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



                       HOMESTAR MORTGAGE ACCEPTANCE CORP.,

                                    Company,


                             WELLS FARGO BANK, N.A.

                  Master Servicer and Securities Administrator,


                                       and


                                  HSBC BANK USA

                                     Trustee





                         POOLING AND SERVICING AGREEMENT

                            Dated as of June 1, 2004

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


                     Asset-Backed Pass-Through Certificates

                                  Series 2004-3


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


<PAGE>


<TABLE>
<CAPTION>

                                                 TABLE OF CONTENTS

                                                                                                               Page

                                                     ARTICLE I
                                                    DEFINITIONS
<S>                                                                                                            <C>
Section 1.01.     Defined Terms...................................................................................4
         Accepted Master Servicing Practices......................................................................4
         Accrual Period...........................................................................................4
         Accrued Certificate Interest.............................................................................5
         Adjustable Rate Mortgage Loans...........................................................................5
         Advance..................................................................................................5
         Affiliate................................................................................................5
         Aggregate Stated Principal Balance.......................................................................5
         Agreement................................................................................................5
         Allocated Realized Loss Amount...........................................................................5
         Assignment...............................................................................................5
         Assignment Agreement.....................................................................................5
         Available Distribution Amount............................................................................6
         Balloon Loan.............................................................................................6
         Balloon Payment..........................................................................................6
         Bankruptcy Code..........................................................................................6
         Basic Principal Distribution Amount......................................................................6
         Basis Risk Shortfall.....................................................................................6
         Basis Risk Shortfall Carry-Forward Amount................................................................6
         Basis Risk Shortfall Reserve Fund........................................................................7
         Book-Entry Certificate...................................................................................7
         Business Day.............................................................................................7
         Cash Liquidation.........................................................................................7
         Cenlar...................................................................................................7
         Cenlar...................................................................................................7
         Certificate..............................................................................................7
         Certificate Account......................................................................................7
         Certificate Account Deposit Date.........................................................................7
         Certificateholder........................................................................................7
         Holder...................................................................................................7
         Certificate Margin.......................................................................................8
         Certificate Owner........................................................................................8
         Certificate Principal Balance............................................................................8
         Certificate Register.....................................................................................8
         Class....................................................................................................8
         Class A Certificate......................................................................................8
         Class A Corridor Contract Allocation Amount..............................................................8
         Class A Principal Distribution Amount....................................................................8
         Class AV-1 Certificate...................................................................................9



<PAGE>



         Class AV-2 Certificates..................................................................................9
         Class AV-2A Certificate..................................................................................9
         Class AV-2B Certificate..................................................................................9
         Class AV-2C Certificate..................................................................................9
         Class AV-3 Certificate...................................................................................9
         Class C Certificate.....................................................................................10
         Class C Interest........................................................................................10
         Class M Certificates....................................................................................10
         Class M-1 Certificate...................................................................................10
         Class M Corridor Contract Allocation Amount.............................................................10
         Class M-1 Principal Distribution Amount.................................................................10
         Class M-2 Certificate...................................................................................11
         Class M-2 Principal Distribution Amount.................................................................11
         Class M-3 Certificate...................................................................................11
         Class M-3 Principal Distribution Amount.................................................................11
         Class M-4 Certificate...................................................................................12
         Class M-4 Principal Distribution Amount.................................................................12
         Class M-5 Certificate...................................................................................12
         Class M-5 Principal Distribution Amount.................................................................12
         Class P Certificate.....................................................................................13
         Class P Interest........................................................................................13
         Class R Certificate.....................................................................................13
         Class R-X Certificate...................................................................................13
         Class R-1 Interest......................................................................................13
         Class R-2 Interest......................................................................................13
         Class R-3 Interest......................................................................................13
         Class R-4 Interest......................................................................................13
         Closing Date............................................................................................13
         Code....................................................................................................13
         Collateral Value........................................................................................13
         Commission..............................................................................................14
         Company.................................................................................................14
         Compensating Interest...................................................................................14
         Corridor Contract Counterparty..........................................................................14
         Corridor Contracts......................................................................................14
         Corporate Trust Office..................................................................................14
         Corresponding Certificate...............................................................................14
         Curtailment.............................................................................................15
         Custodial Account.......................................................................................15
         Custodial Agreement.....................................................................................15
         Custodian...............................................................................................15
         Cut-off Date............................................................................................15
         Deficient Valuation.....................................................................................15
         Definitive Certificate..................................................................................15
         Deleted Mortgage Loan...................................................................................15



<PAGE>



         Depository..............................................................................................15
         Depository Participant..................................................................................15
         Determination Date......................................................................................15
         Disqualified Organization...............................................................................16
         Distribution Date.......................................................................................16
         Due Date................................................................................................16
         Due Period..............................................................................................16
         EDGAR...................................................................................................16
         Eligible Account........................................................................................16
         Event of Default........................................................................................17
         Exchange Act............................................................................................17
         Extra Principal Distribution Amount.....................................................................17
         Fannie Mae..............................................................................................17
         FDIC....................................................................................................17
         Fitch Ratings...........................................................................................17
         Fixed Rate Mortgage Loans...............................................................................17
         Freddie Mac.............................................................................................17
         Funding Date............................................................................................17
         Initial Certificate Principal Balance...................................................................17
         Initial Notional Amount.................................................................................17
         Insurance Policy........................................................................................17
         Insurance Proceeds......................................................................................17
         Interest Carry Forward Amount...........................................................................18
         Interest Determination Date.............................................................................18
         Interest Remittance Amount..............................................................................18
         Late Collections........................................................................................18
         LIBOR...................................................................................................18
         LIBOR Business Day......................................................................................18
         Liquidated Mortgage Loan................................................................................18
         Liquidation Proceeds....................................................................................18
         Loan-to-Value Ratio.....................................................................................18
         Lost Note Affidavit.....................................................................................19
         Majority Class C Certificateholder......................................................................19
         Marker Rate.............................................................................................19
         Master Servicer.........................................................................................19
         Master Servicing Fees...................................................................................19
         Master Servicing Fee Rate...............................................................................19
         Maximum Uncertificated Accrued Interest Deferral Amount.................................................19
         MERS....................................................................................................20
         MERS(R)System............................................................................................20
         MIN.....................................................................................................20
         MOM Loan................................................................................................20
         Monthly Payment.........................................................................................20
         Moody's.................................................................................................20
         Mortgage................................................................................................20



<PAGE>



         Mortgage File...........................................................................................20
         Mortgage Loan...........................................................................................20
         Mortgage Loan Purchase Agreement........................................................................21
         Mortgage Loan Schedule..................................................................................21
         Mortgage Note...........................................................................................22
         Mortgage Rate...........................................................................................22
         Mortgaged Property......................................................................................22
         Mortgagor...............................................................................................22
         Net Liquidation Proceeds................................................................................23
         Net Mortgage Rate.......................................................................................23
         Net Monthly Excess Cashflow.............................................................................23
         Net Prepayment Interest Shortfall.......................................................................23
         Net WAC Rate............................................................................................23
         Nonrecoverable Advance..................................................................................23
         Non-United States Person................................................................................23
         Notional Amount.........................................................................................23
         Offered Certificates....................................................................................23
         Officers' Certificate...................................................................................23
         Opinion of Counsel......................................................................................24
         Option One..............................................................................................24
         Option One..............................................................................................24
         Optional Termination Date...............................................................................24
         OTS.....................................................................................................24
         Outstanding Mortgage Loan...............................................................................24
         Overcollateralization Deficiency Amount.................................................................24
         Overcollateralization Target Amount.....................................................................24
         Overcollateralized Amount...............................................................................24
         Ownership Interest......................................................................................25
         Pass-Through Rate.......................................................................................25
         Percentage Interest.....................................................................................26
         Permitted Investment....................................................................................26
         Permitted Transferee....................................................................................27
         Person..................................................................................................27
         Prepayment Assumption...................................................................................28
         Prepayment Charge.......................................................................................28
         Prepayment Interest Shortfall...........................................................................28
         Prepayment Period.......................................................................................28
         Primary Hazard Insurance Policy.........................................................................28
         Primary Insurance Policy................................................................................28
         Principal Distribution Amount...........................................................................28
         Principal Prepayment....................................................................................28
         Principal Prepayment in Full............................................................................28
         Principal Remittance Amount.............................................................................28
         Prospectus Supplement...................................................................................29
         Protected Account.......................................................................................29



<PAGE>



         Purchase Price..........................................................................................29
         Qualified Insurer.......................................................................................29
         Qualified Substitute Mortgage Loan......................................................................29
         Rating Agency...........................................................................................30
         Realized Loss...........................................................................................30
         Record Date.............................................................................................30
         Regular Certificate.....................................................................................30
         Relief Act..............................................................................................30
         Relief Act Interest Shortfall...........................................................................30
         REMIC...................................................................................................31
         REMIC 1.................................................................................................31
         REMIC 1 Interest Loss Allocation Amount.................................................................31
         REMIC 1 Overcollateralized Amount.......................................................................31
         REMIC 1 Principal Loss Allocation Amount................................................................31
         REMIC 1 Overcollateralization Target Amount.............................................................32
         REMIC 1 Regular Interest LT-AA..........................................................................32
         REMIC 1 Regular Interest ...............................................................................32
         REMIC 1 Regular Interest LT-AV2A........................................................................32
         REMIC 1 Regular Interest LT-AV2B........................................................................32
         REMIC 1 Regular Interest LT-AV2C........................................................................32
         REMIC 1 Regular Interest LT-AV3.........................................................................33
         REMIC 1 Regular Interest LT-M1..........................................................................33
         REMIC 1 Regular Interest LT-M2..........................................................................33
         REMIC 1 Regular Interest LT-M3..........................................................................33
         REMIC 1 Regular Interest LT-M4..........................................................................33
         REMIC 1 Regular Interest LT-M5..........................................................................33
         REMIC 1 Regular Interest LT-P...........................................................................34
         REMIC 1 Regular Interest LT-ZZ..........................................................................34
         REMIC 1 Regular Interests...............................................................................34
         REMIC 2.................................................................................................34
         REMIC 3.................................................................................................34
         REMIC 4.................................................................................................34
         REMIC Provisions........................................................................................34
         REMIC Regular Interest..................................................................................34
         Remittance Report.......................................................................................35
         REO Acquisition.........................................................................................35
         REO Disposition.........................................................................................35
         REO Imputed Interest....................................................................................35
         REO Proceeds............................................................................................35
         REO Property............................................................................................35
         Request for Release.....................................................................................35
         Residual Interest.......................................................................................35
         Responsible Officer.....................................................................................35
         Securities Administrator................................................................................35
         Seller..................................................................................................35



<PAGE>



         Servicer................................................................................................36
         Servicer Remittance Date................................................................................36
         Servicing Advances......................................................................................36
         Servicing Agreements....................................................................................36
         Servicing Fee...........................................................................................36
         Servicing Fee Rate......................................................................................36
         Servicing Officer.......................................................................................36
         Single Certificate......................................................................................36
         Standard & Poor's.......................................................................................37
         Startup Day.............................................................................................37
         Stated Principal Balance................................................................................37
         Step-Up Date............................................................................................37
         Stepdown Date...........................................................................................37
         Subservicer.............................................................................................37
         Subservicer Remittance Date.............................................................................37
         Subservicing Agreement..................................................................................37
         Subsequent Recoveries...................................................................................37
         Substitution Adjustment.................................................................................38
         Tax Returns.............................................................................................38
         Transfer................................................................................................38
         Transferor..............................................................................................38
         Trigger Event...........................................................................................38
         Trust Fund..............................................................................................38
         Trust REMIC.............................................................................................38
         Trustee.................................................................................................38
         Uncertificated Accrued Interest.........................................................................38
         Uncertificated Principal Balance........................................................................39
         Uncertificated Pass-Through Rate........................................................................39
         Uncertificated REMIC 1 Pass-Through Rate................................................................39
         Underwriter.............................................................................................39
         Uninsured Cause.........................................................................................39
         United States Person....................................................................................39
         Voting Rights...........................................................................................40
         Weighted Average Net Mortgage Rate......................................................................40
Section 1.02      Determination of LIBOR.........................................................................40
Section 1.03      Allocation of Certain Interest Shortfalls......................................................41

                                                    ARTICLE II
                                           CONVEYANCE OF MORTGAGE LOANS;
                                         ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01.     Conveyance of Mortgage Loans...................................................................42
Section 2.02.     Acceptance of the Trust Fund by the Trustee....................................................45
Section 2.03.     Representations, Warranties and Covenants of the Master Servicer and the
                  Company........................................................................................47
Section 2.04.     Assignment of Interest in the Mortgage Loan Purchase Agreement.................................49



<PAGE>



Section 2.05.     Issuance of Certificates; Conveyance of REMIC Regular Interests and Acceptance
                  of REMIC 1, REMIC 2, REMIC 3 and REMIC 4 by the Trustee........................................51
Section 2.06.     ...............................................................................................53

                                                    ARTICLE III
                                           ADMINISTRATION AND SERVICING
                                                 OF THE TRUST FUND
Section 3.01.     Administration and Servicing of Mortgage Loans.................................................54
Section 3.02      REMIC-Related Covenants........................................................................55
Section 3.03      Monitoring of Servicer.........................................................................56
Section 3.04      Fidelity Bond..................................................................................57
Section 3.05      Power to Act; Procedures.......................................................................57
Section 3.06      Due-on-Sale Clauses; Assumption Agreements.....................................................58
Section 3.07      Release of Mortgage Files......................................................................58
Section 3.08      Documents, Records and Funds in Possession of Master Servicer To Be Held for
                  Trustee........................................................................................59
Section 3.09      Standard Hazard Insurance and Flood Insurance Policies.........................................60
Section 3.10      Presentment of Claims and Collection of Proceeds...............................................60
Section 3.11      Maintenance of the Primary Mortgage Insurance Policies.........................................60
Section 3.12      Trustee to Retain Possession of Certain Insurance Policies and Documents.......................61
Section 3.13      Realization Upon Defaulted Mortgage Loans......................................................61
Section 3.14      Compensation for the Master Servicer...........................................................62
Section 3.15      REO Property...................................................................................62
Section 3.16.     Protected Accounts.............................................................................62
Section 3.17      Custodial Account..............................................................................64
Section 3.18      Permitted Withdrawals and Transfers from the Custodial Account.................................65
Section 3.19.     Certificate Account............................................................................65
Section 3.20      Permitted Withdrawals and Transfers from the Certificate Account...............................66
Section 3.21      Annual Officer's Certificate as to Compliance..................................................68
Section 3.22      Annual Independent Accountant's Servicing Report...............................................68
Section 3.23      Reports Filed with Securities and Exchange Commission..........................................69
Section 3.24      UCC............................................................................................70
Section 3.25      Optional Purchase of Defaulted Mortgage Loans..................................................70
Section 3.26.     The Corridor Contracts.........................................................................70

                                                    ARTICLE IV
                                          PAYMENTS TO CERTIFICATEHOLDERS
Section 4.01.     Distributions..................................................................................72
Section 4.02.     Statements to Certificateholders...............................................................76
Section 4.03.     Remittance Reports; Advances by the Master Servicer............................................79
Section 4.04.     Distributions on the REMIC Regular Interests...................................................80
Section 4.05.     Allocation of Realized Losses..................................................................81
Section 4.06.     Information Reports to Be Filed by the Servicer................................................82
Section 4.07.     Compliance with Withholding Requirements.......................................................83
Section 4.08.     Basis Risk Shortfall Reserve Fund..............................................................83



<PAGE>




                                                     ARTICLE V
                                                 THE CERTIFICATES
Section 5.01.     The Certificates...............................................................................85
Section 5.02.     Registration of Transfer and Exchange of Certificates..........................................86
Section 5.03.     Mutilated, Destroyed, Lost or Stolen Certificates..............................................91
Section 5.04.     Persons Deemed Owners..........................................................................92
Section 5.05.     Rule 144A Information..........................................................................92

                                                    ARTICLE VI
                                        THE COMPANY AND THE MASTER SERVICER
Section 6.01.     Liability of the Company and the Master Servicer...............................................93
Section 6.02.     Merger, Consolidation or Conversion of the Company or the Master Servicer......................93
Section 6.03.     Limitation on Liability of the Company, the Master Servicer, the Securities
                  Administrator and Others.......................................................................93
Section 6.04.     Limitation on Resignation of the Master Servicer...............................................94
Section 6.05.     Sale and Assignment of Master Servicing........................................................94

                                                    ARTICLE VII
                                                      DEFAULT
Section 7.01.     Events of Default..............................................................................96
Section 7.02.     Trustee to Act; Appointment of Successor.......................................................97
Section 7.03.     Notification to Certificateholders.............................................................99
Section 7.04.     Waiver of Events of Default....................................................................99
Section 7.05.     List of Certificateholders.....................................................................99

                                                   ARTICLE VIII
                                CONCERNING THE TRUSTEE AND SECURITIES ADMINISTRATOR
Section 8.01.     Duties of Trustee.............................................................................100
Section 8.02.     Certain Matters Affecting the Trustee and the Securities Administrator........................101
Section 8.03.     Trustee and Securities Administrator Not Liable for Certificates or Mortgage
Loans...........................................................................................................103
Section 8.04.     Trustee and Securities Administrator May Own Certificates.....................................103
Section 8.05.     Trustee's and Securities Administrator's Fees.................................................103
Section 8.06.     Eligibility Requirements for Trustee and the Securities Administrator.........................104
Section 8.07.     Resignation and Removal of the Trustee........................................................104
Section 8.08.     Successor Trustee and Successor Securities Administrator......................................105
Section 8.09.     Merger or Consolidation of Trustee or Securities Administrator................................106
Section 8.10.     Appointment of Co-Trustee or Separate Trustee.................................................106

                                                    ARTICLE IX
                                                    TERMINATION
Section 9.01.     Termination Upon Repurchase or Liquidation of All Mortgage Loans or upon
                  Purchase of Certificates......................................................................108
Section 9.02.     Termination of REMIC 2, REMIC 3 and REMIC 4...................................................110



<PAGE>



Section 9.03.     Additional Termination Requirements...........................................................110

                                                     ARTICLE X
                                                 REMIC PROVISIONS
Section 10.01.             REMIC Administration.................................................................112
Section 10.02.             Prohibited Transactions and Activities...............................................115
Section 10.03.             Master Servicer, Securities Administrator and Trustee Indemnification................115


                                                    ARTICLE XI
                                             MISCELLANEOUS PROVISIONS
Section 11.01.             Amendment............................................................................116
Section 11.02.             Recordation of Agreement; Counterparts...............................................117
Section 11.03.             Limitation on Rights of Certificateholders...........................................118
Section 11.04.             Governing Law........................................................................118
Section 11.05.             Notices..............................................................................119
Section 11.06.             Severability of Provisions...........................................................119
Section 11.07.             Successors and Assigns...............................................................119
Section 11.08.             Article and Section Headings.........................................................119
Section 11.09.             Notice to Rating Agencies............................................................119
Section 11.10.             Third Party Rights...................................................................120
</TABLE>

<TABLE>
<CAPTION>

Signatures
Acknowledgments

<S>               <C>
Exhibit A         Form of Class A Certificate
Exhibit B-1       Form of Class M Certificate
Exhibit B-2       Form of Class C Certificate
Exhibit B-3       Form of Class P Certificate
Exhibit B-4       Form of Class R-[_][X] Certificate
Exhibit C         Form of Trustee Initial Certification
Exhibit D         Form of Trustee Final Certification
Exhibit E         Form of Remittance Report
Exhibit F         Request for Release
Exhibit G-1       Form of Investor Representation Letter
Exhibit G-2       Form of Transferor Representation Letter
Exhibit G-3       Form of Rule 144A Investment Representation
Exhibit G-4       Transferor Certificate for Transfers of Residual Certificates
Exhibit G-5       Transfer Affidavit and Agreement for Transfers of Residual Certificates
Exhibit H         Mortgage Loan Schedule
Exhibit I         [Reserved]
Exhibit J         [Reserved]
Exhibit K         Assignment Agreement
Exhibit L-1       Form 10-K Certification
Exhibit L-2       Form 10-K Back-up Certification (Master Servicer)



<PAGE>



Exhibit L-3       Form 10-K Back-up Certification (Trustee)
Exhibit M-1       Form of Servicing Agreement
Exhibit M-2       Form of Servicing Agreement
Exhibit N         Form of Custodial Agreement
Exhibit O         [Reserved]
Exhibit P         Form of Mortgage Loan Purchase Agreement
</TABLE>



<PAGE>



         This Pooling and Servicing Agreement, dated and effective as of June 1,
2004, is entered into among Homestar Mortgage Acceptance Corp., as company (the
"Company"),Wells Fargo Bank, N.A., as master servicer (in such capacity, the
"Master Servicer") and as securities administrator (in such capacity, the
"Securities Administrator"), and HSBC Bank USA, as trustee (the "Trustee").

                             PRELIMINARY STATEMENT:

         The Company intends to sell pass-through certificates (collectively,
the "Certificates"), to be issued hereunder in multiple classes, which in the
aggregate will evidence the entire beneficial ownership interest in the Trust
Fund created hereunder. The Certificates will consist of fourteen classes of
certificates, designated as (i) the Class AV-1, Class AV-2A, Class AV-2B, Class
AV-2C and Class AV-3 Certificates, (ii) the Class M-1, Class M-2, Class M-3,
Class M-4 and Class M-5 Certificates, (iii) the Class C Certificates, (iv) the
Class P Certificates and (v) the Class R and Class R-X Certificates.

                                     REMIC 1
                                     -------

         As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the Trust Fund (exclusive of the Basis
Risk Shortfall Reserve Fund and the Corridor Contracts) as a REMIC for federal
income tax purposes, and such segregated pool of assets will be designated as
"REMIC 1". The Class R-1 Interest will represent the sole class of "residual
interests" in REMIC 1 for purposes of the REMIC Provisions.

         The following table irrevocably sets forth the designation, the
Uncertificated REMIC 1 Pass- Through Rate, the initial Uncertificated Principal
Balance, and solely for purposes of satisfying Treasury regulation Section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for each of the REMIC 1
Regular Interests. None of the REMIC 1 Regular Interests will be certificated.


                                               Initial
               Uncertificated REMIC 1      Uncertificated       Assumed Final
 Designation     Pass-Through Rate        Principal Balance     Maturity Date(1)
 -----------     -----------------        -----------------     ----------------
    LT-AA               (2)               $ 408,714,098.31      July 25, 2034
   LT-AV1               (2)               $   1,725,670.00      July 25, 2034
   LT-AV2A              (2)               $     374,820.00      July 25, 2034
   LT-AV2B              (2)               $     511,610.00      July 25, 2034
   LT-AV2C              (2)               $     839,230.00      July 25, 2034
   LT-AV3               (2)               $     383,490.00      July 25, 2034
    LT-M1               (2)               $     135,540.00      July 25, 2034
    LT-M2               (2)               $     102,180.00      July 25, 2034
    LT-M3               (2)               $      25,020.00      July 25, 2034
    LT-M4               (2)               $      25,030.00      July 25, 2034
    LT-M5               (2)               $      27,110.00      July 25, 2034



                                        1

<PAGE>




    LT-ZZ               (2)               $   4,191,404.05      July 25, 2034
    LT-P                (2)               $         100.00      July 25, 2034

(1)      Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
         regulations, the Distribution Date in the month following the maturity
         date for the Mortgage Loan with the latest possible maturity date has
         been designated as the "latest possible maturity date" for each REMIC 1
         Regular Interest.
(2)      Calculated in accordance with the definition of "Uncertificated REMIC 1
         Pass-Through Rate" herein.

                                     REMIC 2
                                     -------

         As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the REMIC 1 Regular Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC 2". The Class R-2 Interest will represent the sole class of
"residual interests" in REMIC 2 for purposes of the REMIC Provisions.

         The following table irrevocably sets forth the Class designation,
Pass-Through Rate and Initial Certificate Principal Balance for each Class of
Certificates that represents one or more of the "regular interests" in REMIC 2
created hereunder:


                    Initial Certificate                         Assumed Final
Class Designation   Principal Balance   Pass-Through Rate     Maturity Date(1)
-----------------   -----------------   -----------------    -----------------
      AV-1          $ 172,567,000       Adjustable(2)         July 25, 2034
      AV-2A         $  37,482,000       Adjustable(2)         July 25, 2034
      AV-2B         $  51,161,000       Adjustable(2)         July 25, 2034
      AV-2C         $  83,923,000       Adjustable(2)         July 25, 2034
      AV-3          $  38,349,000       Adjustable(2)         July 25, 2034
       M-1          $  13,554,000       Adjustable(2)         July 25, 2034
       M-2          $  10,218,000       Adjustable(2)         July 25, 2034
       M-3          $   2,502,000       Adjustable(2)         July 25, 2034
       M-4          $   2,503,000       Adjustable(2)         July 25, 2034
       M-5          $   2,711,000       Adjustable(2)         July 25, 2034
   C Interest       $2,085,202.36        Variable(2)          July 25, 2034
   P Interest       $      100.00          (4)                July 25, 2034

(1)      Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
         regulations, the Distribution Date in the month following the maturity
         date for the Mortgage Loan with the latest possible maturity date has
         been designated as the "latest possible maturity date" for each REMIC 1
         Regular Interest.
(2)      Calculated in accordance with the definition of "Pass-Through Rate"
         herein.
(3)      The Class C Interest will accrue interest at their variable
         Pass-Through Rate on the Notional Amount of the Class C Certificates
         outstanding from time to time which shall equal the aggregate of the
         Uncertificated Principal Balances of the REMIC 1 Regular Interests
         (other than REMIC 1 Regular Interest LT-P). The Class C Interest will
         not accrue interest on their Certificate Principal Balance.
(4)      The Class P Interest does not accrue interest.


                                        2

<PAGE>



                                     REMIC 3
                                     -------

                  As provided herein, the Trustee shall make an election to
treat the segregated pool of assets consisting of the Class C Interest as a
REMIC for federal income tax purposes, and such segregated pool of assets will
be designated as "REMIC 3." The Class R-3 Interest represents the sole class of
"residual interests" in REMIC 3 for purposes of the REMIC Provisions.

                  The following table sets forth (or describes) the Class
designation, Pass-Through Rate and Original Class Certificate Principal Balance
for the indicated Class of Certificates that represents a "regular interest" in
REMIC 3 created hereunder:



                                         Initial Aggregate
                                       Certificate Principal  Latest Possible
Class Designation    Pass-Through Rate        Balance         Maturity Date(1)
-----------------    ----------------- ---------------------  -----------------
Class C Certificates    Variable(2)      $2,085,202.36 (3)     July 25, 2034
---------------
(1)  Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
     regulations, the Distribution Date immediately following the maturity date
     for the Mortgage Loans with the latest maturity date has been designated as
     the "latest possible maturity date" for the Class C Certificates.
(2)  The Class C Certificates will receive 100% of amounts received in respect
     of the Class C Interest.



                                        3

<PAGE>



                                     REMIC 4
                                     -------

                  As provided herein, the Trustee shall make an election to
treat the segregated pool of assets consisting of the Class P Interest as a
REMIC for federal income tax purposes, and such segregated pool of assets will
be designated as "REMIC 4." The Class R-4 Interest represents the sole class of
"residual interests" in REMIC 4 for purposes of the REMIC Provisions.

                  The following table sets forth (or describes) the Class
designation, Pass-Through Rate and Original Class Certificate Principal Balance
for the indicated Class of Certificates that represents a "regular interest" in
REMIC 4 created hereunder:


                                         Initial Aggregate
                                       Certificate Principal  Latest Possible
Class Designation    Pass-Through Rate        Balance         Maturity Date(1)
-----------------    ----------------- ---------------------  -----------------
Class P Certificates   Variable(2)           $100.00            July 25, 2034
---------------
(1)  Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
     regulations, the Distribution Date immediately following the maturity date
     for the Mortgage Loans with the latest maturity date has been designated as
     the "latest possible maturity date" for the Class P Certificates.
(2)  The Class P Certificates will receive 100% of amounts received in respect
     of the Class P Interest.


                                    ARTICLE I
                                   DEFINITIONS

     Section 1.01.             Defined Terms.

         Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the meanings specified in this
Article. Unless otherwise specified, all calculations in respect of interest on
the Class A Certificates, the Class M Certificates, the Class C Certificates and
the REMIC 1 Regular Interests shall be made on the basis of a 360-day year
consisting of the actual number of days in the related Accrual Period. The Class
P Certificates and the Class R Certificates do not accrue interest.

     "Accepted Master Servicing Practices": With respect to any Mortgage Loan,
as applicable, either (x) those customary mortgage master servicing practices of
prudent mortgage master servicing institutions that master service mortgage
loans of the same type and quality as such Mortgage Loan in the jurisdiction
where the related Mortgaged Property is located, to the extent applicable to the
Trustee or the Master Servicer (except in its capacity as successor to the
Servicer), or (y) as provided in this Agreement, to the extent applicable to the
Master Servicer, but in no event below the standard set forth in clause (x).

