherwise   make    available    electronically    to   each    Noteholder   and
Certificateholder,  respectively, the statement delivered to it, on the Business
Day  following  the related  Determination  Date pursuant to Section 4.01 of the
Servicing Agreement.

        Section 3.27. Payments under the Credit Enhancement  Instrument.  (a) On
any Payment  Date,  including  the Final  Insured  Payment  Date,  the Indenture
Trustee shall make a draw on the Credit Enhancement  Instrument in an amount, if
any, equal to the Credit  Enhancement  Draw Amount.  On any Dissolution  Payment
Date,  the  Indenture  Trustee  shall  make a draw  on  the  Credit  Enhancement
Instrument in an amount, if any, equal to the Dissolution Draw.

        (b) The Indenture  Trustee shall submit,  if a Credit  Enhancement  Draw
Amount or Dissolution Draw is specified in any Servicing Certificate prepared by
the Master  Servicer  pursuant to Section 4.01 of the Servicing  Agreement,  the
Notice of Non  Payment  and Demand for  Payment of Insured  Amounts (in the form
attached as Exhibit A to the Credit Enhancement Instrument) in the amount of the
Credit  Enhancement  Draw Amount or Dissolution  Draw to the Credit  Enhancer no
later than 2:00 P.M.,  New York City time,  on the second  Business Day prior to
the applicable Payment Date. Upon receipt of such Credit Enhancement Draw Amount
in accordance with the terms of the Credit Enhancement Instrument or Dissolution
Draw, the Indenture Trustee shall deposit such Credit Enhancement Draw Amount in
the Payment Account for distribution to Noteholders pursuant to Section 3.05 and
shall distribute such Dissolution Draw in accordance with Section 5.04.

        Section 3.28. Reserved.
                      --------

        Section  3.29.  Determination  of Class  A-I-1 Note Rate.  On the second
LIBOR Business Day immediately preceding (i) the Closing Date in the case of the
first Interest Accrual Period and (ii) the first day of each succeeding Interest
Accrual  Period,  the Indenture  Trustee shall determine LIBOR and the Note Rate
for the Class A-I-1 Notes for such Interest  Accrual Period and shall inform the
Issuer,  the Master  Servicer,  the Credit  Enhancer and the  Depositor at their
respective  facsimile  numbers  given to the Indenture  Trustee in writing.  All
determinations  of LIBOR by the  Indenture  Trustee  shall,  in the  absence  of
manifest error, be conclusive for all purposes, and each holder of a Class A-I-1
Note,  by  accepting  this  Class  A-I-1  Note,  agrees  to  be  bound  by  such
determination.



                                              16

<PAGE>



        Section 3.30.  Liquidation  on Final Insured  Payment Date. On the Final
Insured Payment Date, if the Notes are not paid in full on or prior to the Final
Insured  Payment  Date,  the  Indenture  Trustee  shall take full account of the
assets and  liabilities  of the Owner Trust,  shall  liquidate the assets,  in a
commercially reasonable manner and on commercially reasonable terms, as promptly
as is consistent  with  obtaining the fair value thereof and in accordance  with
Section  5.15,  and shall apply and  distribute  the proceeds  therefrom  net of
expenses  incurred by the Indenture  Trustee in connection with such liquidation
in the order of priority described in Section 3.05(b).

        Section  3.31. No Recourse.  Upon the  occurrence of an Event of Default
under the Notes,  this  Indenture or the other Basic  Documents,  Holders of the
Notes shall have recourse only to the  Collateral and all proceeds  thereof,  as
and to the extent provided herein,  and no recourse shall be had by such Holders
against the Issuer or its other assets or properties.

        Section 3.32. Additional UCC Representations and Warranties.  The Issuer
hereby represents and warrants that:

                      (i) this Agreement creates a valid and continuing security
        interest (as defined in the applicable UCC) in the Trust Estate in favor
        of the  Indenture  Trustee on behalf of the Holders of the Notes,  which
        security  interest is prior to all other liens,  and is  enforceable  as
        such as against creditors of the Issuer.

                      (ii) the Issuer owns and has good and marketable  title to
        the Trust Estate free and clear of any lien, claim or encumbrance of any
        Person.

                      (iii) the Issuer will cause the filing of all  appropriate
        financing  statements  in the proper  filing  office in the  appropriate
        jurisdictions under applicable law within 10 days of the Closing Date in
        order to perfect the security  interest in the Trust  Estate  granted to
        the Indenture Trustee on behalf of the Holders of the Notes.

                      (iv)  other  than the  security  interest  granted  to the
        Indenture  Trustee on behalf of the Holders of the Notes pursuant to the
        Basic Documents,  the Issuer has not pledged,  assigned, sold, granted a
        security interest in, or otherwise conveyed any of the Trust Estate. The
        Issuer is not aware of any judgment or tax lien filings  against it. The
        Issuer  has  not  authorized  the  filing  of and is  not  aware  of any
        financing  statements  against the Issuer that include a description  of
        collateral  covering the Trust Estate other than any financing statement
        (i) relating to the security  interest  granted to Indenture  Trustee on
        behalf  of the  Holders  of the  Notes  hereunder  or (ii) that has been
        terminated.




                                              17

<PAGE>



                                   Article IV

               The Notes; Satisfaction and Discharge of Indenture

        Section 4.01. The Notes.  The Notes shall be registered in the name of a
nominee  designated by the Depository.  Beneficial Owners will hold interests in
the Notes as set forth in Section 4.06 herein in minimum  initial Note  Balances
of $25,000 and integral multiples of $1 in excess thereof.

        The  Indenture  Trustee may for all  purposes  (including  the making of
payments  due  on  the  Notes)  deal  with  the  Depository  as  the  authorized
representative  of the  Beneficial  Owners  with  respect  to the  Notes for the
purposes  of  exercising  the rights of Holders  of Notes  hereunder.  Except as
provided in the next  succeeding  paragraph of this Section 4.01,  the rights of
Beneficial  Owners  with  respect  to  the  Notes  shall  be  limited  to  those
established  by law  and  agreements  between  such  Beneficial  Owners  and the
Depository  and  Depository  Participants.  Except as provided in Section  4.08,
Beneficial Owners shall not be entitled to definitive certificates for the Notes
as to which they are the Beneficial  Owners.  Requests and directions  from, and
votes of, the Depository as Holder of the Notes shall not be deemed inconsistent
if they are made with  respect to different  Beneficial  Owners.  The  Indenture
Trustee may establish a reasonable record date in connection with  solicitations
of consents from or voting by  Noteholders  and give notice to the Depository of
such record date.  Without the consent of the Issuer and the Indenture  Trustee,
no Note may be transferred by the  Depository  except to a successor  Depository
that agrees to hold such Note for the account of the Beneficial Owners.

        In the event the  Depository  Trust  Company  resigns  or is  removed as
Depository,  the Indenture Trustee with the approval of the Issuer may appoint a
successor  Depository.  If no successor  Depository has been appointed within 30
days of the effective  date of the  Depository's  resignation  or removal,  each
Beneficial  Owner shall be entitled to  certificates  representing  the Notes it
beneficially owns in the manner prescribed in Section 4.08.

        The Notes shall,  on original issue, be executed on behalf of the Issuer
by the  Owner  Trustee,  not in its  individual  capacity  but  solely  as Owner
Trustee,  authenticated  by the Note  Registrar  and  delivered by the Indenture
Trustee to or upon the order of the Issuer.

        Section 4.02.  Registration  of and Limitations on Transfer and Exchange
of Notes;  Appointment  of Certificate  Registrar.  The Issuer shall cause to be
kept at the Indenture Trustee's Corporate Trust Office a Note Register in which,
subject to such reasonable  regulations as it may prescribe,  the Note Registrar
shall  provide for the  registration  of Notes and of transfers and exchanges of
Notes as herein provided.

        Subject  to the  restrictions  and  limitations  set forth  below,  upon
surrender  for  registration  of  transfer  of any Note at the  Corporate  Trust
Office,  the Issuer shall execute and the Note Registrar shall  authenticate and
deliver,  in the name of the designated  transferee or transferees,  one or more
new Notes in authorized  initial Note  Balances  evidencing  the same  aggregate
Percentage Interests.

        Subject to the foregoing, at the option of the Noteholders, Notes may be
exchanged  for other Notes of like tenor,  in  authorized  initial Note Balances
evidencing the same aggregate Percentage


                                              18

<PAGE>



Interests  upon  surrender of the Notes to be exchanged at the  Corporate  Trust
Office  of the  Note  Registrar.  Whenever  any  Notes  are so  surrendered  for
exchange, the Issuer shall execute and the Note Registrar shall authenticate and
deliver  the Notes  which the  Noteholder  making the  exchange  is  entitled to
receive.  Each Note presented or  surrendered  for  registration  of transfer or
exchange shall (if so required by the Note Registrar) be duly endorsed by, or be
accompanied by a written instrument of transfer in form reasonably  satisfactory
to the Note  Registrar duly executed by, the Holder thereof or his attorney duly
authorized in writing with such  signature  guaranteed  by a commercial  bank or
trust company located or having a correspondent located in the city of New York.
Notes  delivered  upon any such  transfer or  exchange  will  evidence  the same
obligations,  and will be  entitled to the same  rights and  privileges,  as the
Notes surrendered.

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

        All Notes surrendered for registration of transfer and exchange shall be
cancelled  by the Note  Registrar  and  delivered to the  Indenture  Trustee for
subsequent destruction without liability on the part of either.

        The  Issuer  hereby  appoints  the  Indenture   Trustee  as  Certificate
Registrar to keep at its Corporate Trust Office a Certificate  Register pursuant
to Section  3.09 of the Trust  Agreement  in which,  subject to such  reasonable
regulations as it may prescribe, the Certificate Registrar shall provide for the
registration of Certificates and of transfers and exchanges  thereof pursuant to
Section 3.05 of the Trust Agreement.  The Indenture  Trustee hereby accepts such
appointment.

        Each purchaser of a Note, by its acceptance of the Note, shall be deemed
to have  represented that either (i) it is not a Plan nor is it acquiring a Note
with Plan Assets or (2) the  acquisition  of such Note by the purchaser does not
constitute or give rise to a prohibited  transaction  under Section 406 of ERISA
or  Section  4975  of  the  Code,   for  which  no   statutory,   regulatory  or
administrative exemption is available.

        The Notes may not be  purchased  with the assets of an ERISA plan if the
Depositor,  the Master Servicer,  the owner of the  Certificates,  the Indenture
Trustee, the Owner Trustee or any of their Affiliates:

                  (i) has investment or  administrative  discretion with respect
to the ERISA plan's assets;

                  (ii)has  authority  or  responsibility  to give,  or regularly
gives,  investment advice regarding the ERISA plan's assets, for a fee and under
an agreement or understanding  that the advice will serve as a primary basis for
investment  decisions regarding the ERISA plan's assets and will be based on the
particular investment needs for the ERISA plan; or

                  (iii) is an employer  maintaining or contributing to the ERISA
plan.



                                              19

<PAGE>



        Section 4.03.  Mutilated,  Destroyed,  Lost or Stolen Notes.  If (i) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee
receives  evidence to its satisfaction of the destruction,  loss or theft of any
Note,  and (ii) there is delivered  to the  Indenture  Trustee such  security or
indemnity as may be required by it to hold the Issuer and the Indenture  Trustee
harmless,  then, in the absence of notice to the Issuer,  the Note  Registrar or
the Indenture Trustee that such Note has been acquired by a bona fide purchaser,
and  provided  that the  requirements  of Section 8- 405 of the UCC are met, the
Issuer  shall  execute,  and  upon  its  request  the  Indenture  Trustee  shall
authenticate  and  deliver,  in exchange  for or in lieu of any such  mutilated,
destroyed,  lost or stolen Note, a replacement Note; provided,  however, that if
any such destroyed,  lost or stolen Note, but not a mutilated  Note,  shall have
become or within  seven  days  shall be due and  payable,  instead  of issuing a
replacement Note, the Issuer may pay such destroyed, lost or stolen Note when so
due or  payable  without  surrender  thereof.  If,  after the  delivery  of such
replacement Note or payment of a destroyed,  lost or stolen Note pursuant to the
proviso to the preceding sentence, a bona fide purchaser of the original Note in
lieu of which  such  replacement  Note was  issued  presents  for  payment  such
original Note, the Issuer and the Indenture Trustee shall be entitled to recover
such replacement Note (or such payment) from the Person to whom it was delivered
or any  Person  taking  such  replacement  Note  from  such  Person to whom such
replacement  Note was  delivered or any  assignee of such Person,  except a bona
fide purchaser,  and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred by
the Issuer or the Indenture Trustee in connection therewith.

        Upon the issuance of any  replacement  Note under this Section 4.03, the
Issuer may require the payment by the Holder of such Note of a sum sufficient to
cover any tax or other  governmental  charge  that may be  imposed  in  relation
thereto and any other  reasonable  expenses  (including the fees and expenses of
the Indenture Trustee) connected therewith.

        Every   replacement  Note  issued  pursuant  to  this  Section  4.03  in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute an
original  additional  contractual  obligation of the Issuer,  whether or not the
mutilated,  destroyed,  lost or stolen Note shall be at any time  enforceable by
anyone,  and shall be entitled to all the benefits of this Indenture equally and
proportionately  with  any  and all  other  Notes  duly  issued  hereunder.  The
provisions of this Section 4.03 are exclusive and shall  preclude (to the extent
lawful) all other rights and remedies with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Notes.

        Section  4.04.  Persons  Deemed  Owners.  Prior to due  presentment  for
registration of transfer of any Note, the Issuer,  the Indenture Trustee and any
agent of the Issuer or the Indenture  Trustee may treat the Person in whose name
any Note is  registered  (as of the day of  determination)  as the owner of such
Note for the purpose of receiving payments of principal of and interest, if any,
on such Note and for all other purposes whatsoever,  whether or not such Note be
overdue,  and none of the  Issuer,  the  Indenture  Trustee  or any agent of the
Issuer or the Indenture Trustee shall be affected by notice to the contrary.

        Section  4.05.   Cancellation.   All  Notes   surrendered  for  payment,
registration  of transfer,  exchange or redemption  shall, if surrendered to any
Person other than the Indenture  Trustee,  be delivered to the Indenture Trustee
and shall be promptly cancelled by the Indenture Trustee.  The Issuer may at any
time deliver to the Indenture Trustee for cancellation any Notes previously


                                              20

<PAGE>



authenticated and delivered  hereunder which the Issuer may have acquired in any
manner whatsoever, and all Notes so delivered shall be promptly cancelled by the
Indenture Trustee. No Notes shall be authenticated in lieu of or in exchange for
any Notes  cancelled  as  provided in this  Section  4.05,  except as  expressly
permitted by this  Indenture.  All cancelled Notes may be held or disposed of by
the  Indenture  Trustee in  accordance  with its standard  retention or disposal
policy as in effect at the time  unless  the  Issuer  shall  direct by an Issuer
Request that they be destroyed or returned to it;  provided  however,  that such
Issuer Request is timely and the Notes have not been  previously  disposed of by
the Indenture Trustee.

        Section 4.06.  Book-Entry  Notes. Each Class of Notes shall initially be
issued as one or more Notes held by the Book-Entry Custodian or, if appointed to
hold such Notes as provided  below,  the Depository  Trust Company,  the initial
Depository,  and  registered  in the name of its  nominee  Cede & Co.  Except as
provided  below,  registration  of  such  Notes  may not be  transferred  by the
Indenture  Trustee except to another  Depository  that agrees to hold such Notes
for the respective  Beneficial Owners. The Indenture Trustee is hereby initially
appointed  as the  Book-Entry  Custodian  and  hereby  agrees  to act as such in
accordance  herewith and in accordance  with the agreement  that it has with the
Depository  authorizing it to act as such. The Book-Entry Custodian may, and, if
it is no  longer  qualified  to act as such,  the  Book-Entry  Custodian  shall,
appoint, by a written instrument delivered to the Depositor, the Master Servicer
and, if the Indenture  Trustee is not the  Book-Entry  Custodian,  the Indenture
Trustee,  any other  transfer  agent  (including the Depository or any successor
Depository)  to  act  as  Book-Entry  Custodian  under  such  conditions  as the
predecessor  Book-Entry Custodian and the Depository or any successor Depository
may prescribe,  provided that the predecessor  Book-Entry Custodian shall not be
relieved  of any  of  its  duties  or  responsibilities  by  reason  of any  new
appointment,  except  if the  Depository  is  the  successor  to the  Book-Entry
Custodian. If the Indenture Trustee resigns or is removed in accordance with the
terms hereof,  the successor  trustee or, if it so elects,  the Depository shall
immediately  succeed to its predecessor's  duties as Book-Entry  Custodian.  The
Depositor  shall have the right to inspect,  and to obtain  copies of, any Notes
held as Book-Entry Notes by the Book-Entry  Custodian.  No Beneficial Owner will
receive a Definitive Note representing such Beneficial  Owner's interest in such
Note,  except as provided in Section 4.08.  Unless and until  definitive,  fully
registered Notes (the "Definitive  Notes") have been issued to Beneficial Owners
pursuant to Section 4.08:

                      (i) the  provisions  of this Section 4.06 shall be in full
force and effect;

     (ii) the Note Registrar and the Indenture Trustee shall be entitled to deal
with the Depository for all purposes of this Indenture (including the payment of
principal  of and  interest  on the Notes  and the  giving  of  instructions  or
directions  hereunder)  as the sole  holder  of the  Notes,  and  shall  have no
obligation to the Owners of Notes;

     (iii) to the extent that the  provisions of this Section 4.06 conflict with
any other  provisions  of this  Indenture,  the  provisions of this Section 4.06
shall control;

     (iv) the rights of  Beneficial  Owners shall be exercised  only through the
Depository  and shall be  limited  to those  established  by law and  agreements
between  such  Owners  of  Notes  and  the  Depository   and/or  the  Depository
Participants.  Unless and until  Definitive Notes are issued pursuant to Section
4.08, the initial Depository will make book-entry transfers among the


                                              21

<PAGE>



Depository  Participants  and receive and transmit  payments of principal of and
interest on the Notes to such Depository Participants; and

     (v) whenever this Indenture  requires or permits  actions to be taken based
upon  instructions  or  directions  of Holders of Notes  evidencing  a specified
percentage of the aggregate Note Balance of the Notes,  the Depository  shall be
deemed to  represent  such  percentage  only to the extent that it has  received
instructions   to  such  effect  from   Beneficial   Owners  and/or   Depository
Participants owning or representing,  respectively,  such required percentage of
the beneficial  interest in the Notes and has delivered such instructions to the
Indenture Trustee.

        Section  4.07.  Notices  to  Depository.  Whenever  a  notice  or  other
communication  to the Note Holders is required under this Indenture,  unless and
until Definitive  Notes shall have been issued to Beneficial  Owners pursuant to
Section  4.08,   the   Indenture   Trustee  shall  give  all  such  notices  and
communications  specified  herein  to be given to  Holders  of the  Notes to the
Depository, and shall have no obligation to the Beneficial Owners.

        Section 4.08.  Definitive Notes. If (i) the Indenture Trustee determines
that the  Depository  is no longer  willing or able to  properly  discharge  its
responsibilities  with respect to the Notes and the Indenture  Trustee is unable
to locate a qualified successor,  (ii) the Indenture Trustee elects to terminate
the book-entry system through the Depository or (iii) after the occurrence of an
Event of Default,  Owners of Notes representing beneficial interests aggregating
at least a  majority  of the  aggregate  Note  Balance  of the Notes  advise the
Depository in writing that the  continuation of a book-entry  system through the
Depository is no longer in the best interests of the Beneficial Owners, then the
Depository shall notify all Beneficial  Owners and the Indenture  Trustee of the
occurrence  of any such event and of the  availability  of  Definitive  Notes to
Beneficial  Owners  requesting the same. Upon surrender to the Indenture Trustee
of the typewritten  Notes  representing  the Book-Entry  Notes by the Book-Entry
Custodian  or  the  Depository,  as  applicable,   accompanied  by  registration
instructions,   the  Issuer  shall  execute  and  the  Indenture  Trustee  shall
authenticate  the Definitive  Notes in accordance  with the  instructions of the
Depository.  None of the Issuer,  the Note  Registrar or the  Indenture  Trustee
shall  be  liable  for  any  delay  in  delivery  of such  instructions  and may
conclusively  rely on, and shall be protected in relying on, such  instructions.
Upon the issuance of Definitive Notes, the Indenture Trustee shall recognize the
Holders of the Definitive Notes as Noteholders.

        Section 4.09. Tax Treatment. The Issuer has entered into this Indenture,
and the Notes will be issued,  with the intention  that, for federal,  state and
local income, single business and franchise tax purposes, the Notes will qualify
as indebtedness of the Issuer. The Issuer, by entering into this Indenture,  and
each Noteholder, by its acceptance of its Note (and each Beneficial Owner by its
acceptance of an interest in the applicable Book-Entry Note), agree to treat the
Notes for federal,  state and local  income,  single  business and franchise tax
purposes as indebtedness of the Issuer.

        Section 4.10.  Satisfaction  and Discharge of Indenture.  This Indenture
shall cease to be of further  effect with  respect to the Notes except as to (i)
rights of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments
of principal thereof and interest thereon, (iv) Sections 3.03, 3.04, 3.06, 3.09,
3.16, 3.18 and 3.19, (v) the rights, obligations and immunities of the Indenture
Trustee  hereunder  (including the rights of the Indenture Trustee under Section
6.07 and the obligations of the Indenture Trustee under


                                              22

<PAGE>



Section 4.11) and (vi) the rights of  Noteholders as  beneficiaries  hereof with
respect to the property so deposited with the Indenture  Trustee  payable to all
or any of them,  and the Indenture  Trustee,  on demand of and at the expense of
the Issuer,  shall execute proper  instruments  acknowledging  satisfaction  and
discharge of this Indenture with respect to the Notes, when

                      (A) either

                  (1) the Notes  theretofore  authenticated and delivered (other
        than (i) Notes  that have been  destroyed,  lost or stolen and that have
        been  replaced or paid as  provided  in Section  4.03 and (ii) Notes for
        whose  payment  money  has  theretofore   been  deposited  in  trust  or
        segregated and held in trust by the Issuer and thereafter  repaid to the
        Issuer or discharged  from such trust, as provided in Section 3.03) have
        been delivered to the Indenture Trustee for cancellation; or

                  (2) the  Notes  not  theretofore  delivered  to the  Indenture
Trustee for cancellation

                      a. have become due and payable,

                      b.  will  become  due and  payable  at the  Final  Insured
                  Payment Date within one year, or

                      c. have been declared immediately due and payable pursuant
                  to Section 5.02.

        and the Issuer, in the case of a. or b. above, has irrevocably deposited
        or caused to be irrevocably deposited with the Indenture Trustee cash or
        direct obligations of or obligations  guaranteed by the United States of
        America  (which will mature prior to the date such amounts are payable),
        in trust for such purpose,  in an amount sufficient to pay and discharge
        the entire  indebtedness on such Notes then  outstanding not theretofore
        delivered  to the  Indenture  Trustee for  cancellation  when due on the
        Final Insured Payment Date;

                      (B) the  Issuer  has paid or  caused  to be paid all other
                  sums payable  hereunder and under the  Insurance  Agreement by
                  the Issuer; and

                      (C) the Issuer has delivered to the Indenture  Trustee and
                  the Credit Enhancer an Officer's Certificate and an Opinion of
                  Counsel,  each meeting the applicable  requirements of Section
                  10.01 and each stating that all  conditions  precedent  herein
                  provided for  relating to the  satisfaction  and  discharge of
                  this  Indenture have been complied with and, if the Opinion of
                  Counsel  relates to a deposit made in connection  with Section
                  4.10(A)(2)b.  above,  such  opinion  shall  further  be to the
                  effect that such deposit  will not have any  material  adverse
                  tax  consequences  to  the  Issuer,  any  Noteholders  or  any
                  Certificateholders.

        Section 4.11.  Application of Trust Money. All monies deposited with the
Indenture  Trustee  pursuant to Section  4.10 hereof  shall be held in trust and
applied  by it,  in  accordance  with  the  provisions  of the  Notes  and  this
Indenture,  to the  payment,  either  directly  or through  any Paying  Agent or
Certificate Paying Agent, as the Indenture Trustee may determine, to the Holders
of


                                              23

<PAGE>



Securities,  of all  sums  due and to  become  due  thereon  for  principal  and
interest;  but such monies need not be segregated from other funds except to the
extent required herein or required by law.

        Section  4.12.  Subrogation  and  Cooperation.  (a) The  Issuer  and the
Indenture  Trustee  acknowledge that (i) to the extent the Credit Enhancer makes
payments under the Credit  Enhancement  Instrument on account of principal of or
interest on the Home Loans,  the Credit Enhancer will be fully subrogated to the
rights of the  Noteholders  to receive such principal and interest from the Home
Loans,  and (ii) the Credit  Enhancer  shall be paid such principal and interest
but only from the sources and in the manner provided herein and in the Insurance
Agreement for the payment of such principal and interest.

        The  Indenture   Trustee  shall  cooperate  in  all  respects  with  any
reasonable  request by the Credit Enhancer for action to preserve or enforce the
Credit  Enhancer's  rights or interest  under this  Indenture  or the  Insurance
Agreement, consistent with this Indenture and without limiting the rights of the
Noteholders  as  otherwise  set  forth  in  the  Indenture,  including,  without
limitation, upon the occurrence and continuance of a default under the Insurance
Agreement, a request to take any one or more of the following actions:

                      (i)  institute  Proceedings  for  the  collection  of  all
        amounts then payable on the Notes, or under this Indenture in respect to
        the Notes and all amounts  payable under the Insurance  Agreement and to
        enforce  any  judgment  obtained  and  collect  from the  Issuer  monies
        adjudged due;

                      (ii)  sell the  Trust  Estate or any  portion  thereof  or
        rights or interest  therein,  at one or more public or private Sales (as
        defined in Section  5.15  hereof)  called  and  conducted  in any manner
        permitted by law;

                      (iii)  file  or  record  all  assignments  that  have  not
        previously been recorded;

                      (iv)  institute  Proceedings  from  time to  time  for the
        complete or partial foreclosure of this Indenture; and

                      (v)  exercise  any  remedies of a secured  party under the
        Uniform Commercial Code and take any other appropriate action to protect
        and enforce the rights and remedies of the Credit Enhancer hereunder.

                  Following  the  payment  in  full  of the  Notes,  the  Credit
Enhancer shall  continue to have all rights and privileges  provided to it under
this Section and in all other  provisions of this  Indenture,  until all amounts
owing to the Credit Enhancer have been paid in full.

        Section 4.13.  Repayment of Monies Held by Paying  Agent.  In connection
with the satisfaction and discharge of this Indenture with respect to the Notes,
all monies then held by any Person other than the  Indenture  Trustee  under the
provisions of this  Indenture  with respect to such Notes shall,  upon demand of
the Issuer, be paid to the Indenture Trustee to be held and applied according to
Section 3.05 and thereupon  such Paying Agent shall be released from all further
liability with respect to such monies.


                                              24

<PAGE>




        Section 4.14. Temporary Notes. Pending the preparation of any Definitive
Notes,  the Issuer may  execute and upon its written  direction,  the  Indenture
Trustee may authenticate  and make available for delivery,  temporary Notes that
are printed,  lithographed,  typewritten,  photocopied or otherwise produced, in
any denomination,  substantially of the tenor of the Definitive Notes in lieu of
which  they  are  issued  and  with  such  appropriate  insertions,   omissions,
substitutions  and other  variations  as the officers  executing  such Notes may
determine, as evidenced by their execution of such Notes.

        If temporary Notes are issued, the Issuer will cause Definitive Notes to
be prepared without  unreasonable delay. After the preparation of the Definitive
Notes,  the temporary  Notes shall be  exchangeable  for  Definitive  Notes upon
surrender  of the  temporary  Notes at the  office or  agency  of the  Indenture
Trustee,  without charge to the Holder.  Upon surrender for  cancellation of any
one or more temporary Notes, the Issuer shall execute and the Indenture  Trustee
shall  authenticate  and make  available  for  delivery,  in exchange  therefor,
Definitive  Notes of  authorized  denominations  and of like tenor and aggregate
principal amount. Until so exchanged, such temporary Notes shall in all respects
be entitled to the same benefits under this Indenture as Definitive Notes.


                                              25

<PAGE>



                                          Article V

                                     Default and Remedies

        Section  5.01.  Events of  Default.  The  Issuer  shall  deliver  to the
Indenture  Trustee  and the Credit  Enhancer,  within five  calendar  days after
learning of the  occurrence of any event which with the giving of notice and the
lapse of time  would  become  an  Event of  Default  under  clause  (iii) of the
definition  of "Event of  Default"  written  notice in the form of an  Officer's
Certificate  of its status and what  action the Issuer is taking or  proposes to
take with respect thereto.

        Section 5.02. Acceleration of Maturity;  Rescission and Annulment. If an
Event of Default should occur and be continuing, then and in every such case the
Indenture Trustee or the Holders of Notes  representing not less than a majority
of the  aggregate  Note  Balance  of all Notes with the  written  consent of the
Credit Enhancer,  or the Credit Enhancer may declare the Notes to be immediately
due and  payable,  by a notice in writing to the  Issuer  (and to the  Indenture
Trustee  if given by  Noteholders),  and upon any such  declaration  the  unpaid
principal  amount of such  Notes,  together  with  accrued  and unpaid  interest
thereon  through the date of  acceleration,  shall  become  immediately  due and
payable.

        At any time after such  declaration  of  acceleration  of maturity  with
respect to an Event of Default has been made and before a judgment or decree for
payment  of the  money  due  has  been  obtained  by the  Indenture  Trustee  as
hereinafter  in this  Article V provided,  the Holders of Notes  representing  a
majority of the aggregate  Note Balance of all Notes,  by written  notice to the
Issuer  and the  Indenture  Trustee  with  the  written  consent  of the  Credit
Enhancer,  or the Credit  Enhancer,  may in writing  waive the related  Event of
Default and rescind and annul such declaration and its consequences if:

                      (i) the Issuer has paid or  deposited  with the  Indenture
        Trustee a sum sufficient to pay:

                      (A) all payments of principal of and interest on the Notes
        and all other amounts that would then be due hereunder or upon the Notes
        if the  Event  of  Default  giving  rise  to such  acceleration  had not
        occurred; and

                      (B) all sums paid or  advanced  by the  Indenture  Trustee
        hereunder and the reasonable compensation,  expenses,  disbursements and
        advances of the Indenture Trustee and its agents and counsel; and

                      (ii) all Events of Default,  other than the  nonpayment of
        the  principal  of  the  Notes  that  has  become  due  solely  by  such
        acceleration, have been cured or waived as provided in Section 5.12.

        No such  rescission  shall affect any  subsequent  default or impair any
right consequent thereto.



                                              26

<PAGE>



     Section 5.03.  Collection  of  Indebtedness  and Suits for  Enforcement  by
          Indenture Trustee.

        (a) Subject to Section 3.31, the Issuer covenants that if default in the
payment of (i) any  interest on any Note when the same  becomes due and payable,
and such default  continues  for a period of five days, or (ii) the principal of
or any  installment  of the  principal of any Note when the same becomes due and
payable,  the Issuer shall, upon demand of the Indenture Trustee, pay to it, for
the  benefit of the Holders of Notes,  the whole  amount then due and payable on
the Notes for principal and interest,  with interest upon the overdue principal,
and in addition  thereto such further amount as shall be sufficient to cover the
costs  and  expenses  of  collection,  including  the  reasonable  compensation,
expenses, disbursements and advances of the Indenture Trustee and its agents and
counsel.

        (b) In case the Issuer  shall fail  forthwith  to pay such  amounts upon
such demand, the Indenture Trustee, in its own name and as trustee of an express
trust,  subject to the  provisions  of Section  10.17  hereof  may  institute  a
Proceeding for the  collection of the sums so due and unpaid,  and may prosecute
such  Proceeding to judgment or final  decree,  and may enforce the same against
the Issuer or other obligor upon the Notes and collect in the manner provided by
law out of the property of the Issuer or other obligor upon the Notes,  wherever
situated, the monies adjudged or decreed to be payable.

        (c) If an Event of  Default  occurs  and is  continuing,  the  Indenture
Trustee  subject  to the  provisions  of  Section  10.17  hereof  may,  as  more
particularly provided in Section 5.04, in its discretion, proceed to protect and
enforce  its  rights  and the  rights of the  Noteholders,  by such  appropriate
Proceedings  as the Indenture  Trustee shall deem most  effective to protect and
enforce any such rights, whether for the specific enforcement of any covenant or
agreement  in this  Indenture  or in aid of the  exercise  of any power  granted
herein, or to enforce any other proper remedy or legal or equitable right vested
in the Indenture Trustee by this Indenture or by law.

        (d) In case there shall be pending,  relative to the Issuer or any other
obligor upon the Notes or any Person having or claiming an ownership interest in
the Trust  Estate,  Proceedings  under Title 11 of the United States Code or any
other applicable  federal or state bankruptcy,  insolvency or other similar law,
or in case a receiver,  assignee  or trustee in  bankruptcy  or  reorganization,
liquidator,  sequestrator  or similar  official shall have been appointed for or
taken  possession of the Issuer or its property or such other obligor or Person,
or in case of any other comparable judicial  Proceedings  relative to the Issuer
or other  obligor upon the Notes,  or to the creditors or property of the Issuer
or such other  obligor,  the  Indenture  Trustee,  irrespective  of whether  the
principal of any Notes shall then be due and payable as therein  expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee shall
have made any  demand  pursuant  to the  provisions  of this  Section,  shall be
entitled and empowered, by intervention in such Proceedings or otherwise:

                      (i) to file and  prove a claim  or  claims  for the  whole
        amount of  principal  and  interest  owing and  unpaid in respect of the
        Notes and to file such other  papers or documents as may be necessary or
        advisable  in  order  to  have  the  claims  of  the  Indenture  Trustee
        (including  any  claim  for  reasonable  compensation  to the  Indenture
        Trustee and each  predecessor  Indenture  Trustee,  and their respective
        agents, attorneys and counsel, and for reimbursement of all expenses and
        liabilities incurred, and all advances made, by the


                                              27

<PAGE>



        Indenture Trustee and each predecessor  Indenture  Trustee,  except as a
        result  of  negligence,  willful  misconduct  or bad  faith)  and of the
        Noteholders allowed in such Proceedings;

                      (ii) unless  prohibited by applicable law and regulations,
        to vote on behalf of the Holders of Notes in any  election of a trustee,
        a standby  trustee or Person  performing  similar  functions in any such
        Proceedings;

                      (iii) to collect and receive any monies or other  property
        payable or  deliverable on any such claims and to distribute all amounts
        received  with  respect  to the  claims  of the  Noteholders  and of the
        Indenture Trustee on their behalf; and

                      (iv) to file such  proofs  of claim  and  other  papers or
        documents  as may be  necessary or advisable in order to have the claims
        of the Indenture Trustee or the Holders of Notes allowed in any judicial
        proceedings relative to the Issuer, its creditors and its property;  and
        any trustee, receiver,  liquidator,  custodian or other similar official
        in any such Proceeding is hereby  authorized by each of such Noteholders
        to make  payments to the Indenture  Trustee,  and, in the event that the
        Indenture  Trustee shall  consent to the making of payments  directly to
        such Noteholders,  to pay to the Indenture Trustee such amounts as shall
        be sufficient to cover reasonable compensation to the Indenture Trustee,
        each  predecessor   Indenture  Trustee  and  their  respective   agents,
        attorneys and counsel, and all other expenses and liabilities  incurred,
        and all advances  made,  by the Indenture  Trustee and each  predecessor
        Indenture Trustee except as a result of negligence,  willful  misconduct
        or bad faith.

        (e) Nothing herein  contained shall be deemed to authorize the Indenture
Trustee to  authorize  or consent to or vote for or accept or adopt on behalf of
any  Noteholder  any  plan  of   reorganization,   arrangement,   adjustment  or
composition  affecting  the Notes or the  rights  of any  Holder  thereof  or to
authorize  the  Indenture  Trustee  to  vote  in  respect  of the  claim  of any
Noteholder in any such proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar Person.

        (f) All rights of action and of asserting  claims under this  Indenture,
or under any of the Notes, may be enforced by the Indenture  Trustee without the
possession of any of the Notes or the  production  thereof in any trial or other
Proceedings relative thereto,  and any such action or proceedings  instituted by
the Indenture  Trustee shall be brought in its own name as trustee of an express
trust,  and any  recovery of judgment,  subject to the payment of the  expenses,
disbursements  and  compensation  of the  Indenture  Trustee,  each  predecessor
Indenture  Trustee and their respective  agents and attorneys,  shall be for the
ratable benefit of the Holders of the Notes.

        (g) In any  Proceedings  brought by the Indenture  Trustee (and also any
Proceedings  involving the  interpretation of any provision of this Indenture to
which the Indenture  Trustee shall be a party),  the Indenture  Trustee shall be
held to represent all the Holders of the Notes, and it shall not be necessary to
make any Noteholder a party to any such Proceedings.



                                              28

<PAGE>



        Section  5.04.  Remedies;  Priorities.  (a) If an Event of Default shall
have occurred and be continuing, the Indenture Trustee subject to the provisions
of Section 10.17 hereof may with the written consent of the Credit Enhancer,  or
shall at the written  direction  of the Credit  Enhancer,  do one or more of the
following (subject to Section 5.05):

                      (i) institute  Proceedings  in its own name and as trustee
        of an express  trust for the  collection  of all amounts then payable on
        the Notes or under  this  Indenture  with  respect  thereto,  whether by
        declaration  or otherwise,  and all amounts  payable under the Insurance
        Agreement,  enforce any judgment  obtained,  and collect from the Issuer
        and any other obligor upon such Notes monies adjudged due;

                      (ii)  institute  Proceedings  from  time to  time  for the
        complete or partial  foreclosure  of this  Indenture with respect to the
        Trust Estate;

                      (iii)  exercise any remedies of a secured  party under the
        UCC and take any other  appropriate  action to protect  and  enforce the
        rights and  remedies  of the  Indenture  Trustee  and the Holders of the
        Notes; and

                      (iv)  sell the  Trust  Estate or any  portion  thereof  or
        rights or  interest  therein,  at one or more  public or  private  sales
        called and conducted in any manner permitted by law; provided,  however,
        that the Indenture Trustee may not sell or otherwise liquidate the Trust
        Estate following an Event of Default,  unless (A) the Indenture  Trustee
        obtains the consent of the Holders of 100% of the aggregate Note Balance
        of the  Notes  and  the  Credit  Enhancer,  which  consent  will  not be
        unreasonably  withheld,  (B) the proceeds of such Sale  distributable to
        Holders are  sufficient  to  discharge  in full all amounts then due and
        unpaid upon the Notes for  principal  and interest and to reimburse  the
        Credit  Enhancer  for any  amounts  drawn  under the Credit  Enhancement
        Instrument  and any other  amounts  due the  Credit  Enhancer  under the
        Insurance  Agreement or (C) the Indenture  Trustee  determines  that the
        Home Loans will not continue to provide sufficient funds for the payment
        of  principal of and interest on the Notes as they would have become due
        if the Notes had not been  declared due and payable,  and the  Indenture
        Trustee obtains the consent of the Credit  Enhancer,  which consent will
        not be  unreasonably  withheld,  and of the  Holders  of 66  2/3% of the
        aggregate Note Balance of the Notes. In determining  such sufficiency or
        insufficiency  with respect to clause (B) and (C), the Indenture Trustee
        may,  but need not,  obtain and rely upon an  opinion of an  Independent
        investment  banking or accounting firm of national  reputation as to the
        feasibility  of such proposed  action and as to the  sufficiency  of the
        Trust Estate for such purpose. Following an Event of Liquidation, on the
        related Dissolution Payment Date the Indenture Trustee shall make a draw
        on  the  Credit  Enhancement  Instrument  in  an  amount  equal  to  the
        Dissolution  Draw  pursuant to Section  3.27 and shall  distribute  such
        amount  as set  forth in  Section  5.04(b)  below.  Notwithstanding  the
        foregoing,  so long as a Servicing Default has not occurred, any Sale of
        the Trust Estate shall be made subject to the continued servicing of the
        Home  Loans  by  the  Master  Servicer  as  provided  in  the  Servicing
        Agreement.

        (b) If the Indenture  Trustee collects any money or property pursuant to
this Article V, it shall pay out the money or property in the following order:



                                              29

<PAGE>



                    FIRST:  to the  Indenture  Trustee  for  amounts  due  under
                    Section 6.07;

                    SECOND:  to the  Holders  of the Notes for  amounts  due and
                    unpaid on the Notes for  interest,  according to the amounts
                    due and  payable on such  Notes for  interest  from  amounts
                    available in the Trust Estate for such Noteholders;

                    THIRD:  on a pro rata  basis,  to  Holders  of the Notes for
                    amounts  due and  unpaid on the Notes  for  principal,  from
                    amounts  available in the Trust Estate for such Noteholders,
                    according  to the  amounts  due and payable on the Notes for
                    principal,  until the related Note Balances of the Notes are
                    reduced to zero;

                    FOURTH: [reserved];

                    FIFTH:  to the  payment of all  amounts due and owing to the
                    Credit Enhancer under the Insurance Agreement;

                    SIXTH: to the Certificate Paying Agent for amounts due under
                    Article VIII of the Trust Agreement; and

                    SEVENTH:  to the  payment of the  remainder,  if any, to the
                    Issuer or any other person legally entitled thereto.

        The  Indenture  Trustee may fix a record  date and payment  date for any
payment to  Noteholders  pursuant to this Section  5.04. At least 15 days before
such record date, the Indenture  Trustee shall mail to each  Noteholder a notice
that states the record date, the payment date and the amount to be paid.

        Section 5.05.  Optional  Preservation of the Trust Estate.  If the Notes
have been declared to be due and payable  under Section 5.02  following an Event
of Default and such declaration and its consequences have not been rescinded and
annulled,  the  Indenture  Trustee may, but need not,  (but shall at the written
direction of the Credit  Enhancer) elect to take and maintain  possession of the
Trust Estate.  It is the desire of the parties hereto and the  Noteholders  that
there be at all times  sufficient  funds for the  payment  of  principal  of and
interest on the Notes and other  obligations of the Issuer including  payment to
the Credit  Enhancer,  and the  Indenture  Trustee  shall take such  desire into
account when determining  whether or not to take and maintain  possession of the
Trust  Estate.  In  determining  whether to take and maintain  possession of the
Trust Estate, the Indenture Trustee may, but need not, obtain (at the expense of
the Issuer)  and rely upon an opinion of an  Independent  investment  banking or
accounting  firm of national  reputation as to the  feasibility of such proposed
action and as to the sufficiency of the Trust Estate for such purpose.

        Section 5.06.  Limitation of Suits. No Holder of any Note shall have any
right to institute any Proceeding,  judicial or otherwise,  with respect to this
Indenture,  or for the  appointment  of a receiver or trustee,  or for any other
remedy hereunder, unless and subject to the provisions of Section 10.17 hereof:



                                              30

<PAGE>



                      (i) such Holder has previously given written notice to the
        Indenture Trustee of a continuing Event of Default;

                      (ii) the  Holders  of not less  than 25% of the  aggregate
        Note  Balance of the Notes have made  written  request to the  Indenture
        Trustee to institute such Proceeding in respect of such Event of Default
        in its own name as Indenture Trustee hereunder;

                      (iii) such Holder or Holders have offered to the Indenture
        Trustee reasonable indemnity against the costs, expenses and liabilities
        to be incurred in complying with such request;

                      (iv) the  Indenture  Trustee for 60 days after its receipt
        of such notice,  request and offer of indemnity  has failed to institute
        such Proceedings; and

                      (v) no direction  inconsistent  with such written  request
        has been given to the Indenture Trustee during such 60-day period by the
        Holders of a majority of the  aggregate  Note Balance of the Notes or by
        the Credit Enhancer.

It is  understood  and intended  that no one or more Holders of Notes shall have
any right in any manner  whatever by virtue of, or by availing of, any provision
of this  Indenture  to  affect,  disturb  or  prejudice  the rights of any other
Holders of Notes or to obtain or to seek to obtain  priority or preference  over
any other  Holders or to enforce any right under this  Indenture,  except in the
manner herein provided.

        In  the  event  the  Indenture  Trustee  shall  receive  conflicting  or
inconsistent requests and indemnity from two or more groups of Holders of Notes,
each  representing  less than a majority of the  aggregate  Note  Balance of the
Notes,  the Indenture  Trustee in its sole discretion may determine what action,
if any, shall be taken, notwithstanding any other provisions of this Indenture.

        Section 5.07.  Rights of Noteholders to Receive  Principal and Interest.
Notwithstanding  any other provisions in this Indenture,  but subject to Section
3.31,  the  Holder of any Note  shall  have the  right,  which is  absolute  and
unconditional,  to receive payment of the principal of and interest,  if any, on
such Note on or after the respective due dates thereof expressed in such Note or
in this Indenture and to institute suit for the enforcement of any such payment,
and such right shall not be impaired without the consent of such Holder.

        Section  5.08.  Restoration  of Rights and  Remedies.  If the  Indenture
Trustee or any  Noteholder has instituted any Proceeding to enforce any right or
remedy  under  this  Indenture  and such  Proceeding  has been  discontinued  or
abandoned  for any  reason or has been  determined  adversely  to the  Indenture
Trustee  or to such  Noteholder,  then and in every  such case the  Issuer,  the
Indenture  Trustee and the Noteholders  shall,  subject to any  determination in
such  Proceeding,  be restored  severally and  respectively to their  respective
former  positions  hereunder,  and  thereafter  all rights and  remedies  of the
Indenture  Trustee  and  the  Noteholders  shall  continue  as  though  no  such
Proceeding had been instituted.



                                              31

<PAGE>



        Section 5.09. Rights and Remedies Cumulative.  No right or remedy herein
conferred upon or reserved to the Indenture  Trustee,  the Credit Enhancer or to
the  Noteholders  is intended to be exclusive of any other right or remedy,  and
every right and remedy shall, to the extent  permitted by law, be cumulative and
in addition to every other right and remedy given  hereunder or now or hereafter
existing at law or in equity or  otherwise.  The  assertion or employment of any
right or remedy  hereunder,  or  otherwise,  shall not  prevent  the  concurrent
assertion or employment of any other appropriate right or remedy.

        Section  5.10.  Delay or Omission Not a Waiver.  No delay or omission of
the Indenture Trustee, the Credit Enhancer or any Holder of any Note to exercise
any right or remedy  accruing  upon any Event of Default  shall  impair any such
right or  remedy  or  constitute  a waiver of any such  Event of  Default  or an
acquiescence  therein.  Every right and remedy given by this Article V or by law
to the Indenture  Trustee or to the  Noteholders  may be exercised  from time to
time, and as often as may be deemed  expedient,  by the Indenture  Trustee or by
the Noteholders, as the case may be.

        Section 5.11.  Control by Noteholders.  The Holders of a majority of the
aggregate Note Balance of Notes with the consent of the Credit Enhancer,  or the
Credit  Enhancer (so long as no Credit  Enhancer  Default exists) shall have the
right to direct the time,  method and place of conducting any Proceeding for any
remedy  available  to  the  Indenture  Trustee  with  respect  to the  Notes  or
exercising any trust or power conferred on the Indenture Trustee; provided that:

                      (i) such direction  shall not be in conflict with any rule
        of law or with this Indenture;

                      (ii)  subject to the express  terms of Section  5.04,  any
        direction to the Indenture Trustee to sell or liquidate the Trust Estate
        shall be by  Holders  of Notes  representing  not less  than 100% of the
        aggregate Note Balance of Notes with the consent of the Credit Enhancer,
        or the Credit Enhancer (so long as no Credit Enhancer Default exists);

                      (iii) if the  conditions  set forth in  Section  5.05 have
        been  satisfied  and the  Indenture  Trustee  elects to retain the Trust
        Estate  pursuant to such  Section,  then any  direction to the Indenture
        Trustee by Holders of Notes representing less than 100% of the aggregate
        Note Balance of Notes to sell or liquidate  the Trust Estate shall be of
        no force and effect; and

                      (iv) the  Indenture  Trustee  may take  any  other  action
        deemed proper by the  Indenture  Trustee that is not  inconsistent  with
        such direction.

Notwithstanding the rights of Noteholders set forth in this Section,  subject to
Section 6.01, the Indenture  Trustee need not take any action that it determines
might involve it in liability or might materially adversely affect the rights of
any Noteholders not consenting to such action.

        Section 5.12.  Waiver of Past Defaults.  Prior to the declaration of the
acceleration  of the  maturity  of the Notes as provided  in Section  5.02,  the
Holders of Notes of not less than a majority of the  aggregate  Note  Balance of
the Notes with the consent of the Credit  Enhancer,  or the Credit  Enhancer (so
long as no Credit  Enhancer  Default exists) may waive any past Event of Default
and its  consequences  except an Event of Default (a) with respect to payment of
principal of or interest


                                              32

<PAGE>



on any of the Notes or (b) in respect of a covenant or  provision  hereof  which
cannot be modified or amended without the consent of the Holder of each Note. In
the case of any such waiver,  the Issuer,  the Indenture Trustee and the Holders
of the Notes shall be restored to their former  positions and rights  hereunder,
respectively;  but no such waiver shall extend to any  subsequent or other Event
of Default or impair any right consequent thereto.

        Upon any such waiver,  any Event of Default  arising  therefrom shall be
deemed to have been cured and not to have  occurred,  for every  purpose of this
Indenture;  but no such waiver shall extend to any  subsequent or other Event of
Default or impair any right consequent thereto.

        Section  5.13.  Undertaking  for Costs.  All  parties to this  Indenture
agree, and each Holder of any Note by such Holder's  acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture,  or in any suit
against the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture  Trustee,  the  filing  by any  party  litigant  in  such  suit  of an
undertaking  to pay the  costs of such  suit,  and that  such  court  may in its
discretion  assess  reasonable  costs,  including  reasonable  attorneys'  fees,
against  any party  litigant  in such suit,  having due regard to the merits and
good  faith of the  claims or  defenses  made by such  party  litigant;  but the
provisions  of this Section 5.13 shall not apply to (a) any suit  instituted  by
the Indenture  Trustee,  (b) any suit instituted by any Noteholder,  or group of
Noteholders,  in  each  case  holding  in the  aggregate  more  than  10% of the
aggregate Note Balance of the Notes or (c) any suit instituted by any Noteholder
for the enforcement of the payment of principal of or interest on any Note on or
after the respective due dates expressed in such Note and in this Indenture.

        Section 5.14. Waiver of Stay or Extension Laws. The Issuer covenants (to
the extent that it may lawfully do so) that it will not at any time insist upon,
or plead or in any manner whatsoever, claim or take the benefit or advantage of,
any stay or extension  law  wherever  enacted,  now or at any time  hereafter in
force,  that may affect the covenants or the performance of this Indenture;  and
the Issuer (to the extent that it may  lawfully do so) hereby  expressly  waives
all  benefit  or  advantage  of any such law,  and  covenants  that it shall not
hinder,  delay or impede  the  execution  of any  power  herein  granted  to the
Indenture Trustee,  but will suffer and permit the execution of every such power
as though no such law had been enacted.