     "Accrual Period": With respect to any Distribution Date and the Offered
Certificates, the period commencing on the immediately preceding Distribution
Date (or, in the case of the first Distribution


                                        4

<PAGE>



Date, the Closing Date) and ending on the day immediately preceding the current
Distribution Date. With respect to any Distribution Date and the Class C
Certificates, the calendar month preceding the month in which such Distribution
Date occurs. The Class R Certificates and Class P Certificates will not accrue
any interest and therefore have no Accrual Period.

     "Accrued Certificate Interest": With respect to the Class A, Class M and
Class C Certificates and any Distribution Date, the amount of interest accrued
during the related Accrual Period at the related Pass-Through Rate on the
Certificate Principal Balance (or Notional Amount in the case of the Class C
Certificates) of such Class immediately prior to such Distribution Date, in each
case, reduced by any Net Prepayment Interest Shortfalls and Relief Act Interest
Shortfalls (allocated to such Certificate as set forth in Section 1.03). The
Accrued Certificate Interest on the Class A, Class M and Class C Certificates
will be calculated on the basis of a 360-day year and the actual number of days
in the related Accrual Period.

     "Adjustable Rate Mortgage Loans": The Mortgage Loans identified in the
Mortgage Loan Schedule as having a Mortgage Rate which is adjustable at any
point during the life of the related Mortgage, including any Mortgage Loans
delivered in replacement thereof.

     "Advance": As to any Mortgage Loan, any advance made by the Servicer or the
Master Servicer on any Distribution Date pursuant to Section 4.03.

     "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.

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

     "Agreement":  This Pooling and Servicing Agreement and all amendments
hereof.

     "Allocated Realized Loss Amount": With respect to any Distribution Date and
any Class of Class AV-3 Certificates and Class M Certificates, an amount equal
to the sum of any Realized Loss allocated to that class of Certificates on that
Distribution Date and any Allocated Realized Loss Amount for that class
remaining unpaid from any previous Distribution Date.

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

     "Assignment Agreement": The Assignment, Assumption and Recognition
Agreement, dated as of the Closing Date, among the Company, the Trustee and the
Seller, whereby the Servicing Agreements are being assigned to the Trust, and
attached hereto as Exhibit K.



                                        5

<PAGE>



     "Available Distribution Amount": With respect to any Distribution Date, an
amount equal to the aggregate of the following amounts with respect to the
Mortgage Loans: (a) all previously undistributed payments on account of
principal and all previously undistributed payments on account of interest
received after the Cut-off Date and on or prior to the related Determination
Date, (b) any Advances and Compensating Interest paid by the Servicers or the
Master Servicer with respect to such Distribution Date and (c) any reimbursed
amount in connection with losses on investments of deposits in an account,
except: (i) all payments that were due on or before the Cut-off Date; (ii) all
Principal Prepayments, Liquidation Proceeds and Subsequent Recoveries received
after the applicable Prepayment Period; (iii) all payments, other than Principal
Prepayments, that represent early receipt of scheduled payments due on a date or
dates subsequent to the related Due Date; (iv) amounts received on particular
Mortgage Loans as late payments of principal or interest and respecting which,
and to the extent that, there are any unreimbursed Advances; (v) any investment
earnings on amounts on deposit in the Custodial Account and the Certificate
Account and amounts permitted to be withdrawn from the Custodial Account and the
Certificate Account pursuant to this Agreement; (vi) amounts needed to pay the
Servicing Fees and Master Servicing Fees or to reimburse the Servicer or the
Master Servicer for amounts due under the applicable Servicing Agreement and the
Agreement to the extent such amounts have not been retained by, or paid
previously to, the Servicer or the Master Servicer; and (vii) any amounts
reimbursable to the Trustee, the Securities Administrator and the Custodian
pursuant to this Agreement.

     "Balloon Loan": Each of the Mortgage Loans identified in the Mortgage Loan
Schedule as having an original term to maturity that is shorter than the related
amortization term.

     "Balloon Payment": With respect to any Balloon Loan, the payment due on the
stated maturity date of such Balloon Loan.

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

     "Basic Principal Distribution Amount":  With respect to any Distribution
Date, the Principal Remittance Amount for such Distribution Date.

     "Basis Risk Shortfall": With respect to any Class of Offered Certificates,
on each Distribution Date where clause (ii) of the definition of "Pass-Through
Rate" is less than clause (i) of the definition of "Pass-Through Rate", the
excess, if any, of (x) the aggregate Accrued Certificate Interest thereon for
such Distribution Date calculated pursuant to the lesser of clause (i) of the
definition of "Pass-Through Rate" over (y) interest accrued on the Mortgage
Loans at the Net WAC Rate.

     "Basis Risk Shortfall Carry-Forward Amount": With respect to each class of
Offered Certificates and any Distribution Date, as determined separately for
each such class of Offered Certificates, an amount equal to the aggregate amount
of Basis Risk Shortfall for such Certificates on such Distribution Date, plus
any unpaid Basis Risk Shortfall for such class of Certificates from prior
Distribution Dates, plus interest thereon at the Pass-Through Rate for such
Distribution Date, to the extent previously unreimbursed by the Net Monthly
Excess Cashflow or the Corridor Contracts.



                                        6

<PAGE>



     "Basis Risk Shortfall Reserve Fund": A reserve fund established by the
Securities Administrator on behalf of the Trustee for the benefit of the Holders
of the Offered Certificates. The Basis Risk Shortfall Reserve Fund is an
"outside reserve fund" within the meaning of Treasury regulation Section
1.860G-2(h), which is not an asset of any REMIC, ownership of which is evidenced
by the Class C Certificates, and which is established and maintained pursuant to
Section 4.08.

     "Book-Entry Certificate": Any Certificate registered in the name of the
Depository or its nominee.

     "Business Day": Any day other than (i) a Saturday or a Sunday, or (ii) a
day on which the New York Stock Exchange or Federal Reserve is closed or on
which banking institutions in the jurisdiction in which the Trustee, the Master
Servicer, the Servicer, any Subservicer or the Securities Administrator is
located are authorized or obligated by law or executive order to be closed.

     "Cash Liquidation": As to any defaulted Mortgage Loan other than a Mortgage
Loan as to which an REO Acquisition occurred, a determination by the Servicer
that it has received all Insurance Proceeds, Liquidation Proceeds and other
payments or cash recoveries which the Servicer reasonably and in good faith
expects to be finally recoverable with respect to such Mortgage Loan.

     "Cenlar": Cenlar FSB.

     "Cenlar Servicing Agreement": The Servicing Agreement dated March 5, 2004,
between the Company as owner and the Home Star Mortgage Services LLC as
servicer.

     "Certificate":  Any  Class  A,  Class  M,  Class  C,  Class  P or  Class  R
Certificate.

     "Certificate Account": The trust account or accounts created and maintained
pursuant to Section 4.01, which shall be entitled "HSBC Bank USA, in trust for
registered holders of Homestar Mortgage Acceptance Corp., Asset-Backed
Pass-Through Certificates, Series 2004-3 ", and which account or accounts must
each be an Eligible Account.

     "Certificate Account Deposit Date": With respect to any Distribution Date,
the Business Day immediately preceding such Distribution Date.

     "Certificateholder" or "Holder": The Person in whose name a Certificate is
registered in the Certificate Register, except that only a Permitted Transferee
shall be a holder of a Residual Certificate for any purposes hereof and, solely
for the purposes of giving any consent pursuant to this Agreement, any
Certificate registered in the name of the Company or the Master Servicer or any
affiliate thereof shall be deemed not to be outstanding and the Voting Rights to
which such Certificate is entitled shall not be taken into account in
determining whether the requisite percentage of Voting Rights necessary to
effect any such consent has been obtained, except as otherwise provided in
Section 11.01. The Trustee and the Securities Administrator shall be entitled to
rely upon a certification of the Company or the Master Servicer in determining
if any Certificates are registered in the name of the respective affiliate. All
references herein to "Holders" or "Certificateholders" shall reflect the rights
of Certificate Owners as they may indirectly exercise such


                                        7

<PAGE>



rights through the Depository and participating members thereof, except as
otherwise specified herein; provided, however, that the Trustee and the
Securities Administrator shall be required to recognize as a "Holder" or
"Certificateholder" only the Person in whose name a Certificate is registered in
the Certificate Register.

     "Certificate Margin": With respect to the Class AV-1, Class AV-2A, Class
AV-2B, Class AV- 2C, Class AV-3, Class M-1, Class M-2, Class M-3, Class M-4 and
Class M-5 Certificates and solely for the purposes of the definition of Marker
Rate and Maximum Uncertificated Accrued Interest Deferral Amount, the REMIC I
Regular Interests (other than REMIC I Regular Interests LT-AA, LT- ZZ and LT-P),
on any Distribution Date prior to the Optional Termination Date, 0.450%, 0.170%,
0.300%, 0.580%, 0.520%, 0.630%, 1.300%, 1.600%, 2.150% and 2.500% per annum,
respectively, and on any Distribution Date on and after the Step-Up Date,
0.900%, 0.340%, 0.600%, 1.160%, 1.040%, 0.945%, 1.950%, 2.400%, 3.225% and
3.750% per annum, respectively.

     "Certificate Owner": With respect to a Book-Entry Certificate, the Person
who is the beneficial owner of such Certificate, as reflected on the books of an
indirect participating brokerage firm for which a Depository Participant acts as
agent, if any, and otherwise on the books of a Depository Participant, if any,
and otherwise on the books of the Depository.

     "Certificate Principal Balance": With respect to any Class of Class A
Certificates or Class M Certificates immediately prior to any Distribution Date,
the Initial Certificate Principal Balance thereof, plus any Subsequent
Recoveries added to the Certificate Principal Balance of such Certificate,
reduced by the sum of (a) all amounts actually distributed in respect of
principal of such Class and, (b) in the case of a Class AV-3 Certificate or
Class M Certificate, Realized Losses allocated thereto on all prior Distribution
Dates. With respect to the Class C Certificates as of any date of determination,
an amount equal to the excess, if any, of (A) the then aggregate Uncertificated
Principal Balances of the REMIC 1 Regular Interests over (B) the then aggregate
Certificate Principal Balances of the Class A Certificates, the Class M
Certificates and the Class P Certificates then outstanding.

     "Certificate Register":  The register maintained pursuant to Section 5.02.

     "Class":  Collectively, all of the Certificates bearing the same
designation.

     "Class A Certificate": Class AV-1, Class AV-2A, Class AV-2B, Class AV-2C or
Class AV-3 Certificates.

     "Class A Corridor Contract Allocation Amount": With respect to each Class
of Class A Certificates and any Distribution Date, the amount received with
respect to the Corridor Contract for the Class A Certificates for such
Distribution Date times a fraction, the numerator of which is the Certificate
Principal Balance of such Class of Certificates immediately prior to such
Distribution Date, and the denominator of which is the aggregate Certificate
Principal Balance of the Class A Certificates immediately prior to such
Distribution Date.

     "Class A Principal  Distribution  Amount": For any applicable  Distribution
Date on or after the


                                        8

<PAGE>



Stepdown Date as long as a Trigger Event has not occurred with respect to such
Distribution Date, an amount equal to the excess (if any) of (x) the aggregate
Certificate Principal Balance of the Class A Certificates immediately prior to
such Distribution Date over (y) the lesser of (a) the Aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period, and after reduction for
Realized Losses incurred during the related Prepayment Period) multiplied by
approximately 83.90% and (b) the amount, if any, by which (i) the Aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period (after giving effect to scheduled payments of principal due during
the related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period, and
after reduction for Realized Losses incurred during the related Prepayment
Period) exceeds (ii) the Overcollateralization Target Amount.

     "Class AV-1 Certificate": Any one of the Class AV-1 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A, executed by the Securities Administrator and authenticated and
delivered by the Securities Administrator, representing the right to
distributions as set forth herein and therein and evidencing (i) a REMIC Regular
Interest in REMIC 2 and (ii) the right to receive the related Basis Risk
Shortfall Carry-Forward Amount from the Basis Risk Shortfall Reserve Fund.

     "Class AV-2  Certificates":  The Class  AV-2A,  Class AV-2B and Class AV-2C
Certificates.

     "Class AV-2A Certificate": Any one of the Class AV-2A Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A, executed by the Securities Administrator and authenticated and
delivered by the Securities Administrator, representing the right to
distributions as set forth herein and therein and evidencing (i) a REMIC Regular
Interest in REMIC 2 and (ii) the right to receive the related Basis Risk
Shortfall Carry-Forward Amount from the Basis Risk Shortfall Reserve Fund.

     "Class AV-2B Certificate": Any one of the Class AV-2B Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A, executed by the Securities Administrator and authenticated and
delivered by the Securities Administrator, representing the right to
distributions as set forth herein and therein and evidencing (i) a REMIC Regular
Interest in REMIC 2 and (ii) the right to receive the related Basis Risk
Shortfall Carry-Forward Amount from the Basis Risk Shortfall Reserve Fund.

     "Class AV-2C Certificate": Any one of the Class AV-2C Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A, executed by the Securities Administrator and authenticated and
delivered by the Securities Administrator, representing the right to
distributions as set forth herein and therein and evidencing (i) a REMIC Regular
Interest in REMIC 2 and (ii) the right to receive the related Basis Risk
Shortfall Carry-Forward Amount from the Basis Risk Shortfall Reserve Fund.

     "Class  AV-3  Certificate":  Any  one of the  Class  AV-3  Certificates  as
designated on the face


                                        9

<PAGE>



thereof substantially in the form annexed hereto as Exhibit A, executed by the
Securities Administrator and authenticated and delivered by the Securities
Administrator, representing the right to distributions as set forth herein and
therein and evidencing (i) a REMIC Regular Interest in REMIC 2 and (ii) the
right to receive the related Basis Risk Shortfall Carry-Forward Amount from the
Basis Risk Shortfall Reserve Fund.

     "Class C Certificate": Any one of the Class C Certificates as designated on
the face thereof substantially in the form annexed hereto as Exhibit B-2,
executed by the Securities Administrator and authenticated and delivered by the
Securities Administrator, representing the right to distributions as set forth
herein and therein and evidencing a REMIC Regular Interest in REMIC 3.

     "Class C Interest": An uncertificated interest in the Trust Fund held by
the Trustee on behalf of the Holders of the Class C Certificates, evidencing a
Regular Interest in REMIC 2 for purposes of the REMIC Provisions.

     "Class M Certificates":  The Class M-1, Class M-2, Class M-3, Class M-4 and
Class M-5 Certificates.

     "Class M-1 Certificate": Any one of the Class M-1 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit B-1, executed by the Securities Administrator and authenticated and
delivered by the Securities Administrator, representing the right to
distributions as set forth herein and therein and evidencing (i) a REMIC Regular
Interest in REMIC 2 and (ii) the right to receive the related Basis Risk
Shortfall Carry-Forward Amount from the Basis Risk Shortfall Reserve Fund.

     "Class M Corridor Contract Allocation Amount": With respect to each Class
of Class M Certificates and any Distribution Date, the amount received with
respect to the Corridor Contract for the Class M Certificates for such
Distribution Date times a fraction, the numerator of which is the Certificate
Principal Balance of such Class of Certificates immediately prior to such
Distribution Date, and the denominator of which is the aggregate Certificate
Principal Balance of the Class M Certificates immediately prior to such
Distribution Date.

     "Class M-1 Principal Distribution Amount": For any applicable Distribution
Date on or after the Stepdown Date as long as a Trigger Event has not occurred
with respect to such Distribution Date, an amount equal to the excess (if any)
of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A
Certificates (after taking into account the distribution of the Class A
Principal Distribution Amount on such Distribution Date) and (ii) the
Certificate Principal Balance of the Class M-1 Certificates immediately prior to
such Distribution Date over (y) the lesser of (a) the Aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period, and after reduction for
Realized Losses incurred during the related Prepayment Period) multiplied by
approximately 90.40% and (b) the amount, if any, by which (i) the Aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period (after giving effect to scheduled payments of principal due during
the related Due Period, to the extent


                                       10

<PAGE>



received or advanced, and unscheduled collections of principal received during
the related Prepayment Period, and after reduction for Realized Losses incurred
during the related Prepayment Period) exceeds (ii) the Overcollateralization
Target Amount.

     "Class M-2 Certificate": Any one of the Class M-2 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit B-1, executed by the Securities Administrator and authenticated and
delivered by the Securities Administrator, representing the right to
distributions as set forth herein and therein and evidencing (i) a REMIC Regular
Interest in REMIC 2 and (ii) the right to receive the related Basis Risk
Shortfall Carry-Forward Amount from the Basis Risk Shortfall Reserve Fund.

     "Class M-2 Principal Distribution Amount": For any applicable Distribution
Date on or after the Stepdown Date as long as a Trigger Event has not occurred
with respect to such Distribution Date, an amount equal to the excess (if any)
of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A
Certificates and Class M-1 Certificates (after taking into account the
distribution of the Class A and Class M-1 Principal Distribution Amounts on such
Distribution Date) and (ii) the Certificate Principal Balance of the Class M-2
Certificates immediately prior to such Distribution Date over (y) the lesser of
(a) the Aggregate Stated Principal Balance of the Mortgage Loans as of the last
day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period, and after reduction for Realized Losses incurred during the related
Prepayment Period) multiplied by approximately 95.30% and (b) the amount, if
any, by which (i) the Aggregate Stated Principal Balance of the Mortgage Loans
as of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period, and after reduction for Realized Losses incurred
during the related Prepayment Period) exceeds (ii) the Overcollateralization
Target Amount.

     "Class M-3 Certificate": Any one of the Class M-3 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit B-1, executed by the Securities Administrator and authenticated and
delivered by the Securities Administrator, representing the right to
distributions as set forth herein and therein and evidencing (i) a REMIC Regular
Interest in REMIC 2 and (ii) the right to receive the related Basis Risk
Shortfall Carry-Forward Amount from the Basis Risk Shortfall Reserve Fund.

     "Class M-3 Principal Distribution Amount": For any applicable Distribution
Date on or after the Stepdown Date as long as a Trigger Event has not occurred
with respect to such Distribution Date, an amount equal to the excess (if any)
of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class
A, Class M-1 and Class M-2 Certificates (after taking into account the
distributions of the Class A, Class M-1 and Class M-2 Principal Distribution
Amounts on such Distribution Date) and (ii) the Certificate Principal Balance of
the Class M-3 Certificates immediately prior to such Distribution Date over (y)
the lesser of (a) the Aggregate Stated Principal Balance of the Mortgage Loans
as of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or


                                       11

<PAGE>



advanced, and unscheduled collections of principal received during the related
Prepayment Period, and after reduction for Realized Losses incurred during the
related Prepayment Period) multiplied by 96.50% and (a) the amount, if any, by
which (i) the Aggregate Stated Principal Balance of the Mortgage Loans as of the
last day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period, and after reduction for Realized Losses incurred during the related
Prepayment Period) exceeds (ii) the Overcollateralization Target Amount.

     "Class M-4 Certificate": Any one of the Class M-4 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit B-1, executed by the Securities Administrator and authenticated and
delivered by the Securities Administrator, representing the right to
distributions as set forth herein and therein and evidencing (i) a REMIC Regular
Interest in REMIC 2 and (ii) the right to receive the related Basis Risk
Shortfall Carry-Forward Amount from the Basis Risk Shortfall Reserve Fund.

     "Class M-4 Principal Distribution Amount": For any applicable Distribution
Date on or after the Stepdown Date as long as a Trigger Event has not occurred
with respect to such Distribution Date, an amount equal to the excess (if any)
of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class
A, Class M-1, Class M-2 and Class M-3 Certificates (after taking into account
the distribution of the Class A, Class M-1, Class M-2 and Class M-3 Principal
Distribution Amounts on such Distribution Date) and (ii) the Certificate
Principal Balance of the Class M-4 Certificates immediately prior to such
Distribution Date over (y) the lesser of (a) the Aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period, and after reduction for
Realized Losses incurred during the related Prepayment Period) multiplied by
97.70% and (b) the amount, if any, by which (i) the Aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period, and after reduction for
Realized Losses incurred during the related Prepayment Period) exceeds (ii) the
Overcollateralization Target Amount.

     "Class M-5 Certificate": Any one of the Class M-5 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit B-1, executed by the Securities Administrator and authenticated and
delivered by the Securities Administrator, representing the right to
distributions as set forth herein and therein and evidencing (i) a REMIC Regular
Interest in REMIC 2 and (ii) the right to receive the related Basis Risk
Shortfall Carry-Forward Amount from the Basis Risk Shortfall Reserve Fund.

     "Class M-5 Principal Distribution Amount": For any applicable Distribution
Date on or after the Stepdown Date as long as a Trigger Event has not occurred
with respect to such Distribution Date, an amount equal to the excess (if any)
of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class
A, Class M-1, Class M-2, Class M-3 and Class M-4 Certificates (after taking


                                       12

<PAGE>



into account the distribution of the Class A, Class M-1, Class M-2, Class M-3
and Class M-4 Principal Distribution Amount on such Distribution Date) and (ii)
the Certificate Principal Balance of the Class M-5 Certificates immediately
prior to such Distribution Date over (y) the lesser of (a) the Aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period, and
after reduction for Realized Losses incurred during the related Prepayment
Period) multiplied by 99.00% and (b) the amount, if any, by which (i) the
Aggregate Stated Principal Balance of the Mortgage Loans as of the last day of
the related Due Period (after giving effect to scheduled payments of principal
due during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period, and after reduction for Realized Losses incurred during the related
Prepayment Period) exceeds (ii) the Overcollateralization Target Amount.

     "Class P Certificate": Any one of the Class P Certificates as designated on
the face thereof substantially in the form annexed hereto as Exhibit B-3,
executed by the Securities Administrator and authenticated and delivered by the
Securities Administrator, representing the right to distributions as set forth
herein and therein and evidencing a REMIC Regular Interest in REMIC 4.

     "Class P Interest": An uncertificated interest in the Trust Fund held by
the Trustee on behalf of the Holders of the Class P Certificates, evidencing a
Regular Interest in REMIC 2 for purposes of the REMIC Provisions.

     "Class R Certificate": Any one of the Class R Certificates as designated on
the face thereof substantially in the form annexed hereto as Exhibit B-4,
executed by the Securities Administrator and authenticated and delivered by the
Securities Administrator, evidencing the ownership of the Class R-1 Interest and
Class R-2 Interest.

     "Class R-X Certificate": The Class R-X Certificate executed by the Trustee,
and authenticated and delivered by the Certificate Registrar, substantially in
the form annexed hereto as Exhibit B-4 and evidencing the ownership of the Class
R-3 Interest and the Class R-4 Interest.

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

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

     "Class R-3 Interest":  The uncertificated Residual Interest in REMIC 3.

     "Class R-4 Interest":  The uncertificated Residual Interest in REMIC 4.

     "Closing Date": July 1, 2004.

     "Code":  The Internal Revenue Code of 1986, as amended.

     "Collateral  Value": The appraised value of a Mortgaged Property based upon
the lesser of (i)


                                       13

<PAGE>



the appraisal made at the time of the origination of the related Mortgage Loan,
or (ii) the sales price of such Mortgaged Property at such time of origination.
With respect to a Mortgage Loan the proceeds of which were used to refinance an
existing mortgage loan, the appraised value of the Mortgaged Property based upon
the appraisal obtained at the time of refinancing.

     "Commission":  The Securities and Exchange Commission.

     "Company":  Homestar Mortgage Acceptance Corp., or its successor in
interest.

     "Compensating Interest": With respect to any Distribution Date, an amount
equal to Prepayment Interest Shortfalls resulting from Principal Prepayments
during the related Prepayment Period, but not more than the Servicing Fees for
the immediately preceding Due Period.

     "Corridor Contract Counterparty": Bear Stearns Financial Products Inc.

     "Corridor  Contracts":  The corridor  contracts between the Trustee and the
Corridor Contract  Counterparty for the benefit of the Offered  Certificates and
the Class C Certificates.

     "Corporate Trust Office": With respect to the Trustee, the principal
corporate trust office of the Trustee at which at any particular time its
corporate trust business related to this Agreement shall be administered, which
office at the date of the execution of this Agreement is located at 452 Fifth
Avenue, New York, New York 10018, Attention: Corporate Trust Services -
Homestar, and with respect to the Securities Administrator, for Certificate
transfer purposes, Wells Fargo Center, Sixth Avenue and Marquette Street,
Minneapolis, Minnesota 55479, Attn: Corporate Trust Services - Homestar 2004-3,
and for all other purposes, 9062 Old Annapolis Road, Columbia, Maryland, 21045,
Attn: Corporate Trust Services - Homestar 2004-3.

     "Corresponding Certificate": With respect to:

         (i) REMIC 1 Regular Interest LT-AV1, the Class AV-1 Certificates,

         (ii) REMIC 1 Regular Interest LT-AV2A, the Class AV-2A Certificates,

         (iii) REMIC 1 Regular Interest LT-AV2B, the Class AV-2B Certificates,

         (iv) REMIC 1 Regular Interest LT-AV2C, the Class AV-2C Certificates,

         (v) REMIC 1 Regular Interest LT-AV3, the Class AV-3 Certificates,

         (vi) REMIC 1 Regular Interest LT-M1, the Class M-1 Certificates,

         (vii) REMIC 1 Regular Interest LT-M2, the Class M-2 Certificates,

         (viii) REMIC 1 Regular Interest LT-M3, the Class M-3 Certificates,



                                       14

<PAGE>



         (ix) REMIC 1 Regular Interest LT-M4, the Class M-4 Certificates,

         (x) REMIC 1 Regular Interest LT-M5, the Class M-5 Certificates, and

         (xi) REMIC 1 Regular Interest LT-P, the Class P Certificates.

     "Curtailment":  Any Principal Prepayment made by a Mortgagor which is not a
Principal Prepayment in Full.

     "Custodial Account": The custodial account or accounts created and
maintained by the Master Servicer pursuant to Section 3.17 in the name of a
depository institution, as custodian for the Holders of the Certificates. Any
such account or accounts shall be an Eligible Account.

     "Custodial Agreement" An agreement, dated as of the Closing Date among the
Company, the Master Servicer, the Trustee and the Custodian in substantially the
form of Exhibit N hereto.

     "Custodian":  Wells Fargo Bank, N.A., or any successor  custodian appointed
pursuant to the provisions hereof and of the Custodial Agreement.

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

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

     "Definitive Certificate":  Any definitive, fully registered Certificate.

     "Deleted  Mortgage Loan": A Mortgage Loan replaced or to be replaced with a
Qualified Substitute Mortgage Loan.

     "Depository": The Depository Trust Company, or any successor Depository
hereafter named. The nominee of the initial Depository for purposes of
registering those Certificates that are to be Book-Entry Certificates is Cede &
Co. The Depository shall at all times be a "clearing corporation" as defined in
Section 8-102(5) of the Uniform Commercial Code of the State of New York and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934, as amended.

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

     "Determination Date": The 15th day (or if such 15th day is not a Business
Day, the Business Day immediately preceding such 15th day) of the month of the
related Distribution Date.


                                       15

<PAGE>



     "Disqualified Organization": Any organization defined as a "disqualified
organization" under Section 860E(e)(5) of the Code, which includes any of the
following: (i) the United States, any State or political subdivision thereof,
any possession of the United States, or any agency or instrumentality of any of
the foregoing (other than an instrumentality which is a corporation if all of
its activities are subject to tax and, except for the Freddie Mac, a majority of
its board of directors is not selected by such governmental unit), (ii) a
foreign government, any international organization, or any agency or
instrumentality of any of the foregoing, (iii) any organization (other than
certain farmers' cooperatives described in Section 521 of the Code) which is
exempt from the tax imposed by Chapter 1 of the Code (including the tax imposed
by Section 511 of the Code on unrelated business taxable income), (iv) rural
electric and telephone cooperatives described in Section 1381(a)(2)(C) of the
Code and (v) any other Person so designated by the Securities Administrator
based upon an Opinion of Counsel that the holding of an Ownership Interest in a
Class R Certificate by such Person may cause REMIC 1 or REMIC 2 or any Person
having an Ownership Interest in any Class of Certificates (other than such
Person) to incur a liability for any federal tax imposed under the Code that
would not otherwise be imposed but for the Transfer of an Ownership Interest in
a Class R Certificate to such Person. The terms "United States", "State" and
"international organization" shall have the meanings set forth in Section 7701
of the Code or successor provisions.

     "Distribution Date": The 25th day of any month, or if such 25th day is not
a Business Day, the Business Day immediately following such 25th day, commencing
in July 2004.

     "Due Date": With respect to approximately 99.91% of the Mortgage Loans, the
first day of the month of the related Distribution Date. Approximately 0.09% of
the Mortgage Loans have Due Dates which do not occur on the first day of the
month.

     "Due Period": With respect to any Distribution Date, the period commencing
on the second day of the month preceding the month of such Distribution Date
(or, with respect to the first Due Period, the day following the Cut-off Date)
and ending on the first day of the month of the related Distribution Date.

     "EDGAR":  The  Electronic  Data  Gathering  and  Retrieval  System  of  the
Commission.