        Section 5.15.  Sale of Trust  Estate.  (a) The power to effect any sale,
liquidation  or other  disposition (a "Sale") of any portion of the Trust Estate
pursuant to Section 5.04 is expressly  subject to the provisions of Section 5.05
and this Section 5.15.  The power to effect any such Sale shall not be exhausted
by any one or more Sales as to any portion of the Trust Estate remaining unsold,
but shall continue unimpaired until the entire Trust Estate shall have been sold
or all  amounts  payable  on the Notes and under  this  Indenture  and under the
Insurance Agreement shall have been paid. The Indenture Trustee may from time to
time postpone any public Sale by public  announcement made at the time and place
of such Sale.  The Indenture  Trustee hereby  expressly  waives its right to any
amount fixed by law as compensation for any Sale.

        (b) The  Indenture  Trustee shall not in any private Sale sell the Trust
Estate, or any portion thereof, unless:



                                              33

<PAGE>



                  (1) the Holders of all Notes and the Credit  Enhancer  consent
to, or direct the Indenture Trustee to make, such Sale, or

                  (2) the  proceeds  of such  Sale  would be not  less  than the
entire  amount which would be payable to the  Noteholders  under the Notes,  the
Certificateholders  under the Certificates and the Credit Enhancer in respect of
amounts drawn under the Credit Enhancement  Instrument and any other amounts due
the  Indenture  Trustee in connection  with expenses  incurred by reason of such
sale and due the Credit Enhancer under the Insurance Agreement,  in full payment
thereof in accordance with Section 5.02, on the Payment Date next succeeding the
date of such Sale, or

                  (3) the Indenture Trustee determines,  in its sole discretion,
that the  conditions for retention of the Trust Estate set forth in Section 5.05
cannot be satisfied (in making any such determination, the Indenture Trustee may
rely upon an opinion of an  Independent  investment  banking  firm  obtained and
delivered as provided in Section 5.05), and the Credit Enhancer consents to such
Sale,  which  consent  will  not  be  unreasonably   withheld  and  the  Holders
representing at least 66-2/3% of the aggregate Note Balance of the Notes consent
to such Sale.

The purchase by the Indenture  Trustee of all or any portion of the Trust Estate
at a private  Sale shall not be deemed a Sale or other  disposition  thereof for
purposes of this Section 5.15(b).

        (c) Unless the Holders and the Credit Enhancer have otherwise  consented
or directed the Indenture  Trustee,  at any public Sale of all or any portion of
the Trust  Estate at which a minimum  bid equal to or  greater  than the  amount
described in paragraph (2) of  subsection  (b) of this Section 5.15 has not been
established  by the  Indenture  Trustee and no Person bids an amount equal to or
greater than such amount,  the  Indenture  Trustee  shall bid an amount at least
$1.00 more than the highest other bid.

        (d) In connection with a Sale of all or any portion of the Trust Estate:

                  (1) any  Holder or  Holders  of Notes may bid for and with the
consent of the Credit Enhancer  purchase the property offered for sale, and upon
compliance  with the terms of sale may hold,  retain and  possess and dispose of
such property,  without further accountability,  and may, in paying the purchase
money therefor, deliver any Notes or claims for interest thereon in lieu of cash
up to the amount  which  shall,  upon  distribution  of the net proceeds of such
sale, be payable thereon, and such Notes, in case the amounts so payable thereon
shall be less than the amount due  thereon,  shall be  returned  to the  Holders
thereof after being appropriately stamped to show such partial payment;

                  (2) the Indenture Trustee may bid for and acquire the property
offered  for Sale in  connection  with any Sale  thereof,  and,  subject  to any
requirements  of, and to the extent  permitted by,  applicable law in connection
therewith,  may  purchase  all or any  portion of the Trust  Estate in a private
sale, and, in lieu of paying cash therefor, may make settlement for the purchase
price by crediting  the gross Sale price against the sum of (A) the amount which
would be  distributable  to the Holders of the Notes and Holders of Certificates
and amounts owing to the Credit  Enhancer as a result of such Sale in accordance
with Section  5.04(b) on the Payment Date next  succeeding the date of such Sale
and (B) the expenses of the Sale and of any Proceedings in connection  therewith
which


                                              34

<PAGE>



are  reimbursable to it, without being required to produce the Notes in order to
complete any such Sale or in order for the net Sale price to be credited against
such Notes, and any property so acquired by the Indenture  Trustee shall be held
and dealt with by it in accordance with the provisions of this Indenture;

                  (3)  the  Indenture  Trustee  shall  execute  and  deliver  an
appropriate instrument of conveyance transferring its interest in any portion of
the Trust Estate in connection with a Sale thereof;

                  (4) the Indenture Trustee is hereby irrevocably  appointed the
agent and attorney-in- fact of the Issuer to transfer and convey its interest in
any portion of the Trust Estate in connection  with a Sale thereof,  and to take
all action necessary to effect such Sale; and

                  (5) no purchaser or  transferee  at such a Sale shall be bound
to ascertain the Indenture Trustee's authority, inquire into the satisfaction of
any conditions precedent or see to the application of any monies.

        Section 5.16. Action on Notes. The Indenture Trustee's right to seek and
recover  judgment on the Notes or under this Indenture  shall not be affected by
the seeking,  obtaining or application of any other relief under or with respect
to this Indenture. Neither the lien of this Indenture nor any rights or remedies
of the Indenture Trustee or the Noteholders shall be impaired by the recovery of
any judgment by the Indenture  Trustee  against the Issuer or by the levy of any
execution  under such  judgment upon any portion of the Trust Estate or upon any
of the assets of the Issuer.  Any money or property  collected by the  Indenture
Trustee shall be applied in accordance with Section 5.04(b).

        Section 5.17.  Performance and Enforcement of Certain  Obligations.  (a)
Promptly  following a written  request from the Credit Enhancer or the Indenture
Trustee with the written consent of the Credit Enhancer to do so, the Issuer, in
its capacity as holder of the Home Loans, shall, with the written consent of the
Credit  Enhancer,  take all such  lawful  action as the  Indenture  Trustee  may
request to cause the Issuer to compel or secure the  performance  and observance
by the  Seller  and the  Master  Servicer,  as  applicable,  of  each  of  their
obligations  to the Issuer under or in  connection  with the Home Loan  Purchase
Agreement  and the  Servicing  Agreement,  and to  exercise  any and all rights,
remedies,  powers and  privileges  lawfully  available to the Issuer under or in
connection with the Home Loan Purchase Agreement and the Servicing  Agreement to
the extent and in the manner  directed by the Indenture  Trustee,  as pledgee of
the Home Loans,  including the transmission of notices of default on the part of
the Seller or the Master  Servicer  thereunder  and the  institution of legal or
administrative  actions or  proceedings  to compel or secure  performance by the
Seller or the Master Servicer of each of their  obligations  under the Home Loan
Purchase Agreement and the Servicing Agreement.

        (b) If an Event of Default has occurred and is continuing, the Indenture
Trustee,  as  pledgee  of the Home  Loans,  subject  to the rights of the Credit
Enhancer  under  the  Servicing  Agreement  may,  and  at the  direction  (which
direction  shall be in writing or by telephone  (confirmed  in writing  promptly
thereafter))  of the  Holders of 66-2/3% of the  aggregate  Note  Balance of the
Notes shall, exercise all rights, remedies, powers, privileges and claims of the
Issuer against the Seller or the Master Servicer under or in connection with the
Home Loan Purchase Agreement and


                                              35

<PAGE>



the  Servicing  Agreement,  including  the right or power to take any  action to
compel or secure performance or observance by the Seller or the Master Servicer,
as the case may be, of each of their obligations to the Issuer thereunder and to
give any consent,  request,  notice,  direction,  approval,  extension or waiver
under the Home Loan Purchase Agreement and the Servicing Agreement,  as the case
may be, and any right of the Issuer to take such action shall not be  suspended.
In connection  therewith,  as determined  by the Indenture  Trustee,  the Issuer
shall take all actions necessary to effect the transfer of the Home Loans to the
Indenture Trustee.


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<PAGE>



                                          Article VI

                                    The Indenture Trustee

        Section 6.01.  Duties of Indenture  Trustee.  (a) If an Event of Default
has occurred and is continuing,  the Indenture Trustee shall exercise the rights
and powers  vested in it by this  Indenture  and use the same degree of care and
skill in their  exercise  as a prudent  person  would  exercise or use under the
circumstances in the conduct of such person's own affairs.

        (b) Except during the continuance of an Event of Default:

                      (i) the  Indenture  Trustee  undertakes  to  perform  such
        duties  and only  such  duties  as are  specifically  set  forth in this
        Indenture  and no implied  covenants or  obligations  shall be read into
        this Indenture against the Indenture Trustee; and

                      (ii)  in  the  absence  of bad  faith  on  its  part,  the
        Indenture  Trustee  may  conclusively  rely,  as to  the  truth  of  the
        statements and the correctness of the opinions expressed  therein,  upon
        certificates  or  opinions   furnished  to  the  Indenture  Trustee  and
        conforming to the requirements of this Indenture; however, the Indenture
        Trustee shall examine the certificates and opinions to determine whether
        or not they conform to the requirements of this Indenture.

        (c) The Indenture Trustee may not be relieved from liability for its own
negligent  action,  its  own  negligent  failure  to  act  or  its  own  willful
misconduct, except that:

                      (i) this  paragraph does not limit the effect of paragraph
        (b) of this Section 6.01;

                      (ii) the  Indenture  Trustee  shall not be liable  for any
        error of judgment made in good faith by a Responsible  Officer unless it
        is proved that the Indenture  Trustee was negligent in ascertaining  the
        pertinent facts; and

                      (iii) the  Indenture  Trustee  shall  not be  liable  with
        respect  to any  action  it  takes  or  omits  to take in good  faith in
        accordance with a direction  received by it (A) pursuant to Section 5.11
        or (B) from the Credit Enhancer,  which it is entitled to give under any
        of the Basic Documents.

        (d) The Indenture  Trustee shall not be liable for interest on any money
received by it except as the  Indenture  Trustee  may agree in writing  with the
Issuer.

        (e) Money held in trust by the Indenture  Trustee need not be segregated
from  other  funds  except to the  extent  required  by law or the terms of this
Indenture or the Trust Agreement.

        (f) No provision of this Indenture  shall require the Indenture  Trustee
to expend or risk its own funds or otherwise  incur  financial  liability in the
performance  of any of its duties  hereunder  or in the  exercise  of any of its
rights or powers, if it shall have reasonable grounds to


                                              37

<PAGE>



believe that repayment of such funds or adequate  indemnity against such risk or
liability is not reasonably assured to it.

        (g)  Every  provision  of this  Indenture  relating  to the  conduct  or
affecting  the liability of or affording  protection  to the  Indenture  Trustee
shall be subject to the  provisions of this Section and to the provisions of the
TIA.

        Section 6.02. Rights of Indenture Trustee. (a) The Indenture Trustee may
rely on any  document  believed  by it to be genuine  and to have been signed or
presented by the proper person.  The Indenture  Trustee need not investigate any
fact or matter stated in the document.

        (b) Before the Indenture  Trustee acts or refrains  from acting,  it may
require an Officer's Certificate or an Opinion of Counsel. The Indenture Trustee
shall not be liable  for any  action it takes or omits to take in good  faith in
reliance on an Officer's Certificate or Opinion of Counsel.

        (c) The  Indenture  Trustee  may  execute  any of the  trusts  or powers
hereunder  or perform  any duties  hereunder  either  directly  or by or through
agents or attorneys or a custodian or nominee,  and the Indenture  Trustee shall
not be  responsible  for any misconduct or negligence on the part of, or for the
supervision of, any such agent,  attorney,  custodian or nominee  appointed with
due care by it hereunder.

        (d) The Indenture Trustee shall not be liable for any action it takes or
omits to take in good faith  which it believes  to be  authorized  or within its
rights or powers;  provided,  however, that the Indenture Trustee's conduct does
not constitute willful misconduct, negligence or bad faith.

        (e) The Indenture  Trustee may consult with  counsel,  and the advice or
opinion of counsel with respect to legal matters  relating to this Indenture and
the Notes shall be full and complete authorization and protection from liability
in respect to any action  taken,  omitted or  suffered by it  hereunder  in good
faith and in accordance with the advice or opinion of such counsel.

        Section  6.03.  Individual  Rights of Indenture  Trustee.  The Indenture
Trustee in its  individual or any other capacity may become the owner or pledgee
of Notes and may otherwise deal with the Issuer or its Affiliates  with the same
rights  it would  have if it were not  Indenture  Trustee.  Any Note  Registrar,
co-registrar or co-paying agent may do the same with like rights.  However,  the
Indenture Trustee must comply with Sections 6.11 and 6.12.

        Section 6.04.  Indenture  Trustee's  Disclaimer.  The Indenture  Trustee
shall not be (i) responsible for and makes no  representation as to the validity
or adequacy of this Indenture or the Notes,  (ii)  accountable  for the Issuer's
use of the proceeds from the Notes or (iii) responsible for any statement of the
Issuer in the Indenture or in any document issued in connection with the sale of
the Notes or in the Notes  other than the  Indenture  Trustee's  certificate  of
authentication.



                                              38

<PAGE>



        Section 6.05. Notice of Event of Default.  If an Event of Default occurs
and is continuing  and if it is known to a Responsible  Officer of the Indenture
Trustee, the Indenture Trustee shall give notice thereof to the Credit Enhancer.
The  Indenture  Trustee  shall  mail to each  Noteholder  notice of the Event of
Default  within  90 days  after  it  occurs.  Except  in the case of an Event of
Default  in payment of  principal  of or  interest  on any Note,  the  Indenture
Trustee may withhold the notice if and so long as a committee of its Responsible
Officers  in  good  faith  determines  that  withholding  the  notice  is in the
interests of Noteholders.

        Section  6.06.  Reports by Indenture  Trustee to Holders.  The Indenture
Trustee shall deliver to each Noteholder such  information as may be required to
enable  such holder to prepare its  federal  and state  income tax  returns.  In
addition,  upon the  Issuer's  written  request,  the  Indenture  Trustee  shall
promptly  furnish  information  reasonably  requested  by  the  Issuer  that  is
reasonably  available to the  Indenture  Trustee to enable the Issuer to perform
its federal and state income tax reporting obligations.

        Section 6.07.  Compensation  and Indemnity.  The Issuer shall pay to the
Indenture Trustee on each Payment Date reasonable compensation for its services.
The  Indenture  Trustee  shall be  compensated  and  indemnified  by the  Master
Servicer in  accordance  with Section 6.06 of the Servicing  Agreement,  and all
amounts owing to the Indenture  Trustee hereunder in excess of such amount shall
be paid solely as provided in Section 3.05 hereof (subject to the priorities set
forth therein). The Indenture Trustee's compensation shall not be limited by any
law on compensation of a trustee of an express trust. The Issuer shall reimburse
the Indenture Trustee for all reasonable out-of-pocket expenses incurred or made
by it,  including costs of collection,  in addition to the  compensation for its
services.  Such expenses shall include the reasonable compensation and expenses,
disbursements  and  advances  of  the  Indenture   Trustee's  agents,   counsel,
accountants  and  experts.  The Issuer shall  indemnify  the  Indenture  Trustee
against  any and all loss,  liability  or expense  (including  attorneys'  fees)
incurred  by it in  connection  with the  administration  of this  trust and the
performance  of its duties  hereunder.  The  Indenture  Trustee shall notify the
Issuer  promptly  of any claim for which it may seek  indemnity.  Failure by the
Indenture  Trustee to so notify the Issuer  shall not  relieve the Issuer of its
obligations hereunder. The Issuer shall defend any such claim, and the Indenture
Trustee may have separate counsel and the Issuer shall pay the fees and expenses
of such  counsel.  The  Issuer is not  obligated  to  reimburse  any  expense or
indemnify  against any loss,  liability  or expense  incurred  by the  Indenture
Trustee through the Indenture  Trustee's own willful  misconduct,  negligence or
bad faith. The Issuer's payment obligations to the Indenture Trustee pursuant to
this  Section  6.07 shall  survive the  discharge  of this  Indenture.  When the
Indenture  Trustee  incurs  expenses after the occurrence of an Event of Default
specified  in clause (iv) or (v) of the  definition  thereof with respect to the
Issuer, the expenses are intended to constitute expenses of administration under
Title 11 of the  United  States  Code or any other  applicable  federal or state
bankruptcy, insolvency or similar law.

        Section  6.08.  Replacement  of Indenture  Trustee.  No  resignation  or
removal of the Indenture  Trustee and no  appointment  of a successor  Indenture
Trustee  shall become  effective  until the  acceptance  of  appointment  by the
successor Indenture Trustee pursuant to this Section 6.08. The Indenture Trustee
may resign at any time by so notifying the Issuer and the Credit  Enhancer.  The
Holders of a majority of the  aggregate  Note Balance of the Notes or the Credit
Enhancer may remove


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<PAGE>



the  Indenture  Trustee by so  notifying  the  Indenture  Trustee and the Credit
Enhancer and may appoint a successor Indenture Trustee.  The Issuer shall remove
the Indenture Trustee if:

                      (i) the  Indenture  Trustee  fails to comply with  Section
        6.11;

                      (ii) the  Indenture  Trustee is  adjudged  a  bankrupt  or
        insolvent;

                      (iii) a receiver or other public  officer  takes charge of
        the Indenture Trustee or its property; or

                      (iv) the Indenture  Trustee otherwise becomes incapable of
        acting.

If the  Indenture  Trustee  resigns or is removed or if a vacancy  exists in the
office of the Indenture  Trustee for any reason (the  Indenture  Trustee in such
event being referred to herein as the retiring  Indenture  Trustee),  the Issuer
shall  promptly  appoint a successor  Indenture  Trustee with the consent of the
Credit  Enhancer which consent will not be unreasonably  withheld.  In addition,
the  Indenture  Trustee  will  resign  to avoid  being  directly  or  indirectly
controlled by the Issuer.

        A successor  Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee and to the Issuer.  Thereupon, the
resignation or removal of the retiring Indenture Trustee shall become effective,
and the successor Indenture Trustee shall have all the rights, powers and duties
of the Indenture Trustee under this Indenture.  The successor  Indenture Trustee
shall mail a notice of its  succession to  Noteholders.  The retiring  Indenture
Trustee shall promptly  transfer all property held by it as Indenture Trustee to
the successor Indenture Trustee.

        If a successor  Indenture  Trustee  does not take office  within 60 days
after the  retiring  Indenture  Trustee  resigns  or is  removed,  the  retiring
Indenture Trustee, the Issuer or the Holders of a majority of the aggregate Note
Balance of the Notes may petition any court of  competent  jurisdiction  for the
appointment of a successor Indenture Trustee.

        If the  Indenture  Trustee  fails  to  comply  with  Section  6.11,  any
Noteholder may petition any court of competent  jurisdiction  for the removal of
the Indenture Trustee and the appointment of a successor Indenture Trustee.

        Notwithstanding  the  replacement of the Indenture  Trustee  pursuant to
this Section, the Issuer's obligations under Section 6.07 shall continue for the
benefit of the retiring Indenture Trustee.

        Section 6.09.  Successor  Indenture  Trustee by Merger. If the Indenture
Trustee  consolidates  with,  merges  or  converts  into,  or  transfers  all or
substantially all its corporate trust business or assets to, another corporation
or banking  association,  the  resulting,  surviving or  transferee  corporation
without any further act shall be the successor Indenture Trustee; provided, that
such  corporation  or  banking  association  shall be  otherwise  qualified  and
eligible  under  Section 6.11.  The  Indenture  Trustee shall provide the Rating
Agencies written notice of any such transaction after the Closing Date.



                                              40

<PAGE>



        In case at the time such  successor or successors by merger,  conversion
or consolidation to the Indenture Trustee shall succeed to the trusts created by
this Indenture any of the Notes shall have been authenticated but not delivered,
any such  successor  to the  Indenture  Trustee  may  adopt the  certificate  of
authentication   of  any  predecessor   trustee,   and  deliver  such  Notes  so
authenticated;  and in case at that  time any of the  Notes  shall not have been
authenticated,  any successor to the  Indenture  Trustee may  authenticate  such
Notes  either  in the name of any  predecessor  hereunder  or in the name of the
successor  to the  Indenture  Trustee;  and in all such cases such  certificates
shall have the full force which it is anywhere in the Notes or in this Indenture
provided that the certificate of the Indenture Trustee shall have.

        Section 6.10.  Appointment of Co-Indenture Trustee or Separate Indenture
Trustee.  (a)  Notwithstanding  any other  provisions of this Indenture,  at any
time, for the purpose of meeting any legal  requirement of any  jurisdiction  in
which any part of the Trust  Estate may at the time be  located,  the  Indenture
Trustee  shall have the power and may execute and  deliver  all  instruments  to
appoint one or more Persons to act as a co-trustee or  co-trustees,  or separate
trustee or separate trustees, of all or any part of the Owner Trust, and to vest
in such  Person  or  Persons,  in such  capacity  and  for  the  benefit  of the
Noteholders,  such title to the Trust Estate, or any part thereof,  and, subject
to the other  provisions  of this  Section,  such powers,  duties,  obligations,
rights and trusts as the Indenture Trustee may consider  necessary or desirable.
No co-trustee or separate trustee  hereunder shall be required to meet the terms
of  eligibility  as a  successor  trustee  under  Section  6.11 and no notice to
Noteholders of the  appointment  of any co-trustee or separate  trustee shall be
required under Section 6.08 hereof.

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

                      (i) all rights,  powers,  duties and obligations conferred
        or imposed upon the Indenture Trustee shall be conferred or imposed upon
        and  exercised or performed by the  Indenture  Trustee and such separate
        trustee or co-trustee  jointly (it being  understood  that such separate
        trustee or co-trustee is not  authorized to act  separately  without the
        Indenture  Trustee joining in such act), except to the extent that under
        any law of any  jurisdiction  in which any particular act or acts are to
        be performed the Indenture  Trustee shall be  incompetent or unqualified
        to perform such act or acts, in which event such rights,  powers, duties
        and  obligations  (including the holding of title to the Trust Estate or
        any portion  thereof in any such  jurisdiction)  shall be exercised  and
        performed singly by such separate  trustee or co-trustee,  but solely at
        the direction of the Indenture Trustee;

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

                      (iii) the  Indenture  Trustee  may at any time  accept the
        resignation of or remove any separate trustee or co-trustee.

        (c) Any notice,  request or other writing given to the Indenture Trustee
shall be deemed to have been  given to each of the then  separate  trustees  and
co-trustees,  as  effectively  as if  given to each of  them.  Every  instrument
appointing any separate trustee or co-trustee shall refer to


                                              41

<PAGE>



this Agreement and the conditions of this Article VI. Each separate  trustee and
co-trustee,  upon its acceptance of the trusts  conferred,  shall be vested with
the estates or property  specified  in its  instrument  of  appointment,  either
jointly with the Indenture  Trustee or separately,  as may be provided  therein,
subject to all the provisions of this  Indenture,  specifically  including every
provision of this Indenture  relating to the conduct of, affecting the liability
of, or affording  protection to, the Indenture  Trustee.  Every such  instrument
shall be filed with the Indenture Trustee.

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

        Section 6.11. Eligibility; Disqualification. The Indenture Trustee shall
at all times satisfy the requirements of TIA ss. 310(a).  The Indenture  Trustee
shall have a combined  capital and surplus of at least  $50,000,000 as set forth
in its most recent  published  annual  report of condition  and it or its parent
shall have a  long-term  debt rating of A or better by  Moody's.  The  Indenture
Trustee  shall comply with TIA ss.  310(b),  including  the  optional  provision
permitted by the second sentence of TIA ss. 310(b)(9);  provided,  however, that
there shall be excluded from the operation of TIA ss. 310(b)(1) any indenture or
indentures  under which other  securities of the Issuer are  outstanding  if the
requirements for such exclusion set forth in TIA ss. 310(b)(1) are met.

        Section 6.12.  Preferential  Collection of Claims  Against  Issuer.  The
Indenture  Trustee  shall  comply with TIA ss.  311(a),  excluding  any creditor
relationship  listed in TIA ss. 311(b). An Indenture Trustee who has resigned or
been removed shall be subject to TIA ss. 311(a) to the extent indicated.

        Section 6.13.  Representations  and  Warranties.  The Indenture  Trustee
hereby represents that:

                      (i)  The  Indenture  Trustee  is duly  organized,  validly
        existing  and in good  standing  under the laws of the State of New York
        with  power and  authority  to own its  properties  and to  conduct  its
        business as such  properties  are  currently  owned and such business is
        presently conducted.

                      (ii) The Indenture  Trustee has the power and authority to
        execute and deliver this  Indenture and to carry out its terms;  and the
        execution,  delivery and  performance  of this  Indenture have been duly
        authorized by the Indenture Trustee by all necessary corporate action.

                      (iii) The consummation of the transactions contemplated by
        this  Indenture and the  fulfillment of the terms hereof do not conflict
        with,  result in any  breach of any of the terms and  provisions  of, or
        constitute  (with or without  notice or lapse of time) a default  under,
        the articles of organization  or bylaws of the Indenture  Trustee or any
        agreement or other instrument to which the Indenture  Trustee is a party
        or by which it is bound.



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<PAGE>



                      (iv) To the Indenture Trustee's best knowledge,  there are
        no proceedings or investigations pending or threatened before any court,
        regulatory   body,   administrative   agency   or   other   governmental
        instrumentality  having  jurisdiction  over the Indenture Trustee or its
        properties:  (A) asserting the  invalidity of this Indenture (B) seeking
        to prevent the consummation of any of the  transactions  contemplated by
        this  Indenture  or (C) seeking any  determination  or ruling that might
        materially and adversely affect the performance by the Indenture Trustee
        of its  obligations  under, or the validity or  enforceability  of, this
        Indenture.

                      (v) The  Indenture  Trustee  does not have  notice  of any
        adverse  claim (as such terms are used in Delaware  UCC  Section  8-302)
        with respect to the Home Loans.

     Section 6.14.  Directions to Indenture  Trustee.  The Indenture  Trustee is
hereby directed:

        (a) to accept  the  pledge of the Home  Loans and hold the assets of the
Trust in trust for the Noteholders and the Credit Enhancer;

        (b) to  authenticate  and  deliver the Notes  substantially  in the form
prescribed  by  Exhibit  A-1  and  A-2 in  accordance  with  the  terms  of this
Indenture; and

        (c) to take all other  actions as shall be  required  to be taken by the
terms of this Indenture.

        Section  6.15.  Indenture  Trustee  May Own  Securities.  The  Indenture
Trustee, in its individual or any other capacity may become the owner or pledgee
of  Securities  with the same  rights  it  would  have if it were not  Indenture
Trustee.


                                              43

<PAGE>



                                   Article VII

                         Noteholders' Lists and Reports

        Section 7.01. Issuer to Furnish Indenture Trustee Names and Addresses of
Noteholders.  The Issuer will furnish or cause to be furnished to the  Indenture
Trustee (a) not more than five days after each Record Date, a list, in such form
as the Indenture Trustee may reasonably  require,  of the names and addresses of
the Holders of Notes as of such Record Date and,  (b) at such other times as the
Indenture Trustee and the Credit Enhancer may request in writing, within 30 days
after  receipt by the  Issuer of any such  request,  a list of similar  form and
content  as of a date not more  than 10 days  prior  to the  time  such  list is
furnished;  provided, however, that so long as the Indenture Trustee is the Note
Registrar, no such list shall be required to be furnished.

        Section   7.02.   Preservation   of   Information;   Communications   to
Noteholders.  (a) The Indenture Trustee shall preserve,  in as current a form as
is  reasonably  practicable,  the names and  addresses  of the  Holders of Notes
contained in the most recent list furnished to the Indenture Trustee as provided
in Section 7.01 and the names and addresses of Holders of Notes  received by the
Indenture  Trustee in its capacity as Note Registrar.  The Indenture Trustee may
destroy any list  furnished  to it as provided in such Section 7.01 upon receipt
of a new list so furnished.

        (b) Noteholders  may  communicate  pursuant to TIA ss. 312(b) with other
Noteholders  with  respect to their  rights  under this  Indenture  or under the
Notes.

        (c) The Issuer,  the Indenture Trustee and the Note Registrar shall have
the protection of TIA ss. 312(c).

        Section 7.03. Reports by Issuer.   (a)  The Issuer shall:

                      (i) file with the Indenture Trustee,  within 15 days after
        the Issuer is required to file the same with the  Commission,  copies of
        the annual reports and the information,  documents and other reports (or
        copies of such  portions of any of the foregoing as the  Commission  may
        from time to time by rules and  regulations  prescribe)  that the Issuer
        may be  required to file with the  Commission  pursuant to Section 13 or
        15(d) of the Exchange Act;

                      (ii) file with the Indenture  Trustee,  and the Commission
        in accordance with rules and regulations prescribed from time to time by
        the Commission such additional  information,  documents and reports with
        respect to compliance by the Issuer with the conditions and covenants of
        this  Indenture  as may be required  from time to time by such rules and
        regulations; and

                      (iii) supply to the  Indenture  Trustee (and the Indenture
        Trustee shall transmit by mail to all  Noteholders  described in TIA ss.
        313(c))  such  summaries  of  any  information,  documents  and  reports
        required  to be filed by the Issuer  pursuant to clauses (i) and (ii) of
        this Section 7.03(a) and by rules and  regulations  prescribed from time
        to time by the Commission.



                                              44

<PAGE>



        (b) Unless  the  Issuer  otherwise  determines,  the fiscal  year of the
Issuer shall end on December 31 of each year.

        Section  7.04.  Reports by  Indenture  Trustee.  If  required by TIA ss.
313(a),  within 60 days after each January 1 beginning with January 1, 2004, the
Indenture  Trustee  shall mail to each  Noteholder as required by TIA ss. 313(c)
and to the Credit  Enhancer a brief report  dated as of such date that  complies
with TIA ss.  313(a).  The  Indenture  Trustee  also shall  comply  with TIA ss.
313(b). A copy of each report at the time of its mailing to Noteholders shall be
filed by the Indenture  Trustee with the Commission and each stock exchange,  if
any,  on which the Notes are  listed.  The Issuer  shall  notify  the  Indenture
Trustee if and when the Notes are listed on any stock exchange.

        Section 7.05. Exchange Act Reporting. In connection with the preparation
and filing of periodic  reports by the Master Servicer  pursuant to Section 4.04
of the Servicing  Agreement,  the Indenture  Trustee shall timely provide to the
Master  Servicer  (I) a list  of  Holders  as  shown  on the  Note  Register  or
Certificate  Register as of the end of each  calendar  year,  (II) copies of all
pleadings,  other legal process and any other documents  relating to any claims,
charges or  complaints  involving the Indenture  Trustee,  as indenture  trustee
hereunder, or the Trust Estate that are received by the Indenture Trustee, (III)
notice of all matters that, to the actual knowledge of a Responsible  Officer of
the Indenture Trustee, have been submitted to a vote of the Holders,  other than
those  matters that have been  submitted to a vote of the Holders at the request
of the Depositor or the Master  Servicer,  and (IV) notice of any failure of the
Indenture  Trustee to make any distribution to the Holders as required  pursuant
to this Indenture.  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.  In connection with the
Form 10-K Certification (as defined in the Servicing  Agreement),  the Indenture
Trustee  shall  provide  the  Master  Servicer  with  a  back-up   certification
substantially in the form attached hereto as Exhibit B. A supplemental indenture
may be entered  into in  accordance  with the  provisions  of this  Indenture to
revise this Section 7.05 without the consent of the Holders.



                                              45

<PAGE>



                                  Article VIII

                      Accounts, Disbursements and Releases

        Section  8.01.  Collection  of  Money.  Except  as  otherwise  expressly
provided  herein,  the Indenture  Trustee may demand payment or delivery of, and
shall receive and collect,  directly and without  intervention  or assistance of
any fiscal agent or other intermediary,  all money and other property payable to
or receivable by the Indenture Trustee pursuant to this Indenture. The Indenture
Trustee shall apply all such money received by it as provided in this Indenture.
Except as otherwise expressly provided in this Indenture,  if any default occurs
in the making of any payment or  performance  under any  agreement or instrument
that is part of the Trust Estate,  the Indenture Trustee may take such action as
may be  appropriate  to enforce  such  payment  or  performance,  including  the
institution and prosecution of appropriate Proceedings. Any such action shall be
without prejudice to any right to claim a Default or Event of Default under this
Indenture and any right to proceed thereafter as provided in Article V.

        Section 8.02.  Trust Accounts.  (a) On or prior to the Closing Date, the
Issuer shall cause the Indenture Trustee to establish and maintain,  in the name
of the Indenture Trustee, for the benefit of the Noteholders and the Certificate
Paying Agent, on behalf of the  Certificateholders  and the Credit Enhancer, the
Payment Account as provided in Section 3.01 of this Indenture.

        (b) All  monies  deposited  from  time to  time in the  Payment  Account
pursuant to the Servicing  Agreement and all deposits  therein  pursuant to this
Indenture  are for the benefit of the  Noteholders  and the  Certificate  Paying
Agent, on behalf of the  Certificateholders  and all investments  made with such
monies  including  all  income or other gain from such  investments  are for the
benefit of the Master Servicer as provided by the Servicing Agreement.

        On each Payment Date, the Indenture Trustee shall distribute all amounts
on deposit in the Payment  Account to Noteholders in respect of the Notes and in
its capacity as Certificate Paying Agent to  Certificateholders  in the order of
priority  set forth in Section  3.05  (except as  otherwise  provided in Section
5.04(b).

        The Master  Servicer  shall direct the  Indenture  Trustee in writing to
invest any funds in the Payment  Account in  Permitted  Investments  maturing no
later than the Business Day preceding each Payment Date and shall not be sold or
disposed of prior to the maturity.

        Section 8.03. Officer's Certificate. The Indenture Trustee shall receive
at least  seven  days  notice  when  requested  by the Issuer to take any action
pursuant to Section  8.05(a),  accompanied  by copies of any  instruments  to be
executed,  and the Indenture Trustee shall also require,  as a condition to such
action,  an Officer's  Certificate,  in form and substance  satisfactory  to the
Indenture  Trustee,  stating the legal effect of any such action,  outlining the
steps  required  to  complete  the  same,  and  concluding  that all  conditions
precedent to the taking of such action have been complied with.



                                              46

<PAGE>



        Section  8.04.  Termination  Upon  Distribution  to  Noteholders.   This
Indenture and the respective  obligations and responsibilities of the Issuer and
the Indenture  Trustee created hereby shall  terminate upon the  distribution to
the   Noteholders,   the   Certificate   Paying   Agent   (on   behalf   of  the
Certificateholders)  and the  Indenture  Trustee of all  amounts  required to be
distributed pursuant to Article III; provided,  however,  that in no event shall
the trust created  hereby  continue  beyond the  expiration of 21 years from the
death  of the  survivor  of the  descendants  of  Joseph  P.  Kennedy,  the late
ambassador of the United  States to the Court of St.  James,  living on the date
hereof.

        Section 8.05. Release of Trust Estate. (a) Subject to the payment of its
fees  and  expenses,  the  Indenture  Trustee  may,  and  when  required  by the
provisions of this Indenture shall, execute instruments to release property from
the lien of this Indenture,  or convey the Indenture  Trustee's  interest in the
same, in a manner and under  circumstances  that are not  inconsistent  with the
provisions of this  Indenture.  No party relying upon an instrument  executed by
the Indenture  Trustee as provided in Article VIII  hereunder  shall be bound to
ascertain the Indenture  Trustee's  authority,  inquire into the satisfaction of
any conditions precedent, or see to the application of any monies.

        (b) The Indenture  Trustee shall, at such time as (i) there are no Notes
Outstanding,  (ii) all sums due the Indenture Trustee pursuant to this Indenture
and other  Basic  Documents  have been  paid,  and (iii) all sums due the Credit
Enhancer have been paid,  release any remaining portion of the Trust Estate that
secured the Notes from the lien of this Indenture.

        (c) The Indenture  Trustee shall release  property from the lien of this
Indenture  pursuant to this Section 8.05 only upon receipt of a request from the
Issuer  accompanied  by an  Officers'  Certificate  and a letter from the Credit
Enhancer, stating that the Credit Enhancer has no objection to such request from
the Issuer.

        (d) The  Indenture  Trustee  shall,  at the request of the Issuer or the
Depositor,  surrender the Credit  Enhancement  Instrument to the Credit Enhancer
for cancellation, upon final payment on the Notes.

        Section 8.06.  Surrender of Notes Upon Final  Payment.  By acceptance of
any Note,  the Holder  thereof  agrees to surrender  such Note to the  Indenture
Trustee  promptly,  prior to such  Noteholder's  receipt  of the  final  payment
thereon.


                                              47

<PAGE>



                                   Article IX

                             Supplemental Indentures

        Section 9.01.  Supplemental  Indentures  Without Consent of Noteholders.
(a) Without the consent of the Holders of any Notes but with prior notice to the
Rating Agencies and the Credit Enhancer,  the Issuer and the Indenture  Trustee,
when  authorized by an Issuer  Request,  at any time and from time to time,  may
enter into one or more  indentures  supplemental  hereto (which shall conform to
the  provisions  of the  Trust  Indenture  Act as in  force  at the  date of the
execution  thereof),  in form satisfactory to the Indenture Trustee,  for any of
the following purposes:

                      (i) to correct or amplify the  description of any property
        at any time subject to the lien of this Indenture,  or better to assure,
        convey and confirm unto the  Indenture  Trustee any property  subject or
        required to be subjected to the lien of this Indenture, or to subject to
        the lien of this Indenture additional property;

                      (ii) to evidence the  succession,  in compliance  with the
        applicable  provisions  hereof, of another person to the Issuer, and the
        assumption  by any such  successor of the covenants of the Issuer herein
        and in the Notes contained;

                      (iii)  to add to the  covenants  of the  Issuer,  for  the
        benefit  of the  Holders  of the  Notes or the  Credit  Enhancer,  or to
        surrender any right or power herein conferred upon the Issuer;

                      (iv) to convey,  transfer,  assign, mortgage or pledge any
        property to or with the Indenture Trustee;

                      (v) to cure any  ambiguity,  to correct  any error,  or to
        correct  or  supplement  any  provision  herein  or in any  supplemental
        indenture that may be inconsistent  with any other provision  herein, in
        any supplemental indenture or in the Prospectus Supplement;

                      (vi) to make any other  provisions with respect to matters
        or  questions  arising  under  this  Indenture  or in  any  supplemental
        indenture; provided, that such action shall not materially and adversely
        affect the interests of the Holders of the Notes or the Credit Enhancer;

                      (vii) to evidence  and provide for the  acceptance  of the
        appointment  hereunder by a successor  trustee with respect to the Notes
        and to add to or change any of the provisions of this Indenture as shall
        be necessary to facilitate the administration of the trusts hereunder by
        more than one trustee, pursuant to the requirements of Article VI; or

                      (viii) to modify,  eliminate or add to the  provisions  of
        this  Indenture  to such  extent as shall be  necessary  to  effect  the
        qualification  of this  Indenture  under  the TIA or under  any  similar
        federal  statute  hereafter  enacted and to add to this  Indenture  such
        other  provisions  as may be  expressly  required by the TIA;  provided,
        however, that no such indenture supplements shall be entered into unless
        the Indenture Trustee shall have received


                                              48

<PAGE>



        an Opinion of Counsel that entering into such indenture  supplement will
        not have any material adverse tax  consequences to the Noteholders.  The
        Indenture  Trustee is hereby  authorized to join in the execution of any
        such  supplemental   indenture  and  to  make  any  further  appropriate
        agreements and stipulations that may be therein contained.

        (b) The Issuer and the Indenture  Trustee,  when authorized by an Issuer
Request,  may,  also  without the consent of any of the Holders of the Notes but
with prior notice to the Rating Agencies and the Credit Enhancer,  enter into an
indenture  or  indentures  supplemental  hereto  for the  purpose  of adding any
provisions  to, or changing in any manner or  eliminating  any of the provisions
of, this  Indenture  or of  modifying in any manner the rights of the Holders of
the Notes under this Indenture;  provided,  however, that such action shall not,
as  evidenced  by an Opinion of Counsel,  (i)  adversely  affect in any material
respect the interests of any Noteholder or the Credit Enhancer or (ii) cause the
Issuer to be subject to an entity level tax.

        (c) The Issuer and the  Indenture  Trustee  shall,  as  directed  by the
Holders of  Certificates  which  represent not less than 100% of the Certificate
Percentage Interests thereof, enter into an indenture or indentures supplemental
hereto for the purpose of providing  for the issuance of one or more  additional
classes of Notes  entitled to payments  derived  solely from all or a portion of
the payments to which the  Certificates  issued on the Closing Date  pursuant to
the Trust Agreement are entitled; provided, however, that such action shall not,
as  evidenced  by an Opinion of Counsel,  (i)  adversely  affect in any material
respect the interests of any Noteholder or the Credit Enhancer or (ii) cause the
Issuer to be subject to an entity level tax. Each such class of Notes shall be a
non-recourse  obligation  of the Issuer and shall be entitled  to  interest  and
principal in such amounts,  and to such security for the repayment  thereof,  as
shall be specified in such amendment or amendments. Promptly after the execution
by the  Issuer and the  Indenture  Trustee of any  amendments  pursuant  to this
Section or the creation of a new indenture and the issuance of the related class
or classes of Notes,  the Issuer  shall  require the  Indenture  Trustee to give
notice to the  Holders of the Notes and the  Rating  Agencies  setting  forth in
general terms the substance of the provisions of such amendment.  Any failure of
the  Indenture  Trustee  to  provide  such  notice  as is  required  under  this
paragraph,  or any  defect  therein,  shall not,  however,  in any way impair or
affect the  validity of such  amendment  or any class of Notes  issued  pursuant
thereto.  Unless the Credit Enhancer agrees in writing, (i) any classes of Notes
issued  pursuant  to a  supplemental  indenture  shall  not be  entitled  to the
insurance provided by the Credit Enhancement  Instrument and (ii) the Holders of
any such  classes of Notes shall be  entitled  only to such  distributions  or a
portion of such  distributions  as the Holders would have received as Holders of
Certificates.

        Section 9.02. Supplemental  Indentures With Consent of Noteholders.  The
Issuer and the Indenture  Trustee,  when authorized by an Issuer  Request,  also
may,  with  prior  notice to the  Rating  Agencies  and with the  consent of the
Holders of not less than a majority of the  aggregate  Note Balance of the Notes
affected  thereby and the Credit Enhancer,  by Act of such Holders  delivered to
the Issuer and the  Indenture  Trustee,  enter into an indenture  or  indentures
supplemental  hereto for the purpose of adding any provisions to, or changing in
any  manner or  eliminating  any of the  provisions  of,  this  Indenture  or of
modifying  in any  manner  the  rights of the  Holders  of the Notes  under this
Indenture; provided, however, that no such supplemental indenture shall, without
the consent of the Holder of each Note affected thereby:



                                              49

<PAGE>



                      (i)  change  the date of  payment  of any  installment  of
        principal  of or interest on any Note,  or reduce the  principal  amount
        thereof or the interest  rate  thereon,  change the  provisions  of this
        Indenture relating to the application of collections on, or the proceeds
        of the Sale of, the Trust  Estate to payment of principal of or interest
        on the  Notes,  or change  any place of  payment  where,  or the coin or
        currency  in which,  any Note or the  interest  thereon is  payable,  or
        impair the right to institute suit for the enforcement of the provisions
        of this Indenture requiring the application of funds available therefor,
        as  provided  in Article V, to the payment of any such amount due on the
        Notes on or after the respective due dates thereof;

                      (ii) reduce the  percentage of the related Note Balance of
        any Class of Notes,  the consent of the Holders of which is required for
        any such supplemental  indenture, or the consent of the Holders of which
        is required for any waiver of compliance with certain provisions of this
        Indenture or certain defaults hereunder and their consequences  provided
        for in this Indenture;

                      (iii) modify or alter the provisions of the proviso to the
        definition of the term "Outstanding" or modify or alter the exception in
        the definition of the term "Holder";

                      (iv) reduce the  percentage of the aggregate  Note Balance
        of the Notes  required  to direct  the  Indenture  Trustee to direct the
        Issuer to sell or liquidate the Trust Estate pursuant to Section 5.04;

                      (v) modify any  provision  of this  Section 9.02 except to
        increase  any  percentage  specified  herein or to provide  that certain
        additional provisions of this Indenture or the Basic Documents cannot be
        modified  or  waived  without  the  consent  of the  Holder of each Note
        affected thereby;

                      (vi) modify any of the  provisions  of this  Indenture  in
        such manner as to affect the calculation of the amount of any payment of
        interest or principal due on any Note on any Payment Date (including the
        calculation of any of the individual components of such calculation); or

                      (vii) permit the creation of any lien ranking  prior to or
        on a parity with the lien of this  Indenture with respect to any part of
        the Trust  Estate or,  except as  otherwise  permitted  or  contemplated
        herein, terminate the lien of this Indenture on any property at any time
        subject  hereto  or  deprive  the  Holder  of any  Note of the  security
        provided by the lien of this Indenture; and provided, further, that such
        action  shall not,  as  evidenced  by an Opinion of  Counsel,  cause the
        Issuer to be subject to an entity level tax.

and provided,  further, that no such indenture supplements shall be entered into
unless the  Indenture  Trustee  shall have  received an Opinion of Counsel  that
entering  into  such  indenture  supplement  will not  adversely  affect  in any
material respect the interests of the  Certificateholder  or shall have received
the  express  written  consent  of  the   Certificateholder   to  the  indenture
supplement.



                                              50

<PAGE>



        The Indenture Trustee may in its discretion determine whether or not any
Notes would be affected by any supplemental indenture and any such determination
shall be  conclusive  upon the  Holders of all  Notes,  whether  theretofore  or
thereafter  authenticated and delivered  hereunder.  The Indenture Trustee shall
not be liable for any such determination made in good faith.

        It shall not be  necessary  for any Act of  Noteholders  (as  defined in
Section  10.03) under this Section  9.02 to approve the  particular  form of any
proposed  supplemental  indenture,  but it shall be sufficient if such Act shall
approve the substance thereof.

        Promptly after the execution by the Issuer and the Indenture  Trustee of
any supplemental  indenture pursuant to this Section 9.02, the Indenture Trustee
shall mail to the Holders of the Notes and the Custodian to which such amendment
or  supplemental  indenture  relates a notice setting forth in general terms the
substance of such supplemental  indenture.  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 supplemental indenture.

        Section 9.03.  Execution of Supplemental  Indentures.  In executing,  or
permitting  the  additional  trusts  created  by,  any  supplemental   indenture
permitted by this Article IX or the  modification  thereby of the trusts created
by this  Indenture,  the  Indenture  Trustee  shall be entitled to receive,  and
subject to Sections 6.01 and 6.02,  shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental  indenture is
authorized or permitted by this  Indenture and conforms to the  requirements  of
the Trust  Indenture Act. The Indenture  Trustee may, but shall not be obligated
to,  enter into any such  supplemental  indenture  that  affects  the  Indenture
Trustee's own rights, duties,  liabilities or immunities under this Indenture or
otherwise.

        Section 9.04.  Effect of Supplemental  Indenture.  Upon the execution of
any supplemental  indenture  pursuant to the provisions  hereof,  this Indenture
shall be and shall be deemed to be modified and amended in accordance  therewith
with  respect  to  the  Notes  affected  thereby,  and  the  respective  rights,
limitations of rights,  obligations,  duties,  liabilities and immunities  under
this Indenture of the Indenture Trustee, the Issuer and the Holders of the Notes
shall thereafter be determined,  exercised and enforced hereunder subject in all
respects to such modifications and amendments,  and all the terms and conditions
of any such  supplemental  indenture  shall be and be  deemed  to be part of the
terms and conditions of this Indenture for any and all purposes.

        Section 9.05.  Conformity  with Trust  Indenture Act. Every amendment of
this  Indenture  and every  supplemental  indenture  executed  pursuant  to this
Article IX shall conform to the  requirements of the Trust Indenture Act as then
in effect so long as this  Indenture  shall  then be  qualified  under the Trust
Indenture Act.

        Section  9.06.  Reference  in Notes to  Supplemental  Indentures.  Notes
authenticated  and delivered after the execution of any  supplemental  indenture
pursuant to this Article IX may, and if required by the Indenture Trustee shall,
bear a  notation  in form  approved  by the  Indenture  Trustee as to any matter
provided  for in such  supplemental  indenture.  If the Issuer or the  Indenture
Trustee shall so determine,  new Notes so modified as to conform, in the opinion
of the Indenture Trustee and the Issuer, to any such supplemental  indenture may
be prepared and executed by the Issuer and  authenticated  and  delivered by the
Indenture Trustee in exchange for Outstanding Notes.


                                              51

<PAGE>



                                          Article X

                                        Miscellaneous

        Section 10.01.  Compliance  Certificates and Opinions, etc. (a) Upon any
application or request by the Issuer to the Indenture Trustee to take any action
under any provision of this Indenture, the Issuer shall furnish to the Indenture
Trustee and to the Credit Enhancer (i) an Officer's Certificate stating that all
conditions  precedent,  if any,  provided for in this Indenture  relating to the
proposed  action have been complied with and (ii) an Opinion of Counsel  stating
that in the opinion of such counsel all such conditions precedent,  if any, have
been complied with,  except that, in the case of any such application or request
as to which the  furnishing of such  documents is  specifically  required by any
provision  of this  Indenture,  no  additional  certificate  or opinion  need be
furnished.  Every  certificate  or opinion  with  respect to  compliance  with a
condition or covenant provided for in this Indenture shall include:

                  (1) a statement  that each  signatory of such  certificate  or
        opinion has read or has caused to be read such covenant or condition and
        the definitions herein relating thereto;

                  (2) a  brief  statement  as to the  nature  and  scope  of the
        examination  or  investigation  upon which the  statements  or  opinions
        contained in such certificate or opinion are based;

                  (3) a statement  that, in the opinion of each such  signatory,
        such  signatory  has  made  such  examination  or  investigation  as  is
        necessary to enable such signatory to express an informed  opinion as to
        whether or not such covenant or condition has been complied with;

                  (4) a  statement  as to  whether,  in the opinion of each such
        signatory, such condition or covenant has been complied with; and

                  (5) if the Signer of such  Certificate  or Opinion is required
        to be Independent,  the Statement required by the definition of the term
        "Independent".

        (b) (i) Prior to the  deposit of any  Collateral  or other  property  or
securities  with the  Indenture  Trustee  that is to be made the  basis  for the
release of any property or securities subject to the lien of this Indenture, the
Issuer  shall,  in addition  to any  obligation  imposed in Section  10.01(a) or
elsewhere  in this  Indenture,  furnish to the  Indenture  Trustee an  Officer's
Certificate  certifying  or stating  the  opinion of each  person  signing  such
certificate  as to the fair value (within 90 days of such deposit) to the Issuer
of the Collateral or other property or securities to be so deposited.

                      (ii)  Whenever  the Issuer is  required  to furnish to the
        Indenture  Trustee an Officer's  Certificate  certifying  or stating the
        opinion of any signer thereof as to the matters  described in clause (i)
        above,  the  Issuer  shall  also  deliver  to the  Indenture  Trustee an
        Independent Certificate as to the same matters, if the fair value to the
        Issuer  of the  securities  to be so  deposited  and of all  other  such
        securities  made the basis of any such  withdrawal  or release since the
        commencement of the then-current fiscal year of the Issuer, as set forth
        in the  certificates  delivered  pursuant  to clause  (i) above and this
        clause (ii), is 10% or more of the aggregate  Note Balance of the Notes,
        but such


                                              52

<PAGE>



        a certificate  need not be furnished  with respect to any  securities so
        deposited,  if the fair value  thereof to the Issuer as set forth in the
        related  Officer's  Certificate  is less than  $25,000  or less than one
        percent of the aggregate Note Balance of the Notes.