     "Eligible Account": Any of (i) a segregated account maintained with a
federal or state chartered depository institution (A) the short-term obligations
of which are rated A-1+ or better by Standard & Poor's and P-1 by Moody's at the
time of any deposit therein or (B) insured by the FDIC (to the limits
established by such Corporation), the uninsured deposits in which account are
otherwise secured such that, as evidenced by an Opinion of Counsel (obtained by
the Person requesting that the account be held pursuant to this clause (ii))
delivered to the Trustee prior to the establishment of such account, the
Certificateholders will have a claim with respect to the funds in such account
and a perfected first priority security interest against any collateral (which
shall be limited to Permitted Investments, each of which shall mature not later
than the Business Day immediately preceding the Distribution Date next following
the date of investment in such collateral or the Distribution Date if such
Permitted Investment is an obligation of the institution that maintains the
Certificate Account or Custodial Account) securing such funds that is superior
to claims of any other depositors or general creditors of the depository
institution with which such account is maintained,


                                       16

<PAGE>



(ii) a segregated trust account or accounts maintained with a federal or state
chartered depository institution or trust company subject to regulations
regarding fiduciary funds on deposit similar to Title 12 of the Code of Federal
Regulations Section 9.10(b), which, in either case, has corporate trust powers,
acting in its fiduciary capacity or (iii) a segregated account or accounts of a
depository institution acceptable to the Rating Agencies (as evidenced in
writing by a letter from the Rating Agencies to the Trustee that use of any such
account as the Custodial Account or the Certificate Account will not have an
adverse effect on the then-current ratings assigned to the Classes of the
Certificates then rated by the Rating Agencies). Eligible Accounts may bear
interest.

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

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

     "Extra Principal Distribution Amount": With respect to any Distribution
Date, is the lesser of (x) the Overcollateralization Deficiency Amount for such
Distribution Date and (y) the Net Monthly Excess Cashflow Amount for such
Distribution Date.

     "Fannie Mae":  Federal National Mortgage Association or any successor.

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

     "Fitch Ratings": Fitch, Inc., or its successor in interest.

     "Fixed Rate Mortgage Loans": The Mortgage Loans identified in the Mortgage
Loan Schedule as having a Mortgage Rate which is fixed for the life of the
related Mortgage, including any Mortgage Loans delivered in replacement thereof.

     "Freddie Mac":  Federal Home Loan Mortgage Corporation or any successor.

     "Funding Date": With respect to each Mortgage Loan, the date on which funds
were advanced by or on behalf of the Seller and interest began to accrue
thereunder.

     "Initial Certificate Principal Balance": With respect to each Class of
Regular Certificates, the Initial Certificate Principal Balance of such Class of
Certificates as set forth in the Preliminary Statement hereto, or with respect
to any single Certificate, the Initial Certificate Principal Balance as stated
on the face thereof.

     "Initial Notional Amount": With respect to the Class C Certificate, the
aggregate of the initial Uncertificated Principal Balance of the REMIC 1 Regular
Interests (other than REMIC 1 Regular Interest LT-P).

     "Insurance Policy": With respect to any Mortgage Loan, any insurance policy
which is required to be maintained from time to time under this Agreement in
respect of such Mortgage Loan.



                                       17

<PAGE>



     "Insurance Proceeds": Proceeds paid in respect of the Mortgage Loans
pursuant to any Primary Hazard Insurance Policy, any title insurance policy or
any other insurance policy covering a Mortgage Loan, to the extent such proceeds
are not applied to the restoration of the related Mortgaged Property or released
to the Mortgagor in accordance with the procedures that the Servicer would
follow in servicing mortgage loans held for its own account.

     "Interest Carry Forward Amount: With respect to each Class of Offered
Certificates and each Distribution Date, the excess of (a) the Accrued
Certificate Interest for such Class with respect to prior Distribution Dates,
over (b) the amount actually distributed to such Class with respect to interest
on such prior Distribution Dates, with interest on such excess at the related
Pass-Through Rate.

     "Interest Determination Date": With respect to the first Accrual Period,
the second LIBOR Business Day preceding the Closing Date, and with respect to
each Accrual Period thereafter, the second LIBOR Business Day preceding the
related Payment Date on which such Accrual Period commences.

     "Interest Remittance Amount": With respect to any Distribution Date, that
portion of the Available Distribution Amount for such Distribution Date
allocable to interest received or advanced on the Mortgage Loans.

     "Late Collections": With respect to any Mortgage Loan, all amounts received
during any Due Period, whether as late payments of Monthly Payments or as
Insurance Proceeds, Liquidation Proceeds or otherwise, which represent late
payments or collections of Monthly Payments due but delinquent for a previous
Due Period and not previously recovered.

     "LIBOR": With respect to any Distribution Date and the Pass-Through Rates
on the Offered Certificates, the arithmatic mean of the Loan interbank offered
rate quotations of reference banks (which will be selected by the Securities
Administrator) for one-month U.S. dollar deposits, expressed on a per annum
basis, determined in accordance with Section 1.02.

     "LIBOR Business Day": A day on which banks are open for dealing in foreign
currency and exchange in London and New York City.

     "Liquidated Mortgage Loan": As to any Distribution Date, any Mortgage Loan
in respect of which the Servicer has determined, in accordance with the
servicing procedures specified in the Servicing Agreement, as of the end of the
related Prepayment Period, that all Liquidation Proceeds which it expects to
recover with respect to the liquidation of the Mortgage Loan or disposition of
the related REO Property have been recovered.

     "Liquidation Proceeds": Amounts (other than Insurance Proceeds) received by
the Servicer or Master Servicer in connection with the taking of an entire
Mortgaged Property by exercise of the power of eminent domain or condemnation or
in connection with the liquidation of a defaulted Mortgage Loan through
trustee's sale, foreclosure sale or otherwise and any Subsequent Recoveries,
other than amounts received in respect of any REO Property.


                                       18

<PAGE>



     "Loan-to-Value Ratio": As of any date of determination, the fraction,
expressed as a percentage, the numerator of which is the current principal
balance of the related Mortgage Loan at the date of determination and the
denominator of which is the Collateral Value of the related Mortgaged Property.

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

     "Majority Class C Certificateholder": With respect to the Class C
Certificates and any Distribution Date, the Holder of a 50.01% or greater
Percentage Interest of the Class C Certificates.

     "Marker Rate": With respect to the Class C Interest and any Distribution
Date, a per annum rate equal to two (2) times the weighted average of the
Uncertificated REMIC 1 Pass-Through Rates for each REMIC 1 Regular Interest
(other than REMIC 1 Regular Interest LT-AA and REMIC I Regular Interest LT-P)
subject to a cap (for each such REMIC 1 Regular Interest other than REMIC 1
Regular Interest LT-ZZ) equal to the lesser of (x) One-Month LIBOR plus the
related Certificate Margin of the Corresponding Certificate and (y) the Net WAC
Rate for the purpose of this calculation; with the rate on REMIC 1 Regular
Interest LT-ZZ subject to a cap of zero for the purpose of this calculation;
provided, however, that solely for this purpose, calculations of the
Uncertificated REMIC 1 Pass-Through Rate and the related caps with respect to
REMIC 1 Regular Interest LT-AV1, REMIC 1 Regular Interest LT-AV2A, REMIC 1
Regular Interest LT-AV2B, REMIC 1 Regular Interest LT-AV2C, REMIC 1 Regular
Interest LT-AV3, REMIC 1 Regular Interest LT-M1, REMIC 1 Regular Interest LT-M2,
REMIC 1 Regular Interest LT-M3, REMIC 1 Regular Interest LT-M4 and REMIC 1
Regular Interest LT-M5 shall be multiplied by a fraction, the numerator of which
is the actual number of days in the Interest Accrual Period and the denominator
of which is 30.

     "Master Servicer": Wells Fargo Bank, N.A., or any successor master servicer
appointed as herein provided.

     "Master Servicing Fees": As to each Mortgage Loan, an amount, equal to
interest at the Master Servicing Fee Rate on the Stated Principal Balance of
such Mortgage Loan as of the Due Date in the calendar month preceding the month
in which the payment of the Master Servicing Fee is due.

     "Master Servicing Fee Rate": With respect to each Mortgage Loan, the per
annum rate of 0.0125%.

     "Maximum Uncertificated Accrued Interest Deferral Amount": With respect to
any Distribution Date, the excess of (a) accrued interest at the Uncertificated
REMIC 1 Pass-Through Rate applicable to REMIC 1 Regular Interest LT-ZZ for such
Distribution Date on a balance equal to the excess of (i) the Uncertificated
Principal Balance of REMIC 1 Regular Interest LT-ZZ over (ii) the REMIC


                                       19

<PAGE>



1 Overcollateralized Amount, in each case for such Distribution Date over (b)
the sum of (I) Uncertificated Accrued Interest on REMIC 1 Regular Interest
LT-AV1, REMIC 1 Regular Interest LT-AV2A, REMIC 1 Regular Interest LT-AV2B,
REMIC 1 Regular Interest LT-AV2C, REMIC 1 Regular Interest LT-AV3, REMIC 1
Regular Interest LT-M1, REMIC 1 Regular Interest LT-M2, REMIC 1 Regular Interest
LT-M3, REMIC 1 Regular Interest LT-M4, REMIC 1 Regular Interest LT-M5 with the
rate on each such REMIC 1 Regular Interest subject to a cap equal to the lesser
of (x) One-Month LIBOR plus the related Certificate Margin and (y) the Net WAC
Rate; provided, however, that solely for this purpose, calculations of the
Uncertificated REMIC 1 Pass-Through Rate and the related caps with respect to
REMIC 1 Regular Interest LT-AV1, REMIC 1 Regular Interest LT-AV2A, REMIC 1
Regular Interest LT-AV2B, REMIC 1 Regular Interest LT-AV2C, REMIC 1 Regular
Interest LT-AV3, REMIC 1 Regular Interest LT-M1, REMIC 1 Regular Interest LT-M2,
REMIC 1 Regular Interest LT-M3, REMIC 1 Regular Interest LT-M4 and REMIC 1
Regular Interest LT-M5 shall be multiplied by a fraction, the numerator of which
is the actual number of days in the Interest Accrual Period and the denominator
of which is 30.

     "MERS":  Mortgage  Electronic  Registration  Systems,  Inc., a  corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.

     "MERS(R) System": The system of recording transfers of Mortgages
electronically maintained by MERS.

     "MIN": The Mortgage Identification Number for Mortgage Loans registered
with MERS on the MERS(R) System.

     "MOM Loan": With respect to any Mortgage Loan, MERS acting as the mortgagee
of such Mortgage Loan, solely as nominee for the originator of such Mortgage
Loan and its successors and assigns, at the origination thereof.

     "Monthly Payment": With respect to any Mortgage Loan, the scheduled monthly
payment of principal and interest on such Mortgage Loan which is payable by a
Mortgagor from time to time under the related Mortgage Note as originally
executed (after adjustment, if any, for Deficient Valuations occurring prior to
such Due Date, and after any adjustment by reason of any bankruptcy or similar
proceeding or any moratorium or similar waiver or grace period), and other than
any Balloon Payment.

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

     "Mortgage":  The mortgage,  deed of trust or any other instrument  securing
the Mortgage Loan.

     "Mortgage File": The mortgage documents listed in Section 2.01 pertaining
to a particular Mortgage Loan and any additional documents required to be added
to the Mortgage File pursuant to this Agreement; provided, that whenever the
term "Mortgage File" is used to refer to documents actually received by the
Custodian as agent for the Trustee, such term shall not be deemed to include
such additional documents required to be added unless they are actually so
added.



                                       20

<PAGE>



     "Mortgage Loan": Each of the mortgage loans, transferred and assigned to
the Trustee pursuant to Section 2.01, 2.04 or 2.06 and from time to time held in
the Trust Fund (including any Qualified Substitute Mortgage Loans), the Mortgage
Loans so transferred, assigned and held being identified in the Mortgage Loan
Schedule. As used herein, the term "Mortgage Loan" includes the related Mortgage
Note and Mortgage.

     "Mortgage Loan Purchase Agreement": The Mortgage Loan Purchase Agreement
dated as the Cut-off Date, between Home Star Mortgage Services, LLC, as seller
and the Company as purchaser, and all amendments thereof and supplements
thereto, attached hereto as Exhibit P.

     "Mortgage Loan Schedule": As of any date of determination, the schedule of
Mortgage Loans included in the Trust Fund. The initial schedule of Mortgage
Loans with accompanying information transferred on the Closing Date to the
Trustee as part of the Trust Fund for the Certificates, attached hereto as
Exhibit H (as amended from time to time to reflect the addition of Qualified
Substitute Mortgage Loans) (and, for purposes of the Trustee pursuant to Section
2.02, in computer-readable form as delivered to the Trustee), which list shall
set forth the following information with respect to each Mortgage Loan:

     (i) the loan number and name of the Mortgagor;

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

     (iii) (A) the original term to maturity and (B) if such Mortgage Loan is a
Balloon Loan, the amortization term thereof;

     (iv) the original principal balance and the original Mortgage Rate;

     (v) the first Distribution Date;

     (vi) whether the Mortgage Loan is a Balloon Mortgage Loan or a Mortgage
Loan the terms of which do not provide for a Balloon Payment;

     (vii) the type of Mortgaged Property;

     (viii) the Monthly Payment in effect as of the Cut-off Date;

     (ix) the principal balance as of the Cut-off Date;

     (x) the Mortgage Rate as of the Cut-off Date;

     (xi) the occupancy status;

     (xii) the purpose of the Mortgage Loan;

     (xiii) the Collateral Value of the Mortgaged Property;


                                       21

<PAGE>



     (xiv) the original term to maturity;

     (xv) the paid-through date of the Mortgage Loan;

     (xvi) the Master Servicing Fee Rate;

     (xvii) the Servicing Fee Rate;

     (xviii) the Net Mortgage Rate for such Mortgage Loan;

     (xix) whether the Mortgage Loan is covered by a private mortgage insurance
policy or an original certificate of private mortgage insurance;

     (xx) the documentation type;

     (xxi) the type and term of the related Prepayment Charge, if any;

     (xxii) with respect to each Adjustable Rate Mortgage Loan;

         (a) the frequency of each Adjustment Date;

         (b) the next Adjustment Date;

         (c) the Maximum Mortgage Rate;

         (d) the Minimum Mortgage Rate;

         (e) the Mortgage Rate as of the Cut-off Date;

         (f) the related Periodic Rate Cap;

         (g) the Gross Margin; and

         (h) the purpose of the Mortgage Loan.

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

     "Mortgage Rate": With respect to any Mortgage Loan, the annual rate at
which interest accrues on such Mortgage Loan, as adjusted from time to time in
accordance with the provisions of the Mortgage Note.

     "Mortgaged Property":  The underlying property securing a Mortgage Loan.

     "Mortgagor":  The obligor or obligors on a Mortgage Note.


                                       22

<PAGE>



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

     "Net Mortgage Rate": With respect to each Mortgage Loan Due Date, a per
annum rate of interest equal to the then-applicable Mortgage Rate on such
Mortgage Loan less the sum of the Master Servicing Fee Rate and the Servicing
Fee Rate.

     "Net Monthly Excess Cashflow": For any Distribution Date, the excess of (x)
the Available Distribution Amount for such distribution date over (y) the sum
for such Distribution Date of (A) the aggregate Accrued Certificate Interest for
the Offered Certificates, (B) the aggregate Interest Carry Forward Amount for
the Class A Certificates and (C) the Principal Remittance Amount.

     "Net Prepayment Interest Shortfall": With respect to any Distribution Date,
the excess, if any, of any Prepayment Interest Shortfalls for such date over the
related Compensating Interest.

     "Net WAC Rate": With respect to the Offered Certificates, the weighted
average of the Net Mortgage Rates of the Mortgage Loans, weighted on the basis
of the Stated Principal Balances thereof as of the close of business on the
first day of the calendar month preceding the month in which such Distribution
Date occurs. For federal income tax purposes, the equivalent of the foregoing
shall be expressed as the weighted average of the Uncertificated REMIC 1
Pass-Through Rate on each REMIC 1 Regular Interest, weighted on the basis of the
Uncertificated Principal Balance of each such REMIC 1 Regular Interest.

     "Nonrecoverable Advance": Any Advance or Servicing Advance previously made
or proposed to be made in respect of a Mortgage Loan which, in the good faith
judgment of the Servicer or the Master Servicer, will not or, in the case of a
proposed Advance or Servicing Advance, would not be ultimately recoverable from
related Late Collections, Insurance Proceeds, Liquidation Proceeds or REO
Proceeds. The determination by the Servicer or the Master Servicer that it has
made a Nonrecoverable Advance or that any proposed Advance or Servicing Advance
would constitute a Nonrecoverable Advance, shall be evidenced by a certificate
of a Servicing Officer delivered, in the case of the Servicer, to the Company
and the Master Servicer, and in the case of the Master Servicer, to the Company
and the Trustee.

     "Non-United States Person":  Any Person other than a United States Person.

     "Notional Amount": With respect to the Class C Interest, immediately prior
to any Distribution Date, the aggregate of the Uncertificated Principal Balances
of the REMIC 1 Regular Interests other than REMIC 1 Regular Interest LT-P.

     "Offered Certificates": The Class A Certificates and Class M Certificates.

     "Officers' Certificate": A certificate signed by the Chairman of the Board,
the Vice Chairman


                                       23

<PAGE>



of the Board, the President or a vice president and by the Treasurer, the
Secretary, or one of the assistant treasurers or assistant secretaries of the
Company, the Seller, the Master Servicer or of any Subservicer and delivered to
the Company and Trustee.

     "Opinion of Counsel": A written opinion of counsel, who may be counsel for
the Company, the Seller, or the Master Servicer, reasonably acceptable to the
Trustee and Securities Administrator; except that any opinion of counsel
relating to (a) the qualification of any account required to be maintained
pursuant to this Agreement as an Eligible Account, (b) the qualification of
REMIC 1 or REMIC 2 as REMICs, (c) compliance with the REMIC Provisions or (d)
resignation of the Master Servicer pursuant to Section 6.04 must be an opinion
of counsel who (i) is in fact independent of the Company and the Master
Servicer, (ii) does not have any direct financial interest or any material
indirect financial interest in the Company or the Master Servicer or in an
affiliate of either and (iii) is not connected with the Company or the Master
Servicer as an officer, employee, director or person performing similar
functions.

     "Option One": Option One Mortgage Corporation.

     "Option One Servicing  Agreement":  The Servicing  Agreement dated March 5,
2004,  between  Wells Fargo  Bank,  N.A.  as master  servicer  and the Home Star
Mortgage Services LLC as seller and servicer.

     "Optional Termination Date": The first Distribution Date following the
first Distribution Date after the aggregate Stated Principal Balance of the
Mortgage Loans, and properties acquired in respect thereof, remaining in the
Trust Fund has been reduced to less than or equal to 10% of the aggregate Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date.

     "OTS":  Office of Thrift Supervision or any successor.

     "Outstanding Mortgage Loan": As to any Due Date, a Mortgage Loan (including
an REO Property) which was not the subject of a Principal Prepayment in Full,
Cash Liquidation or REO Disposition and which was not purchased prior to such
Due Date pursuant to Sections 2.02, 2.04 or 3.14.

     "Overcollateralization Deficiency Amount": With respect to any Distribution
Date, the amount, if any, by which the Overcollateralization Target Amount
exceeds the Overcollateralized Amount on such Distribution Date (after giving
effect to distributions in respect of the Basic Principal Distribution Amount on
such Distribution Date).

     "Overcollateralization Target Amount": With respect to any Distribution
Date, 0.50% of the aggregate Stated Principal Balance of the Mortgage Loans as
of the Cut-off Date.

     "Overcollateralized Amount": With respect to any Distribution Date, the
amount, if any, by which (i) the aggregate Stated Principal Balance of the
Mortgage Loans (after giving effect to scheduled payments of principal due
during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period


                                       24

<PAGE>



and any Realized Losses on the Mortgage Loans) exceeds (ii) the aggregate
Certificate Principal Balance of the Offered Certificates as of such
Distribution Date after giving effect to distributions in respect of the Basic
Principal Distribution Amount on such Distribution Date.

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

     "Pass-Through Rate": With respect to each Distribution Date and each class
of Offered Certificates, a floating rate equal to the lesser of (i) One-Month
LIBOR plus the related Certificate Margin and (ii) the Net WAC Rate with respect
to such Distribution Date. With respect to any Distribution Date and the Class C
Interest, a per annum rate equal to the percentage equivalent of a fraction, the
numerator of which is (x) the sum of the amounts calculated pursuant to clauses
(A) through (M) below, and the denominator of which is (y) the aggregate of the
Uncertificated Principal Balances of the REMIC 1 Regular Interests (other than
REMIC 1 Regular Interests LT-P). For purposes of calculating the Pass-Through
Rate for the Class C Interest, the numerator is equal to the sum of the
following components:

         (A) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT- AA minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT-AA;

         (B) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT- AV1 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT-AV1;

         (C) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT- AV2A minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT-AV2A;

         (D) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT- AV2B minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT-AV2B;

         (E) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT- AV2C minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT-AV2C;

         (F) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT- AV3minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT-AV3;

         (G) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT- M1 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT-M1;


                                       25

<PAGE>



         (H) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT- M2 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT-M2;

         (I) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT- M3 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT-M3;

         (J) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT- M4 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT-M4;

         (K) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT- M5 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT-M5;

         (L) the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
Interest LT-ZZ minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT-ZZ; and

         (M)      100% of the interest on REMIC 1 Regular Interest LT-P.

The Class P Certificates and the Class R Certificates will not accrue interest
and therefore will not have a Pass-Through Rate.

     "Percentage Interest": With respect to any Certificate (other than a Class
R Certificate), the undivided percentage ownership interest in the related Class
evidenced by such Certificate, which percentage ownership interest shall be
equal to the Initial Certificate Principal Balance thereof or Initial Notional
Amount, as applicable, thereof divided by the aggregate Initial Certificate
Principal Balance or Initial Notional Amount, as applicable, of all of the
Certificates of the same Class. With respect to any Class R Certificate, the
interest in distributions to be made with respect to such Class evidenced
thereby, expressed as a percentage, as stated on the face of each such
Certificate.

     "Permitted Investment": 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
available;

     (iii) federal funds, certificates of deposit, demand deposits, time
deposits and bankers'


                                       26

<PAGE>



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 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 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 Moody's and
Standard & Poor's in their highest short-term ratings 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 Moody's in
its highest long- term ratings available and rated AAAm or AAAm-G by Standard &
Poor's, including any such funds for which Wells Fargo Bank, N.A. or any
affiliate thereof serves as an investment advisor, manager, administrator,
shareholder, servicing agent, and/or custodian or sub-custodian; and

     (vi) other obligations or securities that are acceptable to each Rating
Agency as a Permitted Investment hereunder and will not reduce the rating
assigned to any Class of Certificates by such Rating Agency below the lower of
the then-current rating or the rating assigned to such Certificates as of the
Closing Date by such Rating Agency, as evidenced in writing;

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.

     "Permitted Transferee": Any transferee of a Residual Certificate other than
a Disqualified Organization, a Non-United States Person or an "electing large
partnership" (as defined in Section 775 of the Code).

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


                                       27

<PAGE>



     "Prepayment Assumption": As defined in the Prospectus Supplement.

     "Prepayment Charge": With respect to any Mortgage Loan, the charges,
penalties or premiums, if any, due in connection with a full or partial
prepayment of such Mortgage Loan in accordance with the terms of the related
Mortgage Note (or any rider or annex thereto), or any amounts in respect thereof
paid by the Seller in accordance with the Mortgage Loan Purchase Agreement or
the Servicer in accordance with the Servicing Agreements.

     "Prepayment Interest Shortfall": As to any Distribution Date and any
Mortgage Loan (other than a Mortgage Loan relating to an REO Property) that was
the subject of (a) a Principal Prepayment in Full during the related Prepayment
Period, an amount equal to the excess of one month's interest at the Net
Mortgage Rate on the Stated Principal Balance of such Mortgage Loan over the
amount of interest (adjusted to the Net Mortgage Rate) paid by the Mortgagor for
such Prepayment Period to the date of such Principal Prepayment in Full or (b) a
Curtailment during the prior calendar month, an amount equal to one month's
interest at the Mortgage Rate on the amount of such Curtailment.

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

     "Primary Hazard Insurance Policy": Each primary hazard insurance policy
required to be maintained pursuant to Section 3.13.

     "Primary Insurance Policy": Any primary policy of mortgage guaranty
insurance, or any replacement policy therefor.

     "Principal Distribution Amount": With respect to any Distribution Date, an
amount equal to the sum of the Basic Principal Distribution Amount plus the
Extra Principal Distribution Amount.

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

     "Principal Prepayment in Full": Any Principal Prepayment made by a
Mortgagor of the entire unpaid principal balance of the Mortgage Loan.

     "Principal Remittance Amount": With respect to any Distribution Date, the
sum of (i) each scheduled payment of principal collected or advanced on the
Mortgage Loans by the Servicer or Master Servicer that was due during the
related Due Period, (ii) the principal portion of all partial and full Principal
Prepayments of the Mortgage Loans applied by the Servicer or Master Servicer
during the related Prepayment Period, (iii) the principal portion of all Net
Liquidation Proceeds, REO Proceeds, Insurance Proceeds and Subsequent Recoveries
received during the related Prepayment Period, (iv) the principal portion of
proceeds of Mortgage Loan purchases made pursuant to Section 2.02, 2.04 or 3.06,
in each case received or made during the related Prepayment Period, (v) the
principal portion of any related Substitution Adjustments deposited in the
Custodial


                                       28

<PAGE>



Account during the related Prepayment Period and (vi) on the Distribution Date
on which the Trust Fund is to be terminated pursuant to Section 9.01, the
principal portion of the termination price received from the Servicer or the
Master Servicer, as applicable, in connection with a termination of the Trust
Fund to occur on such Distribution Date.

     "Prospectus Supplement": That certain Prospectus Supplement dated June 30,
2004 relating to the public offering of the Offered Certificates.

     "Protected Account": An account established and maintained for the benefit
of Certificateholders by the Servicer with respect to the related Mortgage Loans
and with respect to REO Property pursuant to the respective Servicing
Agreements.

     "Purchase Price": With respect to any Mortgage Loan (or REO Property)
required to be purchased pursuant to Section 2.02, 2.04 or 3.06, an amount equal
to the sum of (i) 100% of the Stated Principal Balance thereof, (ii) unpaid
accrued interest (or REO Imputed Interest) at the applicable Net Mortgage Rate
on the Stated Principal Balance thereof outstanding during each Due Period that
such interest was not paid or advanced, from the date through which interest was
last paid by the Mortgagor or advanced and distributed to Certificateholders
together with unpaid Master Servicing Fees and Servicing Fees, from the date
through which interest was last paid by the Mortgagor, in each case to the first
day of the month in which such Purchase Price is to be distributed, plus (iii)
the aggregate of all Advances and Servicing Advances made in respect thereof
that were not previously reimbursed and (iv) costs and damages incurred by the
Trust Fund in connection with a repurchase pursuant to Section 2.04 hereof that
arises out of a violation of any predatory lending law which also constitutes an
actual breach of representation (xxxiii), (xxxiv), (xxxv), (xxxvi) or
representation (lxvi) of Section 3.01(b) of the Mortgage Loan Purchase
Agreement.

     "Qualified Insurer": Any insurance company duly qualified as such under the
laws of the state or states in which the related Mortgaged Property or Mortgaged
Properties is or are located, duly authorized and licensed in such state or
states to transact the type of insurance business in which it is engaged and
approved as an insurer by the Master Servicer, so long as the claims paying
ability of which is acceptable to the Rating Agencies for pass-through
certificates having the same rating as the Certificates rated by the Rating
Agencies as of the Closing Date.

     "Qualified Substitute Mortgage Loan": A Mortgage Loan substituted by the
Company for a Deleted Mortgage Loan which must, on the date of such
substitution, as confirmed in an Officers' Certificate of the Seller delivered
to the 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 Mortgage Loan for a Deleted
Mortgage Loan, an aggregate outstanding principal balance, after such
deduction), not in excess of the Stated Principal Balance of the Deleted
Mortgage Loan (the amount of any shortfall to be paid to the Master Servicer for
deposit in the Custodial Account in the month of substitution); (ii) have a
Mortgage Rate and a Net Mortgage Rate no lower than and not more than 1% per
annum higher than the Mortgage Rate and Net Mortgage Rate, respectively, of the
Deleted Mortgage Loan as of the date of substitution; (iii) have a Loan-to-Value
Ratio at the time of substitution no higher than that of the Deleted Mortgage


                                       29

<PAGE>



Loan at the time of substitution; (iv) have a remaining term to stated maturity
not greater than (and not more than one year less than) that of the Deleted
Mortgage Loan; (v) comply with each representation and warranty set forth in
Section 2.04 hereof; and, (vi) comply with each non- statistical representation
and warranty set forth in the Mortgage Loan Purchase Agreement.