                      (iii)  Whenever  any  property  or  securities  are  to be
        released from the lien of this Indenture,  the Issuer shall also furnish
        to the Indenture Trustee an Officer's Certificate  certifying or stating
        the opinion of each person signing such certificate as to the fair value
        (within 90 days of such release) of the property or securities  proposed
        to be  released  and  stating  that in the  opinion  of such  person the
        proposed  release will not impair the security  under this  Indenture in
        contravention of the provisions hereof.

                      (iv)  Whenever  the Issuer is  required  to furnish to the
        Indenture  Trustee an Officer's  Certificate  certifying  or stating the
        opinion of any  signer  thereof as to the  matters  described  in clause
        (iii) above,  the Issuer shall also furnish to the Indenture  Trustee an
        Independent  Certificate as to the same matters if the fair value of the
        property or securities and of all other property, other than property as
        contemplated by clause (v) below or securities released from the lien of
        this Indenture since the commencement of the then-current calendar year,
        as set forth in the certificates required by clause (iii) above and this
        clause  (iv),  equals 10% or more of the  aggregate  Note Balance of the
        Notes,  but such  certificate  need not be  furnished in the case of any
        release of property or securities if the fair value thereof as set forth
        in the related  Officer's  Certificate is less than $25,000 or less than
        one percent of the then aggregate Note Balance of the Notes.

                      (v) Notwithstanding  any provision of this Indenture,  the
        Issuer  may,  without  compliance  with the  requirements  of the  other
        provisions of this Section 10.01, (A) collect, sell or otherwise dispose
        of the Home  Loans as and to the extent  permitted  or  required  by the
        Basic  Documents or (B) make cash payments out of the Payment Account as
        and to the extent permitted or required by the Basic Documents,  so long
        as the Issuer shall deliver to the  Indenture  Trustee every six months,
        commencing  March 30,  2004,  an  Officer's  Certificate  of the  Issuer
        stating that all the dispositions of Collateral described in clauses (A)
        or (B) above that occurred during the preceding six calendar months were
        in the ordinary  course of the  Issuer's  business and that the proceeds
        thereof were applied in accordance with the Basic Documents.

        Section 10.02. Form of Documents  Delivered to Indenture Trustee. In any
case where  several  matters are required to be  certified  by, or covered by an
opinion of, any specified  Person,  it is not necessary that all such matters be
certified  by, or covered by the opinion of, only one such Person,  or that they
be so certified or covered by only one document, but one such Person may certify
or give an  opinion  with  respect  to some  matters  and one or more other such
Persons as to other matters,  and any such Person may certify or give an opinion
as to such matters in one or several documents.

        Any certificate or opinion of an Authorized Officer of the Issuer may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or  representations
with respect to the matters upon which his  certificate  or opinion is based are
erroneous.  Any such certificate of an Authorized  Officer or Opinion of Counsel
may be based,  insofar as it relates to factual  matters,  upon a certificate or
opinion of, or representations by, an


                                              53

<PAGE>



officer or officers of the Seller or the Issuer,  stating  that the  information
with respect to such factual  matters is in the  possession of the Seller or the
Issuer,  unless such counsel knows, or in the exercise of reasonable care should
know,  that the certificate or opinion or  representations  with respect to such
matters are erroneous.

        Where any  Person  is  required  to make,  give or  execute  two or more
applications,  requests, consents,  certificates,  statements, opinions or other
instruments  under this Indenture,  they may, but need not, be consolidated  and
form one instrument.

        Whenever  in this  Indenture,  in  connection  with any  application  or
certificate or report to the Indenture  Trustee,  it is provided that the Issuer
shall  deliver any document as a condition of the granting of such  application,
or as evidence of the Issuer's  compliance with any term hereof,  it is intended
that the truth and accuracy,  at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and  opinions  stated in such  document  shall in such case be  conditions
precedent to the right of the Issuer to have such application  granted or to the
sufficiency of such certificate or report. The foregoing shall not, however,  be
construed  to affect the  Indenture  Trustee's  right to rely upon the truth and
accuracy of any statement or opinion  contained in any such document as provided
in Article VI.

        Section  10.03.   Acts  of   Noteholders.   (a)  Any  request,   demand,
authorization,  direction,  notice,  consent, waiver or other action provided by
this  Indenture  to be  given or taken by  Noteholders  may be  embodied  in and
evidenced by one or more  instruments of  substantially  similar tenor signed by
such Noteholders in person or by agents duly appointed in writing; and except as
herein otherwise expressly provided such action shall become effective when such
instrument or instruments are delivered to the Indenture Trustee,  and, where it
is hereby expressly required, to the Issuer. Such instrument or instruments (and
the action embodied therein and evidenced thereby) are herein sometimes referred
to as the "Act" of the Noteholders signing such instrument or instruments. Proof
of execution of any such  instrument or of a writing  appointing  any such agent
shall be  sufficient  for any purpose of this  Indenture and (subject to Section
6.01)  conclusive in favor of the Indenture  Trustee and the Issuer,  if made in
the manner provided in this Section 10.03.

        (b) The  fact  and  date of the  execution  by any  person  of any  such
instrument  or writing  may be proved in any manner that the  Indenture  Trustee
deems sufficient.

        (c) The ownership of Notes shall be proved by the Note Registrar.

        (d) Any request,  demand,  authorization,  direction,  notice,  consent,
waiver or other action by the Holder of any Notes shall bind the Holder of every
Note issued  upon the  registration  thereof or in exchange  therefor or in lieu
thereof,  in respect of  anything  done,  omitted or  suffered to be done by the
Indenture Trustee or the Issuer in reliance thereon,  whether or not notation of
such action is made upon such Note.

        Section  10.04.  Notices,  etc., to Indenture  Trustee,  Issuer,  Credit
Enhancer and Rating Agencies.  Any request,  demand,  authorization,  direction,
notice,  consent,  waiver or Act of Noteholders or other  documents  provided or
permitted by this Indenture shall be in writing and if


                                              54

<PAGE>



such request, demand,  authorization,  direction, notice, consent, waiver or Act
of Noteholders is to be made upon, given or furnished to or filed with:

                        (i) the  Indenture  Trustee by any  Noteholder or by the
        Issuer shall be sufficient for every purpose  hereunder if made,  given,
        furnished  or filed in writing to or with the  Indenture  Trustee at the
        Corporate Trust Office.  The Indenture  Trustee shall promptly  transmit
        any notice received by it from the Noteholders to the Issuer, or

                        (ii)  the  Issuer  by the  Indenture  Trustee  or by any
        Noteholder shall be sufficient for every purpose hereunder if in writing
        and mailed first-class, postage prepaid to the Issuer addressed to: Home
        Loan Trust  2003-HI3,  in care of Wilmington  Trust  Company,  or at any
        other address  previously  furnished in writing to the Indenture Trustee
        by the Issuer. The Issuer shall promptly transmit any notice received by
        it from the Noteholders to the Indenture Trustee, or

                        (iii) the Credit  Enhancer by the Issuer,  the Indenture
        Trustee or by any  Noteholders  shall be  sufficient  for every  purpose
        hereunder to in writing and mailed,  first class  postage  pre-paid,  or
        personally delivered or telecopied to: Ambac Assurance Corporation,  One
        State Street Plaza,  19th Floor,  New York,  New York 10004,  Attention:
        Consumer   Asset-Backed   Securities  Group,   telecopier  number  (212)
        363-1459.  The  Credit  Enhancer  shall  promptly  transmit  any  notice
        received by it from the Issuer, the Indenture Trustee or the Noteholders
        to the Issuer or Indenture Trustee, as the case may be.

        Notices  required to be given to the Rating Agencies by the Issuer,  the
Indenture Trustee or the Owner Trustee shall be in writing, personally delivered
or mailed by certified  mail,  return receipt  requested,  to (i) in the case of
Moody's,  at  the  following  address:  Moody's  Investors  Service,  Inc.,  ABS
Monitoring  Department,  99 Church Street,  New York, New York 10007 and (ii) in
the case of Standard & Poor's,  at the following  address:  Standard & Poor's, A
Division of the McGraw-Hill  Companies,  Inc., 55 Water Street - 41st Floor, New
York, New York 10041, Attention of Asset Backed Surveillance  Department;  or as
to each of the  foregoing,  at such  other  address  as shall be  designated  by
written notice to the other parties.

        Section  10.05.  Notices to  Noteholders;  Waiver.  Where this Indenture
provides  for  notice  to  Noteholders  of  any  event,  such  notice  shall  be
sufficiently  given (unless  otherwise herein expressly  provided) if in writing
and mailed,  first-class,  postage prepaid to each  Noteholder  affected by such
event,  at such Person's  address as it appears on the Note Register,  not later
than the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to Noteholders is given by mail,
neither  the  failure to mail such notice nor any defect in any notice so mailed
to any particular  Noteholder  shall affect the  sufficiency of such notice with
respect to other Noteholders, and any notice that is mailed in the manner herein
provided shall  conclusively  be presumed to have been duly given  regardless of
whether such notice is in fact actually received.

        Where this Indenture provides for notice in any manner,  such notice may
be waived in writing by any Person  entitled  to  receive  such  notice,  either
before or after the  event,  and such  waiver  shall be the  equivalent  of such
notice. Waivers of notice by Noteholders shall be filed with the


                                              55

<PAGE>



Indenture  Trustee but such filing  shall not be a  condition  precedent  to the
validity of any action taken in reliance upon such a waiver.

        In case, by reason of the suspension of regular mail service as a result
of a strike, work stoppage or similar activity,  it shall be impractical to mail
notice of any event to  Noteholders  when such  notice is  required  to be given
pursuant  to any  provision  of this  Indenture,  then any manner of giving such
notice as shall be satisfactory to the Indenture Trustee shall be deemed to be a
sufficient giving of such notice.

        Where this Indenture provides for notice to the Rating Agencies, failure
to give such notice  shall not affect any other  rights or  obligations  created
hereunder, and shall not under any circumstance constitute an Event of Default.

        Section 10.06. Alternate Payment and Notice Provisions.  Notwithstanding
any provision of this Indenture or any of the Notes to the contrary,  the Issuer
may enter into any agreement with any Holder of a Note providing for a method of
payment,  or notice by the Indenture  Trustee to such Holder,  that is different
from the methods  provided for in this  Indenture  for such payments or notices.
The Issuer shall furnish to the Indenture  Trustee a copy of each such agreement
and the  Indenture  Trustee  shall  cause  payments to be made and notices to be
given in accordance with such agreements.

        Section  10.07.  Conflict  with Trust  Indenture  Act. If any  provision
hereof  limits,  qualifies or conflicts  with another  provision  hereof that is
required to be included in this  Indenture by any of the provisions of the Trust
Indenture  Act, such required  provision  shall  control.  The provisions of TIA
ss.ss.  310  through  317  that  impose  duties  on any  Person  (including  the
provisions  automatically  deemed included herein unless  expressly  excluded by
this  Indenture)  are a part  of  and  govern  this  Indenture,  whether  or not
physically contained herein.

        Section  10.08.  Effect of  Headings.  The Article and Section  headings
herein are for convenience only and shall not affect the construction hereof.

        Section 10.09.  Successors and Assigns.  All covenants and agreements in
this  Indenture  and the  Notes by the  Issuer  shall  bind its  successors  and
assigns, whether so expressed or not. All agreements of the Indenture Trustee in
this Indenture shall bind its successors, co-trustees and agents.

        Section 10.10. Separability.  In case any provision in this Indenture or
in the Notes shall be invalid, illegal or unenforceable, the validity, legality,
and enforceability of the remaining  provisions shall not in any way be affected
or impaired thereby.

        Section  10.11.  Benefits of Indenture.  Nothing in this Indenture or in
the Notes, express or implied,  shall give to any Person, other than the parties
hereto and their successors hereunder, and the Noteholders, the Credit Enhancer,
and any other party  secured  hereunder,  and any other Person with an ownership
interest in any part of the Trust Estate,  any benefit or any legal or equitable
right, remedy or claim under this Indenture.



                                              56

<PAGE>



        Section 10.12.  Legal Holidays.  In any case where the date on which any
payment  is due shall not be a Business  Day,  then  (notwithstanding  any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next  succeeding  Business  Day with the same  force  and
effect as if made on the date on which  nominally  due,  and no  interest  shall
accrue for the period from and after any such nominal date.

        Section  10.13.  GOVERNING  LAW.  THIS  INDENTURE  SHALL BE CONSTRUED IN
ACCORDANCE  WITH THE LAWS OF THE STATE OF NEW  YORK,  WITHOUT  REFERENCE  TO ITS
CONFLICT OF LAW  PROVISIONS,  AND THE  OBLIGATIONS,  RIGHTS AND  REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

        Section  10.14.  Counterparts.  This  Indenture  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 10.15.  Recording of Indenture.  If this Indenture is subject to
recording in any appropriate public recording  offices,  such recording is to be
effected by the Issuer and at its expense  accompanied  by an Opinion of Counsel
(which may be counsel to the Indenture  Trustee or any other counsel  reasonably
acceptable  to the  Indenture  Trustee)  to the effect  that such  recording  is
necessary  either for the  protection  of the  Noteholders  or any other  Person
secured  hereunder or for the  enforcement of any right or remedy granted to the
Indenture Trustee under this Indenture.

        Section 10.16. Issuer Obligation.  No recourse may be taken, directly or
indirectly,  with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Notes or under this Indenture or any certificate or
other  writing  delivered in connection  herewith or therewith,  against (i) the
Indenture  Trustee or the Owner  Trustee in its  individual  capacity,  (ii) any
owner of a  beneficial  interest  in the  Issuer  or (iii) any  partner,  owner,
beneficiary,  agent,  officer,  director,  employee  or agent  of the  Indenture
Trustee  or the  Owner  Trustee  in its  individual  capacity,  any  holder of a
beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or
of any successor or assign of the Indenture  Trustee or the Owner Trustee in its
individual  capacity,  except as any such Person may have  expressly  agreed (it
being  understood that the Indenture  Trustee and the Owner Trustee have no such
obligations  in their  individual  capacity)  and except that any such  partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid  consideration  for stock,  unpaid capital  contribution  or
failure to pay any installment or call owing to such entity. For all purposes of
this  Indenture,  in the  performance of any duties or obligations of the Issuer
hereunder,  the Owner  Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Article VI, VII and VIII of the Trust Agreement.

        Section 10.17. No Petition. The Indenture Trustee, by entering into this
Indenture,  and each Noteholder,  by accepting a Note, hereby covenant and agree
that they will not at any time institute against the Depositor or the Issuer, or
join in any institution  against the Depositor or the Issuer of, any bankruptcy,
reorganization,  arrangement,  insolvency or liquidation  proceedings,  or other
proceedings  under any United States federal or state  bankruptcy or similar law
in connection with any obligations  relating to the Notes, this Indenture or any
of the Basic Documents.



                                              57

<PAGE>



        Section 10.18.  Inspection.  The Issuer agrees that, on reasonable prior
notice, it shall permit any representative of the Indenture Trustee,  during the
Issuer's normal  business  hours, to examine all the books of account,  records,
reports and other papers of the Issuer,  to make copies and extracts  therefrom,
to cause such books to be audited by Independent  certified public  accountants,
and to discuss the Issuer's  affairs,  finances  and accounts  with the Issuer's
officers,  employees, and Independent certified public accountants,  all at such
reasonable  times and as often as may be  reasonably  requested.  The  Indenture
Trustee shall and shall cause its representatives to hold in confidence all such
information  except to the extent  disclosure  may be  required  by law (and all
reasonable applications for confidential treatment are unavailing) and except to
the  extent  that the  Indenture  Trustee  may  reasonably  determine  that such
disclosure is consistent with its obligations hereunder.



                                              58

<PAGE>



        IN WITNESS  WHEREOF,  the Issuer and the  Indenture  Trustee have caused
their names to be signed  hereto by their  respective  officers  thereunto  duly
authorized, all as of the day and year first above written.

                           HOME LOAN TRUST 2003-HI3,
                               as Issuer

                                  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:  Mark McDermott
                           Title: Assistant Vice President


JPMORGAN CHASE BANK
hereby  accepts the  appointment as Paying Agent pursuant to Section 3.03 hereof
and as Note Registrar pursuant to Section 4.02 hereof.


By:  _______________________________
Name: Mark McDermott
Title: Assistant Vice President




<PAGE>



        IN WITNESS  WHEREOF,  the Issuer and the  Indenture  Trustee have caused
their names to be signed  hereto by their  respective  officers  thereunto  duly
authorized, all as of the day and year first above written.

                             HOME LOAN TRUST 2003-HI3,
                                 as Issuer
                                    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:


JPMORGAN CHASE BANK
hereby  accepts the  appointment as Paying Agent pursuant to Section 3.03 hereof
and as Note Registrar pursuant to Section 4.02 hereof.

By: /s/
Name:____________________
Title:___________________




<PAGE>



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

        On this 25th day of September, 2003, before me personally
appeared__________________________, to me known, who being by me duly sworn, did
depose   and   say,   that  he   resides   at  New   York  ,  NY,   that  he  is
the____________________________   of   the   Indenture   Trustee,   one  of  the
corporations  described in and which executed the above instrument;  and that he
signed his name thereto by like order.




                                                                 Notary Public



<PAGE>



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

        On this 25th day of September,  2003, before me the undersigned,  Notary
Public of said State, personally appeared_____________________, personally known
to me to be a duly  authorized  officer of JPMorgan Chase Bank that executed the
within  instrument and personally  known to me to be the person 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.




                                                                 Notary Public



<PAGE>



STATE OF DELAWARE                   )
                                    ) ss.:
COUNTY OF NEW CASTLE                )

        On this 25th day of September,  2003, before me personally appeared , to
me known,  who being by me duly  sworn,  did depose and say,  that he resides at
Wilmington,  DE, that he is the of Wilmington  Trust Company,  as Owner Trustee,
one of the  corporations  described in and which executed the above  instrument;
and that he signed his name thereto by like order.



                                                                 Notary Public


NOTARIAL SEAL



<PAGE>



                                    EXHIBIT A

                                  FORM OF NOTES

                               CLASS A-__-__ NOTES

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

               THE  PRINCIPAL  OF THIS NOTE IS  PAYABLE IN  INSTALLMENTS  AS SET
FORTH HEREIN. ACCORDINGLY,  THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

               THIS NOTE DOES NOT  REPRESENT AN INTEREST IN OR OBLIGATION OF THE
SELLER, THE DEPOSITOR,  THE MASTER SERVICER,  THE INDENTURE  TRUSTEE,  THE OWNER
TRUSTEE OR ANY OF THEIR RESPECTIVE  AFFILIATES,  EXCEPT AS EXPRESSLY PROVIDED IN
THE INDENTURE OR THE BASIC DOCUMENTS.

               THE HOLDER OF THIS NOTE IS DEEMED TO HAVE REPRESENTED THAT EITHER
(1) IT IS NOT A PLAN NOR IS IT  ACQUIRING  THIS NOTE WITH PLAN ASSETS OR (2) THE
ACQUISITION  OF THIS NOTE BY THE HOLDER  DOES NOT  CONSTITUTE  OR GIVE RISE TO A
PROHIBITED  TRANSACTION  UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE,
FOR WHICH NO STATUTORY, REGULATORY OR ADMINISTRATIVE EXEMPTION IS AVAILABLE.

                                   HOME LOAN TRUST 2003-HI3
                              Home Loan-Backed Note

Registered                                         Principal Amount: $________
Class A-__-__
No. __                                             Percentage Interest: _____%

CUSIP No. ___________                                     Note Rate: _____%

               Home Loan Trust  2003-HI3,  a statutory  trust duly organized and
existing  under the laws of the State of  Delaware  (herein  referred  to as the
"Issuer"), for value received, hereby promises


                                              1

<PAGE>



to pay to Cede & Co. or registered  assigns,  the principal sum of $___________,
payable  on each  Payment  Date in an amount  equal to the  Percentage  Interest
specified  above of the  aggregate  amount,  if any,  payable  from the  Payment
Account in respect of principal on the Class A-__-__  Notes  pursuant to Section
3.05 of the Indenture dated as of September 25, 2003 (the  "Indenture")  between
the Issuer,  as Issuer,  and  JPMorgan  Chase Bank,  as  Indenture  Trustee (the
"Indenture Trustee"); provided, however, that the entire unpaid principal amount
of this Note shall be due and payable on the Payment  Date in Ocotber  2028,  to
the extent not previously paid on a prior Payment Date.  Capitalized  terms used
but not defined herein are defined in Appendix A of the Indenture.

               [Interest on the Class A-__-__ Notes will be paid monthly on each
Payment Date at the Note Rate. The Note Rate for the Class A-__-__ Notes will be
_____% per annum. Interest will be computed on the basis of a 30-day month and a
360-day year. Principal of and interest on this Note shall be paid in the manner
specified on the reverse hereof. On the Step-Up Date, the Note Rate on the Class
A-I-5 Notes and the Class A-II Notes will increase by 0.50% per annum.]

               [Interest  on the Class A-I-1 Notes will be paid  monthly on each
Payment Date at the Note Rate for the related Interest Accrual Period.  The Note
Rate for each Interest  Accrual  Period will be equal to the lesser of (i) LIBOR
plus  ____% per  annum  and (ii)  8.00%  per  annum.  LIBOR for each  applicable
Interest  Accrual  Period will be  determined  on the second LIBOR  Business Day
immediately  preceding  (i) the Closing  Date in the case of the first  Interest
Accrual Period and (ii) the first day of each succeeding Interest Accrual Period
by the Indenture  Trustee as set forth in the Indenture.  All  determinations of
LIBOR by the  Indenture  Trustee  shall,  in the absence of manifest  error,  be
conclusive  for all  purposes,  and each  holder of this Class  A-I-1  Note,  by
accepting  this  Class  A-I-1  Note,  agrees to be bound by such  determination.
Interest  on this Class A-I-1 Note will  accrue for each  Payment  Date from the
most recent  Payment  Date on which  interest  has been paid (in the case of the
first Payment Date,  from the Closing Date) to but excluding  such Payment Date.
Interest  will be  computed  on the basis of the  actual  number of days in each
Interest Accrual Period and a year assumed to consist of 360 days.  Principal of
and  interest on this Class A-I-1 Note shall be paid in the manner  specified in
the Indenture.]

               Principal  of and  interest on this Note are payable in such coin
or currency  of the United  States of America as at the time of payment is legal
tender for payment of public and private debts.  All payments made by the Issuer
with respect to this Note shall be applied  first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.

               Reference  is made to the  further  provisions  of this  Note set
forth on the reverse  hereof,  which shall have the same effect as though  fully
set forth on the face of this Note.

               Unless the certificate of authentication hereon has been executed
by the Indenture Trustee whose name appears below by manual signature, this Note
shall not be  entitled  to any benefit  under the  Indenture  referred to on the
reverse hereof, or be valid or obligatory for any purpose.

               This  Note is one of a duly  authorized  issue  of  Notes  of the
Issuer,  designated as its Home  Loan-Backed  Notes (herein called the "Notes"),
all  issued  under  the  Indenture,   to  which  Indenture  and  all  indentures
supplemental thereto reference is hereby made for a statement of the


                                              2

<PAGE>



respective  rights and  obligations  thereunder  of the  Issuer,  the  Indenture
Trustee and the holders of the Notes.  The Notes are subject to all terms of the
Indenture.

               The Notes are and will be  equally  and  ratably  secured  by the
collateral pledged as security therefor as provided in the Indenture.

               This Note is  entitled  to the  benefits  of an  irrevocable  and
unconditional  financial  guaranty  insurance  policy issued by Ambac  Assurance
Corporation.

               Principal  of and  interest  on this Note will be payable on each
Payment Date,  commencing  on October 27, 2003,  as described in the  Indenture.
"Payment Date" means the twenty-fifth day of each month, or, if any such date is
not a Business Day, then the next Business Day.

               The entire unpaid  principal amount of this Note shall be due and
payable in full on the Payment Date in October 2028  pursuant to the  Indenture,
to the extent not previously paid on a prior Payment Date.  Notwithstanding  the
foregoing,  if an Event of Default shall have occurred and be  continuing,  then
the  Indenture  Trustee  or the  holders of Notes  representing  not less than a
majority  of the  aggregate  Note  Balance of all Notes with the  consent of the
Credit Enhancer,  or the Credit Enhancer may declare the Notes to be immediately
due and payable in the manner  provided in Section  5.02 of the  Indenture.  All
principal  payments on the Notes shall be distributed in the manner and priority
set forth in Section 3.05 of the Indenture.

               Any installment of interest or principal,  if any, payable on any
Note  that  is  punctually  paid  or  duly  provided  for by the  Issuer  on the
applicable  Payment  Date  shall,  if such Holder  holds  Notes of an  aggregate
initial Note Balance of at least $1,000,000, be paid to each Holder of record on
the preceding  Record Date, by wire transfer to an account  specified in writing
by such  Holder  reasonably  satisfactory  to the  Indenture  Trustee  as of the
preceding Record Date or in all other cases or if no such instructions have been
delivered to the Indenture  Trustee,  by check or money order to such Noteholder
mailed to such  Holder's  address as it appears in the Note  Register the amount
required to be  distributed to such Holder on such Payment Date pursuant to such
Holder's Securities; provided, however, that the Indenture Trustee shall not pay
to such Holders any amount required to be withheld from a payment to such Holder
by the Code.

               As provided in the Indenture  and subject to certain  limitations
set forth  therein,  the  transfer  of this Note may be  registered  on the Note
Register  upon  surrender  of this  Note for  registration  of  transfer  at the
Corporate Trust Office, duly endorsed by, or accompanied by a written instrument
of transfer in form  satisfactory to the Indenture Trustee duly executed by, the
holder hereof or such holder's  attorney duly  authorized in writing,  with such
signature  guaranteed  by  an  "eligible  guarantor   institution"  meeting  the
requirements of the Note Registrar,  which  requirements  include  membership or
participation in the Securities  Transfer Agent's Medallion Program ("STAMP") or
such  other  "signature  guarantee  program"  as may be  determined  by the Note
Registrar in addition to, or in substitution  for, STAMP, all in accordance with
the Securities  Exchange Act of 1934, as amended,  and thereupon one or more new
Notes in authorized  denominations  and in the same aggregate  principal  amount
will be issued to the designated  transferee or  transferees.  No service charge
will be charged for any registration of transfer or exchange of this


                                              3

<PAGE>



Note, but the Note Registrar  shall require payment of a sum sufficient to cover
any tax or  governmental  charge  that may be  imposed  in  connection  with any
registration of transfer or exchange of this Note.

               Each holder or  Beneficial  Owner of a Note,  by  acceptance of a
Note, or, in the case of a Beneficial Owner of a Note, a beneficial  interest in
a Note,  covenants  and  agrees  that no  recourse  may be  taken,  directly  or
indirectly,  with respect to the  obligations of the Issuer,  the Owner Trustee,
the Seller,  the Master Servicer,  the Depositor or the Indenture Trustee on the
Notes or under the Indenture or any  certificate  or other writing  delivered in
connection therewith,  against (i) the Indenture Trustee or the Owner Trustee in
its individual  capacity,  (ii) any owner of a beneficial interest in the Issuer
or (iii) any partner, owner,  beneficiary,  agent, officer, director or employee
of the Indenture  Trustee or the Owner Trustee in its individual  capacity,  any
holder  of a  beneficial  interest  in the  Issuer,  the  Owner  Trustee  or the
Indenture  Trustee or of any successor or assign of the Indenture Trustee or the
Owner  Trustee in its  individual  capacity,  except as any such Person may have
expressly agreed and except that any such partner, owner or beneficiary shall be
fully  liable,  to  the  extent  provided  by  applicable  law  for  any  unpaid
consideration  for  stock,  unpaid  capital  contribution  or failure to pay any
installment or call owing to such entity.

               Each holder or  Beneficial  Owner of a Note,  by  acceptance of a
Note or, in the case of a Beneficial Owner of a Note, a beneficial interest in a
Note,  covenants and agrees by accepting the benefits of the Indenture that such
holder or Beneficial Owner of a Note will not at any time institute  against the
Depositor,  the  Seller,  the  Master  Servicer  or the  Issuer,  or join in any
institution against the Depositor, the Seller, the Master Servicer or the Issuer
of, any  bankruptcy,  reorganization,  arrangement,  insolvency  or  liquidation
proceedings  under any United States federal or state  bankruptcy or similar law
in connection with any obligations  relating to the Notes,  the Indenture or the
Basic Documents.

               The Issuer has entered into the Indenture and this Note is issued
with the intention  that, for federal,  state and local income,  single business
and  franchise  tax  purposes,  the Notes will  qualify as  indebtedness  of the
Issuer.  Each holder of a Note,  by  acceptance  of a Note (and each  Beneficial
Owner of a Note by  acceptance  of a beneficial  interest in a Note),  agrees to
treat the Notes  for  federal,  state and  local  income,  single  business  and
franchise tax purposes as indebtedness of the Issuer.

               Prior to the due presentment for registration of transfer of this
Note,  the  Issuer,  the  Indenture  Trustee  and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note is registered (as
of the day of  determination or as of such other date as may be specified in the
Indenture)  as the owner  hereof for all  purposes,  whether or not this Note be
overdue,  and none of the Issuer,  the Indenture Trustee or any such agent shall
be affected by notice to the contrary.

               The  Indenture  permits,   with  certain  exceptions  as  therein
provided,  the  amendment  thereof  and  the  modification  of  the  rights  and
obligations  of the  Issuer  and the  Indenture  Trustee  and the  rights of the
holders  of the Notes  under the  Indenture  at any time by the  Issuer  and the
Indenture  Trustee  with the  consent  of the  holders of Notes  representing  a
majority of the aggregate Note Balance of all Notes at the time  Outstanding and
the Credit Enhancer and with prior notice to the


                                              4

<PAGE>



Rating Agencies.  The Indenture also contains provisions  permitting the holders
of Notes representing specified percentages of the aggregate Note Balance of all
Notes,  on behalf of the holders of all the Notes,  to waive  compliance  by the
Issuer with certain  provisions of the Indenture and certain past defaults under
the Indenture and their  consequences.  Any such consent or waiver by the holder
of this Note (or any one of more  Predecessor  Notes)  shall be  conclusive  and
binding  upon such  holder and upon all  future  holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof  whether or not notation of such consent or waiver is made upon this
Note. The Indenture  also permits the Issuer and the Indenture  Trustee to amend
or waive certain  terms and  conditions  set forth in the Indenture  without the
consent of holders of the Notes issued  thereunder  but with prior notice to the
Rating Agencies and the Credit Enhancer.

               The term  "Issuer" as used in this Note includes any successor or
the Issuer under the Indenture.

               The  Issuer  is  permitted  by  the   Indenture,   under  certain
circumstances,  to merge or consolidate,  subject to the rights of the Indenture
Trustee and the holders of Notes under the Indenture.

               The Notes are issuable only in registered  form in  denominations
as provided in the Indenture, subject to certain limitations therein set forth.

               This Note and the Indenture shall be construed in accordance with
the laws of the State of New York,  without  reference  to its  conflict  of law
provisions and the obligations, rights and remedies of the parties hereunder and
thereunder shall be determined in accordance with such laws.

               No  reference  herein to the  Indenture  and no provision of this
Note or of the Indenture  shall alter or impair,  the  obligation of the Issuer,
which is absolute  and  unconditional,  to pay the  principal of and interest on
this  Note at the  times,  place and rate,  and in the coin or  currency  herein
prescribed.

               Anything  herein  to  the  contrary  notwithstanding,  except  as
expressly  provided in the Basic Documents,  none of Wilmington Trust Company in
its individual capacity,  JPMorgan Chase Bank, in its individual  capacity,  any
owner  of a  beneficial  interest  in the  Issuer,  or any of  their  respective
partners, beneficiaries, agents, officers, directors, employees or successors or
assigns shall be personally liable for, nor shall recourse be had to any of them
for, the payment of principal of or interest on this Note or performance  of, or
omission to  perform,  any of the  covenants,  obligations  or  indemnifications
contained in the  Indenture.  The holder of this Note by its  acceptance  hereof
agrees that, except as expressly provided in the Basic Documents, in the case of
an Event of Default under the Indenture,  the holder shall have no claim against
any of the  foregoing for any  deficiency,  loss or claim  therefrom;  provided,
however,  that nothing  contained  herein shall be taken to prevent recourse to,
and enforcement  against,  the assets of the Issuer for any and all liabilities,
obligations and undertakings contained in the Indenture or in this Note.




                                              5

<PAGE>



               IN WITNESS  WHEREOF,  the Owner Trustee,  on behalf of the Issuer
and not in its individual capacity, has caused this Note to be duly executed.

                               HOME LOAN TRUST 2003-HI3

                               By  WILMINGTON TRUST COMPANY, not in
                                   its individual capacity but solely as Owner
                                   Trustee
Dated: September [__], 2003
                               By
                                   -------------------------------------------
                                   Authorized Signatory


                          CERTIFICATE OF AUTHENTICATION

        This  is  one of the  Class  A-__-__  Notes  referred  to in the  within
mentioned Indenture.

                                    JPMORGAN CHASE BANK, not in its
                                    individual capacity but solely as Indenture
                                    Trustee

Dated: September [__], 2003


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


                                              6

<PAGE>



                                          ASSIGNMENT


Social Security or taxpayer I.D. or other identifying number of assignee:

______________________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer unto

_______________________________________________________________________________
                                (name and address of assignee)

the within Note and all rights thereunder,  and hereby  irrevocably  constitutes
and appoints  __________________,  attorney,  to transfer said Note on the books
kept for registration thereof, with full power of substitution in the premises.


Dated:                                                                  */
       ----------------------      ------------------------------------
                                     Signature Guaranteed:


                                                                      / *
                                     ---------------------------------


--------
1       NOTICE:  The signature to this  assignment must correspond with the name
        of the registered  owner as it appears on the face of the within Note in
        every  particular,   without  alteration,   enlargement  or  any  change
        whatever.  Such signature  must be guaranteed by an "eligible  guarantor
        institution"  meeting  the  requirements  of the Note  Registrar,  which
        requirements  include membership or participation in STAMP or such other
        "signature guarantee program" as may be determined by the Note Registrar
        in addition to, or in substitution  for,  STAMP,  all in accordance with
        the Securities Exchange Act of 1934, as amended.


                                              7

<PAGE>

                                   APPENDIX A

                                   DEFINITIONS

     Administrative  Fees:  The Servicing Fees and the fees payable to the Owner
Trustee and the Indenture Trustee.

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

               Appraised  Value:  For any  Home  Loan the  value of the  related
Mortgaged Property  determined by the appraisal,  sales price for such Mortgaged
Property or alternative  valuation  method used in the  origination of such Home
Loan (which may have been  obtained at an earlier  time);  provided that if such
Home Loan was originated  simultaneously with or not more than 12 months after a
senior lien on the related Mortgaged Property which was originated in a purchase
or cash-out  refinance  transaction,  the appraised value shall be the lesser of
the appraised  value at the  origination  of the senior lien and the sales price
for such Mortgaged Property.

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

               Authorized  Officer:  With respect to the Issuer,  any officer of
the Owner  Trustee  who is  authorized  to act for the Owner  Trustee in matters
relating to the Issuer and who is identified on the list of Authorized  Officers
delivered by the Owner Trustee to the Indenture  Trustee on the Closing Date (as
such list may be modified or supplemented from time to time thereafter).

               Bankruptcy Code: The Bankruptcy Code of 1978, as amended.
               ---------------

               Basic  Documents:  The Trust Agreement,  the Indenture,  the Home
Loan  Purchase  Agreement,  the  Insurance  Agreement,  the  Credit  Enhancement
Instrument,  the  Servicing  Agreement,  the  Custodial  Agreement and the other
documents and certificates delivered in connection with any of the above.

               Beneficial Owner: With respect to any Note, the Person who is the
beneficial  owner of such Note as reflected on the books of the Depository or on
the books of a Person maintaining an account with such Depository (directly as a
Depository  Participant  or  indirectly  through a  Depository  Participant,  in
accordance with the rules of such Depository).

               Book-Entry Custodian: The custodian appointed pursuant to Section
4.06 of the Indenture.


                                       -1-

<PAGE>



               Book-Entry Notes:  Beneficial  interests in the Notes,  ownership
and  transfers of which shall be made through book entries by the  Depository as
described in Section 4.06 of the Indenture.

               Business  Day:  Any day other than (i) a Saturday  or a Sunday or
(ii) a day on which banking institutions in the States of New York,  California,
Texas, Minnesota, Pennsylvania,  Illinois or Delaware are required or authorized
by law to be closed.

               Calendar Quarter:  A Calendar Quarter shall consist of one of the
following  time periods in any given year:  January 1 through  March 31, April 1
through June 30, July 1 though September 30, and October 1 through December 31.

               Certificate Distribution Account: The account or accounts created
and maintained by the  Certificate  Paying Agent pursuant to Section  3.10(c) of
the Trust Agreement. The Certificate Paying Agent will make all distributions on
the Certificates from money on deposit in the Certificate  Distribution Account.
The Certificate Distribution Account shall be an Eligible Account.

               Certificate  Distribution  Amount:  The  amount  payable  to  the
Certificate Paying Agent under Section  3.05(a)(ix) of the Indenture for payment
to the Certificates under the Trust Agreement.

     Certificate  Paying  Agent:  The meaning  specified  in Section 3.10 of the
Trust Agreement.

               Certificate Percentage Interest:  With respect to any Certificate
and any date of determination,  the percentage interest as stated on the face of
such  Certificate,  which  percentage  may be  recalculated  in accordance  with
Section 3.03 of the Trust Agreement.

               Certificate  Principal  Balance:  As of any  Payment  Date,  with
respect to any Certificate,  an amount equal to the then applicable  Certificate
Percentage  Interest of such Certificate  multiplied by the Outstanding  Reserve
Amount immediately prior to such Payment Date.

               Certificate Register:  The register maintained by the Certificate
Registrar in which the Certificate  Registrar shall provide for the registration
of Certificates and of transfers and exchanges of Certificates.

               Certificate Registrar:  Initially,  the Indenture Trustee, in its
capacity as Certificate Registrar,  or any successor to the Indenture Trustee in
such capacity.

               Certificate  of Trust:  The  Certificate  of Trust  filed for the
Trust pursuant to Section 3810(a) of the Statutory Trust Statute,  including all
amendments and restatements.

               Certificateholder:  The  Person in whose  name a  Certificate  is
registered in the Certificate  Register except that, any Certificate  registered
in the name of the Issuer,  the Owner  Trustee or the  Indenture  Trustee or any
Affiliate  of any  of  them  shall  be  deemed  not to be  outstanding  and  the
registered  holder will not be  considered a  Certificateholder  or a holder for
purposes  of giving  any  request,  demand,  authorization,  direction,  notice,
consent or waiver under the Indenture or the Trust  Agreement  provided that, in
determining whether the Indenture Trustee or the


                                       -2-

<PAGE>



Owner  Trustee  shall be  protected in relying  upon any such  request,  demand,
authorization,  direction, notice, consent or waiver, only Certificates that the
Indenture  Trustee  or the  Owner  Trustee  knows  to be so  owned  shall  be so
disregarded.  Owners of Certificates that have been pledged in good faith may be
regarded  as Holders  if the  pledgee  establishes  to the  satisfaction  of the
Indenture Trustee or the Owner Trustee,  as the case may be, the pledgee's right
so to act with  respect  to such  Certificates  and that the  pledgee is not the
Issuer,  any other obligor upon the  Certificates or any Affiliate of any of the
foregoing Persons.

               Certificates:  The  Certificates  in  substantially  the form set
forth in Exhibit A to the Trust Agreement.

     Class: Collectively, all of the Notes bearing the same designation.

               Closing Date: September 25, 2003.

     Code:  The  Internal  Revenue Code of 1986,  as amended,  and the rules and
regulations promulgated thereunder.

     Collateral: The meaning specified in the Granting Clause of the Indenture.

     Collection  Period:  With respect to any Payment Date,  the calendar  month
immediately preceding the month of such Payment Date.

               Combined Loan-to-Value Ratio: With respect to each Home Loan, the
ratio,  expressed as a percentage,  of (i) the sum of (A) the original principal
balance  of such  Home  Loan,  and (B) any  outstanding  principal  balance,  at
origination of such Home Loan, of all other mortgage loans,  if any,  secured by
senior or  subordinate  liens on the  related  Mortgaged  Property,  to (ii) the
Appraised Value, or, if permitted by the Program Guide, a statistical  valuation
or the Stated Value.

               Corporate  Trust Office:  With respect to the Indenture  Trustee,
Certificate Registrar,  Certificate Paying Agent and Paying Agent, the principal
corporate  trust office of the Indenture  Trustee and Note Registrar at which at
any particular  time its corporate trust business shall be  administered,  which
office at the date of the execution of this  instrument is located at 4 New York
Plaza,  6th Floor,  New York,  New York 10004,  Attention:  Institutional  Trust
Services/Structured Finance Services - Home Loan Trust 2003-HI3. With respect to
the Owner Trustee,  the principal corporate trust office of the Owner Trustee at
which at any particular time its corporate trust business shall be administered,
which office at the date of the execution of this Trust  Agreement is located at
Rodney Square  North,  1100 North Market  Street,  Wilmington,  Delaware  19890,
Attention: Corporate Trust Administration.

               Credit  Enhancement Draw Amount:  (1) With respect to any Payment
Date, an amount,  if any, equal to the sum of (w) the excess, if any, of (A) the
aggregate  amount of accrued  interest on the Notes at the respective Note Rates
on such Payment Date over (B)(i) the amount on deposit in the Payment Account on
such  Payment  Date,  less  (ii) an  amount  equal to the  Principal  Collection
Distribution  Amount,  if any, for such Payment Date, (x) any  Liquidation  Loss
Amount (other than any Excess Loss Amount) for such Payment Date,  not currently
covered by a Liquidation


                                       -3-

<PAGE>



Loss Distribution  Amount or a reduction in the Outstanding  Reserve Amount, and
(y) any Excess Loss Amount,  and (2) with respect to the Final  Insured  Payment
Date,  the  amount  by which  the Note  Balance  of the  Notes  plus any  amount
determined  pursuant  to  clause  (1)  hereof  exceeds  the  payments  otherwise
available to be made to the Holders thereof on the Final Insured Payment Date.

               Credit Enhancement Instrument: The Certificate Guaranty Insurance
Policy  number  AB0696BE,  dated as of the  Closing  Date,  issued by the Credit
Enhancer to the Indenture Trustee.

     Credit Enhancer: Ambac Assurance Corporation,  a Wisconsin-domiciled  stock
insurance corporation or any successor thereto.

     Credit  Enhancer  Default:  If the Credit  Enhancer fails to make a payment
required under the Credit Enhancement Instrument in accordance with its terms.

               Credit  Scores:  The  figure  assigned  to a Home  Loan  that  is
designed to assess the Mortgagor's  credit history which is obtained from credit
reports provided by various credit reporting  organizations and obtained by many
lenders in connection  with Home Loan  applications to help assess a Mortgagor's
creditworthiness.

               Custodial Account: The account or accounts created and maintained
by the Master Servicer  pursuant to Section 3.02(b) of the Servicing  Agreement,
in which the Master  Servicer  shall  deposit or cause to be  deposited  certain
amounts in respect of the Home Loans.

               Custodial Agreement: Any Custodial Agreement among the Custodian,
the  Indenture  Trustee,  the  Issuer and the Master  Servicer  relating  to the
custody of the Home Loans and the Related Documents.

     Custodian:  Wells Fargo Bank Minnesota,  N.A., a national association,  and
its successors and assigns.

               Cut-off Date: September 1, 2003.

               Cut-off Date Loan  Balance:  With  respect to any Home Loan,  the
unpaid principal balance thereof as of the close of business on the Business Day
immediately prior to the Cut-off Date.

               Default:  Any occurrence  which is or with notice or the lapse of
time or both would become an Event of Default.

               Deficient  Valuation:  With respect to any Home Loan, a valuation
by a court of competent jurisdiction of the Mortgaged Property in an amount less
than the then outstanding  indebtedness under the Home Loan, or any reduction in
the amount of principal to be paid in connection with any scheduled payment that
constitutes a permanent  forgiveness of principal,  which valuation or reduction
results from a proceeding under the Bankruptcy Code.

     Definitive Notes: The meaning specified in Section 4.06 of the Indenture.

                                       -4-

<PAGE>



     Deleted  Loan:  A Home Loan  replaced  or to be  replaced  with an Eligible
Substitute Loan.

               Delinquent:  As used herein,  a Home Loan is considered to be "30
to 59 days" or "30 or more days"  delinquent  when a payment due on any due date
remains  unpaid as of the close of  business on the next  following  monthly due
date.  Since  the  determination  as to  whether a Home Loan  falls  into  these
categories  is made as of the close of business on the last business day of each
month,  a Home Loan with a payment due on July 1 that remained  unpaid as of the
close of business on July 31 would still be considered current as of July 31. If
that payment  remained unpaid as of the close of business on August 31, the Home
Loan would then be considered 30-59 days delinquent.  Delinquency information as
of the Cut-off  Date is  determined  and prepared as of the close of business on
the last business day immediately prior to the Cut-off Date.

     Depositor:  Residential  Funding  Mortgage  Securities II, Inc., a Delaware
corporation, or its successor in interest.

               Depository or Depository  Agency: The Depository Trust Company or
a  successor  appointed  by the  Indenture  Trustee  with  the  approval  of the
Depositor.  Any successor to the Depository shall be an organization  registered
as a  "clearing  agency"  pursuant to Section  17A of the  Exchange  Act and the
regulations of the Securities and Exchange Commission thereunder.

               Depository Participant: A Person for whom, from time to time, the
Depository effects book-entry transfers and pledges of securities deposited with
the Depository.

               Derivative Contract: Any ISDA Master Agreement, together with the
related  schedule  and  confirmation,  entered  into by the Owner  Trustee and a
Derivative Counterparty in accordance with Section 5.06 of the Trust Agreement.

               Derivative   Counterparty:   Any  counterparty  to  a  Derivative
Contract as provided in Section 5.06 of the Trust Agreement.

               Determination  Date:  With respect to any Payment Date,  the 20th
day of the  month in which  such  Payment  Date  occurs  or if such day is not a
Business Day, the next succeeding Business Day.

               Dissolution  Draw:  Following  an  Event of  Liquidation,  on the
related  Dissolution  Payment Date, the amount, if any, by which the proceeds of
the sale,  liquidation or other  disposition of the assets of the Owner Trust in
connection  with the  liquidation  of the Trust Estate which are  available  for
distribution to the  Securityholders is less than the sum of (1) an amount equal
to the  aggregate  of all  accrued  and  unpaid  interest  on the  Notes  at the
respective  Note Rates  through such Payment Date and (2) 100% of the  aggregate
Note  Balance of the Notes  outstanding  immediately  prior to such  Dissolution
Payment Date.

     Dissolution Payment Date:  Following an Event of Liquidation,  the Business
Day following the date on which the proceeds of the sale,  liquidation  or other
disposition of the assets


                                       -5-

<PAGE>



of the Owner Trust in connection  with the  liquidation  of the Trust Estate are
paid to the Securityholders.

     Due Date: The date on which the Monthly Payment on the related Home Loan is
due in accordance with the terms of the related Mortgage Note.

               Eligible  Account:  An account that is any of the following:  (i)
maintained  with a depository  institution  the short-term  debt  obligations of
which have been  rated by each  Rating  Agency in its  highest  rating  category
available,  or (ii) an account or accounts in a depository  institution in which
such accounts are fully insured to the limits established by the FDIC,  provided
that any deposits not so insured shall, to the extent  acceptable to each Rating
Agency,  as evidenced in writing,  be  maintained  such that (as evidenced by an
Opinion of Counsel  delivered to the Indenture  Trustee and each Rating  Agency)
the Indenture Trustee has a claim with respect to the funds in such account or a
perfected first security interest against any collateral (which shall be limited
to Permitted  Investments) securing such funds that is superior to claims of any
other  depositors  or creditors of the  depository  institution  with which such
account is maintained, or (iii) in the case of the Custodial Account, either (A)
a trust account or accounts  maintained at the corporate trust department of the
Indenture  Trustee or (B) an account or  accounts  maintained  at the  corporate
trust  department  of the  Indenture  Trustee,  as long as its  short  term debt
obligations  are rated P-1 by  Moody's  and A-1+ by  Standard  & Poor's  (or the
equivalent)  or better by each Rating Agency and its long term debt  obligations
are rated A2 by Moody's  and AA- by  Standard & Poor's  (or the  equivalent)  or
better,  by each Rating Agency, or (iv) in the case of the Custodial Account and
the Payment  Account,  a trust  account or accounts  maintained in the corporate
trust  division  of the  Indenture  Trustee,  or (v) an account or accounts of a
depository institution acceptable to each Rating Agency (as evidenced in writing
by each Rating Agency that use of any such account as the  Custodial  Account or
the Payment Account will not reduce the rating assigned to any of the Securities
by such Rating Agency (if determined  without  regard to the Credit  Enhancement
Instrument) below the lower of the then-current rating or the rating assigned to
such  Securities  (if  determined  without  regard  to  the  Credit  Enhancement
Instrument) as of the Closing Date by such Rating Agency).

               Eligible  Substitute  Loan: A Home Loan substituted by the Seller
for a Deleted Loan which must, on the date of such substitution, as confirmed in
an  Officers'  Certificate  delivered  to the  Indenture  Trustee,  (i)  have an
outstanding  principal balance,  after deduction of the principal portion of the
monthly  payment  due  in the  month  of  substitution  (or  in  the  case  of a
substitution  of more  than  one Home  Loan for a  Deleted  Loan,  an  aggregate
outstanding  principal  balance,  after  such  deduction),  not in excess of the
outstanding  principal  balance of the Deleted Loan (the amount of any shortfall
to be  deposited  by the  Seller  in the  Custodial  Account  in  the  month  of
substitution);  (ii) comply with each  representation  and warranty other than a
statistical  representation  or warranty set forth in Section 3.1(b) of the Home
Loan Purchase  Agreement as of the date of substitution;  (iii) have a Loan Rate
no lower  than and not more than 1% in  excess of the Loan Rate of such  Deleted
Loan;  (iv) have a Combined  Loan-to-Value  Ratio at the time of substitution no
higher than that of the Deleted Loan at the time of  substitution;  (v) have, at
the time of  substitution,  a remaining term to stated maturity not greater than
(and not more  than  one year  less  than)  that of the  Deleted  Loan;  (vi) be
ineligible for inclusion in a real estate mortgage  investment conduit ("REMIC")
(a "REMIC  Ineligible  Loan") if the Deleted  Loan was a REMIC  Ineligible  Loan
(because (a) the value of the real


                                       -6-

<PAGE>



property  securing the Deleted Loan was not at least equal to eighty  percent of
the adjusted issue price of such loan at the time of origination,  calculated by
subtracting  the  amount  of any liens  that are  senior to such Home Loan and a
proportionate  amount  of any lien of  equal  priority  from  the  value of such
property when the Deleted Loan was originated and (b)  substantially  all of the
proceeds  of the Deleted  Loan were not used to  acquire,  improve or protect an
interest in the real property  securing such loan and such real property was the
only  security  for  such  Deleted  Loan);  and  (vii)  not be 30 or  more  days
delinquent.