     "Rating Agency": Standard & Poor's and Moody's and each of their
successors. If such agencies and their successors are no longer in existence,
"Rating Agency" shall be such nationally recognized statistical rating agency,
or other comparable Person, designated by the Company, notice of which
designation shall be given to the Trustee, the Securities Administrator and
Master Servicer. References herein to the two highest long term debt ratings of
a Rating Agency shall mean "AA" or better in the case of Standard & Poor's and
"Aa2" or better in the case of Moody's and references herein to the two highest
short-term debt ratings of a Rating Agency shall mean "A-1+" in the case of
Standard & Poor's and "P-1" in the case of Moody's, and in the case of any other
Rating Agency such references shall mean such rating categories without regard
to any plus or minus.

     "Realized Loss": With respect to each Mortgage Loan or REO Property as to
which a Cash Liquidation or REO Disposition has occurred, an amount (not less
than zero) equal to (i) the Stated Principal Balance of the Mortgage Loan as of
the date of Cash Liquidation or REO Disposition, plus (ii) interest (and REO
Imputed Interest, if any) at the Net Mortgage Rate from the Due Date as to which
interest was last paid or advanced to Certificateholders up to the date of the
Cash Liquidation or REO Disposition on the Stated Principal Balance of such
Mortgage Loan outstanding during each Due Period that such interest was not paid
or advanced, minus (iii) the proceeds, if any, received during the month in
which such Cash Liquidation or REO Disposition occurred, to the extent applied
as recoveries of interest at the Net Mortgage Rate and to principal of the
Mortgage Loan, net of the portion thereof reimbursable to the Master Servicer or
the Servicer with respect to related Advances or Servicing Advances not
previously reimbursed. With respect to each Mortgage Loan which has become the
subject of a Deficient Valuation, the difference between the principal balance
of the Mortgage Loan outstanding immediately prior to such Deficient Valuation
and the principal balance of the Mortgage Loan as reduced by the Deficient
Valuation. In addition, to the extent the Servicer or Master Servicer receives
Subsequent Recoveries with respect to any Mortgage Loan, the amount of the
Realized Loss with respect to that Mortgage Loan will be reduced to the extent
such recoveries are applied to reduce the Certificate Principal Balance of any
Class of Certificates on any Distribution Date.

     "Record Date": With respect to any Book-Entry Certificates and any
Distribution Date, the close of business on the Business Day immediately
preceding such distribution date. With respect to any Certificates that are not
Book-Entry Certificates, the close of business on the last Business Day of the
calendar month preceding such Distribution Date.

     "Regular  Certificate":  Any  of the  Certificates  other  than a  Residual
Certificate.

     "Relief Act":  The  Servicemembers  Civil Relief Act,  f/k/a  Soldiers' and
Sailors' Civil Relief Act of 1940, as amended.

     "Relief Act Interest Shortfall": With respect to any Distribution Date, for
any Mortgage Loan


                                       30

<PAGE>



with respect to which there has been a reduction in the amount of interest
collectible thereon for the most recently ended Due Period as a result of the
application of the Relief Act, the amount by which (i) interest collectible on
such Mortgage Loan during such Due Period is less than (ii) one month's interest
on the Principal Balance of such Mortgage Loan at the Loan Rate for such
Mortgage Loan before giving effect to the application of the Relief Act.

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

     "REMIC 1": The segregated pool of assets subject hereto (exclusive of the
Basis Risk Shortfall Reserve Fund and the Corridor Contracts) with respect to
which a REMIC election is to be made, conveyed in trust to the Trustee, for the
benefit of the Holders of the REMIC 1 Regular Interests and the Holders of the
Class R Certificates (as holders of the Class R-1 Interest), consisting of: (i)
each Mortgage Loan (exclusive of payments of principal and interest due on or
before the Cut-off Date, if any, received by the Master Servicer which shall not
constitute an asset of the Trust Fund) as from time to time are subject to this
Agreement and all payments under and proceeds of such Mortgage Loans (exclusive
of any prepayment fees and late payment charges received on the Mortgage Loans),
together with all documents included in the related Mortgage File, subject to
Section 2.01; (ii) such funds or assets as from time to time are deposited in
the Custodial Account or the Certificate Account and belonging to the Trust
Fund; (iii) any REO Property; (iv) the Primary Hazard Insurance Policies, if
any, the Primary Insurance Policies, if any, and all other Insurance Policies
with respect to the Mortgage Loans; (v) [reserved]; and (vi) the Company's
interest in respect of the representations and warranties made by the Seller in
the Mortgage Loan Purchase Agreement as assigned to the Trustee pursuant to
Section 2.04 hereof. REMIC 1 specifically does not include the Basis Risk
Shortfall Reserve Fund and the Corridor Contracts.

     "REMIC 1 Interest Loss Allocation Amount": With respect to any Distribution
Date, an amount equal to (a) the product of (i) the aggregate Principal Balance
of the mortgage loans and related REO Properties then outstanding and (ii) the
Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular Interest LT-AA
minus the Marker Rate, divided by (b) 12.

     "REMIC 1 Overcollateralized Amount": With respect to any date of
determination, (i) 1% of the aggregate Uncertificated Principal Balances of
REMIC 1 Regular Interest LT-AA, REMIC 1 Regular Interest LT-AV1, REMIC 1 Regular
Interest LT-AV2A, REMIC 1 Regular Interest LT- AV2B, REMIC 1 Regular Interest
LT-AV2C, REMIC 1 Regular Interest LT-AV3, REMIC 1 Regular Interest LT-M1, REMIC
1 Regular Interest LT-M2, REMIC 1 Regular Interest LT-M3, REMIC 1 Regular
Interest LT-M4, REMIC 1 Regular Interest LT-M5, REMIC 1 Regular Interest LT-ZZ
and REMIC 1 Regular Interest LT-P, minus (ii) the aggregate of the
Uncertificated Principal Balances of REMIC 1 Regular Interest LT-AV1, REMIC 1
Regular Interest LT-AV2A, REMIC 1 Regular Interest LT-AV2B, REMIC 1 Regular
Interest LT-AV2C, REMIC 1 Regular Interest LT- AV3, REMIC 1 Regular Interest
LT-M1, REMIC 1 Regular Interest LT-M2, REMIC 1 Regular Interest LT-M3, REMIC 1
Regular Interest LT-M4, REMIC 1 Regular Interest LT-M5 and REMIC 1 Regular
Interest LT-P, in each case as of such date of determination.

     "REMIC  1  Principal  Loss   Allocation   Amount":   With  respect  to  any
Distribution Date and the


                                       31

<PAGE>



mortgage loans, an amount equal to (a) the product of (i) the aggregate
Principal Balance of the mortgage loans and related REO Properties then
outstanding and (ii) 1 minus a fraction, the numerator of which is two times the
aggregate of the Uncertificated Principal Balances of REMIC 1 Regular Interest
LT-AV1, REMIC 1 Regular Interest LT-AV2A, REMIC 1 Regular Interest LT- AV2B,
REMIC 1 Regular Interest LT-AV2C, REMIC 1 Regular Interest LT-AV3, REMIC 1
Regular Interest LT-M1, REMIC 1 Regular Interest LT-M2, REMIC 1 Regular Interest
LT-M3, REMIC 1 Regular Interest LT-M4, REMIC 1 Regular Interest LT-M5 and the
denominator of which is the aggregate of the Uncertificated Principal Balances
of REMIC 1 Regular Interest LT-AV1, REMIC 1 Regular Interest LT-AV2A, REMIC 1
Regular Interest LT-AV2B, REMIC 1 Regular Interest LT-AV2C, REMIC 1 Regular
Interest LT-AV3, REMIC 1 Regular Interest LT-M1, REMIC 1 Regular Interest LT-M2,
REMIC 1 Regular Interest LT-M3, REMIC 1 Regular Interest LT-M4, REMIC 1 Regular
Interest LT-M5 and REMIC 1 Regular Interest LT-ZZ.

     "REMIC 1 Overcollateralization Target Amount": 1% of the
Overcollateralization Target Amount.

     "REMIC 1 Regular Interest LT-AA": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
"regular interest" in REMIC 1. REMIC 1 Regular Interest LT-AA shall accrue
interest at the related Uncertificated REMIC 1 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

     "REMIC 1 Regular Interest LT-AV1": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
regular interest in REMIC 1. REMIC 1 Regular Interest LT-AV1 shall accrue
interest at the related Uncertificated REMIC 1 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

     "REMIC 1 Regular Interest LT-AV2A": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
regular interest in REMIC 1. REMIC 1 Regular Interest LT-AV2A shall accrue
interest at the related Uncertificated REMIC 1 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

     "REMIC 1 Regular Interest LT-AV2B": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
regular interest in REMIC 1. REMIC 1 Regular Interest LT-AV2B shall accrue
interest at the related Uncertificated REMIC 1 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

     "REMIC 1 Regular Interest LT-AV2C": One of the separate non-certificated
beneficial


                                       32

<PAGE>



ownership interests in REMIC 1 issued hereunder and designated as a regular
interest in REMIC 1. REMIC 1 Regular Interest LT-AV2C shall accrue interest at
the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

     "REMIC 1 Regular Interest LT-AV3": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
regular interest in REMIC 1. REMIC 1 Regular Interest LT-AV3 shall accrue
interest at the related Uncertificated REMIC 1 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

     "REMIC 1 Regular Interest LT-M1": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
"regular interest" in REMIC 1. REMIC 1 Regular Interest LT-M1 shall accrue
interest at the related Uncertificated REMIC 1 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

     "REMIC 1 Regular Interest LT-M2": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
"regular interest" in REMIC 1. REMIC 1 Regular Interest LT-M2 shall accrue
interest at the related Uncertificated REMIC 1 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

     "REMIC 1 Regular Interest LT-M3": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
"regular interest" in REMIC 1. REMIC 1 Regular Interest LT-M3 shall accrue
interest at the related Uncertificated REMIC 1 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

     "REMIC 1 Regular Interest LT-M4": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
"regular interest" in REMIC 1. REMIC 1 Regular Interest LT-M4 shall accrue
interest at the related Uncertificated REMIC 1 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

     "REMIC 1 Regular Interest LT-M5": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
"regular interest" in REMIC 1. REMIC 1 Regular Interest LT-M5 shall accrue
interest at the related Uncertificated REMIC 1 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the


                                       33

<PAGE>



terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

     "REMIC 1 Regular Interest LT-P": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
"regular interest" in REMIC 1. REMIC 1 Regular Interest LT-P shall accrue
interest at the related Uncertificated REMIC 1 Pass-Through Rate in effect from
time to time, and shall be entitled to any amounts distributed to REMIC 1
Regular Interest LT-P (including Prepayment Charges).

     "REMIC 1 Regular Interest LT-ZZ": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
"regular interest" in REMIC 1. REMIC 1 Regular Interest LT-ZZ shall accrue
interest at the related Uncertificated REMIC 1 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

     "REMIC 1 Regular Interests": REMIC 1 Regular Interest LT-AA, REMIC 1
Regular Interest LT-AV1, REMIC 1 Regular Interest LT-AV2A, REMIC 1 Regular
Interest LT-AV2B, REMIC 1 Regular Interest LT-AV2C, REMIC 1 Regular Interest
LT-AV3, REMIC 1 Regular Interest LT-M1, REMIC 1 Regular Interest LT-M2, REMIC 1
Regular Interest LT-M3, REMIC 1 Regular Interest LT-M4, REMIC 1 Regular Interest
LT-M5, REMIC 1 Regular Interest LT-ZZ and REMIC 1 Regular Interest LT-P.

     "REMIC 2": The segregated pool of assets consisting of all of the REMIC 1
Regular Interests conveyed in trust to the Trustee, for the benefit of the
Holders of the Regular Certificates and the Holders of the Class R Certificates
(as holders of the Class R-2 Interest), pursuant to Article II hereunder, and
all amounts deposited therein, with respect to which a separate REMIC election
is to be made.

     "REMIC 3": The segregated pool of assets consisting of all of the Class C
Interest conveyed in trust to the Trustee, for the benefit of the Holders of the
Regular Certificates and the Class R-X Certificate (in respect of the Class R-3
Interest), pursuant to Article II hereunder, and all amounts deposited therein,
with respect to which a separate REMIC election is to be made.

     "REMIC 4": The segregated pool of assets consisting of all of the Class P
Interest conveyed in trust to the Trustee, for the benefit of the Holders of the
Regular Certificates and the Class R-X Certificate (in respect of the Class R-4
Interest), pursuant to Article II hereunder, and all amounts deposited therein,
with respect to which a separate REMIC election is to be made.

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



                                       34

<PAGE>



     "REMIC Regular  Interest":  A REMIC 1 Regular  Interest,  Class C Interest,
Class P Interest or Regular Certificate.

     "Remittance Report": A report prepared by the Master Servicer (and
delivered to the Securities Administrator) providing the information set forth
in Exhibit E attached hereto.

     "REO Acquisition": The acquisition by the Servicer on behalf of the Trust
Fund for the benefit of the Certificateholders of any REO Property pursuant to
Section 3.15.

     "REO Disposition": The receipt by the Servicer of Insurance Proceeds,
Liquidation Proceeds, Subsequent Recoveries and other payments and recoveries
(including proceeds of a final sale) which the Servicer expects to be finally
recoverable from the sale or other disposition of the REO Property.

     "REO Imputed Interest": As to any REO Property, for any period, an amount
equivalent to interest (at the Mortgage Rate that would have been applicable to
the related Mortgage Loan had it been outstanding) on the unpaid principal
balance of the Mortgage Loan as of the date of acquisition thereof (as such
balance is reduced pursuant to Section 3.15 by any income from the REO Property
treated as a recovery of principal).

     "REO Proceeds": Proceeds, net of directly related expenses, received in
respect of any REO Property (including, without limitation, proceeds from the
rental of the related Mortgaged Property and of any REO Disposition), which
proceeds are required to be deposited into the Custodial Account as and when
received.

     "REO Property": A Mortgaged Property acquired by the Servicer on behalf of
the Trust Fund through foreclosure or deed-in-lieu of foreclosure in connection
with a defaulted Mortgage Loan.

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

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

     "Responsible Officer": When used with respect to the Trustee shall mean any
officer within the Corporate Trust Office of the Trustee with direct
responsibility for the administration of this Agreement and also, with respect
to a particular matter, any other officer of the Trustee to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject. When used with respect to the Securities Administrator shall
mean any officer assigned with direct responsibility for the administration of
this Agreement and also, with respect to a particular matter, any other officer
of the Securities Administrator to whom such matter is referred because of such
officer's knowledge of and familiarity with the particular subject.

     "Securities  Administrator":  Wells Fargo Bank,  N.A.,  or its successor in
interest,  or  any  successor  securities   administrator  appointed  as  herein
provided.



                                       35

<PAGE>



     "Seller": Home Star Mortgage Services, LLC, or its successor in interest.

     "Senior Enhancement Percentage": For any Distribution Date, the percentage
obtained by dividing (x) the sum of (i) the aggregate Certificate Principal
Balance of the Class M Certificates and (ii) the related Overcollateralization
Amount, in each case prior to the distribution of the Principal Distribution
Amount on such Distribution Date, by (y) the Aggregate Stated Principal Balance
of the Mortgage Loans after giving effect to distributions to be made on that
Distribution Date.

     "Servicer": Home Star Mortgage Services, LLC, or its successor in interest.

     "Servicer Remittance Date": The 18th day of any month, or if such 18th day
is not a Business Day, the first Business Day immediately following such 18th
day. The first Remittance Date shall occur on July 19, 2004.

     "Servicing Advances": All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in connection with a default, delinquency or
other unanticipated event in the performance by the Master Servicer, the
Servicer or any Subservicer of its servicing obligations, including, but not
limited to, the cost of (i) the preservation, restoration and protection of a
Mortgaged Property, (ii) any enforcement or judicial proceedings, including
foreclosures, including any expenses incurred in relation to any such
proceedings that result from the Mortgage Loan being registered on the MERS
System, (iii) the management and liquidation of any REO Property, including
reasonable fees paid to any independent contractor in connection therewith, and
(iv) compliance with the obligations under the second paragraph of Section 3.01,
Section 3.09 and Section 3.13 (other than any deductible described in the last
paragraph thereof).

     "Servicing Agreements": The Cenlar Servicing Agreement and the Option One
Servicing Agreement, attached hereto as Exhibits M-1 and M-2, respectively.

     "Servicing Fee": With respect to each Mortgage Loan, accrued interest at
the Servicing Fee Rate with respect to the Mortgage Loan on the same principal
balance on which interest on the Mortgage Loan accrues for the calendar month.
The Servicing Fee consists of servicing and other related compensation payable
to the Servicer or to the Master Servicer if the Master Servicer is directly
servicing the loan, and includes any amount payable to any Subservicer by the
Servicer.

     "Servicing Fee Rate": With respect to each Mortgage Loan, the rate per
annum set forth in the Mortgage Loan Schedule, ranging from 0.250% per annum to
0.500% per annum.

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

     "Single Certificate": A Regular Certificate of any Class (other than a
Class P Certificate) evidencing an Initial Certificate Principal Balance or
Initial Notional Amount, as applicable, of $1,000, or, in the case of a Class P
Certificate, a Certificate of such Class evidencing an Initial


                                       36

<PAGE>



Certificate Principal Balance of $100.

     "Standard & Poor's":  Standard & Poor's Ratings Services, a division of The
McGraw Hill Companies, Inc., or its successor in interest.

     "Startup Day":  The day designated as such pursuant to Article X hereof.

     "Stated Principal Balance": With respect to any Mortgage Loan or related
REO Property at any given time, (i) the principal balance of the Mortgage Loan
outstanding as of the Cut-off Date, after application of principal payments due
on or before such date, whether or not received, minus (ii) the sum of (a) the
principal portion of the Monthly Payments due with respect to such Mortgage Loan
or REO Property during each Due Period ending prior to the most recent
Distribution Date which were received or with respect to which an Advance was
made, and (b) all Principal Prepayments with respect to such Mortgage Loan or
REO Property, and all Insurance Proceeds, Liquidation Proceeds, Subsequent
Recoveries and REO Proceeds to the extent applied by the Master Servicer as
recoveries of principal in accordance with Section 3.15 with respect to such
Mortgage Loan or REO Property, which were distributed pursuant to Section 4.01
on any previous Distribution Date, and (c) any Realized Loss with respect
thereto allocated pursuant to Section 4.07 for any previous Distribution Date.

     "Step-Up Date": The first Distribution Date following the first
Distribution Date on which the aggregate unpaid principal balance of the
Mortgage Loans, and properties acquired in respect thereof, remaining in the
Trust Fund has been reduced to less than or equal to 10% of the Aggregate Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date.

     "Stepdown Date": The earlier to occur of (i) the Distribution Date on which
the aggregate Certificate Principal Balance of the Class A Certificates has been
reduced to zero and (ii) the later to occur of (x) the Distribution Date
occurring in July 2007 and (y) the first Distribution Date for which the Senior
Enhancement Percentage is greater than or equal to approximately 16.10%.

     "Subservicer":  Any  Subservicer  appointed by the  Servicer  pursuant to a
Servicing Agreement. Initially, Cenlar and Option One.

     "Subservicer  Remittance  Date": The 18th day of each month, or if such day
is not a Business Day, the immediately preceding Business Day.

     "Subservicing Agreement": The written contract between the Servicer and a
Subservicer and any successor Subservicer relating to servicing and
administration of certain Mortgage Loans as provided in the Servicing
Agreements.

     "Subsequent Recoveries": As of any Distribution Date, amounts received by
the Servicer or Master Servicer (net of any related expenses permitted to be
reimbursed pursuant to Section 4.02) or surplus amounts held by the Servicer or
Master Servicer to cover estimated expenses (including, but not limited to,
recoveries in respect of the representations and warranties made by the Seller
pursuant to the Mortgage Loan Purchase Agreement) specifically related to a
Mortgage Loan that


                                       37

<PAGE>



was the subject of a liquidation or final disposition of any REO Property prior
to the related Prepayment Period that resulted in a Realized Loss.

     "Substitution Adjustment":  As defined in Section 2.04 hereof.

     "Tax Returns": The federal income tax return on Internal Revenue Service
Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax Return,
including Schedule Q thereto, Quarterly Notice to Residual Interest Holders of
REMIC Taxable Income or Net Loss Allocation, or any successor forms, to be filed
on behalf of REMIC 1 and REMIC 2 due to their classification as REMICs under the
REMIC Provisions, together with any and all other information, reports or
returns that may be required to be furnished to the Certificateholders or filed
with the Internal Revenue Service or any other governmental taxing authority
under any applicable provisions of federal, state or local tax laws.

     "Transfer": Any direct or indirect transfer, sale, pledge, hypothecation or
other form of assignment of any Ownership Interest in a Certificate.

     "Transferor":  Any Person who is  disposing  by Transfer  of any  Ownership
Interest in a Certificate.

     "Trigger  Event":  A  Trigger  Event  is in  effect  with  respect  to  any
distribution date if

     (1) the three-month rolling average of the aggregate principal balance of
Mortgage Loans that are 60 or more days delinquent (including for this purpose
any such Mortgage Loans in foreclosure and Mortgage Loans with respect to which
the related mortgaged property has been acquired by the trust) as of the close
of business on the last day of the preceding calendar month exceeds 40% of the
Senior Enhancement Percentage; or

     (2) in the case of any Distribution Date after the 36th Distribution Date,
the cumulative amount of Realized Losses incurred on the Mortgage Loans from the
Cut-off Date through the end of the calendar month immediately preceding such
Distribution Date exceeds the applicable percentage set forth below of the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date:

     Distribution Date                              Percentage
     -----------------                              ----------
     July 2007 to June 2008                         1.10%
     July 2008 to June 2009                         1.50%
     July 2009 to June 2010                         1.75%
     July 2010 and thereafter                       1.85%

     "Trust Fund": REMIC 1, REMIC 2, REMIC 3, REMIC 4, the Corridor Contracts,
the Basis Risk Shortfall Reserve Fund, the Custodial Account and the Certificate
Account.

     "Trust REMIC": Any of REMIC 1, REMIC 2, REMIC 3 or REMIC 4.

     "Trustee":  HSBC Bank USA, or its  successor in interest,  or any successor
trustee appointed as


                                       38

<PAGE>



herein provided.

     "Uncertificated Accrued Interest": With respect to each REMIC Regular
Interest on each Distribution Date, an amount equal to one month's interest at
the related Uncertificated Pass- Through Rate on the Uncertificated Principal
Balance or Uncertificated Notional Amount, as applicable, of such REMIC Regular
Interest. In each case, Uncertificated Accrued Interest will be reduced by any
Net Prepayment Interest Shortfalls and Relief Act Interest Shortfalls (allocated
to such REMIC Regular Interests as set forth in Section 1.03).

     "Uncertificated Principal Balance": With respect to each REMIC 1 Regular
Interest, the principal amount of such REMIC Regular Interest outstanding as of
any date of determination. As of the Closing Date, the Uncertificated Principal
Balance of each REMIC 1 Regular Interest shall equal the amount set forth in the
Preliminary Statement hereto as its initial Uncertificated Principal Balance. On
each Distribution Date, the Uncertificated Principal Balance of each such REMIC
1 Regular Interest shall be reduced by all distributions of principal made on
such REMIC 1 Regular Interest on such Distribution Date pursuant to Section 4.06
and, if and to the extent necessary and appropriate, shall be further reduced on
such Distribution Date by Realized Losses as provided in Section 4.07. The
Uncertificated Principal Balance of REMIC 1 Regular Interest LT-ZZ shall be
increased by interest deferrals as provided in Section 4.06. The Uncertificated
Principal Balance of each REMIC Regular Interest shall never be less than zero.

     "Uncertificated Pass-Through Rate": The Uncertificated REMIC 1 Pass-Through
Rate.

     "Uncertificated REMIC 1 Pass-Through Rate": With respect to each REMIC 1
Regular Interest and any Distribution Date, a per annum rate equal to the
average of the Net Mortgage Rates of the Mortgage Loans, weighted on the basis
of the Stated Principal Balances thereof as of the close of business on the last
day of the calendar month preceding the month in which such Distribution Date
occurs.

     "Underwriter": Citigroup Global Markets Inc.

     "Uninsured Cause": Any cause of damage to property subject to a Mortgage
such that the complete restoration of such property is not fully reimbursable by
the hazard insurance policies or flood insurance policies required to be
maintained pursuant to Section 3.13.

     "United States Person": A citizen or resident of the United States, a
corporation or a partnership (including an entity treated as a corporation or
partnership for United States federal income tax purposes) 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) provided that, for purposes solely of the restrictions on the
transfer of Class R Certificates, no partnership or other entity treated as a
partnership for United States federal income tax purposes shall be treated as a
United States Person unless all persons that own an interest in such partnership
either directly or through any entity that is not a corporation for United
States federal income tax purposes are required by the applicable operative
agreement to be United States Persons or an estate whose income is subject to
United States federal income tax regardless of its source, or a trust if a court


                                       39

<PAGE>



within the United States is able to exercise primary supervision over the
administration of the trust and one or more such United States Persons have the
authority to control all substantial decisions of the trust. To the extent
prescribed in regulations by the Secretary of the Treasury, a trust which was in
existence on August 20, 1996 (other than a trust treated as owned by the grantor
under subpart E of part I of subchapter J of chapter 1 of the Code), and which
was treated as a United States person on August 20, 1996 may elect to continue
to be treated as a United States person notwithstanding the previous sentence.

     "Voting Rights": The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. At all times during the term
of this Agreement, (i) 97% of all Voting Rights will be allocated among the
Holders of the Offered Certificates in proportion to the then outstanding
Certificate Principal Balances of their respective Certificates, (ii) 1% of all
Voting Rights will be allocated to the Holders of the Class C Certificates,
(iii) 1% of all Voting Rights will be allocated to the Holders of the Class P
Certificates and (iv) 1% of all Voting Rights will be allocated to the Holders
of the Class R Certificates. The Voting Rights allocated to any Class of
Certificates shall be allocated among all Holders of the Certificates of such
Class in proportion to the outstanding Percentage Interests in such Class
represented thereby.

     "Weighted Average Net Mortgage Rate": The weighted average of the Net
Mortgage Rates of the Mortgage Loans, weighted on the basis of the Stated
Principal Balances thereof as of the close of business on the first day of the
calendar month preceding the month in which such Distribution Date occurs.

     Section 1.02              Determination of LIBOR.

     LIBOR applicable to the calculation of the Pass-Through Rate on the Offered
Certificates for any Accrual Period will be determined on each Interest
Determination Date.

     On each Interest Determination Date, LIBOR shall be established by the
Securities Administrator and, as to any Accrual Period, will equal the rate for
one month United States dollar deposits that appears on the Telerate Screen Page
3750 as of 11:00 a.m., London time, on such Interest Determination Date.
"Telerate Screen Page 3750" means the display designated as page 3750 on the
Telerate Service (or such other page as may replace page 3750 on that service
for the purpose of displaying London interbank offered rates of major banks). 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, LIBOR shall be so
established by use of such other service for displaying LIBOR or comparable
rates as may be selected by the Securities Administrator), the rate will be the
Reference Bank Rate. The "Reference Bank Rate" will be determined on the basis
of the rates at which deposits in U.S. Dollars are offered by the reference
banks (which shall be any three major banks that are engaged in transactions in
the London interbank market, selected by the Securities Administrator after
consultation with the Master Servicer) as of 11:00 a.m., London time, on the
Interest Determination Date to prime banks in the London interbank market for a
period of one month in amounts approximately equal to the aggregate Certificate
Principal Balance of the Offered Certificates then outstanding. The Securities
Administrator will request the principal London office of each of the reference
banks to provide a quotation of its rate. If at least two such quotations are
provided, the


                                       40

<PAGE>



rate will be the arithmetic mean of the quotations rounded up to the next
multiple of 1/16%. If on such date fewer than two quotations are provided as
requested, the rate will be the arithmetic mean of the rates quoted by one or
more major banks in New York City, selected by the Securities Administrator, as
of 11:00 a.m., New York City time, on such date for loans in U.S. Dollars to
leading European banks for a period of one month in amounts approximately equal
to the aggregate Certificate Principal Balance of the Offered Certificates then
outstanding. If no such quotations can be obtained, the rate will be LIBOR for
the prior Distribution Date; provided however, if, under the priorities
described above, LIBOR for a Distribution Date would be based on LIBOR for the
previous Distribution Date for the third consecutive Distribution Date, the
Securities Administrator shall select an alternative comparable index (over
which the Securities Administrator has no control), used for determining
one-month Eurodollar lending rates that is calculated and published (or
otherwise made available) by an independent party.

     The establishment of LIBOR by the Securities Administrator on any Interest
Determination Date and the Trustee's subsequent calculation of the Pass-Through
Rate applicable to the Offered Certificates for the relevant Accrual Period, in
the absence of manifest error, will be final and binding.

     The Securities Administrator will supply to any Certificateholder so
requesting by telephone the Pass-Through Rate on the Offered Certificates for
the current and the immediately preceding Accrual Period.

     Section 1.03              Allocation of Certain Interest Shortfalls.

     For purposes of calculating the amount of the Accrued Certificate Interest
for the Class A, Class M and Class C Certificates for any Distribution Date, the
aggregate amount of any Net Prepayment Interest Shortfalls and any Relief Act
Interest Shortfalls incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated first, to the Class C Certificates to the
extent of one month's interest at the then applicable Pass-Through Rate on the
Notional Amount of each such Certificate and, thereafter, among the Class A
Certificates and Class M Certificates on a PRO RATA basis based on, and to the
extent of, one month's interest at the then applicable respective Pass- Through
Rate on the respective Certificate Principal Balance of each such Certificate.

     For purposes of calculating the amount of Uncertificated Accrued Interest
for the Uncertificated REMIC 1 Regular Interests for any Distribution Date, the
aggregate amount of any Net Prepayment Interest Shortfalls and any Relief Act
Interest Shortfalls incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated (i) with respect to the Mortgage Loans,
first, to Uncertificated Accrued Interest payable to REMIC 1 Regular Interest
LT-AA and REMIC 1 Regular Interest LT-ZZ up to an aggregate amount equal to the
REMIC 1 Interest Loss Allocation Amount, 98% and 2%, respectively, and
thereafter among REMIC 1 Regular Interest LT-AA, REMIC 1 Regular Interest
LT-AV1, REMIC 1 Regular Interest LT-AV2A, REMIC 1 Regular Interest LT- AV2B,
REMIC 1 Regular Interest LT-AV2C, REMIC 1 Regular Interest LT-AV3, REMIC 1
Regular Interest LT-M1, REMIC 1 Regular Interest LT-M2, REMIC 1 Regular Interest
LT-M3, REMIC 1 Regular Interest LT-M4, REMIC 1 Regular Interest LT-M5 and REMIC
1 Regular Interest LT-ZZ, PRO RATA based on, and to the extent of, one month's
interest at the then applicable respective


                                       41

<PAGE>



Uncertificated REMIC 1 Pass-Through Rate on the respective Uncertificated
Principal Balance of each such Uncertificated REMIC 1 Regular Interest.


                                       42

<PAGE>




                                   ARTICLE II
                          CONVEYANCE OF MORTGAGE LOANS;
                        ORIGINAL ISSUANCE OF CERTIFICATES

     Section 2.01.             Conveyance of Mortgage Loans.

     The Company, as of the Closing Date, and concurrently with the execution
and delivery hereof, does hereby assign, transfer, sell, set over and otherwise
convey to the Trustee without recourse all the right, title and interest of the
Company in and to (1) the Mortgage Loans identified on the Mortgage Loan
Schedule (including any Prepayment Charges but exclusive of any late payment
charges received thereon), (2) the rights with respect to the Servicing
Agreements as assigned to the Trustee on behalf the Certificateholders by the
Assignment Agreement, and (3) all other assets included or to be included in the
Trust Fund for the benefit of the Certificateholders. Such assignment includes
all principal and interest due and received by the Servicer on or with respect
to the Mortgage Loans (other than payment of principal and interest due on or
before the Cut-off Date).

     In connection with such transfer and assignment, the Company has caused the
Seller to deliver to, and deposit with the Custodian as agent for the Trustee,
as described in the Mortgage Loan Purchase Agreement, with respect to each
Mortgage Loan, the following documents or instruments:

         (i) the original Mortgage Note (including all riders thereto) bearing
     all intervening endorsements necessary to show a complete chain of
     endorsements from the original payee, endorsed "Pay to the order of
     _____without recourse", via original signature, and, if previously
     endorsed, signed in the name of the last endorsee by a duly qualified
     officer of the last endorsee or, with respect to any Mortgage Loan as to
     which the original Mortgage Note has been permanently lost or destroyed and
     has not been replaced, a Lost Note Affidavit. If the Mortgage Loan was
     acquired by the last endorsee in a merger, the endorsement must be by
     "[name of last endorsee], successor by merger to [name of the
     predecessor]." If the Mortgage Loan was acquired or originated by the last
     endorsee while doing business under another name, the endorsement must be
     by "[name of last endorsee], formerly known as [previous name]." Within 45
     days after the Closing Date, the Custodian shall endorse the Mortgage Note
     in the name of "HSBC Bank USA, as trustee under the Pooling and Servicing
     Agreement relating to Homestar Mortgage Acceptance Corp., Asset-Backed
     Pass-Through Certificates, Series 2004-3" for each Mortgage Note;

         (ii) The original recorded Mortgage, noting the presence of the MIN of
     the Mortgage Loan and either language indicating that the Mortgage Loan is
     a MOM loan or if the Mortgage Loan was not a MOM loan at origination, the
     original Mortgage and the assignment thereof to MERS, with evidence of
     recording indicated thereon; provided that if such document is not included
     because of a delay by the public recording office where such document has
     been delivered for recordation or such office as a matter of policy does
     not return the original of such document or if such original Mortgage has
     been lost, the Seller shall include or cause to be included a copy thereof
     certified by the appropriate recording office, if available;



                                       43

<PAGE>



         (iii) the original Assignment of Mortgage in blank, in form and
     substance acceptable for recordation in the jurisdiction in which the
     related mortgage property is located and signed in the name of the Last
     Endorsee by an authorized officer; unless the Mortgage Loan is registered
     on the MERS system;

         (iv) The original intervening Assignments, if any, with evidence of
     recording thereon, showing an unbroken chain of title to the Mortgage from
     the originator thereof to Person assigning it to the Trustee (or to MERS,
     if the Mortgage Loan is registered on the MERS(R) System); provided that if
     such document is not included because of a delay by the public recording
     office where such document has been delivered for recordation or such
     office as a matter of policy does not return the original of such document,
     the Seller shall include or cause to be included a copy thereof certified
     by the appropriate recording office, if available;

         (v) The originals of each assumption, modification or substitution
     agreement, if any, relating to the Mortgage Loan; and

         (vi) the original title insurance policy, or, if such policy has not
     been issued, any one of an original or a copy of the preliminary title
     report, title binder or title commitment on the Mortgaged Property with the
     original policy of the insurance to be delivered promptly following the
     receipt thereof.

     Within 30 days after the Closing Date, the Company shall complete or cause
to be completed the Assignments of Mortgage in the name of "HSBC Bank USA, as
trustee under the Pooling and Servicing Agreement relating to Homestar Mortgage
Acceptance Corp., Asset-Backed Pass-Through Certificates, Series 2004-3" (or
shall prepare or cause to be prepared new forms of Assignment of Mortgage so
completed in the name of the Trustee) for each Mortgage Property in a state, if
any, which is specifically excluded from the Opinion of Counsel delivered by the
Company to the Trustee and the Custodian, each such assignment shall be recorded
in the appropriate public office for real property records, and returned to the
Custodian, at no expense to the Custodian.

     The Seller is obligated as described in the Mortgage Loan Purchase
Agreement, with respect to the Mortgage Loans, to deliver to the Custodian as
agent for the Trustee: (a) either the original recorded Mortgage, or in the
event such original cannot be delivered by the Seller, a copy of such Mortgage
certified as true and complete by the appropriate recording office, in those
instances where a copy thereof certified by the Seller was delivered to the
Custodian as agent for the Trustee pursuant to clause (ii) above; and (b) either
the original Assignment or Assignments of the Mortgage, with evidence of
recording thereon, showing an unbroken chain of assignment from the originator
to the Seller, or in the event such original cannot be delivered by the Seller,
a copy of such Assignment or Assignments certified as true and complete by the
appropriate recording office, in those instances where copies thereof certified
by the Seller were delivered to the Custodian as agent for the Trustee pursuant
to clause (iv) above. However, pursuant to the Mortgage Loan Purchase Agreement,
the Seller need not cause to be recorded any assignment in any jurisdiction
under the laws of which, as evidenced by an Opinion of Counsel delivered by the
Seller to the Trustee, the Custodian and the Rating Agencies, the recordation of
such assignment is not necessary to protect the Trustee's interest in the
related Mortgage Loan; provided, however, notwithstanding the delivery of any
Opinion of


                                       44

<PAGE>



Counsel, each assignment shall be submitted for recording by the Seller in the
manner described above, at no expense to the Trust or the Trustee, upon the
earliest to occur of: (i) reasonable direction by the Holders of Certificates
evidencing at least 25% of the Voting Rights, (ii) the occurrence of an Event of
Default, (iii) the occurrence of a bankruptcy, insolvency or foreclosure
relating to the Seller, (iv) the occurrence of a servicing transfer as described
in Section 7.02 hereof and (v) if the Seller is not the Master Servicer and with
respect to any one assignment, the occurrence of a bankruptcy, insolvency or
foreclosure relating to the Mortgagor under the related Mortgage.

     Notwithstanding anything to the contrary contained in this Section 2.01, in
those instances where the public recording office retains the original Mortgage
after it has been recorded, the Seller shall be deemed to have satisfied its
obligations hereunder upon delivery to the Custodian as agent for the Trustee of
a copy of such Mortgage certified by the public recording office to be a true
and complete copy of the recorded original thereof.

     If any Assignment is lost or returned unrecorded to the Custodian as agent
for the Trustee because of any defect therein, the Seller is required, as
described in the Mortgage Loan Purchase Agreement, to prepare a substitute
Assignment or cure such defect, as the case may be, and the Seller shall cause
such Assignment to be recorded in accordance with this section.

     The Seller is required as described in the Mortgage Loan Purchase
Agreement, with respect to the Mortgage Loans, to exercise its best reasonable
efforts to deliver or cause to be delivered to the Custodian as agent for the
Trustee within 120 days of the Closing Date, with respect to the Mortgage Loans,
the original or a photocopy of the title insurance policy with respect to each
such Mortgage Loan assigned to the Trustee pursuant to this Section 2.01.

     In connection with the assignment of any Mortgage Loan registered on the
MERS(R) System, the Seller further agrees that it will cause, at the Seller's
own expense, as of the Closing Date, the MERS(R) System to indicate that such
Mortgage Loans have been assigned by the Seller to the Trustee in accordance
with this Agreement for the benefit of the Certificateholders by including (or
deleting, in the case of Mortgage Loans which are repurchased in accordance with
this Agreement) in such computer files (a) the code in the field which
identifies the specific Trustee and (b) the code in the field "Pool Field" which
identifies the series of the Certificates issued in connection with such
Mortgage Loans. The Company further agrees that it will not, and will not permit
the Servicer to alter the codes referenced in this paragraph with respect to any
Mortgage Loan during the term of this Agreement unless and until such Mortgage
Loan is repurchased in accordance with the terms of this Agreement.

     All original documents relating to the Mortgage Loans which are not
delivered to the Custodian as agent for the Trustee are and shall be held by the
Seller in trust for the benefit of the Trustee on behalf of the
Certificateholders.

     Except as may otherwise expressly be provided herein, none of the Company,
the Custodian, the Master Servicer, or the Trustee shall (and the Master
Servicer shall ensure that no Servicer shall) assign, sell, dispose of or
transfer any interest in the Trust Fund or any portion thereof, or cause the
Trust Fund or any portion thereof to be subject to any lien, claim, mortgage,
security interest, pledge


                                       45

<PAGE>



or other encumbrance.

     It is intended that the conveyance of the Mortgage Loans by the Company to
the Trustee as provided in this Section be, and be construed as, a sale of the
Mortgage Loans as provided for in this Section 2.01 by the Company to the
Trustee for the benefit of the Certificateholders. It is, further, not intended
that such conveyance be deemed a pledge of the Mortgage Loans by the Company to
the Trustee to secure a debt or other obligation of the Company. However, in the
event that the Mortgage Loans are held to be property of the Company, or if for
any reason this Agreement is held or deemed to create a security interest in the
Mortgage Loans, then it is intended that, (a) this Agreement shall also be
deemed to be a security agreement within the meaning of Articles 8 and 9 of the
New York Uniform Commercial Code and the Uniform Commercial Code of any other
applicable jurisdiction; (b) the conveyance provided for in this Section shall
be deemed to be (1) a grant by the Company to the Trustee of a security interest
in all of the Company's right (including the power to convey title thereto),
title and interest, whether now owned or hereafter acquired, in and to (A) the
Mortgage Loans, including the Mortgage Notes, the Mortgages, any related
Insurance Policies and all other documents in the related Mortgage Files, (B)
all amounts payable to the holders of the Mortgage Loans in accordance with the
terms thereof and (C) all proceeds of the conversion, voluntary or involuntary,
of the foregoing into cash, instruments, securities or other property, including
without limitation all amounts from time to time held or invested in the
Certificate Account or the Custodial Account, whether in the form of cash,
instruments, securities or other property and (2) an assignment by the Company
to the Trustee of any security interest in any and all of the Seller's right
(including the power to convey title thereto), title and interest, whether now
owned or hereafter acquired, in and to the property described in the foregoing
clauses (1)(A) through (C); (c) the possession by the Custodian as agent for the
Trustee or any other agent of the Trustee of Mortgage Notes and such other items
of property as constitute instruments, money, negotiable documents or chattel
paper shall be deemed to be "possession by the secured party" or possession by a
purchaser or a person designated by such secured party, for purposes of
perfecting the security interest pursuant to the New York Uniform Commercial
Code and the Uniform Commercial Code of any other applicable jurisdiction
(including, without limitation, Sections 9-115, 9-305, 8-102, 8- 301, 8-501 and
8-503 thereof); and (d) notifications to persons holding such property, and
acknowledgments, receipts or confirmations from persons holding such property,
shall be deemed notifications to, or acknowledgments, receipts or confirmations
from, financial intermediaries, bailees or agents (as applicable) of the Trustee
for the purpose of perfecting such security interest under applicable law. The
Company and the Trustee shall, to the extent consistent with this Agreement,
take such actions as may be necessary to ensure that, if this Agreement were
deemed to create a security interest in the Mortgage Loans and the REMIC 1
Regular Interests, such security interest would be deemed to be a perfected
security interest of first priority under applicable law and will be maintained
as such throughout the term of the Agreement.

     Section 2.02.             Acceptance of the Trust Fund by the Trustee.

     The Trustee acknowledges receipt (subject to any exceptions noted in the
Initial Certification described below), of the documents referred to in Section
2.01 above and all other assets included in the definition of "Trust Fund" and
declares that it (or the Custodian on its behalf) holds and will hold such
documents and the other documents delivered to Custodian as agent for the
Trustee


                                       46

<PAGE>



constituting the Mortgage Files, and that it holds or will hold such other
assets included in the definition of "Trust Fund" (to the extent delivered or
assigned to the Custodian as agent for the Trustee), in trust for the exclusive
use and benefit of all present and future Certificateholders.

     The Trustee agrees that, for the benefit of the Certificateholders, the
Custodian as agent for the Trustee will review each Mortgage File on or before
the Closing Date to ascertain that all documents required to be delivered to it
are in its possession, and the Custodian as agent for the Trustee agrees to
execute and deliver, or cause to be executed and delivered, to the Company on
the Closing Date, with respect to each Mortgage Loan, an Initial Certification
in the form annexed hereto as Exhibit C to the effect that, as to each Mortgage
Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in
full or any Mortgage Loan specifically identified in such certification as not
covered by such certification), (i) all documents required to be delivered to it
pursuant to this Agreement with respect to such Mortgage Loan are in its
possession, and (ii) such documents have been reviewed by it and appear regular
on their face and relate to such Mortgage Loan. Neither the Custodian, the
Trustee or the Master Servicer shall be under any duty to determine whether any
Mortgage File should include any of the documents specified in clauses (v) or
(vi) of Section 2.01. Neither the Custodian, the Trustee or the Master Servicer
shall be under any duty or obligation to inspect, review or examine said
documents, instruments, certificates or other papers to determine that the same
are genuine, enforceable or appropriate for the represented purpose or that they
have actually been recorded, or they are in recordable form or that they are
other than what they purport to be on their face.

     Within 180 days of the Closing Date, with respect to the Mortgage Loans,
the Custodian as agent for the Trustee shall deliver to the Company a Final
Certification in the form annexed hereto as Exhibit D evidencing the
completeness of the Mortgage Files, with any applicable exceptions noted
thereon.

     If in the process of reviewing the Mortgage Files and preparing the
certifications referred to above the Custodian as agent for the Trustee or the
Master Servicer finds any document or documents constituting a part of a
Mortgage File to be missing or defective in any material respect, the Custodian
as agent for the Trustee shall promptly notify the Trustee, the Seller and the
Company. The Custodian as agent for the Trustee shall promptly notify the Seller
and the Securities Administrator of such defect and request that the Seller cure
any such defect within 60 days from the date on which the Seller was notified of
such defect, and if the Seller does not cure such defect in all material
respects during such period, request on behalf of the Certificateholders that
the Seller purchase such Mortgage Loan from the Trust Fund at the Purchase Price
within 90 days after the date on which the Seller was notified of such defect;
provided that if such defect would cause the Mortgage Loan to be other than a
"qualified mortgage" as defined in Section 860G(a)(3) of the Code, any such cure
or repurchase must occur within 90 days from the date such breach was
discovered. It is understood and agreed that the obligation of the Seller to
cure a material defect in, or purchase any Mortgage Loan as to which a material
defect in a constituent document exists shall constitute the sole remedy
respecting such defect available to Certificateholders or the Trustee on behalf
of Certificateholders. The Purchase Price for the purchased Mortgage Loan shall
be deposited or caused to be deposited upon receipt by the Master Servicer in
the Custodial Account and, upon receipt by the Custodian as agent for the
Trustee and the Securities Administrator of written


                                       47

<PAGE>



notification of such deposit signed by a Servicing Officer, the Custodian as
agent for the Trustee shall release or cause to be released to the Seller the
related Mortgage File and shall execute and deliver such instruments of transfer
or assignment, in each case without recourse, as the Seller shall require as
necessary to vest in the Seller ownership of any Mortgage Loan released pursuant
hereto and at such time the Custodian as agent for the Trustee shall have no
further responsibility with respect to the related Mortgage File. In furtherance
of the foregoing, if the Seller is not a member of MERS and the Mortgage is
registered on the MERS(R) System, the Trustee, at the Seller's expense, shall
cause MERS to execute and deliver an assignment of the Mortgage in recordable
form to transfer the Mortgage from MERS to the Seller and shall cause such
Mortgage to be removed from registration on the MERS(R) System in accordance
with MERS' rules and regulations.

     Section 2.03.       Representations, Warranties and Covenants of the
                         Master Servicer and the Company.

     (a) The Master Servicer hereby represents and warrants to and covenants
with the Company for the benefit of Certificateholders and the Trustee that:

         (i) The Master Servicer is, and throughout the term hereof shall
remain, a corporation duly organized, validly existing and in good standing
under the laws of the state of its incorporation, the Master Servicer is, and
shall remain, in compliance with the laws of each state in which any Mortgaged
Property is located to the extent necessary to perform its obligations under
this Agreement, and the Master Servicer or an affiliate is, and shall remain,
approved to service mortgage loans for Fannie Mae and Freddie Mac;

         (ii) The execution and delivery of this Agreement by the Master
Servicer, and the performance and compliance with the terms of this Agreement by
the Master Servicer, will not violate the Master Servicer's articles of
incorporation or bylaws or constitute a default (or an event which, with notice
or lapse of time, or both, would constitute a default) under, or result in the
breach of, any material agreement or other instrument to which it is a party or
which is applicable to it or any of its assets;

         (iii) The Master Servicer has the full power and authority to enter
into and consummate all transactions contemplated by this Agreement, has duly
authorized the execution, delivery and performance of this Agreement, and has
duly executed and delivered this Agreement;

         (iv) This Agreement, assuming due authorization, execution and delivery
by the Company and the Trustee, constitutes a valid, legal and binding
obligation of the Master Servicer, enforceable against the Master Servicer in
accordance with the terms hereof, subject to (A) applicable bankruptcy,
insolvency, reorganization, moratorium and other laws affecting the enforcement
of creditors' rights generally, and (B) general principles of equity, regardless
of whether such enforcement is considered in a proceeding in equity or at law;

         (v) The Master Servicer is not in violation of, and its execution and
delivery of this Agreement and its performance and compliance with the terms of
this Agreement will not constitute a violation of, any law, any order or decree
of any court or arbiter, or any order, regulation or demand


                                       48

<PAGE>



of any federal, state or local governmental or regulatory authority, which
violation is likely to affect materially and adversely either the ability of the
Master Servicer to perform its obligations under this Agreement or the financial
condition of the Master Servicer;

         (vi) No litigation is pending (other than litigation with respect to
which pleadings or documents have been filed with a court, but not served on the
Master Servicer) or, to the best of the Master Servicer's knowledge, threatened
against the Master Servicer which would prohibit its entering into this
Agreement or performing its obligations under this Agreement or is likely to
affect materially and adversely either the ability of the Master Servicer to
perform its obligations under this Agreement or the financial condition of the
Master Servicer;

         (vii) The Master Servicer will comply in all material respects in the
performance of this Agreement with all reasonable rules and requirements of each
insurer under each Insurance Policy;

         (viii) The execution of this Agreement and the performance of the
Master Servicer's obligations hereunder do not require any license, consent or
approval of any state or federal court, agency, regulatory authority or other
governmental body having jurisdiction over the Master Servicer, other than such
as have been obtained; and

         (ix) No information, certificate of an officer, statement furnished in
writing or report delivered to the Company, any affiliate of the Company or the
Trustee by the Master Servicer in its capacity as Master Servicer, will, to the
knowledge of the Master Servicer, contain any untrue statement of a material
fact.

     It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.03(a) shall survive the execution and
delivery of this Agreement, and shall inure to the benefit of the Company, the
Trustee and the Certificateholders. Upon discovery by any of the Company, the
Trustee, the Securities Administrator or the Master Servicer of a breach of any
of the foregoing representations, warranties and covenants that materially and
adversely affects the interests of the Company or the Trustee or the value of
any Mortgage Loan or Prepayment Charge, the party discovering such breach shall
give prompt written notice to the other parties.

     (b) The Company hereby represents and warrants to the Master Servicer, the
Securities Administrator and the Trustee for the benefit of Certificateholders
that as of the Closing Date

         (i) the Company (a) is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and (b) is
qualified and in good standing as a foreign corporation to do business in each
jurisdiction where such qualification is necessary, except where the failure so
to qualify would not reasonably be expected to have a material adverse effect on
the Company's business as presently conducted or on the Company's ability to
enter into this Agreement and to consummate the transactions contemplated
hereby;

         (ii) the Company has full corporate power to own its property, to carry
on its business as presently conducted and to enter into and perform its
obligations under this Agreement;



                                       49

<PAGE>



         (iii) the execution and delivery by the Company of this Agreement have
been duly authorized by all necessary corporate action on the part of the
Company; and neither the execution and delivery of this Agreement, nor the
consummation of the transactions herein contemplated, nor compliance with the
provisions hereof, will conflict with or result in a breach of, or constitute a
default under, any of the provisions of any law, governmental rule, regulation,
judgment, decree or order binding on the Company or its properties or the
articles of incorporation or by-laws of the Company, except those conflicts,
breaches or defaults which would not reasonably be expected to have a material
adverse effect on the Company's ability to enter into this Agreement and to
consummate the transactions contemplated hereby;

         (iv) the execution, delivery and performance by the Company of this
Agreement and the consummation of the transactions contemplated hereby do not
require the consent or approval of, the giving of notice to, the registration
with, or the taking of any other action in respect of, any state, federal or
other governmental authority or agency, except those consents, approvals,
notices, registrations or other actions as have already been obtained, given or
made;

         (v) this Agreement has been duly executed and delivered by the Company
and, assuming due authorization, execution and delivery by the other parties
hereto, constitutes a valid and binding obligation of the Company enforceable
against it in accordance with its terms (subject to applicable bankruptcy and
insolvency laws and other similar laws affecting the enforcement of the rights
of creditors generally);

         (vi) there are no actions, suits or proceedings pending or, to the
knowledge of the Company, threatened against the Company, before or by any
court, administrative agency, arbitrator or governmental body (i) with respect
to any of the transactions contemplated by this Agreement or (ii) with respect
to any other matter which in the judgment of the Company will be determined
adversely to the Company and will if determined adversely to the Company
materially and adversely affect the Company's ability to enter into this
Agreement or perform its obligations under this Agreement; and the Company is
not in default with respect to any order of any court, administrative agency,
arbitrator or governmental body so as to materially and adversely affect the
transactions contemplated by this Agreement; and

         (vii) immediately prior to the transfer and assignment to the Trustee,
each Mortgage Note and each Mortgage were not subject to an assignment or
pledge, and the Company had good and marketable title to and was the sole owner
thereof and had full right to transfer and sell such Mortgage Loan to the
Trustee free and clear of any encumbrance, equity, lien, pledge, charge, claim
or security interest.

     Upon discovery by either the Company, the Master Servicer, the Securities
Administrator, the Custodian or the Trustee of a breach of any representation or
warranty set forth in this Section 2.03 which materially and adversely affects
the interests of the Certificateholders in any Mortgage Loan, the party
discovering such breach shall give prompt written notice to the other parties.

     Section 2.04.      Assignment of Interest in the Mortgage Loan Purchase
                        Agreement.



                                       50

<PAGE>



     The Company hereby assigns to the Trustee for the benefit of
Certificateholders all of its rights (but none of its obligations) in, to and
under the Mortgage Loan Purchase Agreement. Insofar as the Mortgage Loan
Purchase Agreement relates to such representations and warranties and any
remedies provided thereunder for any breach of such representations and
warranties, such right, title and interest may be enforced by the Trustee on
behalf of the Certificateholders. Upon the discovery by the Company, the Master
Servicer, the Securities Administrator or the Trustee of a breach of any of the
representations and warranties made in the Mortgage Loan Purchase Agreement in
respect of any Mortgage Loan which materially and adversely affects the value of
a Mortgage Loan or the interests of the Certificateholders in such Mortgage
Loan, the party discovering such breach shall give prompt written notice to the
other parties. The Trustee shall promptly notify the Seller of such breach and
request that the Seller shall, within 90 days from the date that the Seller was
notified or otherwise obtained knowledge of such breach, either (i) cure such
breach in all material respects or (ii) purchase such Mortgage Loan from the
Trust Fund at the Purchase Price and in the manner set forth in Section 2.02;
provided that if such breach would cause the Mortgage Loan to be other than a
"qualified mortgage" as defined in Section 860G(a)(3) of the Code, any such cure
or repurchase must occur within 90 days from the date such breach was
discovered. However, in the case of a breach under the Mortgage Loan Purchase
Agreement, subject to the approval of the Company the Seller shall have the
option to substitute a Qualified Substitute Mortgage Loan or Loans for such
Mortgage Loan if such substitution occurs within two years following the Closing
Date, except that if the breach would cause the Mortgage Loan to be other than a
"qualified mortgage" as defined in Section 860G(a)(3) of the Code, any such
substitution must occur within 90 days from the date the breach was discovered
if such 90 day period expires before two years following the Closing Date. In
the event that the Seller elects to substitute a Qualified Substitute Mortgage
Loan or Loans for a Deleted Mortgage Loan pursuant to this Section 2.04, the
Trustee shall enforce the obligation of the Seller under the Mortgage Loan
Purchase Agreement to deliver to the Custodian as agent for the Trustee and the
Master Servicer, as appropriate, with respect to such Qualified Substitute
Mortgage Loan or Loans, the original Mortgage Note, the Mortgage, an Assignment
of the Mortgage in recordable form, and such other documents and agreements as
are required by Section 2.01, with the Mortgage Note endorsed as required by
Section 2.01. No substitution will be made in any calendar month after the
Determination Date for such month. Monthly Payments due with respect to
Qualified Substitute Mortgage Loans in the month of substitution, to the extent
received by the Master Servicer or any Subservicer, shall not be part of the
Trust Fund and will be retained by the Master Servicer and remitted by the
Master Servicer to the Seller on the next succeeding Distribution Date. For the
month of substitution, distributions to Certificateholders will include the
Monthly Payment due on a Deleted Mortgage Loan for such month and thereafter the
Seller shall be entitled to retain all amounts received in respect of such
Deleted Mortgage Loan. The Company shall amend or cause to be amended the
Mortgage Loan Schedule for the benefit of the Certificateholders to reflect the
removal of such Deleted Mortgage Loan and the substitution of the Qualified
Substitute Mortgage Loan or Loans and the Company shall deliver the amended
Mortgage Loan Schedule to the Custodian as agent for the Trustee. Upon such
substitution, the Qualified Substitute Mortgage Loan or Loans shall be subject
to the terms of this Agreement in all respects, the Seller shall be deemed to
have made the representations and warranties with respect to the Qualified
Substitute Mortgage Loan contained in the Mortgage Loan Purchase Agreement as of
the date of substitution, and the Company shall be deemed to have made with
respect to any Qualified Substitute Mortgage Loan or Loans, as of the date of
substitution, the representations and warranties set forth in the Mortgage


                                       51

<PAGE>



Loan Purchase Agreement (other than any statistical representations set forth
therein).