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

               Event of Default:  With respect to the Indenture,  any one of the
following  events  (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment,  decree or order of any court or any order,  rule or regulation
of any administrative or governmental body):

                      (A) a default in the  payment of any  interest on any Note
        when the same becomes due and payable,  and such default shall  continue
        for a period of five days; or

                      (B) a default in the  payment of the  principal  of or any
        installment  of the  principal of any Note when the same becomes due and
        payable, and such default shall continue for a period of five days; or

                      (C)  there   occurs  a  default  in  the   observance   or
        performance  of any  covenant  or  agreement  of the Issuer  made in the
        Indenture,  or any  representation or warranty of the Issuer made in the
        Indenture or in any  certificate  or other  writing  delivered  pursuant
        hereto or in connection  herewith  proving to have been incorrect in any
        material respect as of the time when the same shall have been made which
        has a material adverse effect on Securityholders, and such default shall
        continue or not be cured, or the circumstance or condition in respect of
        which such  representation or warranty was incorrect shall not have been
        eliminated or otherwise cured, for a period of 30 days after there shall
        have been given,  by registered or certified  mail, to the Issuer by the
        Indenture  Trustee  or to the Issuer  and the  Indenture  Trustee by the
        Holders of at least 25% of the outstanding  Note Balance of the Notes or
        the  Credit  Enhancer,  a written  notice  specifying  such  default  or
        incorrect representation or warranty and requiring it to be remedied and
        stating that such notice is a notice of default hereunder; or

                      (D)  there  occurs  the  filing  of a decree  or order for
        relief by a court having  jurisdiction in the premises in respect of the
        Issuer or any  substantial  part of the Trust  Estate in an  involuntary
        case under any  applicable  federal or state  bankruptcy,  insolvency or
        other similar law now or hereafter in effect,  or appointing a receiver,
        liquidator,   assignee,  custodian,  trustee,  sequestrator  or  similar
        official of the Issuer or for any substantial  part of the Trust Estate,
        or ordering the winding-up or liquidation of the Issuer's  affairs,  and
        such decree or order shall remain unstayed and in effect for a period of
        60 consecutive days; or

                      (E)  there  occurs  the  commencement  by the  Issuer of a
        voluntary  case  under  any  applicable  federal  or  state  bankruptcy,
        insolvency or other similar law now or


                                       -7-

<PAGE>



        hereafter  in  effect,  or the  consent by the Issuer to the entry of an
        order  for  relief in an  involuntary  case  under any such law,  or the
        consent  by the  Issuer to the  appointment  or taking  possession  by a
        receiver,  liquidator,  assignee,  custodian,  trustee,  sequestrator or
        similar official of the Issuer or for any substantial part of the assets
        of  the  Trust  Estate,  or the  making  by the  Issuer  of any  general
        assignment  for the benefit of  creditors,  or the failure by the Issuer
        generally  to pay its debts as such debts  become  due, or the taking of
        any action by the Issuer in furtherance of any of the foregoing.

               Event of  Liquidation:  Following  the  occurrence of an Event of
Default under the Indenture,  the  determination  by the Indenture  Trustee,  as
evidenced by a written notice provided to the Owner Trustee, the Depositor,  the
Issuer and the Credit  Enhancer,  that all  conditions  precedent to the sale or
other  liquidation of the Trust Estate pursuant to Section 5.04 of the Indenture
have been satisfied.

               Event of  Servicer  Termination:  With  respect to the  Servicing
Agreement,  a  Servicing  Default as defined  in Section  7.01 of the  Servicing
Agreement.

               Excess Loss Amount:  As to any Payment Date, any Liquidation Loss
Amounts for the related  Collection Period which, when added to the aggregate of
such  Liquidation  Loss Amounts for all  preceding  Collection  Periods,  exceed
$78,001,872.

               Exchange  Act: The  Securities  Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.

     Expenses: The meaning specified in Section 7.02 of the Trust Agreement.

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

     FHLMC:  The  Federal  Home  Loan  Mortgage  Corporation,  or any  successor
thereto.

     Final Insured Payment Date: The Payment Date in October 2028.

     FNMA: The Federal National Mortgage Association, or any successor thereto.

               Foreclosure  Profit:  With respect to a Liquidated Home Loan, the
excess, if any, of (x) Net Liquidation Proceeds over (y) 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.

               Grant: Pledge, bargain, sell, warrant, alienate, remise, release,
convey, assign, transfer,  create, and grant a lien upon and a security interest
in and right of set-off against,  deposit,  set over and confirm pursuant to the
Indenture.  A Grant of the  Collateral  or of any other  agreement or instrument
shall include all rights,  powers and options (but none of the  obligations)  of
the granting party  thereunder,  including the immediate and continuing right to
claim for, collect, receive and give


                                       -8-

<PAGE>



receipt for  principal  and interest  payments in respect of such  collateral or
other agreement or instrument and all other moneys payable  thereunder,  to give
and  receive  notices  and  other  communications,  to  make  waivers  or  other
agreements, to exercise all rights and options, to bring proceedings in the name
of the granting  party or otherwise,  and  generally to do and receive  anything
that the  granting  party is or may be entitled to do or receive  thereunder  or
with respect thereto.

               Group I  Loans:  The  Home  Loans  designated  on the  Home  Loan
Schedule as Group I Loans.

               Group  II  Loans:  The Home  Loans  designated  on the Home  Loan
Schedule as Group II Loans.

               Holder: Any of the Noteholders or Certificateholders.

               Home  Loans:  At any time,  the Home Loans that have been sold by
the Seller under the Home Loan  Purchase  Agreement,  together  with the Related
Documents, and that remain subject to the terms thereof.

               Home Loan Purchase  Agreement:  The Home Loan Purchase Agreement,
between the Seller, as seller, and the Depositor, as purchaser,  with respect to
the Home Loans, dated as of the Cut-off Date.

               Home Loan Schedule:  The initial schedule of Home Loans as of the
Cut-off  Date set forth in Exhibit  A-1 (with  respect to the Group I Loans) and
Exhibit  A-2 (with  respect to the Group II Loans) of the  Servicing  Agreement,
which  schedule sets forth as to each Home Loan in each Loan Group,  among other
things:

               (i)    the Home Loan identifying number ("RFC LOAN #");

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

               (iii)  the maturity of the Mortgage Note ("MATURITY DATE");

               (iv)   the Loan Rate ("CUR RATE");

               (v)    the Principal Balance at origination ("ORG AMT");

               (vi)   the type of property securing the Mortgage Note ("PROPERTY
                      TYPE");

               (vii)  the appraised value ("APPRSL");

               (viii) the initial  scheduled  monthly  payment of principal,  if
                      any, and interest ("ORIGINAL P & I");

               (ix)   the Cut-off Date Loan Balance ("CUT-OFF BAL");


                                       -9-

<PAGE>



               (x)    the Combined Loan-to-Value Ratio at origination ("CLTV");

               (xi)   the date of the Mortgage Note ("NOTE DATE");

               (xii)  the original term to maturity of the Home Loan  ("ORIGINAL
                      TERM");

               (xiii) under the column  "OCCP CODE," a code  indicating  whether
                      the  Home  Loan  is  secured  by  a   non-owner   occupied
                      residence;

               (xiv)  the Principal Balance of any Home Loan senior thereto ("SR
                      BAL");

               (xv)   the Credit Score ("CR SCORE");

               (xvi)  the debt to income ratio ("DTI");

               (xvii) product code ("PRODUCT CODE");

               (xviii)loan purpose ("PURPOSE");

               (xix) the lien position of the related Mortgage ("LIEN");

               (xx) the Subservicer loan number (SERVICER LOAN #); and

               (xxi) the remaining term of the Home Loan (REMAINING TERM).

Such schedule may consist of multiple reports that collectively set forth all of
the information required.

     Indemnified  Party:  The  meaning  specified  in Section  7.02 of the Trust
Agreement.

     Indenture: The indenture dated as of September 25, 2003 between the Issuer,
as debtor, and the Indenture Trustee, as indenture trustee.

     Indenture  Trustee:  JPMorgan Chase Bank, and its successors and assigns or
any  successor  indenture  trustee  appointed  pursuant  to  the  terms  of  the
Indenture.

               Independent:  When used with respect to any specified Person, the
Person (i) is in fact independent of the Issuer, any other obligor on the Notes,
the Seller,  the Issuer, the Depositor and any Affiliate of any of the foregoing
Persons,  (ii)  does not have any  direct  financial  or any  material  indirect
financial  interest  in the Issuer,  any such other  obligor,  the  Seller,  the
Issuer, the Depositor or any Affiliate of any of the foregoing Persons and (iii)
is not  connected  with the Issuer,  any such other  obligor,  the  Seller,  the
Issuer,  the Depositor or any  Affiliate of any of the  foregoing  Persons as an
officer, employee, promoter,  underwriter,  trustee, partner, director or person
performing similar functions.


                                      -10-

<PAGE>



               Independent Certificate: A certificate or opinion to be delivered
to the  Indenture  Trustee under the  circumstances  described in, and otherwise
complying  with, the applicable  requirements of Section 10.01 of the Indenture,
made by an  Independent  appraiser or other expert  appointed by an Issuer Order
and approved by the Indenture  Trustee in the exercise of reasonable  care,  and
such opinion or certificate  shall state that the signer has read the definition
of "Independent" in this Indenture and that the signer is Independent within the
meaning thereof.

               Initial Certificates:  The Home Loan-Backed Certificates,  Series
2003-HI3,  issued on the Closing  Date,  each  evidencing  undivided  beneficial
interests in the Issuer and executed by the Owner Trustee.

               Initial  Note  Balance:  With  respect to the Class A-I-1  Notes,
$37,040,000, with respect to the Class A-I-2 Notes, $13,953,000, with respect to
the Class A-I-3  Notes,  $22,482,000,  with  respect to the Class  A-I-4  Notes,
$25,474,000, with respect to the Class A-I-5 Notes, $27,801,000 and with respect
to the Class A-II Notes, $126,750,000.

               Insolvency  Event:  With respect to a specified  Person,  (a) the
filing of a decree or order for  relief by a court  having  jurisdiction  in the
premises in respect of such Person or any substantial part of its property in an
involuntary  case under any applicable  bankruptcy,  insolvency or other similar
law now or hereafter in effect, or appointing a receiver, liquidator,  assignee,
custodian,  trustee, sequestrator or similar official for such Person or for any
substantial  part of its property,  or ordering the winding-up or liquidation of
such  Person's  affairs,  and such decree or order shall remain  unstayed and in
effect for a period of 60  consecutive  days;  or (b) the  commencement  by such
Person of a voluntary case under any applicable bankruptcy,  insolvency or other
similar  law now or  hereafter  in effect,  or the consent by such Person to the
entry of an order for relief in an  involuntary  case under any such law, or the
consent by such Person to the appointment of or taking possession by a receiver,
liquidator,  assignee,  custodian, trustee, sequestrator or similar official for
such Person or for any substantial  part of its property,  or the making by such
Person of any general assignment for the benefit of creditors, or the failure by
such Person generally to pay its debts as such debts become due or the admission
by such Person in writing (as to which the Indenture  Trustee shall have notice)
of its  inability  to pay its debts  generally,  or the adoption by the Board of
Directors  or managing  member of such Person of a resolution  which  authorizes
action by such Person in furtherance of any of the foregoing.

               Insurance Agreement:  The Insurance and Indemnity Agreement dated
as of September 25, 2003, among the Master Servicer,  the Seller, the Depositor,
the  Issuer,  the  Indenture  Trustee  and the Credit  Enhancer,  including  any
amendments and supplements thereto.

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


                                      -11-

<PAGE>



               Interest  Accrual  Period:  With respect to the Notes (other than
the Class A-I-1 Notes) and as to any Payment  Date,  will be the calendar  month
preceding  the month in which the related  Payment Date occurs.  With respect to
the Class A-I-1 Notes and any Payment  Date other than the first  Payment  Date,
the  period  beginning  on the  preceding  Payment  Date and  ending  on the day
preceding  such Payment Date,  and in the case of the first  Payment  Date,  the
period  beginning on the Closing Date and ending on the day  preceding the first
Payment Date.

               Interest  Collections:  With respect to any Payment Date and each
Loan Group,  the sum of (i) the portion  allocable to interest of all  scheduled
monthly  payments  on  the  related  Home  Loans  received  during  the  related
Collection Period reduced by the Administrative Fees for such Collection Period,
(ii) the portion of all Net Liquidation Proceeds allocated to interest under the
terms of the related Mortgage Notes, reduced by the Administrative Fees for such
Collection  Period,  (iii) the interest  portion of the Repurchase Price for any
Deleted  Loans in the related  Loan Group and the  interest  portion of the cash
purchase price paid in connection  with any optional  purchase of the Home Loans
by the Master Servicer and (iv) any proceeds and recoveries  received during the
related  Collection  Period on a Home Loan in the  related  Loan Group  after it
becomes a Liquidated  Home Loan allocated to Interest  Collections in accordance
with the last paragraph of Section 3.07 of the Servicing  Agreement,  reduced by
the Administrative Fees for such Collection Period.

               Issuer  or  Trust:  The Home  Loan  Trust  2003-HI3,  a  Delaware
statutory trust, or its successor in interest.

               Issuer Request:  A written order or request signed in the name of
the Issuer by any one of its Authorized  Officers and delivered to the Indenture
Trustee.

               LIBOR:  For any  Interest  Accrual  Period  other  than the first
Interest  Accrual  Period,  the rate for United States  dollar  deposits for one
month which appears on the Dow Jones Telerate Screen Page 3750 as of 11:00 A.M.,
London, England time, on the second LIBOR Business Day prior to the first day of
such Interest Accrual Period. With respect to the first Interest Accrual Period,
the rate for United  States  dollar  deposits for one month which appears on the
Dow Jones Telerate Screen Page 3750 as of 11:00 A.M., London,  England time, two
LIBOR  Business  Days prior to the Closing Date. If such rate does not appear on
such page (or such other page as may replace  that page on that  service,  or if
such service is no longer  offered,  such other service for displaying  LIBOR or
comparable  rates as may be reasonably  selected by the Indenture  Trustee after
consultation with the Master Servicer and the Credit Enhancer), the rate will be
the Reference Bank Rate. If no such  quotations can be obtained and no Reference
Bank Rate is available,  LIBOR will be LIBOR applicable to the preceding Payment
Date.

               LIBOR Business Day: Any day other than (i) a Saturday or a Sunday
or (ii) a day on which banking  institutions in the city of London,  England are
required or authorized by law to be closed.

               Lien:   Any  mortgage,   deed  of  trust,   pledge,   conveyance,
hypothecation, assignment, participation, deposit arrangement, encumbrance, lien
(statutory or other),  preference,  priority right or interest or other security
agreement  or  preferential  arrangement  of  any  kind  or  nature  whatsoever,
including,  without  limitation,  any conditional  sale or other title retention
agreement, any financing


                                      -12-

<PAGE>



lease having  substantially the same economic effect as any of the foregoing and
the  filing  of any  financing  statement  under  the UCC  (other  than any such
financing statement filed for informational  purposes only) or comparable law of
any jurisdiction to evidence any of the foregoing;  provided,  however, that any
assignment  pursuant to Section  6.02 of the  Servicing  Agreement  shall not be
deemed to constitute a Lien.

               Limited Repurchase Right Holder: The Master Servicer.

               Liquidated  Home Loan: With respect to any Payment Date, any Home
Loan in  respect  of which the  Master  Servicer  has  determined,  based on the
servicing procedures specified in the Servicing Agreement,  as of the end of the
preceding  Collection Period, that all Liquidation  Proceeds which it expects to
recover with respect to the disposition of the related  Mortgaged  Property have
been recovered.  In addition,  the Master Servicer will treat any Home Loan that
is 180 days or more delinquent as having been finally liquidated.

               Liquidation  Expenses:   Out-of-pocket   expenses  (exclusive  of
overhead)  which  are  incurred  by or on  behalf  of  the  Master  Servicer  in
connection  with the  liquidation  of any Home Loan and not recovered  under any
insurance policy,  such expenses including,  without limitation,  legal fees and
expenses,  any  unreimbursed  amount expended  (including,  without  limitation,
amounts  advanced  to correct  defaults on any loan which is senior to such Home
Loan and amounts  advanced  to keep  current or pay off a loan that is senior to
such  Home  Loan)   respecting  the  related  Home  Loan  and  any  related  and
unreimbursed  expenditures  for  real  estate  property  taxes  or for  property
acquisition,  restoration,  preservation  or disposition,  or insurance  against
casualty loss or damage.

               Liquidation Loss Amount: With respect to any Payment Date and any
Home Loan that  became a  Liquidated  Home Loan  during the  related  Collection
Period,  the unrecovered  portion of the related Loan Balance thereof at the end
of such Collection Period,  after giving effect to the Net Liquidation  Proceeds
applied in reduction of the Loan Balance.  In addition,  as to any Home Loan for
which  the  Loan  Balance  has  been  reduced  in  connection   with  bankruptcy
proceedings,  the amount of the reduction will be treated as a Liquidation  Loss
Amount.

               Liquidation Loss Distribution Amount: With respect to any Payment
Date,  an amount  equal to the sum of (A) 100% of the  Liquidation  Loss Amounts
(other than any Excess Loss  Amounts) on the related  Home Loans on such Payment
Date, plus (B) any Liquidation Loss Amounts (other than any Excess Loss Amounts)
remaining unpaid from any preceding Payment Date, to the extent not reflected on
such preceding Payment Date by a reduction of the Outstanding Reserve Amount.

               Liquidation Proceeds:  Proceeds (including Insurance Proceeds but
not including  amounts  drawn under the Credit  Enhancement  Instrument)  if any
received in  connection  with the  liquidation  of any Home Loan or related REO,
whether through  trustee's sale,  foreclosure sale, the exercise of the power of
eminent domain or condemnation or otherwise.

               Loan  Balance:  With  respect  to any  Home  Loan,  other  than a
Liquidated  Home Loan, and as of any day, the related Cut-off Date Loan Balance,
minus all  collections  in respect of principal in  accordance  with the related
Mortgage Note and applied in reduction of the Loan Balance thereof.


                                      -13-

<PAGE>



For purposes of this definition,  a Liquidated Home Loan shall be deemed to have
a Loan Balance equal to zero.

               Loan Group: Either or both Loan Group I or Loan Group II.

     Loan Group I: The group of Home Loans comprised of the Group I Loans.

     Loan Group II: The group of Home Loans comprised of the Group II Loans.

               Loan Rate or Mortgage Rate: With respect to any Home Loan and any
day, the per annum rate of interest set forth in the related Mortgage Note.

               Lost Note  Affidavit:  With  respect to any Home Loan as to which
the original  Mortgage Note has been  permanently  lost or destroyed and has not
been  replaced,  an  affidavit  from the  Seller  certifying  that the  original
Mortgage Note has been lost, misplaced or destroyed (together with a copy of the
related Mortgage Note).

     Master Servicer:  Residential Funding Corporation,  a Delaware corporation,
and its successors and assigns.

               Master  Servicing  Fee:  With  respect  to any Home  Loan and any
Collection  Period,  the product of (i) the Master Servicing Fee Rate divided by
12 and (ii) the Loan  Balance  of such  Home  Loan as of the  first  day of such
Collection Period.

               Master  Servicing Fee Rate: With respect to any Home Loan,  0.08%
per annum.

               Monthly Payment: With respect to any Home Loan (including any REO
Property) and any Due Date, the payment of principal and interest due thereon in
accordance with the amortization  schedule at the time applicable thereto (after
adjustment,  if  any,  for  partial  prepayments  and for  Deficient  Valuations
occurring prior to such Due Date but before any adjustment to such  amortization
schedule  by reason of any  bankruptcy,  other than a  Deficient  Valuation,  or
similar proceeding or any moratorium or similar waiver or grace period).

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

               Mortgage:  The  mortgage,  deed  of  trust  or  other  instrument
creating  a first or second  lien on an estate in fee  simple  interest  in real
property securing a Home Loan.

               Mortgage  File:  The  file   containing  the  Related   Documents
pertaining to a particular Home Loan and any additional documents required to be
added to the Mortgage File  pursuant to the Home Loan Purchase  Agreement or the
Servicing Agreement.

               Mortgage  Note:  With respect to a Home Loan,  the mortgage  note
pursuant to which the related mortgagor agrees to pay the indebtedness evidenced
thereby and secured by the related Mortgage as modified or amended.


                                      -14-

<PAGE>



     Mortgaged Property:  The underlying  property,  including real property and
improvements thereon, securing a Home Loan.

               Mortgagor: The obligor or obligors under a Mortgage Note.

     Net  Liquidation  Proceeds:  With  respect  to any  Liquidated  Home  Loan,
Liquidation  Proceeds (including  Insurance Proceeds but excluding amounts drawn
on the Credit Enhancement Instrument) net of Liquidation Expenses.

               Net Loan  Rate:  With  respect  to any Home  Loan and any date of
determination,  a per annum rate of interest equal to the then  applicable  Loan
Rate for such Home Loan minus the Servicing Fee Rate.

               Note  Balance:  With respect to any Payment Date and any Class of
Notes,  the Initial  Note Balance  thereof  reduced by all payments of principal
thereon prior to and as of such Payment Date.

               Note Owner:  The Beneficial Owner of a Note.

               Note Rate:  With  respect to the Class A-I-1  Notes,  will be the
lesser of (a) LIBOR plus 0.13% per annum and (b) 8.00% per annum.  With  respect
to the Class  A-I-2  Notes,  2.68% per annum.  With  respect to the Class  A-I-3
Notes,  3.40% per annum. With respect to the Class A-I-4 Notes, 4.67% per annum.
With  respect to the Class A-I-5  Notes,  5.83% per annum.  With  respect to the
Class A-II Notes, 4.69% per annum; provided,  that on the Step-Up Date, the Note
Rate on the Class A-I-5  Notes and Class A-II Notes shall  increase by 0.50% per
annum.

               Note Register:  The register  maintained by the Note Registrar in
which the Note  Registrar  shall  provide for the  registration  of Notes and of
transfers and exchanges of Notes.

     Note Registrar: The Indenture Trustee, in its capacity as Note Registrar.

               Noteholder:  The Person in whose name a Note is registered in the
Note Register,  except that,  any Note  registered in the name of the Depositor,
the Issuer or the  Indenture  Trustee or any  Affiliate  of any of them shall be
deemed not to be outstanding and the registered  holder will not be considered a
Noteholder or holder for purposes of giving any request, demand,  authorization,
direction,  notice, consent or waiver under the Indenture or the Trust Agreement
provided that, in determining  whether the Indenture  Trustee shall be protected
in relying upon any such  request,  demand,  authorization,  direction,  notice,
consent or waiver,  only Notes that the  Indenture  Trustee or the Owner Trustee
knows to be so owned  shall be so  disregarded.  Owners of Notes  that have been
pledged in good faith may be regarded as Holders if the pledgee  establishes  to
the  satisfaction  of the  Indenture  Trustee or the Owner Trustee the pledgee's
right so to act with  respect  to such  Notes  and that the  pledgee  is not the
Issuer,  any  other  obligor  upon  the  Notes  or any  Affiliate  of any of the
foregoing  Persons.  Any  Notes on which  payments  are made  under  the  Credit
Enhancement Instrument shall be deemed Outstanding until the Credit Enhancer has
been reimbursed with respect thereto and the Credit Enhancer shall be deemed the
Noteholder thereof to the extent of such unreimbursed payment.


                                      -15-

<PAGE>



               Notes:  Any one of the Class  A-I-1,  Class  A-I-2,  Class A-I-3,
Class A-I-4, Class A-I- 5 or Class A-II Notes issued and outstanding at any time
pursuant to the Indenture.

               Officer's  Certificate:  With respect to the Master  Servicer,  a
certificate  signed by the  President,  Managing  Director,  a Director,  a Vice
President or an Assistant Vice  President,  of the Master Servicer and delivered
to the Indenture  Trustee.  With respect to the Issuer, a certificate  signed by
any Authorized Officer of the Issuer, under the circumstances  described in, and
otherwise  complying  with, the applicable  requirements of Section 10.01 of the
Indenture,  and delivered to the Indenture Trustee.  Unless otherwise specified,
any  reference  in the  Indenture  to an  Officer's  Certificate  shall be to an
Officer's Certificate of any Authorized Officer of the Issuer.

               Opinion of Counsel: A written opinion of counsel.  Any Opinion of
Counsel for the Master  Servicer  may be  provided  by in-house  counsel for the
Master Servicer if reasonably  acceptable to the Indenture  Trustee,  the Credit
Enhancer and the Rating  Agencies or counsel for the Depositor,  as the case may
be.

               Optional Redemption: The right of the Master Servicer to purchase
the Home Loans on any Payment Date on which the aggregate  Principal  Balance of
the Home Loans as of the end of the related  Collection  Period is less than 10%
of the  Cut-off  Date  Balance,  pursuant  to  Section  8.08  of  the  Servicing
Agreement.

               Original  Trust  Agreement:  The  Trust  Agreement,  dated  as of
September 16, 2003, between the Owner Trustee and the Depositor.