     In connection with the substitution of one or more Qualified Substitute
Mortgage Loans for one or more Deleted Mortgage Loans, the Master Servicer will
determine the amount (the "Substitution Adjustment"), if any, by which the
aggregate principal balance of all such Qualified Substitute Mortgage Loans as
of the date of substitution is less than the aggregate Stated Principal Balance
of all such Deleted Mortgage Loans (in each case after application of the
principal portion of the Monthly Payments due in the month of substitution that
are to be distributed to Certificateholders in the month of substitution). The
Trustee shall enforce the obligation of the Seller under the Mortgage Loan
Purchase Agreement to provide the Master Servicer on the day of substitution for
immediate deposit into the Custodial Account the amount of such shortfall,
without any reimbursement therefor. In accordance with the Mortgage Loan
Purchase Agreement, the Seller shall give notice in writing to the Trustee and
the Custodian of such event, which notice shall be accompanied by an Officers'
Certificate as to the calculation of such shortfall and by an Opinion of Counsel
to the effect that such substitution will not cause (a) any federal tax to be
imposed on any Trust REMIC, including without limitation, any federal tax
imposed on "prohibited transactions" under Section 860F(a)(1) of the Code or on
"contributions after the startup date" under Section 860G(d)(1) of the Code or
(b) any portion of any Trust REMIC to fail to qualify as a REMIC at any time
that any Certificate is outstanding. The costs of any substitution as described
above, including any related assignments, opinions or other documentation in
connection therewith shall be borne by the Seller.

     Except as expressly set forth herein none of the Trustee, the Custodian,
the Securities Administrator or the Master Servicer is under any obligation to
discover any breach of the above- mentioned representations and warranties. It
is understood and agreed that the obligation of the Seller to cure such breach,
purchase or to substitute for such Mortgage Loan as to which such a breach has
occurred and is continuing shall constitute the sole remedy respecting such
breach available to Certificateholders or the Trustee on behalf of
Certificateholders. Notwithstanding the foregoing, within 90 days of the earlier
of discovery by the Seller or receipt of notice by the Seller of the breach of
the representation or covenant of the Seller set forth in Section 3.01(b)(xlix)
of the Mortgage Loan Purchase Agreement which materially and adversely affects
the interests of the Holders of the Class P Certificates in any Prepayment
Charge, the Seller shall remedy such breach as set forth in Section 3.01(b) of
the Mortgage Loan Purchase Agreement.

     Section 2.05.       Issuance of Certificates; Conveyance of REMIC
                         Regular Interests and Acceptance of REMIC
                         1, REMIC 2, REMIC 3 and REMIC 4 by the Trustee.

     (a) The Trustee acknowledges the assignment to it of the Mortgage Loans and
the delivery to the Custodian as agent for the Trustee of the Mortgage Files,
subject to the provisions of Sections 2.01 and 2.02, together with the
assignment to it of all other assets included in the Trust Fund, receipt of
which is hereby acknowledged. Concurrently with such assignment and delivery and
in exchange therefor, the Trustee, pursuant to the written request of the
Company executed by an officer of the Company, has executed, authenticated and
delivered to or upon the order of the Company, the Certificates in authorized
denominations. The interests evidenced by the Certificates, constitute the


                                       52

<PAGE>



entire beneficial ownership interest in the Trust Fund.

     (b) The Company, concurrently with the execution and delivery hereof, does
hereby transfer, assign, set over and otherwise convey in trust to the Trustee
without recourse all the right, title and interest of the Company in and to the
REMIC 1 Regular Interests for the benefit of the Holders of the REMIC 1 Regular
Interests and Holders of the Class R Certificates (as Holders of the Class R-1
Interest). The Trustee acknowledges receipt of the REMIC 1 Regular Interests
(which are uncertificated) and declares that it holds and will hold the same in
trust for the exclusive use and benefit of the Holders of the REMIC 1 Regular
Interests and Holders of the Class R Certificates (as Holders of the Class R-1
Interest). The interests evidenced by the Class R-1 Interest, together with the
REMIC 1 Regular Interests, constitute the entire beneficial ownership interest
in REMIC 1.

     (c) The Company, concurrently with the execution and delivery hereof, does
hereby transfer, assign, set over and otherwise convey in trust to the Trustee
without recourse all the right, title and interest of the Company in and to the
REMIC 1 Regular Interests (which are uncertificated) for the benefit of the
Holders of the Regular Certificates and the Class R Certificates (in respect of
the Class R-2 Interest). The Trustee acknowledges receipt of the REMIC 1 Regular
Interests and declares that it holds and will hold the same in trust for the
exclusive use and benefit of the Holders of the Regular Certificates and the
Class R Certificates (in respect of the Class R-2 Interest). The interests
evidenced by the Class R-2 Interest, together with the Regular Certificates
(other than the Class C Certificates and the Class P Certificates), the Class C
Interest and the Class P Interest, constitute the entire beneficial ownership
interest in REMIC 2.

     (d) The Company, concurrently with the execution and delivery hereof, does
hereby transfer, assign, set over and otherwise convey in trust to the Trustee
without recourse all the right, title and interest of the Company in and to the
Class C Interest (which is uncertificated) for the benefit of the Holders of the
Class C Certificates and the Class R-X Certificates (in respect of the Class R-3
Interest). The Trustee acknowledges receipt of the Class C Interest and declares
that it holds and will hold the same in trust for the exclusive use and benefit
of the Holders of the Class C Certificates and the Class R-X Certificates (in
respect of the Class R-3 Interest). The interests evidenced by the Class R-3
Interest, together with the Class C Certificates, constitute the entire
beneficial ownership interest in REMIC 3.

     (e) The Company, concurrently with the execution and delivery hereof, does
hereby transfer, assign, set over and otherwise convey in trust to the Trustee
without recourse all the right, title and interest of the Company in and to the
Class P Interest (which is uncertificated) for the benefit of the Holders of the
Class P Certificates and the Class R-X Certificates (in respect of the Class R-4
Interest). The Trustee acknowledges receipt of the Class P Interest and declares
that it holds and will hold the same in trust for the exclusive use and benefit
of the Holders of the Class P Certificates and the Class R-X Certificates (in
respect of the Class R-4 Interest). The interests evidenced by the Class R-4
Interest, together with the Class P Certificates, constitute the entire
beneficial ownership interest in REMIC 4.

     (f) Concurrently with (i) the assignment and delivery to the Trustee of
REMIC 1 and the acceptance by the Trustee thereof, pursuant to Section 2.01,
Section 2.02 and subsection (a), (ii) the


                                       53

<PAGE>



assignment and delivery to the Trustee of REMIC 2 (including the Residual
Interest therein represented by the Class R-2 Interest) and the acceptance by
the Trustee thereof, pursuant to subsection (b), (iii) the assignment and
delivery to the Trustee of REMIC 3 (including the Residual Interest therein
represented by the Class R-3 Interest) and the acceptance by the Trustee
thereof, pursuant to subsection (c) and (iv) the assignment and delivery to the
Trustee of REMIC 4 (including the Residual Interest therein represented by the
Class R-4 Interest) and the acceptance by the Trustee thereof, pursuant to
subsection (d), the Trustee, pursuant to the written request of the Company
executed by an officer of the Company, has executed, authenticated and delivered
to or upon the order of the Company, (A) the Class R Certificates in authorized
denominations evidencing the Class R-1 Interest and the Class R-2 Interest and
(B) the Class R-X Certificates in authorized denominations evidencing the Class
R-3 Interest and the Class R-4 Interest.

     Section 2.06.    Negative Covenants of the Trustee and Master Servicer.

         Except as otherwise expressly permitted by this Agreement the Trustee
and Master Servicer shall not cause the Trust Fund to:

         (i) sell, transfer, exchange or otherwise dispose of any of the assets
     of the Trust Fund;

         (ii) dissolve or liquidate the Trust Fund in whole or in part;

         (iii) engage, directly or indirectly, in any business other than that
     arising out of the issue of the Certificates, and the actions contemplated
     or required to be performed under this Agreement;

         (iv) incur, create or assume any indebtedness for borrowed money;

         (v) voluntarily file a petition for bankruptcy, reorganization,
     assignment for the benefit of creditors or similar proceeding; or

         (vi) merge, convert or consolidate with any other Person.





                                       54

<PAGE>



                                   ARTICLE III
                          ADMINISTRATION AND SERVICING
                                OF THE TRUST FUND

     Section 3.01.       Administration and Servicing of Mortgage Loans

     (a) The Master Servicer shall supervise, monitor and oversee the obligation
of the Servicer to service and administer the Mortgage Loans in accordance with
the terms of the related Servicing Agreement and shall have full power and
authority to do any and all things which it may deem necessary or desirable in
connection with such master servicing and administration. In performing its
obligations hereunder, the Master Servicer shall act in a manner consistent with
Accepted Master Servicing Practices. Furthermore, the Master Servicer shall
oversee and consult with the Servicer as necessary from time-to-time to carry
out the Master Servicer's obligations hereunder, shall receive, review and
evaluate all reports, information and other data provided to the Master Servicer
by the Servicer and shall cause the Servicer to perform and observe the
covenants, obligations and conditions to be performed or observed by the
Servicer under the applicable Servicing Agreement. The Master Servicer shall
independently and separately monitor the Servicer's servicing activities with
respect to each related Mortgage Loan, reconcile the results of such monitoring
with such information provided in the previous sentence on a monthly basis and
coordinate corrective adjustments to the Servicer's and Master Servicer's
records, and based on such reconciled and corrected information, the Master
Servicer shall provide such information to the Securities Administrator as shall
be necessary in order for it to prepare the statements specified in Section
4.03, and prepare any other information and statements required to be forwarded
by the Master Servicer hereunder. The Master Servicer shall reconcile the
results of its Mortgage Loan monitoring with the actual remittances of the
Servicer to the Custodial Account pursuant to the applicable Servicing
Agreement.

     The Trustee shall furnish the Servicer and the Master Servicer with any
powers of attorney and other documents in form as provided to it necessary or
appropriate to enable the Servicer and the Master Servicer to service and
administer the related Mortgage Loans and REO Property.

     The Trustee shall provide access to the records and documentation in
possession of the Trustee regarding the related Mortgage Loans and REO Property
and the servicing thereof to the Certificateholders, the FDIC, and the
supervisory agents and examiners of the FDIC, such access being afforded only
upon reasonable prior written request and during normal business hours at the
office of the Trustee; provided, however, that, unless otherwise required by
law, the Trustee shall not be required to provide access to such records and
documentation if the provision thereof would violate the legal right to privacy
of any Mortgagor. The Trustee shall allow representatives of the above entities
to photocopy any of the records and documentation and shall provide equipment
for that purpose at a charge that covers the Trustee's actual costs.

     The Trustee shall execute and deliver to the Servicer and the Master
Servicer any court pleadings, requests for trustee's sale or other documents
necessary or desirable to (i) the foreclosure or trustee's sale with respect to
a Mortgaged Property; (ii) any legal action brought to obtain judgment against
any Mortgagor on the Mortgage Note or Security Instrument; (iii) obtain a


                                       55

<PAGE>



deficiency judgment against the Mortgagor; or (iv) enforce any other rights or
remedies provided by the Mortgage Note or Security Instrument or otherwise
available at law or equity.

     (b) Consistent with the terms of this Agreement, the Master Servicer may
waive, modify or vary any term of any Mortgage Loan or consent to the
postponement of strict compliance with any such term or in any manner grant
indulgence to any Mortgagor if such waiver, modification, postponement or
indulgence is in conformity with the Accepted Servicing Practices; provided,
however, that:

         (A) the Master Servicer shall not make future advances (except as
provided in Section 4.03);

         (B) the Master Servicer shall not permit any modification with respect
to any Mortgage Loan that would change the Mortgage Rate, defer or forgive the
payment of any principal or interest payments, reduce the outstanding Stated
Principal Balance (except for reductions resulting from actual payments of
principal) or extend the final maturity date on such Mortgage Loan (unless (i)
the Mortgagor is in default with respect to the Mortgage Loan or (ii) such
default is, in the judgment of the Master Servicer, reasonably foreseeable); and

         (C) the Master Servicer shall not consent to (i) partial releases of
Mortgages, (ii) alterations, (iii) removal, demolition or division of properties
subject to Mortgages, (iv) modification or (v) second mortgage subordination
agreements with respect to any Mortgage Loan that would: (i) affect adversely
the status of any REMIC as a REMIC,(ii) cause any REMIC to be subject to a tax
on "prohibited transactions" or "contributions" pursuant to the REMIC
Provisions, or (iii) both (x) effect an exchange or reissuance of such Mortgage
Loan under Section 1001 of the Code (or Treasury regulations promulgated
thereunder) and (y) cause any REMIC constituting part of the Trust Fund to fail
to qualify as a REMIC under the Code or the imposition of any tax on "prohibited
transactions" or "contributions" after the Startup Day under the REMIC
Provisions.

The provisions of this Section 3.01(b) shall apply to the exercise of such
waiver, modification, postponement or indulgence rights by the Master Servicer
in its capacity as such and shall not apply to the exercise of any similar
rights by the Servicer, who shall instead by subject to the provisions of the
Servicing Agreement. Such waiver, modification, postponement and indulgence
rights of the Master Servicer set forth in this Section shall not be construed
as a duty.

     (c) The Master Servicer shall enforce the obligation of the Servicer under
the Servicing Agreements to waive Prepayment Charges in accordance with the
criteria therein and to pay the amount of any waived Prepayment Charges.

     Section 3.02     REMIC-Related Covenants.

     For as long as each REMIC shall exist, the Trustee, the Master Servicer and
the Securities Administrator shall act in accordance herewith to assure
continuing treatment of such REMIC as a REMIC, and the Trustee, the Master
Servicer and the Securities Administrator shall comply with any directions of
the Company, the Servicer or the Master Servicer to assure such continuing
treatment.


                                       56

<PAGE>



In particular, the Trustee shall not (a) sell or permit the sale of all or any
portion of the Mortgage Loans or of any investment of deposits in an Account
unless such sale is as a result of a repurchase of the Mortgage Loans pursuant
to this Agreement or the Trustee has received a REMIC Opinion addressed to the
Trustee prepared at the expense of the Trust Fund; and (b) other than with
respect to a substitution pursuant to the Mortgage Loan Purchase Agreement or
Section 2.04 of this Agreement, as applicable, accept any contribution to any
REMIC after the Startup Day without receipt of a REMIC Opinion addressed to the
Trustee.

     Section 3.03      Monitoring of Servicer.

     (a) The Master Servicer shall be responsible for reporting to the Trustee
and the Company the compliance by the Servicer with its duties under the related
Servicing Agreement. In the review of the Servicer's activities, the Master
Servicer may rely upon an officer's certificate of the Servicer (or similar
document signed by an officer of the Servicer) with regard to the Servicer's
compliance with the terms of its Servicing Agreement. In the event that the
Master Servicer, in its judgment, determines that the Servicer should be
terminated in accordance with its Servicing Agreement, or that a notice should
be sent pursuant to such Servicing Agreement with respect to the occurrence of
an event that, unless cured, would constitute grounds for such termination, the
Master Servicer shall notify the Company and the Trustee thereof and the Master
Servicer shall issue such notice or take such other action as it deems
appropriate.

     (b) The Master Servicer, for the benefit of the Trustee and the
Certificateholders, shall enforce the obligations of the Servicer under the
related Servicing Agreement, and shall, in the event that the Servicer fails to
perform its obligations in accordance with the related Servicing Agreement,
subject to the preceding paragraph, terminate the rights and obligations of the
Servicer thereunder and act as servicer of the related Mortgage Loans or to
cause the Trustee to enter in to a new Servicing Agreement with a successor
Servicer selected by the Master Servicer; provided, however, it is understood
and acknowledged by the parties hereto that there will be a period of transition
(not to exceed 90 days) before the actual servicing functions can be fully
transferred to such successor Servicer. Such enforcement, including, without
limitation, the legal prosecution of claims, termination of Servicing Agreements
and the pursuit of other appropriate remedies, shall be in such form and carried
out to such an extent and at such time as the Master Servicer, in its good faith
business judgment, would require were it the owner of the related Mortgage
Loans. The Master Servicer shall pay the costs of such enforcement at its own
expense, provided that the Master Servicer shall not be required to prosecute or
defend any legal action except to the extent that the Master Servicer shall have
received reasonable indemnity for its costs and expenses in pursuing such
action.

     (c) To the extent that the costs and expenses of the Master Servicer
related to any termination of the Servicer, appointment of a successor Servicer
or the transfer and assumption of servicing by the Master Servicer with respect
to any Servicing Agreement (including, without limitation, (i) all legal costs
and expenses and all due diligence costs and expenses associated with an
evaluation of the potential termination of the Servicer as a result of an event
of default by the Servicer and (ii) all costs and expenses associated with the
complete transfer of servicing, including all servicing files and all servicing
data and the completion, correction or manipulation of such servicing data as
may


                                       57

<PAGE>



be required by the successor servicer to correct any errors or insufficiencies
in the servicing data or otherwise to enable the successor service to service
the Mortgage Loans in accordance with the related Servicing Agreement) are not
fully and timely reimbursed by the terminated Servicer, the Master Servicer
shall be entitled to reimbursement of such costs and expenses from the Custodial
Account.

     (d) The Master Servicer shall require the Servicer to comply with the
remittance requirements and other obligations set forth in the related Servicing
Agreement.

     (e) If the Master Servicer acts as Servicer, it will not assume liability
for the representations and warranties of the Servicer, if any, that it
replaces.

     Section 3.04              Fidelity Bond.

     The Master Servicer, at its expense, shall maintain in effect a blanket
fidelity bond and an errors and omissions insurance policy, affording coverage
with respect to all directors, officers, employees and other Persons acting on
such Master Servicer's behalf, and covering errors and omissions in the
performance of the Master Servicer's obligations hereunder. The errors and
omissions insurance policy and the fidelity bond shall be in such form and
amount generally acceptable for entities serving as master servicers or
trustees.

     Section 3.05              Power to Act; Procedures.

     The Master Servicer shall master service the Mortgage Loans and shall have
full power and authority, subject to the REMIC Provisions and the provisions of
Article X hereof, to do any and all things that it may deem necessary or
desirable in connection with the master servicing and administration of the
Mortgage Loans, including but not limited to the power and authority (i) to
execute and deliver, on behalf of the Certificateholders and the Trustee,
customary consents or waivers and other instruments and documents, (ii) to
consent to transfers of any Mortgaged Property and assumptions of the Mortgage
Notes and related Mortgages, (iii) to collect any Insurance Proceeds,
Liquidation Proceeds and Subsequent Recoveries, and (iv) to effectuate
foreclosure or other conversion of the ownership of the Mortgaged Property
securing any Mortgage Loan, in each case, in accordance with the provisions of
this Agreement and the related Servicing Agreement, as applicable; provided,
however, that the Master Servicer shall not (and, consistent with its
responsibilities under Section 3.03, shall not permit the Servicer to) knowingly
or intentionally take any action, or fail to take (or fail to cause to be taken)
any action reasonably within its control and the scope of duties more
specifically set forth herein, that, under the REMIC Provisions, if taken or not
taken, as the case may be, would cause any REMIC to fail to qualify as a REMIC
or result in the imposition of a tax upon the Trust Fund (including but not
limited to the tax on prohibited transactions as defined in Section 860F(a)(2)
of the Code and the tax on contributions to a REMIC set forth in Section 860G(d)
of the Code) unless the Master Servicer has received an Opinion of Counsel (but
not at the expense of the Master Servicer) to the effect that the contemplated
action would not cause any REMIC to fail to qualify as a REMIC or result in the
imposition of a tax upon any REMIC. The Trustee shall furnish the Master
Servicer, upon written request from a Servicing Officer, with any powers of
attorney empowering the Master Servicer or the Servicer to execute and


                                       58

<PAGE>



deliver instruments of satisfaction or cancellation, or of partial or full
release or discharge, and to foreclose upon or otherwise liquidate Mortgaged
Property, and to appeal, prosecute or defend in any court action relating to the
Mortgage Loans or the Mortgaged Property, in accordance with the applicable
Servicing Agreement and this Agreement, and the Trustee shall execute and
deliver such other documents, as the Master Servicer may request, to enable the
Master Servicer to master service and administer the Mortgage Loans and carry
out its duties hereunder, in each case in accordance with Accepted Master
Servicing Practices (and the Trustee shall have no liability for misuse of any
such powers of attorney by the Master Servicer or the Servicer). If the Master
Servicer or the Trustee has been advised that it is likely that the laws of the
state in which action is to be taken prohibit such action if taken in the name
of the Trustee or that the Trustee would be adversely affected under the "doing
business" or tax laws of such state if such action is taken in its name, the
Master Servicer shall join with the Trustee in the appointment of a co-trustee
pursuant to Section 8.10 hereof. In the performance of its duties hereunder, the
Master Servicer shall be an independent contractor and shall not, except in
those instances where it is taking action in the name of the Trustee, be deemed
to be the agent of the Trustee.

     Section 3.06              Due-on-Sale Clauses; Assumption Agreements.

     To the extent provided in the applicable Servicing Agreement, to the extent
Mortgage Loans contain enforceable due-on-sale clauses, the Master Servicer
shall cause the Servicer to enforce such clauses in accordance with the
applicable Servicing Agreement. If applicable law prohibits the enforcement of a
due-on-sale clause or such clause is otherwise not enforced in accordance with
the applicable Servicing Agreement, and, as a consequence, a Mortgage Loan is
assumed, the original Mortgagor may be released from liability in accordance
with the applicable Servicing Agreement.

     Section 3.07              Release of Mortgage Files.

     (a) Upon becoming aware of the payment in full of any Mortgage Loan, or the
receipt by the Servicer of a notification that payment in full has been escrowed
in a manner customary for such purposes for payment to Certificateholders on the
next Distribution Date, the Servicer will, if required under the applicable
Servicing Agreement (or if the Servicer does not, the Master Servicer may),
promptly furnish to the Custodian, on behalf of the Trustee, two copies of a
certification substantially in the form of Exhibit F hereto signed by an officer
of the Servicer or in a mutually agreeable electronic format which will, in lieu
of a signature on its face, originate from a Servicing Officer (which
certification shall include a statement to the effect that all amounts received
in connection with such payment that are required to be deposited in the
Protected Account maintained by the Servicer pursuant to Section 3.16 or by the
Servicer pursuant to its Servicing Agreement have been or will be so deposited)
and shall request that the Custodian, on behalf of the Trustee, deliver to the
Servicer the related Mortgage File. Upon receipt of such certification and
request, the Custodian, on behalf of the Trustee, shall promptly release the
related Mortgage File to the Servicer and the Trustee and Custodian shall have
no further responsibility with regard to such Mortgage File. Upon any such
payment in full, the Servicer is authorized, to give, as agent for the Trustee,
as the mortgagee under the Mortgage that secured the Mortgage Loan, an
instrument of satisfaction (or assignment of mortgage without recourse)
regarding the Mortgaged Property subject to the Mortgage, which instrument of
satisfaction or assignment, as the case may be, shall be delivered to


                                       59

<PAGE>



the Person or Persons entitled thereto against receipt therefor of such payment,
it being understood and agreed that no expenses incurred in connection with such
instrument of satisfaction or assignment, as the case may be, shall be
chargeable to the Protected Account.

     (b) From time to time and as appropriate for the servicing or foreclosure
of any Mortgage Loan and in accordance with the applicable Servicing Agreement,
the Trustee shall execute such documents as shall be prepared and furnished to
the Trustee by the Servicer or the Master Servicer (in form reasonably
acceptable to the Trustee) and as are necessary to the prosecution of any such
proceedings. The Custodian, on behalf of the Trustee, shall, upon the request of
the Servicer or the Master Servicer, and delivery to the Custodian, on behalf of
the Trustee, of two copies of a request for release signed by a Servicing
Officer substantially in the form of Exhibit F (or in a mutually agreeable
electronic format which will, in lieu of a signature on its face, originate from
a Servicing Officer), release the related Mortgage File held in its possession
or control to the Servicer or the Master Servicer, as applicable. Such trust
receipt shall obligate the Servicer or the Master Servicer to return the
Mortgage File to the Custodian on behalf of the Trustee, when the need therefor
by the Servicer or the Master Servicer no longer exists unless the Mortgage Loan
shall be liquidated, in which case, upon receipt of a certificate of a Servicing
Officer similar to that hereinabove specified, the Mortgage File shall be
released by the Custodian, on behalf of the Trustee, to the Servicer or the
Master Servicer.

     Section 3.08              Documents, Records and Funds in Possession of
                               Master Servicer To Be Held for Trustee.

     (a) The Master Servicer shall transmit and the Servicer (to the extent
required by the related Servicing Agreement) shall transmit to the Trustee or
Custodian such documents and instruments coming into the possession of the
Master Servicer or the Servicer from time to time as are required by the terms
hereof, or in the case of the Servicer, the applicable Servicing Agreement, to
be delivered to the Trustee or Custodian. Any funds received by the Master
Servicer or by the Servicer in respect of any Mortgage Loan or which otherwise
are collected by the Master Servicer or by the Servicer as Liquidation Proceeds,
Insurance Proceeds or Subsequent Recoveries in respect of any Mortgage Loan
shall be held for the benefit of the Trustee and the Certificateholders subject
to the Master Servicer's right to retain or withdraw from the Custodial Account
the Master Servicing Compensation and other amounts provided in this Agreement,
and to the right of the Servicer to retain its Servicing Fee and other amounts
as provided in the applicable Servicing Agreement. The Master Servicer shall,
and (to the extent provided in the applicable Servicing Agreement) shall cause
the Servicer to, provide access to information and documentation regarding the
Mortgage Loans to the Trustee, its agents and accountants at any time upon
reasonable request and during normal business hours, and to Certificateholders
that are savings and loan associations, banks or insurance companies, the Office
of Thrift Supervision, the FDIC and the supervisory agents and examiners of such
Office and Corporation or examiners of any other federal or state banking or
insurance regulatory authority if so required by applicable regulations of the
Office of Thrift Supervision or other regulatory authority, such access to be
afforded without charge but only upon reasonable request in writing and during
normal business hours at the offices of the Master Servicer designated by it. In
fulfilling such a request the Master Servicer shall not be responsible for
determining the sufficiency of such information.


                                       60

<PAGE>



     (b) All Mortgage Files and funds collected or held by, or under the control
of, the Master Servicer, in respect of any Mortgage Loans, whether from the
collection of principal and interest payments or from Liquidation Proceeds,
Insurance Proceeds or Subsequent Recoveries, shall be held by the Master
Servicer for and on behalf of the Trustee and the Certificateholders and shall
be and remain the sole and exclusive property of the Trustee; provided, however,
that the Master Servicer and the Servicer shall be entitled to setoff against,
and deduct from, any such funds any amounts that are properly due and payable to
the Master Servicer or the Servicer under this Agreement or the applicable
Servicing Agreement.

     Section 3.09        Standard Hazard Insurance and Flood Insurance Policies.

     (a) For each Mortgage Loan, the Master Servicer shall enforce any
obligation of the Servicer under the related Servicing Agreement to maintain or
cause to be maintained standard fire and casualty insurance and, where
applicable, flood insurance, all in accordance with the provisions of the
related Servicing Agreement. It is understood and agreed that such insurance
shall be with insurers meeting the eligibility requirements set forth in the
applicable Servicing Agreement and that no earthquake or other additional
insurance is to be required of any Mortgagor or to be maintained on property
acquired in respect of a defaulted loan, other than pursuant to such applicable
laws and regulations as shall at any time be in force and as shall require such
additional insurance.

     (b) Pursuant to Section 3.16 and 3.17, any amounts collected by the
Servicer or the Master Servicer, or by the Servicer, under any insurance
policies (other than amounts to be applied to the restoration or repair of the
property subject to the related Mortgage or released to the Mortgagor in
accordance with the applicable Servicing Agreement) shall be deposited into the
Custodial Account, subject to withdrawal pursuant to Section 3.17 and 3.18. Any
cost incurred by the Master Servicer or the Servicer in maintaining any such
insurance if the Mortgagor defaults in its obligation to do so shall be added to
the amount owing under the Mortgage Loan where the terms of the Mortgage Loan so
permit; provided, however, that the addition of any such cost shall not be taken
into account for purposes of calculating the distributions to be made to
Certificateholders and shall be recoverable by the Master Servicer or the
Servicer pursuant to Section 3.17 and 3.18.

     Section 3.10      Presentment of Claims and Collection of Proceeds.

     The Master Servicer shall (to the extent provided in the applicable
Servicing Agreement) cause the Servicer to prepare and present on behalf of the
Trustee and the Certificateholders all claims under the Insurance Policies and
take such actions (including the negotiation, settlement, compromise or
enforcement of the insured's claim) as shall be necessary to realize recovery
under such policies. Any proceeds disbursed to the Master Servicer (or disbursed
to the Servicer and remitted to the Master Servicer) in respect of such
policies, bonds or contracts shall be promptly deposited in the Custodial
Account upon receipt, except that any amounts realized that are to be applied to
the repair or restoration of the related Mortgaged Property as a condition
precedent to the presentation of claims on the related Mortgage Loan to the
insurer under any applicable Insurance Policy need not be so deposited (or
remitted).

     Section 3.11      Maintenance of the Primary Mortgage Insurance Policies.


                                       61

<PAGE>



     (a) The Master Servicer shall not take, or permit the Servicer (to the
extent such action is prohibited under the applicable Servicing Agreement) to
take, any action that would result in noncoverage under any applicable Primary
Mortgage Insurance Policy of any loss which, but for the actions of the Master
Servicer or the Servicer, would have been covered thereunder. The Master
Servicer shall use its best reasonable efforts to cause the Servicer (to the
extent required under the related Servicing Agreement) to keep in force and
effect (to the extent that the Mortgage Loan requires the Mortgagor to maintain
such insurance), primary mortgage insurance applicable to each Mortgage Loan in
accordance with the provisions of this Agreement and the related Servicing
Agreement, as applicable. The Master Servicer shall not, and shall not permit
the Servicer (to the extent required under the related Servicing Agreement) to,
cancel or refuse to renew any such Primary Mortgage Insurance Policy that is in
effect at the date of the initial issuance of the Mortgage Note and is required
to be kept in force hereunder except in accordance with the provisions of this
Agreement and the related Servicing Agreement, as applicable.

     (b) The Master Servicer agrees to present, or to cause the Servicer (to the
extent required under the related Servicing Agreement) to present, on behalf of
the Trustee and the Certificateholders, claims to the insurer under any Primary
Mortgage Insurance Policies and, in this regard, to take such reasonable action
as shall be necessary to permit recovery under any Primary Mortgage Insurance
Policies respecting defaulted Mortgage Loans. Pursuant to Section 3.16 and 3.17,
any amounts collected by the Master Servicer or the Servicer under any Primary
Mortgage Insurance Policies shall be deposited in the Custodial Account, subject
to withdrawal pursuant to Sections 3.17 and 3.18.

     Section 3.12              Trustee to Retain Possession of Certain Insurance
                               Policies and Documents.

     The Trustee (or the Custodian, as directed by the Trustee), shall retain
possession and custody of the originals (to the extent available) of any Primary
Mortgage Insurance Policies, or certificate of insurance if applicable, and any
certificates of renewal as to the foregoing as may be issued from time to time
as contemplated by this Agreement. Until all amounts distributable in respect of
the Certificates have been distributed in full and the Master Servicer otherwise
has fulfilled its obligations under this Agreement, the Trustee (or its
Custodian, if any, as directed by the Trustee) shall also retain possession and
custody of each Mortgage File in accordance with and subject to the terms and
conditions of this Agreement. The Master Servicer shall promptly deliver or
cause to be delivered to the Trustee (or the Custodian, as directed by the
Trustee), upon the execution or receipt thereof the originals of any Primary
Mortgage Insurance Policies, any certificates of renewal, and such other
documents or instruments that constitute portions of the Mortgage File that come
into the possession of the Master Servicer from time to time.

     Section 3.13              Realization Upon Defaulted Mortgage Loans.

     The Master Servicer shall cause the Servicer (to the extent required under
the related Servicing Agreement) to foreclose upon, repossess or otherwise
comparably convert the ownership of Mortgaged Properties securing such of the
Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments, all
in accordance with the applicable Servicing Agreement.


                                       62

<PAGE>



     Section 3.14              Compensation for the Master Servicer.

     The Master Servicer will be entitled to the Master Servicer Fee and any all
income and gain realized from any investment of funds in the Certificate Account
and the Custodial Account, pursuant to Article IV, for the performance of its
activities hereunder. Servicing compensation in the form of assumption fees, if
any, late payment charges, as collected, if any, or otherwise (but not including
any Prepayment Charge) shall be retained by the Servicer and shall not be
deposited in the Protected Account. The Master Servicer shall be required to pay
all expenses incurred by it in connection with its activities hereunder and
shall not be entitled to reimbursement therefor except as provided in this
Agreement.

     Section 3.15              REO Property.

     (a) In the event the Trust Fund acquires ownership of any REO Property in
respect of any related Mortgage Loan, the deed or certificate of sale shall be
issued to the Trustee, or to its nominee, on behalf of the related
Certificateholders. The Master Servicer shall, to the extent provided in the
applicable Servicing Agreement, cause the Servicer to sell any REO Property as
expeditiously as possible and in accordance with the provisions of this
Agreement and the related Servicing Agreement, as applicable. Pursuant to its
efforts to sell such REO Property, the Master Servicer shall cause the Servicer
to protect and conserve, such REO Property in the manner and to the extent
required by the applicable Servicing Agreement, in accordance with the REMIC
Provisions and in a manner that does not result in a tax on "net income from
foreclosure property" or cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code.

     (b) The Master Servicer shall, to the extent required by the related
Servicing Agreement, cause the Servicer to deposit all funds collected and
received in connection with the operation of any REO Property in the Protected
Account.

     (c) The Master Servicer and the Servicer, upon the final disposition of any
REO Property, shall be entitled to reimbursement for any related unreimbursed
Monthly Advances and other unreimbursed advances as well as any unpaid Servicing
Fees from Liquidation Proceeds received in connection with the final disposition
of such REO Property; provided, that any such unreimbursed Monthly Advances as
well as any unpaid Servicing Fees may be reimbursed or paid, as the case may be,
prior to final disposition, out of any net rental income or other net amounts
derived from such REO Property.

     (d) To the extent provided in the related Servicing Agreement, the
Liquidation Proceeds from the final disposition of the REO Property, net of any
payment to the Master Servicer and the Servicer as provided above shall be
deposited in the Protected Account on or prior to the Determination Date in the
month following receipt thereof and be remitted by wire transfer in immediately
available funds to the Master Servicer for deposit into the related Custodial
Account on the next succeeding Servicer Remittance Date.

     Section 3.16.             Protected Accounts


                                       63

<PAGE>



     (a) The Master Servicer shall enforce the obligation of the Servicer to
establish and maintain a Protected Account in accordance with the applicable
Servicing Agreement, with records to be kept with respect thereto on a Mortgage
Loan by Mortgage Loan basis, into which accounts shall be deposited within 48
hours (or as of such other time specified in the related Servicing Agreement) of
receipt, all collections of principal and interest on any Mortgage Loan and any
REO Property received by the Servicer, including Principal Prepayments,
Insurance Proceeds, Liquidation Proceeds, and advances made from the Servicer's
own funds (less servicing compensation as permitted by the applicable Servicing
Agreement in the case of the Servicer) and all other amounts to be deposited in
the Protected Account. The Servicer is hereby authorized to make withdrawals
from and deposits to the related Protected Account for purposes required or
permitted by this Agreement. To the extent provided in the related Servicing
Agreement, the Protected Account shall be held by a Designated Depository
Institution and segregated on the books of such institution in the name of the
Trustee for the benefit of Certificateholders.

     (b) To the extent provided in the related Servicing Agreement, amounts on
deposit in a Protected Account may be invested in Permitted Investments in the
name of the Trustee for the benefit of Certificateholders and, except as
provided in the preceding paragraph, not commingled with any other funds. Such
Permitted Investments shall mature, or shall be subject to redemption or
withdrawal, no later than the date on which such funds are required to be
withdrawn for deposit in the Custodial Account, and shall be held until required
for such deposit. The income earned from Permitted Investments made pursuant to
this Section 3.16 shall be paid to the Servicer under the applicable Servicing
Agreement, and the risk of loss of moneys required to be distributed to the
Certificateholders resulting from such investments shall be borne by and be the
risk of the Servicer. The Servicer (to the extent provided in the Servicing
Agreement) shall deposit the amount of any such loss in the Protected Account
within two Business Days of receipt of notification of such loss but not later
than the second Business Day prior to the Distribution Date on which the moneys
so invested are required to be distributed to the Certificateholders.

     (c) To the extent provided in the related Servicing Agreement and subject
to this Article III, on or before each Servicer Remittance Date, the Servicer
shall withdraw or shall cause to be withdrawn from its Protected Accounts and
shall immediately deposit or cause to be deposited in the Custodial Account
amounts representing the following collections and payments (other than with
respect to principal of or interest on the Mortgage Loans due on or before the
Cut-off Date):

         (1) Scheduled payments on the Mortgage Loans received or any related
     portion thereof advanced by the Servicer pursuant to its Servicing
     Agreement which were due on or before the related Due Date, net of the
     amount thereof comprising its Servicing Fee or any fees with respect to any
     lender-paid primary mortgage insurance policy;

         (2) Full Principal Prepayments and any Liquidation Proceeds received by
     the Servicer with respect to the Mortgage Loans in the related Prepayment
     Period, with interest to the date of prepayment or liquidation, net of the
     amount thereof comprising its Servicing Fee;

         (3) Partial Principal Prepayments received by the Servicer for the
     Mortgage Loans in the related Prepayment Period; and


                                       64

<PAGE>



         (4) Any amount to be used as a Monthly Advance.

     (b) Withdrawals may be made from an Account only to make remittances as
provided in the Servicing Agreement; to reimburse the Master Servicer or the
Servicer for Monthly Advances which have been recovered by subsequent
collections from the related Mortgagor; to remove amounts deposited in error; to
remove fees, charges or other such amounts deposited on a temporary basis; or to
clear and terminate the account at the termination of this Agreement in
accordance with Section 10.01. As provided in Sections 3.16(a) and 3.17(b)
certain amounts otherwise due to the Servicer may be retained by them and need
not be deposited in the Custodial Account.

     Section 3.17              Custodial Account

     (a) The Master Servicer shall establish and maintain in the name of the
Trustee, for the benefit of the Certificateholders, the Custodial Account as a
segregated trust account or accounts. The Custodial Account shall be an Eligible
Account. The Master Servicer will deposit in the Custodial Account as identified
by the Master Servicer and as received by the Master Servicer from the Servicer,
the following amounts:

         (1) Any amounts withdrawn from a Protected Account;

         (2) Any Monthly Advance and any payments of Compensating Interest;

         (3) Any Insurance Proceeds, Net Liquidation Proceeds or Subsequent
     Recoveries received by or on behalf of the Servicer or Master Servicer or
     which were not deposited in a Protected Account;

         (4) The Repurchase Price with respect to any Mortgage Loans purchased
     by the Seller pursuant to the Mortgage Loan Purchase Agreement or Sections
     2.02 or 2.03 hereof, any amounts which are to be treated pursuant to
     Section 2.04 of this Agreement as the payment of a Repurchase Price in
     connection with the tender of a Substitute Mortgage Loan by the Seller, the
     Repurchase Price with respect to any Mortgage Loans purchased by the
     Company pursuant to Section 2.04, and all proceeds of any Mortgage Loans or
     property acquired with respect thereto repurchased by the Company or its
     designee pursuant to Section 10.01;

         (5) Any amounts required to be deposited with respect to losses on
     investments of deposits in an Account; and

         (6) Any other amounts received by or on behalf of the Master Servicer
     and required to be deposited in the Custodial Account pursuant to this
     Agreement.

     (b) All amounts deposited to the Custodial Account shall be held by the
Master Servicer in the name of the Trustee in trust for the benefit of the
Certificateholders in accordance with the terms and provisions of this
Agreement. The requirements for crediting the Custodial Account or the
Certificate Account shall be exclusive, it being understood and agreed that,
without limiting the generality of the foregoing, payments in the nature of (i)
prepayment or late payment charges or


                                       65

<PAGE>



assumption, tax service, statement account or payoff, substitution,
satisfaction, release and other like fees and charges and (ii) the items
enumerated in Subsection 3.20(a) need not be credited by the Master Servicer or
the Servicer to the Certificate Account or the Custodial Account, as applicable.
In the event that the Master Servicer shall deposit or cause to be deposited to
the Custodial Account any amount not required to be credited thereto, the
Securities Administrator, upon receipt of a written request therefor signed by a
Servicing Officer of the Master Servicer, shall promptly transfer such amount to
the Master Servicer, any provision herein to the contrary notwithstanding.

     (c) The amount at any time credited to the Custodial Account may be
invested, in the name of the Trustee, or its nominee, for the benefit of the
Certificateholders, in Permitted Investments as directed by Master Servicer. All
Permitted Investments shall mature or be subject to redemption or withdrawal on
or before, and shall be held until, the next succeeding Certificate Account
Deposit Date. Any and all investment earnings on amounts on deposit in the
Master Servicer Account from time to time shall be for the account of the Master
Servicer. The Master Servicer from time to time shall be permitted to withdraw
or receive distribution of any and all investment earnings from the Master
Servicer Account. The risk of loss of moneys required to be distributed to the
Certificateholders resulting from such investments shall be borne by and be the
risk of the Master Servicer. The Master Servicer shall deposit the amount of any
such loss in the Custodial Account within two Business Days of receipt of
notification of such loss but not later than the second Business Day prior to
the Distribution Date on which the moneys so invested are required to be
distributed to the Certificateholders.

     Section 3.18              Permitted Withdrawals and Transfers from the
                               Custodial Account.

     (a) The Master Servicer will, from time to time on demand of the Servicer
or the Securities Administrator, make or cause to be made such withdrawals or
transfers from the Custodial Account as the Master Servicer has designated for
such transfer or withdrawal pursuant to this Agreement and the related Servicing
Agreement. The Master Servicer may clear and terminate the Custodial Account
pursuant to Section 10.01 and remove amounts from time to time deposited in
error.

     (b) On an ongoing basis, the Master Servicer shall withdraw from the
Custodial Account (i) any expenses recoverable by the Trustee, the Master
Servicer or the Securities Administrator or the Custodian pursuant to Sections
3.03, 7.04 and 9.05 and (ii) any amounts payable to the Master Servicer as set
forth in Section 3.14.

     (c) In addition, on or before each Certificate Account Deposit Date, the
Master Servicer shall deposit in the Certificate Account (or remit to the
Securities Administrator for deposit therein) any Monthly Advances required to
be made by the Master Servicer with respect to the Mortgage Loans.

     (d) No later than 3:00 p.m. New York time on each Certificate Account
Deposit Date, the Master Servicer will transfer all Available Distribution
Amount on deposit in the Custodial Account with respect to the related
Distribution Date to the Securities Administrator for deposit in the Certificate
Account.

     Section 3.19.             Certificate Account.


                                       66

<PAGE>



     (a) The Securities Administrator shall establish and maintain in the name
of the Trustee, for the benefit of the Certificateholders, the Certificate
Account as a segregated trust account or accounts and it may be a sub-account of
the Custodial Account.

     (b) All amounts deposited to the Certificate Account shall be held by the
Trustee in the name of the Trustee in trust for the benefit of the
Certificateholders in accordance with the terms and provisions of this
Agreement.

     (c) The Certificate Account shall constitute a trust account of the Trust
Fund segregated on the books of the Securities Administrator on behalf of the
Trustee, and the Certificate Account and the funds deposited therein shall not
be subject to, and shall be protected from, all claims, liens, and encumbrances
of any creditors or depositors of the Trustee, the Securities Administrator or
the Master Servicer (whether made directly, or indirectly through a liquidator
or receiver of the Trustee or the Master Servicer). The Certificate Account
shall be an Eligible Account. The Certificate Account may be a sub-account of
the Custodial Account and in such case any withdrawals from the Custodial
Account and deposits into the Certificate Account shall be deemed to have been
made. The amount at any time credited to the Certificate Account shall be (i)
held in cash and fully insured by the FDIC to the maximum coverage provided
thereby or (ii) invested in the name of the Trustee, in such Permitted
Investments selected by the Securities Administrator or deposited in demand
deposits with such depository institutions as selected by the Securities
Administrator, provided that time deposits of such depository institutions would
be a Permitted Investment. All Permitted Investments shall mature or be subject
to redemption or withdrawal on or before, and shall be held until, the next
succeeding Distribution Date if the obligor, manager or advisor for such
Permitted Investment is an affiliate of the Securities Administrator or, if such
obligor is any other Person, the Business Day preceding such Distribution Date.
All investment earnings on amounts on deposit in the Certificate Account or
benefit from funds uninvested therein from time to time shall be for the account
of the Securities Administrator. The Securities Administrator shall be permitted
to withdraw or receive distribution of any and all investment earnings from the
Certificate Account on each Distribution Date. If there is any loss on a
Permitted Investment or demand deposit, the Securities Administrator shall
deposit the amount of the loss to the Certificate Account. With respect to the
Certificate Account and the funds deposited therein, the Master Servicer shall
take such action as may be necessary to ensure that the Certificateholders shall
be entitled to the priorities afforded to such a trust account (in addition to a
claim against the estate of the Trustee) as provided by 12 U.S.C. ss. 92a(e),
and applicable regulations pursuant thereto, if applicable, or any applicable
comparable state statute applicable to state chartered banking corporations.

     Section 3.20              Permitted Withdrawals and Transfers from the
                               Certificate Account.

     (a) The Securities Administrator will, from time to time, make or cause to
be made such withdrawals or transfers from the Certificate Account as the
Securities Administrator has designated for such transfer or withdrawal pursuant
to this Agreement and the Servicing Agreements:

         (1) to reimburse the Master Servicer or the Servicer for any Monthly
     Advance of its own funds, the right of the Master Servicer or the Servicer
     to reimbursement pursuant to this subclause (i) being limited to amounts
     received on a particular Mortgage Loan (including, for


                                       67

<PAGE>



     this purpose, the Repurchase Price therefor, Insurance Proceeds and
     Liquidation Proceeds) which represent late payments or recoveries of the
     principal of or interest on such Mortgage Loan respecting which such
     Monthly Advance was made;

         (2) to reimburse the Master Servicer or the Servicer from Insurance
     Proceeds or Liquidation Proceeds relating to a particular Mortgage Loan for
     amounts expended by the Master Servicer or the Servicer in good faith in
     connection with the restoration of the related Mortgaged Property which was
     damaged by an Uninsured Cause or in connection with the liquidation of such
     Mortgage Loan;

         (3) to reimburse the Master Servicer or the Servicer from Insurance
     Proceeds relating to a particular Mortgage Loan for insured expenses
     incurred with respect to such Mortgage Loan and to reimburse the Master
     Servicer or the Servicer from Liquidation Proceeds from a particular
     Mortgage Loan for Liquidation Expenses incurred with respect to such
     Mortgage Loan; provided that the Master Servicer shall not be entitled to
     reimbursement for Liquidation Expenses with respect to a Mortgage Loan to
     the extent that (i) any amounts with respect to such Mortgage Loan were
     paid as Excess Liquidation Proceeds pursuant to clause (xi) of this
     Subsection 3.20(a) to the Master Servicer; and (ii) such Liquidation
     Expenses were not included in the computation of such Excess Liquidation
     Proceeds;

         (4) to reimburse the Master Servicer or the Servicer for advances of
     funds (other than Monthly Advances) made with respect to the Mortgage
     Loans, and the right to reimbursement pursuant to this subclause being
     limited to amounts received on the related Mortgage Loan (including, for
     this purpose, the Repurchase Price therefor, Insurance Proceeds and
     Liquidation Proceeds) which represent late recoveries of the payments for
     which such advances were made;

         (5) to reimburse the Master Servicer or the Servicer for any Monthly
     Advance or advance, after a Realized Loss has been allocated with respect
     to the related Mortgage Loan if the Monthly Advance or advance has not been
     reimbursed pursuant to clauses (1) and (4);

         (6) to pay the Master Servicer as set forth in Section 3.14;

         (7) to reimburse the Master Servicer for expenses, costs and
     liabilities incurred by and reimbursable to it pursuant to Sections 3.03
     and 6.03;

         (8) to pay to the Master Servicer, as additional servicing
     compensation, any Excess Liquidation Proceeds to the extent not retained by
     the Servicer;

         (9) to reimburse or pay the Servicer any such amounts as are due
     thereto under the applicable Servicing Agreement and have not been retained
     by or paid to the Servicer, to the extent provided in the related Servicing
     Agreement;

         (10) to reimburse the Trustee, the Securities Administrator or the
     Custodian for expenses, costs and liabilities incurred by or reimbursable
     to it pursuant to this Agreement;



                                       68

<PAGE>



         (11) to remove amounts deposited in error; and

         (12) to clear and terminate the Certificate Account pursuant to Section
9.01.

     (b) The Master Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of accounting for any
reimbursement from the Certificate Account pursuant to subclauses (1) through
(4) immediately above or with respect to any such amounts which would have been
covered by such subclauses had the amounts not been retained by the Master
Servicer without being deposited in the Certificate Account under Section
3.18(b).

     (c) On each Distribution Date, the Securities Administrator shall
distribute the Available Distribution Amount to the extent on deposit in the
Certificate Account to the Holders of the Certificates and determined by the
Securities Administrator.

     Section 3.21              Annual Officer's Certificate as to Compliance.

     (a) The Master Servicer shall deliver to the Trustee and the Rating
Agencies on or before March 1 of each year, commencing on March 1, 2005, an
Officer's Certificate, certifying that with respect to the period ending
December 31 of the prior year: (i) such Servicing Officer has reviewed the
activities of such Master Servicer during the preceding calendar year or portion
thereof and its performance under this Agreement, (ii) to the best of such
Servicing Officer's knowledge, based on such review, such Master Servicer has
performed and fulfilled its duties, responsibilities and obligations under this
Agreement in all material respects throughout such year, or, if there has been a
default in the fulfillment of any such duties, responsibilities or obligations,
specifying each such default known to such Servicing Officer and the nature and
status thereof, (iii) nothing has come to the attention of such Servicing
Officer to lead such Servicing Officer to believe that the Servicer has failed
to perform any of its duties, responsibilities and obligations under the related
Servicing Agreement in all material respects throughout such year, or, if there
has been a material default in the performance or fulfillment of any such
duties, responsibilities or obligations, specifying each such default known to
such Servicing Officer and the nature and status thereof.

     (b) Copies of such statements shall be provided to any Certificateholder
upon request, by the Master Servicer or by the Securities Administrator at the
Master Servicer's expense if the Master Servicer failed to provide such copies.

     Section 3.22              Annual Independent Accountant's Servicing Report.

     If the Master Servicer has, during the course of any fiscal year, directly
serviced any of the Mortgage Loans, then the Master Servicer at its expense
shall cause a nationally recognized firm of independent certified public
accountants to furnish a statement to the Trustee, the Rating Agencies and the
Company on or before March 1 of each year, commencing on March 1, 2005 to the
effect that, with respect to the most recently ended fiscal year, such firm has
examined certain records and documents relating to the Master Servicer's
performance of its servicing obligations under this Agreement and pooling and
servicing and trust agreements in material respects similar to this Agreement
and to each other and that, on the basis of such examination conducted
substantially in


                                       69

<PAGE>



compliance with the audit program for mortgages serviced for Freddie Mac or the
Uniform Single Attestation Program for Mortgage Bankers, such firm is of the
opinion that the Master Servicer's activities have been conducted in compliance
with this Agreement, or that such examination has disclosed no material items of
noncompliance except for (i) such exceptions as such firm believes to be
immaterial, (ii) such other exceptions as are set forth in such statement and
(iii) such exceptions that the Uniform Single Attestation Program for Mortgage
Bankers or the Audit Program for Mortgages Serviced by Freddie Mac requires it
to report. Copies of such statements shall be provided to any Certificateholder
upon request by the Master Servicer, or by the Securities Administrator at the
expense of the Master Servicer. If such report discloses exceptions that are
material, the Master Servicer shall advise the Trustee whether such exceptions
have been or are susceptible of cure, and will take prompt action to do so.

     Section 3.23              Reports Filed with Securities and Exchange
                               Commission.

     Within 15 days after each Distribution Date, the Securities Administrator
shall, in accordance with industry standards, file with the Commission via
EDGAR, a Form 8-K with a copy of the statement to the Certificateholders for
such Distribution Date as an exhibit thereto. Prior to January 30 in any year,
the Securities Administrator shall, in accordance with industry standards and
unless otherwise instructed by the Company, file a Form 15 Suspension Notice
with respect to the Trust Fund, if applicable. Prior to (i) March 15, 2005 and
(ii) unless and until a Form 15 Suspension Notice shall have been filed, prior
to March 15 of each year thereafter, the Master Servicer shall provide the
Securities Administrator with a Master Servicer Certification, together with a
copy of the annual independent accountant's servicing report and annual
statement of compliance of the Servicer, in each case, required to be delivered
pursuant to the related Servicing Agreement, and, if applicable, the annual
statement of compliance, and the annual independent accountant's servicing
report to be delivered by the Master Servicer pursuant to Sections 3.21 and
3.22. Prior to (i) March 31, 2005, or such earlier filing date as may be
required by the Commission, and (ii) unless and until a Form 15 Suspension
Notice shall have been filed, March 31 of each year thereafter, or such earlier
filing date as may be required by the Commission, the Securities Administrator
shall file a Form 10- K, in substance conforming to industry standards, with
respect to the Trust. Such Form 10-K shall include the Master Servicer
Certification and other documentation provided by the Master Servicer pursuant
to the second preceding sentence. The Company hereby grants to the Securities
Administrator a limited power of attorney to execute and file each such document
on behalf of the Company. Such power of attorney shall continue until either the
earlier of (i) receipt by the Securities Administrator from the Company of
written termination of such power of attorney and (ii) the termination of the
Trust Fund. The Company agrees to promptly furnish to the Securities
Administrator, from time to time upon request, such further information, reports
and financial statements within its control related to this Agreement and the
Mortgage Loans as the Securities Administrator reasonably deems appropriate to
prepare and file all necessary reports with the Commission. The Securities
Administrator shall have no responsibility to file any items other than those
specified in this Section 3.23; provided, however, the Securities Administrator
will cooperate with the Company in connection with any additional filings with
respect to the Trust Fund as the Company deems necessary under the Exchange Act.
Fees and expenses incurred by the Securities Administrator in connection with
this Section 3.23 shall not be reimbursable from the Trust Fund.



                                       70

<PAGE>



     Section 3.24              UCC.

     The Company shall inform the Trustee in writing of any Uniform Commercial
Code financing statements that were filed on the Closing Date in connection with
the Trust with stamped recorded copies of such financing statements to be
delivered to the Trustee promptly upon receipt by the Company. The Trustee
agrees to monitor and notify the Company if any continuation statements for such
Uniform Commercial Code financing statements need to be filed. If directed by
the Company in writing, the Trustee will file any such continuation statements
solely at the expense of the Company. The Company shall file any financing
statements or amendments thereto required by any change in the Uniform
Commercial Code.

     Section 3.25              Optional Purchase of Defaulted Mortgage Loans.

         (a) During the first full calender month (but excluding the last
Business Day thereof) following a Mortgage Loan or related REO Property becoming
90 days or more delinquent, the Seller shall have the option, but not the
obligation to purchase from the Trust Fund any such Mortgage Loan or related REO
Property that is then still 90 days or more delinquent, which the Seller
determines in good faith will otherwise become subject to foreclosure
proceedings (evidence of such determination to be delivered in writing to the
Trustee prior to purchase), at a price equal to the Purchase Price. The Purchase
Price for any Mortgage Loan or related REO Property purchased hereunder shall be
deposited in the Custodial Account, and the Trustee, upon written certification
of such deposit, shall release or cause to be released to the Seller the related
Mortgage File and the Trustee shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, as the Seller shall
furnish and as shall be necessary to vest in the Seller title to any Mortgage
Loan or related REO Property released pursuant hereto.

         (b) If with respect to any delinquent Mortgage Loan or related REO
Property, the option of the Seller set forth in the preceding paragraph shall
have arisen but the Seller shall have failed to exercise such option on or
before the Business Day preceding the last Business Day of the calendar month
following the calendar month during which such Mortgage Loan or related REO
Property first became 90 days or more delinquent, then such option shall
automatically expire; provided, however, that if any such Mortgage Loan or
related REO Property shall cease to be 90 days or more delinquent but then
subsequently shall again become 90 days or more delinquent, then the Seller
shall be entitled to another repurchase option with respect to such Mortgage
Loan or REO Property as provided in the preceding paragraph.

     Section 3.26.             The Corridor Contracts.

     The Trustee on behalf of the Trust Fund, shall enter into two interest rate
cap transactions evidenced by the Corridor Contracts, on the terms and
conditions set forth in the Corridor Contract Assignment Agreements. The
Corridor Contracts will be an asset of the Trust Fund but will not be an asset
of any REMIC. The Securities Administrator, on behalf of the Trustee, shall
deposit any amounts received from time to time with respect to the Corridor
Contracts into the Basis Risk Shortfall Reserve Fund.



                                       71

<PAGE>



     The Securities Administrator, on behalf of the Trustee, shall prepare and
deliver any notices required to be delivered under the Corridor Contracts.

     The Securities Administrator, on behalf of the Trustee, shall terminate the
Corridor Contracts upon the occurrence of certain events of default or
termination events to the extent specified thereunder.


                                       72

<PAGE>



                                   ARTICLE IV
                         PAYMENTS TO CERTIFICATEHOLDERS

     Section 4.01.             Distributions.