               Outstanding:  With  respect  to  the  Notes,  as of the  date  of
determination, all Notes theretofore executed, authenticated and delivered under
this Indenture except:

                      (i) Notes  theretofore  cancelled by the Note Registrar or
        delivered to the Indenture Trustee for cancellation; and

                      (ii) Notes in exchange for or in lieu of which other Notes
        have  been  executed,   authenticated  and  delivered  pursuant  to  the
        Indenture  unless  proof   satisfactory  to  the  Indenture  Trustee  is
        presented that any such Notes are held by a holder in due course;

provided, however, that for purposes of effectuating the Credit Enhancer's right
of  subrogation  as set forth in Section 4.12 of the Indenture  only,  all Notes
that have been paid with funds provided under the Credit Enhancement  Instrument
shall be deemed to be Outstanding  until the Credit Enhancer has been reimbursed
with respect thereto.

               Outstanding Reserve Amount: With respect to any Payment Date, the
amount,  if any, by which (i) the Pool Balance after applying  payments received
in the related  Collection Period exceeds (ii) the aggregate Note Balance of the
Notes on such  Payment  Date after  application  of  Principal  Collections  and
Liquidation  Loss  Distribution  Amounts for such Payment Date. The  Outstanding
Reserve  Amount will be  increased  by  distributions  of the  Reserve  Increase
Amount, if any, to the Notes. Any Excess Loss Amounts are required to be covered
by a draw on the Credit


                                      -16-

<PAGE>



Enhancement  Instrument in all cases,  without regard to the availability of the
Outstanding Reserve Amount.

               Owner Trust: Home Loan Trust 2003-HI3, created by the Certificate
of Trust pursuant to the Trust Agreement and the Original Trust Agreement.

               Owner Trust Estate: The corpus of the Issuer created by the Trust
Agreement  which  consists  of  the  Home  Loans  and  the  Credit   Enhancement
Instrument.

               Owner  Trustee:  Wilmington  Trust Company not in its  individual
capacity  but  solely as Owner  Trustee  of the Trust,  and its  successors  and
assigns or any successor  owner trustee  appointed  pursuant to the terms of the
Trust Agreement.

               Paying  Agent:  Any paying  agent or  co-paying  agent  appointed
pursuant  to  Section  3.03  of the  Indenture,  which  initially  shall  be the
Indenture Trustee.

               Payment Account: The account established by the Indenture Trustee
pursuant to Section  8.02 of the  Indenture  and Section  5.01 of the  Servicing
Agreement.  Amounts  deposited in the Payment Account will be distributed by the
Indenture Trustee in accordance with Section 3.05 of the Indenture.

               Payment Date: The 25th day of each month, or if such day is not a
Business Day, then the next Business Day.

               Percentage  Interest:  With  respect  to any Note and any date of
determination, the percentage obtained by dividing the Note Balance of such Note
by the aggregate of the Note Balances of all Notes of the same Class.

               Permitted Investments:  One or more of the following:

               (i)  obligations of or guaranteed as to principal and interest by
        the United  States or any agency or  instrumentality  thereof  when such
        obligations  are  backed  by the full  faith and  credit  of the  United
        States;

               (ii) repurchase agreements on obligations specified in clause (i)
        maturing not more than one month from the date of  acquisition  thereof,
        provided  that  the  unsecured  obligations  of the  party  agreeing  to
        repurchase such  obligations are at the time rated by each Rating Agency
        in its highest short-term rating category available;

               (iii) federal funds,  certificates of deposit,  demand  deposits,
        time  deposits  and  bankers'  acceptances  (which  shall  each  have an
        original  maturity of not more than 90 days and, in the case of bankers'
        acceptances,  shall in no event have an  original  maturity of more than
        365 days or a remaining  maturity of more than 30 days)  denominated  in
        United  States  dollars  of any  U.S.  depository  institution  or trust
        company  incorporated  under the laws of the United  States or any state
        thereof or of any domestic branch of a foreign depository institution or
        trust company;  provided that the debt  obligations  of such  depository
        institution


                                      -17-

<PAGE>



        or trust company (or, if the only Rating Agency is Standard & Poor's, in
        the  case  of  the  principal  depository  institution  in a  depository
        institution   holding  company,   debt  obligations  of  the  depository
        institution  holding  company) at the date of  acquisition  thereof have
        been  rated by each  Rating  Agency  in its  highest  short-term  rating
        category available; and provided further that, if the only Rating Agency
        is  Standard  &  Poor's  and if the  depository  or trust  company  is a
        principal  subsidiary of a bank holding company and the debt obligations
        of such subsidiary are not separately rated, the applicable rating shall
        be that of the bank holding company;  and, provided further that, if the
        original maturity of such short-term obligations of a domestic branch of
        a foreign depository  institution or trust company shall exceed 30 days,
        the short-term  rating of such institution  shall be A-1+ in the case of
        Standard & Poor's if Standard & Poor's is the Rating Agency;

               (iv)  commercial  paper (having  original  maturities of not more
        than 365  days) of any  corporation  incorporated  under the laws of the
        United States or any state thereof which on the date of acquisition  has
        been  rated by each  Rating  Agency  in its  highest  short-term  rating
        category  available;  provided that such  commercial  paper shall have a
        remaining maturity of not more than 30 days;

               (v) a money market fund or a qualified  investment  fund rated by
        each Rating Agency in its highest  long-term rating category  available;
        and

               (vi) other  obligations or securities that are acceptable to each
        Rating Agency as an Permitted  Investment  hereunder and will not reduce
        the rating  assigned to any  Securities  by such Rating Agency below the
        lower  of  the  then-current  rating  or the  rating  assigned  to  such
        Securities as of the Closing Date by such Rating  Agency,  and which are
        acceptable  to the Credit  Enhancer,  as evidenced in writing,  provided
        that if the Master Servicer or any other Person controlled by the Master
        Servicer  is the issuer or the  obligor of any  obligation  or  security
        described in this clause (vi) such  obligation  or security must have an
        interest  rate or  yield  that  is  fixed  or is  variable  based  on an
        objective  index that is not affected by the rate or amount of losses on
        the Home Loans;

provided,  however,  that no  instrument  shall be a Permitted  Investment if it
represents,  either (1) the right to receive only interest payments with respect
to the underlying debt instrument or (2) the right to receive both principal and
interest  payments derived from  obligations  underlying such instrument and the
principal and interest payments with respect to such instrument  provide a yield
to maturity greater than 120% of the yield to maturity at par of such underlying
obligations  References  herein to the highest  rating  available  on  unsecured
long-term  debt shall  mean AAA in the case of  Standard & Poor's and Aaa in the
case of Moody's,  and  references  herein to the  highest  rating  available  on
unsecured  commercial paper and short-term debt  obligations  shall mean A-1+ in
the case of Standard & Poor's and P-1 in the case of Moody's.

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


                                      -18-

<PAGE>



     Plan:  Any employee  benefit plan subject to Title IV of ERISA and any plan
or other arrangement described in Section 4975(e)(1) of the Code.

     Plan Assets:  The assets of a Plan as determined  under Department of Labor
regulation section 2510.3-101 or other applicable law.

     Pool Balance:  With respect to any date, the aggregate of the Loan Balances
of all Home Loans as of such date.

               Predecessor  Note:  With respect to any  particular  Note,  every
previous Note  evidencing all or a portion of the same debt as that evidenced by
such  particular  Note;  and,  for the  purpose  of this  definition,  any  Note
authenticated  and  delivered  under  Section 4.03 of the Indenture in lieu of a
mutilated,  lost,  destroyed or stolen Note shall be deemed to evidence the same
debt as the mutilated, lost, destroyed or stolen Note.

               Premium Amount:  The amount of premium due to the Credit Enhancer
in accordance with the terms of the Insurance Agreement.

               Premium Percentage: As set forth in the Insurance Agreement.

               Prepayment  Assumption:  A 100% Prepayment Assumption used solely
for  determining  the accrual of original issue  discount,  market  discount and
premium, if any, on the Notes for federal income tax purposes. A 100% Prepayment
Assumption  assumes  a  constant  prepayment  rate of 2% per annum for the first
month,  increasing  each month by an  additional  1.071429%  until the fifteenth
month.  Beginning in the fifteenth month and in each month thereafter during the
life  of the  Home  Loans,  a 100%  Prepayment  Assumption  assumes  a  constant
prepayment rate of 17% per annum each month.

               Principal  Collection  Distribution Amount: For any Payment Date,
the  Principal  Collections  (reduced by any portion used to pay interest on the
Notes) for such Payment Date; provided, however, on any Payment Date as to which
the Outstanding  Reserve Amount that would result, if determined  without regard
to this proviso,  exceeds the Reserve  Amount Target,  the Principal  Collection
Distribution  Amount will be reduced by the amount of such excess, but not below
zero, until the Outstanding Reserve Amount equals the Reserve Amount Target.

               Principal  Collections:  As to any  Payment  Date and  each  Loan
Group, an amount equal to the sum of the following amounts:

               (i) the principal  portion of all scheduled  Monthly  Payments on
        the related Home Loans received during the related Collection Period;

               (ii) the principal  portion of all proceeds of the  repurchase of
        any  related  Home  Loans  (or,  in  the  case  of a  substitution,  any
        Substitution  Adjustment Amounts) as required by the Servicing Agreement
        received during the related  Collection Period and the principal portion
        of the cash purchase price paid in connection with any optional purchase
        of the Home Loans by the Master Servicer; and


                                      -19-

<PAGE>



               (iii) the principal portion of all other unscheduled  collections
        received on the related Home Loans during the related  Collection Period
        (or  deemed  to  be  received  during  the  related  Collection  Period)
        (including,  without limitation,  full and partial Principal Prepayments
        made  by  the  respective   Mortgagors,   Insurance   Proceeds  and  Net
        Liquidation Proceeds), to the extent not previously distributed;

provided,  however,  that Principal  Collections shall be reduced by any amounts
withdrawn from the Custodial Account pursuant to Section 3.03(ii), (v), (vi) and
(vii) of the Servicing Agreement.

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

     Proceeding:  Any  suit  in  equity,  action  at law or  other  judicial  or
administrative proceeding.

     Program Guide:  Together, the Seller's Seller Guide and Servicing Guide, as
in effect from time to time.

     Prospectus Supplement: The prospectus supplement, dated September 22, 2003,
relating to the issuance of the Home Loan-Backed Notes, Series 2003-HI3.

     Purchase  Price:  The meaning  specified in Section 2.2(a) of the Home Loan
Purchase Agreement.

     Purchaser:  Residential  Funding  Mortgage  Securities II, Inc., a Delaware
corporation, and its successors and assigns.

               Qualified  Insurer:  A mortgage  guaranty  insurance company duly
qualified as such under the laws of the state of its principal place of business
and each state  having  jurisdiction  over such insurer in  connection  with the
insurance  policy issued by such insurer,  duly  authorized and licensed in such
states to transact a mortgage guaranty  insurance business in such states and to
write the insurance  provided by the insurance  policy issued by it, approved as
an insurer by the Master Servicer and as a FNMA-approved mortgage insurer.

               Rating  Agency:  Any  nationally  recognized  statistical  rating
organization,  or its successor, that rated the Securities at the request of the
Depositor at the time of the initial issuance of the Securities, which initially
shall be Moody's or Standard & Poor's. If such organization or a successor is no
longer  in  existence,  "Rating  Agency"  shall  be such  nationally  recognized
statistical rating organization,  or other comparable Person,  designated by the
Depositor,  notice of which designation shall be given to the Indenture Trustee.
References  herein to the  highest  short term  unsecured  rating  category of a
Rating  Agency shall mean A-1 or better in the case of Standard & Poor's and P-1
or better in the case of  Moody's  and in the case of any  other  Rating  Agency
shall mean such equivalent  ratings.  References herein to the highest long-term
rating category of a Rating


                                      -20-

<PAGE>



Agency  shall mean "AAA" in the case of  Standard & Poor's and "Aaa" in the case
of Moody's and in the case of any other Rating Agency, such equivalent rating.

               Record  Date:  With  respect  to the  Class  A-I-1  Notes and any
Payment Date, the Business Day next preceding such Payment Date and with respect
to the Notes  (other than the Class A-I-1  Notes) and the  Certificates  and any
Payment  Date,  the last  Business Day of the month  preceding the month of such
Payment Date.

               Reference Bank Rate: With respect to any Interest Accrual Period,
as follows:  the arithmetic mean (rounded upwards, if necessary,  to the nearest
one  sixteenth  of a percent)  of the  offered  rates for United  States  dollar
deposits  for one month  which are  offered by the  Reference  Banks as of 11:00
A.M., London,  England time, on the second LIBOR Business Day prior to the first
day of such  Interest  Accrual  Period to prime  banks in the  London  interbank
market  for a period of one month in amounts  approximately  equal to the sum of
the  outstanding  Note Balance of the Class A-I-1 Notes;  provided that at least
two such  Reference  Banks  provide such rate.  If fewer than two offered  rates
appear,  the Reference Bank Rate will be the arithmetic mean of the rates quoted
by one or more major banks in New York City,  selected by the Indenture  Trustee
after consultation with the Master Servicer and the Credit Enhancer, as of 11:00
a.m., New York time, on such date for loans in U.S.  Dollars to leading European
Banks for a period of one month in amounts  approximately equal to the aggregate
Note Balance of the Class A-I-1 Notes.  If no such  quotations  can be obtained,
the Reference Bank Rate shall be LIBOR applicable to the preceding Payment Date;
provided  however,  that if, under the priorities  indicated above,  LIBOR for a
Payment Date would be based on LIBOR for the previous Payment Date for the third
consecutive  Payment  Date,  the Indenture  Trustee shall select an  alternative
comparable  index over which the  Indenture  Trustee  has no  control,  used for
determining  one-month Eurodollar lending rates that is calculated and published
or otherwise made available by an independent party.

     Reference Banks: Barclays Bank PLC, Credit Suisse and Abbey National PLC.

     Registered  Holder:  The Person in whose name a Note is  registered  in the
Note Register on the applicable Record Date.

               Related Documents:  With respect to each Home Loan, the documents
specified  in  Section  2.1(c)  of the  Home  Loan  Purchase  Agreement  and any
documents  required  to be added to such  documents  pursuant  to the Home  Loan
Purchase Agreement, the Trust Agreement or the Servicing Agreement.

     Release  Agreement:  A Release  Agreement as defined in Section 3.05 of the
Servicing Agreement.

     REO: A Mortgaged  Property that is acquired by the Issuer in foreclosure or
by deed in lieu of foreclosure.

     Repurchase Event: With respect to any Home Loan, one of the following:  (i)
a discovery  that, as of the Closing Date, the related  Mortgage was not a valid
lien on the related Mortgaged Property subject only to (A) the lien of any prior
mortgage indicated on the Home Loan


                                      -21-

<PAGE>



Schedule,  (B) the lien of real property taxes and  assessments  not yet due and
payable, (C) covenants,  conditions, and restrictions,  rights of way, easements
and other  matters of public record as of the date of recording of such Mortgage
and such other  permissible  title exceptions as are listed in the Program Guide
and (D) other matters to which like properties are commonly subject which do not
materially  adversely affect the value,  use,  enjoyment or marketability of the
related  Mortgaged  Property,  or (ii) with respect to any Home Loan as to which
the Seller  delivers a Lost Note  Affidavit,  a subsequent  default on such Home
Loan if the  enforcement  thereof or of the related  Mortgage is materially  and
adversely affected by the absence of the original Mortgage Note.

               Repurchase  Price:  With respect to any Home Loan  required to be
repurchased  on any  date  pursuant  to the  Home  Loan  Purchase  Agreement  or
purchased by the Master Servicer or the Limited Repurchase Right Holder pursuant
to the Servicing  Agreement,  an amount equal to the sum of (i) 100% of the Loan
Balance thereof (without  reduction for any amounts charged off) and (ii) unpaid
accrued  interest at the Loan Rate (or with respect to the last day of the month
in the month of repurchase,  the Loan Rate will be the Loan Rate in effect as to
the  second to last day in such  month)  on the  outstanding  principal  balance
thereof from the Due Date to which  interest  was last paid by the  Mortgagor to
the first day of the month following the month of purchase.

               Request  for  Release:  The form  attached  as  Exhibit  4 to the
Custodial  Agreement  or an  electronic  request  in a  form  acceptable  to the
Custodian.

               Reserve  Amount Floor:  An amount equal to 0.50% of the aggregate
Pool Balance of the Home Loans as of the Cut-off Date.

               Reserve  Amount  Target:  As to any  Payment  Date  prior  to the
Stepdown  Date,  an amount  equal to 9.00% of the  aggregate  Cut-off  Date Pool
Balance.  On or after the Stepdown Date, the Reserve Amount Target will be equal
to the lesser of:

        (a) the Reserve Amount Target as of the Cut-off Date; and

               (b) 18.00% of the aggregate Pool Balance after applying  payments
        received in the related Collection Period; and

provided,  however,  that the Reserve  Amount  Target shall not be less than the
Reserve Amount Floor;

provided further,  that any scheduled  reduction to the Reserve Amount Target on
or after the Stepdown  Date as described  above shall not be made on any Payment
Date unless:

        (i) either (a) the aggregate  cumulative  Liquidation Loss Amount on the
        Home Loans  from the  Cut-off  Date  through  the end of the  Collection
        Period immediately prior to such Payment Date is less than:

               (A) 7.5% of the Pool  Balance  as of the  Cut-off  Date,  if such
               Payment Date is the 31st through 36th Payment Dates,


                                      -22-

<PAGE>



               (B) 8.0% of the Pool  Balance  as of the  Cut-off  Date,  if such
        Payment Date is the 37th through 48th Payment Dates, or

               (C) 9.0% of the Pool  Balance  as of the  Cut-off  Date,  if such
        Payment Date is the 49th through 60th Payment Dates, or

               (D) 12.0% of the Pool  Balance as of the  Cut-off  Date,  if such
        Payment Date is the 61st through 72nd Payment Dates, or

               (E) 14.0% of the Pool  Balance as of the  Cut-off  Date,  if such
        Payment Date is the 73rd  Payment Date (or any Payment Date  thereafter)
        or

               (b) the average of the aggregate  Liquidation  Loss Amount on the
        Home  Loans  that  became  Liquidated  Home  Loans  during  the  related
        Collection  Period,  as  determined  for the current  and five  previous
        Payment Dates,  is less than 50% of the average of the amount  remaining
        in the Payment  Account on such  Payment  Date  following  distributions
        pursuant to clauses (i)-(v) of Section 3.05 of the Indenture (other than
        distributions made pursuant to clause (iii) thereof),  as determined for
        the current and five previous Payment Dates and

        (ii) there has been no draw on the Credit Enhancement Instrument on such
        Payment Date that remains unreimbursed.

In addition,  the Reserve  Amount  Target may be reduced with the prior  written
consent of the Credit Enhancer and notice to the Rating Agencies.

               Reserve Increase Amount: On each Payment Date, an amount equal to
the  lesser  of (i)  the  amount  remaining  in the  Payment  Account  following
distributions  pursuant  to Section  3.05(a)(v)  of the  Indenture  and (ii) the
amount  necessary  to bring the  Outstanding  Reserve  Amount up to the  Reserve
Amount Target.

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

               Sale:  The meaning specified in Section 5.15 of the Indenture.

     Securities  Act: The Securities Act of 1933, as amended,  and the rules and
regulations promulgated thereunder.

               Security:  Any of the Certificates or Notes.

               Securityholder or Holder:  Any Noteholder or a Certificateholder.


                                      -23-

<PAGE>



               Security Instrument:  A written instrument creating a valid first
lien  on a  Mortgaged  Property  securing  a  Mortgage  Note,  which  may be any
applicable  form of  mortgage,  deed of trust,  deed to secure  debt or security
deed, including any riders or addenda thereto.

     Seller:  Residential Funding Corporation,  a Delaware corporation,  and its
successors and assigns.

     Servicing Agreement: The Servicing Agreement dated as of September 25, 2003
among the  Indenture  Trustee,  the Issuer and the  Master  Servicer,  as master
servicer.

     Servicing  Certificate:  A certificate  prepared by a Servicing  Officer on
behalf of the Master  Servicer in accordance  with Section 4.01 of the Servicing
Agreement.

     Servicing  Default:  The meaning specified in Section 7.01 of the Servicing
Agreement.

     Servicing Fee: With respect to any Home Loan, the sum of the related Master
Servicing Fee and the related Subservicing Fee.

     Servicing Fee Rate:  With respect to any Home Loan,  the sum of the related
Master Servicing Fee Rate and the related Subservicing Fee Rate.

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

               Servicing  Trigger:  As of any  Payment  Date,  for  purposes  of
Section 7.04,  "Servicing  Trigger;  Removal of Master  Servicer,"the  aggregate
cumulative  Liquidation  Loss  Amount on the Home  Loans from the  Cut-off  Date
through the end of the Collection Period  immediately prior to such Payment Date
is greater than:

               (A) 13.5% of the Pool  Balance as of the  Cut-off  Date,  if such
               Payment Date is the 31st through 36th Payment Dates,

               (B) 14.0% of the Pool  Balance as of the  Cut-off  Date,  if such
               Payment Date is the 37th through 48th Payment Dates, or

               (C) 16.0% of the Pool  Balance as of the  Cut-off  Date,  if such
               Payment Date is the 49th through 60th Payment Dates, or

               (D) 22.0% of the Pool  Balance as of the  Cut-off  Date,  if such
               Payment Date is the 61st through 72nd Payment Dates, or

               (E) 26.0% of the Pool  Balance as of the  Cut-off  Date,  if such
               Payment  Date is the  73rd  Payment  Date  (or any  Payment  Date
               thereafter).


                                      -24-

<PAGE>



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

     Stated Value: The value of the Mortgaged  Property as stated by the related
Mortgagor in his or her application.

     Statutory  Trust  Statute:  Chapter 38 of Title 12 of the Delaware Code, 12
Del. Code ss.ss.3801 et seq., as the same may be amended from time to time.

               Step-Up Date: The second Payment Date  immediately  following the
Payment  Date on which the Master  Servicer can purchase all or some of the Home
Loans from the Trust pursuant to Section 8.08 of the Servicing Agreement.

               Stepdown  Date:  The later of (i) the Payment  Date in April 2006
and (ii) the Payment Date on which the Pool  Balance,  after  applying  payments
received in the related  Collection Period, is less than 50% of the Pool Balance
as of the Cut-off Date.

     Subservicer:  Any Person with whom the Master  Servicer  has entered into a
Subservicing Agreement as a Subservicer by the Master Servicer.

     Subservicing  Account:  An Eligible Account  established or maintained by a
Subservicer as provided for in Section 3.02(c) of the Servicing Agreement.

               Subservicing  Agreement:  The written contract between the Master
Servicer and any Subservicer relating to servicing and administration of certain
Home Loans as provided in Section 3.01 of the Servicing Agreement.

               Subservicing Fee: With respect to any Collection  Period, the fee
retained monthly by the Subservicer  (or, in the case of a  nonsubserviced  Home
Loan, by the Master  Servicer) equal to the product of (i) the  Subservicing Fee
Rate  divided  by 12 and (ii)  the  Pool  Balance  as of the  first  day of such
Collection Period.

               Subservicing Fee Rate: With respect to each Home Loan, the amount
payable to the related Subservicer, equal to 0.50% per annum.

               Substitution  Adjustment  Amounts:  With  respect to any Eligible
Substitute  Loan,  the  amount as  defined  in  Section  3.1(b) of the Home Loan
Purchase  Agreement and any Deleted Loan,  the amount,  if any, as determined by
the  Master  Servicer,  by which the  aggregate  principal  balance  of all such
Eligible  Substitute  Loans  as of the  date of  substitution  is less  than the
aggregate  principal balance of all such Deleted Loans (after application of the
principal  portion of the Monthly Payments due in the month of substitution that
are to be distributed to the Payment Account in the month of substitution).

               Termination  Price:  In the event  that all of the Home Loans are
purchased by the Master Servicer,  the Termination Price will be an amount equal
to 100% of the unpaid Loan Balance of each Home Loan so purchased,  plus accrued
and unpaid interest thereon at the weighted average


                                      -25-

<PAGE>


of the Loan Rates  through  the day  preceding  the  Payment  Date on which such
purchase  occurs,  plus any  amounts  owed by the Seller  pursuant to the second
paragraph of Section  3.1(c) of the Home Loan  Purchase  Agreement in respect of
any  liability,   penalty  or  expense  that  resulted  from  a  breach  of  the
representation  and  warranty  set forth in clause (x) of Section  3.1(b) of the
Home Loan Purchase Agreement, that remain unpaid on the date of such purchase.

               Treasury   Regulations:   Regulations,   including   proposed  or
temporary Regulations, promulgated under the Code. References herein to specific
provisions  of  proposed  or  temporary   regulations  shall  include  analogous
provisions  of  final   Treasury   Regulations  or  other   successor   Treasury
Regulations.

               Trust Agreement: The Amended and Restated Trust Agreement,  dated
as of September 25, 2003 between the Owner Trustee and the Depositor.

     Trust  Estate:  The  meaning  specified  in  the  Granting  Clause  of  the
Indenture.

               Trust  Indenture Act or TIA: The Trust  Indenture Act of 1939, as
amended from time to time, as in effect on any relevant date.

               UCC: The Uniform  Commercial  Code, as amended from time to time,
as in effect in any specified jurisdiction.

     Underwriters:  Bear, Stearns & Co. Inc. and Residential  Funding Securities
Corporation.

               Uniform  Single  Attestation  Program for Mortgage  Bankers:  The
Uniform Single  Attestation  Program for Mortgage  Bankers,  as published by the
Mortgage  Bankers  Association  of America and effective  with respect to fiscal
periods ending on or after December 15, 1995.

               United States Person: A citizen or resident of the United States,
a corporation, partnership or other entity created or organized in, or under the
laws of, the United  States or any state  thereof or the  District  of  Columbia
(except,  in the case of a partnership,  to the extent provided in regulations),
or an estate  whose  income is  subject  to United  States  federal  income  tax
regardless  of its source,  or a trust other than a "foreign  trust"  within the
meaning of Section 7701(a)(30) of the Code.


                                      -26-

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