     (a) On each Distribution Date the Securities Administrator shall distribute
to each Certificateholder of record as of the next preceding Record Date (other
than as provided in Section 9.01 respecting the final distribution) either in
immediately available funds (by wire transfer or otherwise) to the account of
such Certificateholder at a bank or other entity having appropriate facilities
therefor, if such Certificateholder has so notified the Securities Administrator
at least 5 Business Days prior to the related Record Date, or otherwise by check
mailed to such Certificateholder at the address of such Holder appearing in the
Certificate Register, such Certificateholder's share (based on the aggregate of
the Percentage Interests represented by Certificates of the applicable Class
held by such Holder) of the amounts required to be distributed to such Holder
pursuant to this Section 4.01.

     On each Distribution Date, the Securities Administrator shall withdraw from
the Certificate Account that portion of Available Distribution Amount for such
Distribution Date consisting of the Interest Remittance Amount for such
Distribution Date, and make the following disbursements and transfers in the
order of priority described below, in each case to the extent of the Interest
Remittance Amount remaining for such Class for such Distribution Date;

         (i) concurrently, to the Holders of the Class A Certificates, the
related Accrued Certificate Interest for such Class and any Interest Carry
Forward Amount for such Class for such Distribution Date; and

         (ii) sequentially, to the Holders of the Class M-1, Class M-2, Class
M-3, Class M-4 and Class M-5 Certificates, in that order, the related Accrued
Certificate Interest for such Class for such Distribution Date.

     (b) (i) On each Distribution Date (a) prior to the Stepdown Date or (b) on
which a Trigger Event is in effect, the Holders of each Class of Offered
Certificates shall be entitled to receive distributions in respect of principal
from that portion of Available Distribution Amount to the extent of the
Principal Distribution Amount in the following amounts and order of priority:

         (1)      to the Class A Certificates, in the order and priority set
                  forth in clause (d) below, until the Certificate Principal
                  Balances thereof are reduced to zero; and

         (2)      sequentially, to the Class M-1, Class M-2, Class M-3, Class
                  M-4 and Class M-5 Certificates, in that order, until the
                  Certificate Principal Balance of each such Class is reduced to
                  zero.

         (ii)     On each Distribution Date (a) on or after the Stepdown Date
                  and (b) on which a Trigger Event is not in effect, the Holders
                  of each Class of Offered Certificates shall be entitled to
                  receive distributions in respect of principal from that
                  portion of Available Distribution Amount to


                                       73

<PAGE>



the extent of the Principal Distribution Amount in the following amounts and
order of priority:

         (1)      first, the Class A Principal Distribution Amount shall be
                  distributed to the Holders of the Class A Certificates, in the
                  order and priority set forth in clause (d) below, until the
                  Certificate Principal Balances thereof have been reduced to
                  zero;

         (2)      second, to the Holders of the Class M-1 Certificates, the
                  Class M-1 Principal Distribution Amount until the Certificate
                  Principal Balance thereof has been reduced to zero;

         (3)      third, to the Holders of the Class M-2 Certificates, the Class
                  M-2 Principal Distribution Amount until the Certificate
                  Principal Balance thereof has been reduced to zero; and

         (4)      fourth, to the Holders of the Class M-3 Certificates, the
                  Class M-3 Principal Distribution Amount until the Certificate
                  Principal Balance thereof has been reduced to zero;

         (5)      fifth, to the Holders of the Class M-4 Certificates, the Class
                  M-4 Principal Distribution Amount until the Certificate
                  Principal Balance thereof has been reduced to zero; and

         (6)      sixth, to the Holders of the Class M-5 Certificates, the Class
                  M-5 Principal Distribution Amount until the Certificate
                  Principal Balance thereof has been reduced to zero.

     (c) On each Distribution Date the Net Monthly Excess Cashflow shall be
distributed in the following order of priority, in each case to the extent of
the Net Monthly Excess Cashflow remaining for such Distribution Date:

         (i) to the Holders of the Offered Certificates then entitled to receive
distributions in respect of principal, in an amount equal to any Extra Principal
Distribution Amount, payable to such Holders as part of the Principal
Distribution Amount as described under Section 4.01(b) above;

         (ii) to the Holders of the Class AV-3 Certificates, in an amount equal
to any Allocated Realized Loss Amount for such Class;

         (iii) sequentially to the Holders of the Class M-1, Class M-2, Class
M-3, Class M-4 and Class M-5 Certificates, in that order, in an amount equal to
any Interest Carry Forward Amount for such Class or Classes;

         (iv) sequentially to the Holders of the Class M-1, Class M-2, Class
M-3, Class M-4 and Class M-5 Certificates, in that order, in an amount equal to
any Allocated Realized Loss Amount for such Class or Classes;



                                       74

<PAGE>



         (v) to the Basis Risk Shortfall Reserve Fund, to pay the Offered
Certificates as follows: first, to the Class A Certificates in the order and
priority set forth under Section 4.01 (d) and second, sequentially to the Class
M-1, Class M-2, Class M-3, Class M-4 and Class M-5 Certificates, in that order,
any related Basis Risk Shortfall Carry-Forward Amount for such Class or Classes
on such Distribution Date, to the extent not covered by the Corridor Contracts;

         (vi) to the Holders of the Class C Certificates, the Accrued
Certificate Interest for such Class and any Principal Remittance Amount not used
to make payments pursuant to clauses (b) and (c)(i) through (v) above;

         (vii) if such Distribution Date follows the Prepayment Period during
which a Prepayment Charge may be required to be paid in respect of any Mortgage
Loans, to the Holders of the Class P Certificates, in reduction of the
Certificate Principal Balance thereof, until the Certificate Principal Balance
thereof is reduced to zero;

         (viii) to the Master Servicer, the Securities Administrator and the
Trustee any amounts payable pursuant to Sections 6.03 or 8.05; and

         (ix) any remaining amounts to the Holders of the Class R Certificates
(in respect of the appropriate Residual Interest).

Without limiting the provisions of Section 9.01, the Class R Certificateholders,
by accepting the Class R Certificates, agree to pledge their rights to receive
any amounts otherwise distributable on the Class R Certificates, and such rights
are hereby assigned and pledged to the holders of the Class C Certificates.

     (d) On each Distribution Date, any Principal Distribution Amount payable to
the Class A Certificates shall be distributed concurrently, to the Class AV-1,
Class AV-2 and Class AV-3 Certificates on a pro rata basis based on the
aggregate Certificate Principal Balances thereof immediately prior to such
Distribution Date, until reduced to zero; provided, that any distributions of
principal allocated to the Class AV-2 Certificates will be distributed to the
Class AV-2A, Class AV-2B and Class AV-2C Certificates, in that order, in each
case until the Certificate Principal Balance thereof has been reduced to zero.

     (e) In addition to the foregoing distributions, with respect to any
Subsequent Recoveries, the Master Servicer shall deposit such funds into the
Custodial Account pursuant to Section 3.17. If, after taking into account such
Subsequent Recoveries, the amount of a Realized Loss is reduced, the amount of
such Subsequent Recoveries will be applied to increase the Certificate Principal
Balance of the Class of Certificates with the highest payment priority to which
Realized Losses have been allocated, but not by more than the amount of Realized
Losses previously allocated to that Class of Certificates. The amount of any
remaining Subsequent Recoveries will be applied to increase the Certificate
Principal Balance of the Class of Certificates with the next highest payment
priority, up to the amount of such Realized Losses previously allocated to that
Class of Certificates, and so on. Holders of such Certificates will not be
entitled to any payment in respect of Accrued Certificate Interest on the amount
of such increases for any Accrual Period preceding the Distribution Date on


                                       75

<PAGE>



which such increase occurs. Any such increases shall be applied to the
Certificate Principal Balance of each Certificate of such Class in accordance
with its respective Percentage Interest.

     (f) On each Distribution Date, all amounts representing Prepayment Charges
         in respect of the Mortgage Loans received during the related Prepayment
         Period will be withdrawn from the Certificate Account and distributed
         by the Securities Administrator to the Holders of the Class P
         Certificates and shall not be available for distribution to the Holders
         of any other Class of Certificates. The payment of the foregoing
         amounts to the Holders of the Class P Certificates shall not reduce the
         Certificate Principal Balances thereof.

     (g) With respect to the Corridor Contracts, on each Distribution Date, any
         payments received from the Corridor Contract Counterparty with respect
         to such Distribution Date will be allocated to the Offered Certificates
         and the Seller in the following order of priority, in each case to the
         extent of amounts remaining:

     (1) the Class A Corridor Contract Allocation Amount shall be paid to the
         Class A Certificates, on a pro rata basis, in reduction of any related
         Basis Risk Shortfall Carry-Forward Amount for such Distribution Date
         and the Class M Corridor Contract Allocation Amount shall be paid to
         the Class M Certificates, on a pro rata basis, in reduction of any
         related Basis Risk Shortfall Carry-Forward Amount for such Distribution
         Date;

     (2) from any amounts remaining from both Corridor Contracts, concurrently
         to the Class A Certificates, on a pro rata basis, in reduction of any
         remaining related Basis Risk Shortfall Carry-Forward Amount for such
         Distribution Date;

     (3) from any amounts remaining from both Corridor Contracts, to the Class
         M-1, Class M-2, Class M-3, Class M-4 and Class M-5 Certificates, in
         that order, any remaining related Basis Risk Shortfall Carry-Forward
         Amount for such class or classes for such Distribution Date; and

     (4) any remaining amounts from both Corridor Contracts to the Class C
         Certificates.

     (h) Each distribution with respect to a Book-Entry Certificate shall be
         paid to the Company, as Holder thereof, and the Company shall be
         responsible for crediting the amount of such distribution to the
         accounts of its Company Participants in accordance with its normal
         procedures. Each Company Participant shall be responsible for
         disbursing such distribution to the Certificate Owners that it
         represents and to each indirect participating brokerage firm (a
         "brokerage firm" or "indirect participating firm") for which it acts as
         agent. Each brokerage firm shall be responsible for disbursing funds to
         the Certificate Owners that it represents. None of the Trustee, the
         Securities Administrator the Company or the Master Servicer shall have
         any responsibility therefor except as otherwise provided by this
         Agreement or applicable law.

     (i) Except as otherwise provided in Section 9.01, if the Securities
         Administrator anticipates that a final distribution with respect to any
         Class of Certificates will be made on the next Distribution Date, the
         Securities Administrator shall, no later than two Business Days after
         the Determination


                                       76

<PAGE>



Date in the month of such final distribution, mail on such date to each Holder
of such Class of Certificates a notice to the effect that: (i) the Securities
Administrator anticipates that the final distribution with respect to such Class
of Certificates will be made on such Distribution Date but only upon
presentation and surrender of such Certificates at the office of the Securities
Administrator or as otherwise specified therein, and (ii) no interest shall
accrue on such Certificates from and after the end of the prior calendar month.

     Any funds not distributed to any Holder or Holders of Certificates of such
Class on such Distribution Date because of the failure of such Holder or Holders
to tender their Certificates shall, on such date, be set aside and held in trust
and credited to the account of the appropriate non- tendering Holder or Holders.
If any Certificates as to which notice has been given pursuant to this Section
4.01(i) shall not have been surrendered for cancellation within six months after
the time specified in such notice, the Securities Administrator shall mail a
second notice to the remaining non-tendering Certificateholders to surrender
their Certificates for cancellation in order to receive the final distribution
with respect thereto. If within six months after the second notice all such
Certificates shall not have been surrendered for cancellation, the Securities
Administrator shall take reasonable steps as directed by the Company, or appoint
an agent to take reasonable steps, to contact the remaining non-tendering
Certificateholders concerning surrender of their Certificates. The costs and
expenses of maintaining the funds in trust and of contacting such
Certificateholders shall be paid out of the assets remaining in the Trust Fund.
If within nine months after the second notice any such Certificates shall not
have been surrendered for cancellation, the Class R Certificateholders shall be
entitled to all unclaimed funds and other assets which remain subject hereto. No
interest shall accrue or be payable to any Certificateholder on any amount held
in trust as a result of such Certificateholder's failure to surrender its
Certificate(s) for final payment thereof in accordance with this Section
4.01(i).

     (j) On each Distribution Date, other than the final Distribution Date, the
Securities Administrator shall distribute to each Certificateholder of record as
of the immediately preceding Record Date the Certificateholder's pro rata share
of its Class (based on the aggregate Percentage Interest represented by such
Holder's Certificates) of all amounts required to be distributed on such
Distribution Date to such Class. The Securities Administrator shall calculate
the amount to be distributed to each Class and, based on such amounts, the
Securities Administrator shall determine the amount to be distributed to each
Certificateholder. All of the Securities Administrator's calculations of
payments shall be based solely on information provided to the Securities
Administrator by the Master Servicer. The Securities Administrator shall not be
required to confirm, verify or recompute any such information but shall be
entitled to rely conclusively on such information.

     Section 4.02.             Statements to Certificateholders.

     (a) On each Distribution Date, based, as applicable, on information
provided to it by the Master Servicer, the Securities Administrator shall
prepare and make available on the Securities Administrator's website as set
forth below, to each Holder of the Regular Certificates, the Trustee, the Master
Servicer and the Rating Agencies, a statement as to the distributions made on
such Distribution Date setting forth:


                                       77

<PAGE>



         (i) (A) the amount of the distribution made on such Distribution Date
to the Holders of each Class of Regular Certificates, separately identified,
allocable to principal and (B) the amount of the distribution made on such
Distribution Date to the Holders of the Class P Certificates allocable to
Prepayment Charges;

         (ii) the amount of the distribution made on such Distribution Date to
the Holders of each Class of Regular Certificates (other than the Class P
Certificates) allocable to interest, separately identified;

         (iii) the Pass-Through Rate on each Class of Regular Certificates
(other than the Class P Certificates) for such Distribution Date;

         (iv) the aggregate amount of Advances for such Distribution Date;

         (v) the number and aggregate Stated Principal Balance of the Mortgage
Loans as of the end of the related Due Period;

         (vi) the Overcollateralized Amount, the Overcollateralization
Deficiency Amount and the Overcollateralization Target Amount for such
Distribution Date;

         (vii) the aggregate Certificate Principal Balance or Notional Amount,
as applicable, of each Class of Regular Certificates after giving effect to the
amounts distributed on such Distribution Date (in the case of each Class of the
Class M Certificates, separately identifying any reduction thereof due to the
allocation of Realized Losses thereto);

         (viii) the number and aggregate Stated Principal Balance of Mortgage
Loans (a) delinquent 31 to 60 days, (b) delinquent 61 to 90 days, (c) delinquent
91 days or more, in each case as of the end of the calendar month prior to such
Distribution Date;

         (ix) the number, aggregate principal balance and book value of any REO
Properties as of the close of business on the last day of the calendar month
preceding the month in which such Distribution Date occurs;

         (x) the weighted average remaining term to maturity, weighted average
Mortgage Rate and weighted average Net Mortgage Rate of the Mortgage Loans as of
the close of business on the first day of the calendar month in which such
Distribution Date occurs;

         (xi) the aggregate amount of Principal Prepayments made during the
related Prepayment Period;

         (xii) the aggregate amount of Realized Losses incurred during the
related Prepayment Period and the cumulative amount of Realized Losses;

         (xiii) the aggregate amount of extraordinary Trust Fund expenses
withdrawn from the Custodial Account or the Certificate Account for such
Distribution Date;


                                       78

<PAGE>



         (xiv) the aggregate amount of any Prepayment Interest Shortfalls for
such Distribution Date, to the extent not covered by payments by the Servicer or
Master Servicer pursuant to Section 3.17, and the aggregate amount of Relief Act
Interest Shortfalls for such Distribution Date;

         (xv) the Accrued Certificate Interest in respect of each Class of the
Class A Certificates, Class M Certificates and Class C Certificates for such
Distribution Date and the Unpaid Interest Shortfall Amount, if any, with respect
to each Class of the Class A Certificates and Class M Certificates for such
Distribution Date;

         (xvi) (A) the Overcollateralization Target Amount, (B) the
Overcollateralized Amount and (C) the amount, if any, by which the
Overcollateralization Target Amount exceeds the Overcollateralized Amount, in
each case after giving effect to the distribution made on the Regular
Certificates on such Distribution Date;

         (xvii) the aggregate amount of the Master Servicer Fee received by the
Master Servicer with respect to the related Due Period and such other customary
information as the Securities Administrator deems necessary or desirable, or
which a Certificateholder reasonably requests, to enable Certificateholders to
prepare their tax returns;

         (xviii) the aggregate of any deposits to and withdrawals from the Basis
Risk Shortfall Reserve Fund for such Distribution Date and the remaining amount
on deposit in the Basis Risk Shortfall Reserve Fund after such deposits and
withdrawals; and

         (xix) the Available Distribution Amount for such Distribution Date.

     In the case of information furnished pursuant to subclauses (i) and (ii)
above, the amounts shall also be expressed as a dollar amount per Single
Certificate.

     On each Distribution Date the Securities Administrator shall provide
Bloomberg Financial Markets, L.P. ("Bloomberg") CUSIP level factors for each
Class of Certificates as of such Distribution Date, using a format and media
mutually acceptable to the Trustee and Bloomberg.

     The information set forth above shall be calculated or reported, as the
case may be, by the Securities Administrator, based solely on, and to the extent
of, information provided to the Securities Administrator by the Master Servicer.
The Securities Administrator may conclusively rely on such information and shall
not be required to confirm, verify or recalculate any such information.

     The Securities Administrator may make available each month, to any
interested party, the monthly statement to Certificateholders via the Securities
Administrator's website initially located at "www.ctslink.com." Assistance in
using the website can be obtained by calling the Securities Administrator's
customer service desk at (301) 815-6600. Parties that are unable to use the
above distribution option are entitled to have a paper copy mailed to them via
first class mail by calling the Securities Administrator's customer service desk
and indicating such. The Securities Administrator shall have the right to change
the way such reports are distributed in order to make such distribution more
convenient and/or more accessible to the parties, and the Securities
Administrator shall provide


                                       79

<PAGE>



timely and adequate notification to all parties regarding any such change.

     Within a reasonable period of time after the end of each calendar year, the
Securities Administrator shall prepare and forward, to each Person who at any
time during the calendar year was a Holder of a Certificate, a statement
containing the information set forth in subclauses (i) and (ii) above,
aggregated for such calendar year or applicable portion thereof during which
such person was a Certificateholder. Such obligation of the Securities
Administrator shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Securities
Administrator pursuant to any requirements of the Code and regulations
thereunder as from time to time are in force.

     Within a reasonable period of time after the end of each calendar year, the
Securities Administrator shall prepare and forward, to each Person who at any
time during the calendar year was a Holder of a Class R Certificate a statement
containing the information provided pursuant to the previous paragraph
aggregated for such calendar year or applicable portion thereof during which
such Person was a Certificateholder. Such obligation of the Securities
Administrator shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Securities
Administrator pursuant to any requirements of the Code as from time to time are
in force.

     Section 4.03.         Remittance Reports; Advances by the Master Servicer.

     (a) On the Business Day following each Determination Date but in no event
later than the 20th day of each month (or if such 20th day is not a Business
Day, the preceding Business Day), the Master Servicer shall deliver to the
Securities Administrator a report, prepared as of the close of business on the
Determination Date (the "Remittance Report"), in the form of an electronic
format mutually acceptable to each party. The Remittance Report and any written
information supplemental thereto shall include such information with respect to
the Mortgage Loans that is required by the Securities Administrator for purposes
of making the calculations and preparing the statement described in Sections
4.01 and 4.02, as set forth in written specifications or guidelines issued by
the Securities Administrator from time to time. The Trustee shall have no
obligation to recompute, recalculate or verify any information provided to it by
the Master Servicer.

     (b) If the scheduled payment on a Mortgage Loan that was due on a related
Due Date is delinquent, other than as a result of application of the Relief Act,
and for which the related Servicer was required to make an advance pursuant to
the related Servicing Agreement exceeds the amount deposited in the Custodial
Account which will be used for an advance with respect to such Mortgage Loan,
the Master Servicer will deposit in the Custodial Account not later than the
Certificate Account Deposit Date immediately preceding the related Distribution
Date an amount equal to such deficiency, net of the Servicing Fee for such
Mortgage Loan except to the extent the Master Servicer determines any such
advance to be a Nonrecoverable Advance. Subject to the foregoing, the Master
Servicer shall continue to make such advances through the date that the related
Servicer is required to do so under its Servicing Agreement. If the Master
Servicer deems an advance to be a Nonrecoverable Advance, on the Certificate
Account Deposit Date, the Master Servicer shall present an Officer's Certificate
to the Trustee (i) stating that the Master Servicer elects not to make a


                                       80

<PAGE>



Monthly Advance in a stated amount and (ii) detailing the reason it deems the
advance to be a Nonrecoverable Advance.

     (c) The Master Servicer shall deposit in the Custodial Account not later
than each Certificate Account Deposit Date an amount equal to the lesser of (i)
the sum of the aggregate amounts required to be paid by the Servicers under the
Servicing Agreements with respect to subclauses (a) and (b) of the definition of
Interest Shortfall with respect to the Mortgage Loans for the related
Distribution Date, and not so paid by the related Servicer and (ii) the Master
Servicer Fees for such Distribution Date (such amount, the "Compensating
Interest Payment"). The Master Servicer shall not be entitled to any
reimbursement of any Compensating Interest Payment.

     Section 4.04.             Distributions on the REMIC Regular Interests.

     (a) On each Distribution Date, the Securities Administrator shall cause the
Available Distribution Amount, in the following order of priority, to be
distributed by REMIC 1 to REMIC 2 on account of the REMIC 1 Regular Interests or
withdrawn from the Certificate Account and distributed to the Holders of the
Class R Certificates (in respect of the Class R-1 Interest), as the case may be:

     (i) to Holders of REMIC 1 Regular Interest LT-AA, REMIC 1 Regular Interest
LT-AV1, REMIC 1 Regular Interest LT-AV2A, REMIC 1 Regular Interest LT-AV2B,
REMIC 1 Regular Interest LT-AV2C, REMIC 1 Regular Interest LT-AV3, REMIC 1
Regular Interest LT-M1, REMIC 1 Regular Interest LT-M2, REMIC 1 Regular Interest
LT-M3, REMIC 1 Regular Interest LT-M4, REMIC 1 Regular Interest LT-M5 and REMIC
1 Regular Interest LT-ZZ and REMIC 1 Regular Interest LT-P, PRO RATA, in an
amount equal to

         (A)      the  related   Uncertificated   Accrued  Interest  for  such
                  Distribution Date, plus

         (B)      any amounts in respect thereof remaining unpaid from the
                  previous Distribution Dates.

Amounts payable as Uncertificated Accrued Interest in respect of REMIC 1 Regular
Interest LT-ZZ shall be reduced when the REMIC 1 Overcollateralized Amount is
less than the REMIC 1 Overcollateralization Target Amount, by the lesser of (x)
the amount of such difference and (y) the Maximum Uncertificated Accrued
Interest Deferral Amount, and such amount will be payable to the Holders of
REMIC 1 Regular Interest LT-AV1, REMIC 1 Regular Interest LT-AV2A, REMIC 1
Regular Interest LT-AV2B, REMIC 1 Regular Interest LT-AV2C, REMIC 1 Regular
Interest LT- AV3, REMIC 1 Regular Interest LT-M1, REMIC 1 Regular Interest
LT-M2, REMIC 1 Regular Interest LT-M3, REMIC 1 Regular Interest LT-M4 and REMIC
1 Regular Interest LT-M5 in the same proportion as the Overcollateralization
Deficiency Amount is allocated to the Corresponding Certificates, and the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT-ZZ shall be
increased by such amount;

     (ii)to the Holders of REMIC 1 Regular Interest LT-P, (A) on each
Distribution Date, 100% of the amount paid in respect of Prepayment Charges and
(B) on the Distribution Date immediately


                                       81

<PAGE>



following the expiration of the latest Prepayment Charge as identified on the
Prepayment Charge Schedule or any Distribution Date thereafter until $100 has
been distributed pursuant to this clause;

     (iii) to the Holders of the REMIC 1 Regular Interests, in an amount equal
to the remainder of the Available Funds for such Distribution Date after the
distributions made pursuant to clauses (i) and (ii) above, allocated as follows:

         (A)      to the Holders of REMIC 1 Regular Interest LT-AA, 98% of such
                  remainder, until the Uncertificated Principal Balance of such
                  Uncertificated REMIC 1 Regular Interest is reduced to zero;

         (B)      to the REMIC 1 Regular Interest LT-AV1, REMIC 1 Regular
                  Interest LT-AV2A,  REMIC 1 Regular Interest LT-AV2B, REMIC 1
                  Regular Interest  LT-AV2C,  REMIC 1 Regular Interest LT-AV3,
                  REMIC 1 Regular  Interest  LT-M1,  REMIC 1 Regular  Interest
                  LT-M2,  REMIC 1  Regular  Interest  LT-M3,  REMIC 1  Regular
                  Interest LT- M4 and REMIC 1 Regular  Interest  LT-M5,  1% of
                  such remainder, in the same proportion as principal payments
                  are allocated to the Corresponding  Certificates,  until the
                  Uncertificated  Principal  Balances  of such REMIC 2 Regular
                  Interests are reduced to zero;

         (C)      to the Holders of REMIC 1 Regular Interest LT-ZZ, 1% of such
                  remainder, until the Uncertificated Principal Balance of such
                  REMIC 1 Regular Interest is reduced to zero; and

         (D)      any remaining amount to the Holders of the Class R
                  Certificates (in respect of the Class R-1 Interest);

provided, however, that 98% and 2% of any principal payments shall be allocated
to Holders of REMIC 1 Regular Interest LT-AA and REMIC 1 Regular Interest LT-ZZ,
respectively, once the Uncertificated Principal Balances of REMIC 1 Regular
Interest LT-AV1, REMIC 1 Regular Interest LT-AV2A, REMIC 1 Regular Interest
LT-AV2B, REMIC 1 Regular Interest LT-AV2C, REMIC 1 Regular Interest LT-AV3,
REMIC 1 Regular Interest LT-M1, REMIC 1 Regular Interest LT-M2, REMIC 1 Regular
Interest LT-M3, REMIC 1 Regular Interest LT-M4 and REMIC 1 Regular Interest
LT-M5 have been reduced to zero.

     Section 4.05.             Allocation of Realized Losses.

     (a) All Realized Losses on the Mortgage Loans shall be allocated by the
Securities Administrator on each Distribution Date as follows: first, to Net
Monthly Excess Cashflow, through a distribution of the Extra Principal
Distribution Amount for that Distribution Date; second, to the
Overcollateralized Amount by a reduction of the Certificate Principal Balance of
the Class C Certificates, until the Certificate Principal Balance thereof has
been reduced to zero; third, to the Class M-5 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; fourth, to the
Class M-4 Certificates, until the Certificate Principal Balance thereof has been
reduced to zero; fifth, to the Class M-3 Certificates, until the Certificate
Principal Balance thereof has been


                                       82

<PAGE>



reduced to zero; sixth, to the Class M-2 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero; seventh, to the Class M-1
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero; and eighth, to the Class AV-3 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero. All Realized Losses to be
allocated to the Certificate Principal Balances of all Classes on any
Distribution Date shall be so allocated after the actual distributions to be
made on such date as provided above. All references above to the Certificate
Principal Balance of any Class of Certificates shall be to the Certificate
Principal Balance of such Class immediately prior to the relevant Distribution
Date, before reduction thereof by any Realized Losses, in each case to be
allocated to such Class of Certificates, on such Distribution Date.

     Any allocation of Realized Losses to a Class AV-3 Certificate and Class M
Certificate on any Distribution Date shall be made by reducing the Certificate
Principal Balance thereof by the amount so allocated. Any allocation of Realized
Losses to a Class C Certificate shall be made by (i) FIRST, reducing the amount
otherwise payable in respect thereof pursuant to Section 4.01(c)(viii), and (ii)
SECOND, by reducing the Certificate Principal Balance thereof by the amount so
allocated. No allocations of any Realized Losses shall be made to the
Certificate Principal Balances of the Class A-V1, Class AV-2A, Class AV-2B,
Class AV-2C or the Class P Certificates.

     All Realized Losses on the Mortgage Loans shall be allocated by the
Securities Administrator on each Distribution Date as follows: first to
Uncertificated Accrued Interest payable to the REMIC 1 Regular Interest LT-AA
and REMIC 1 Regular Interest LT-ZZ up to an aggregate amount equal to the REMIC
1 Interest Loss Allocation Amount, 98% and 2% respectively; second, to the
Uncertificated Principal Balances of REMIC 1 Regular Interest LT-AA and REMIC 1
Regular Interest LT-ZZ up to an aggregate amount equal to the REMIC 1 Principal
Loss Allocation Amount, 98% and 2%, respectively; third, to the Uncertificated
Principal Balances of REMIC 1 Regular Interest LT-AA, REMIC 1 Regular Interest
LT-M5 and REMIC 1 Regular Interest LT-ZZ, 98%, 1% and 1%, respectively, until
the Uncertificated Principal Balance of REMIC 1 Regular Interest LT-M5 has been
reduced to zero; fourth, to the Uncertificated Principal Balances of REMIC 1
Regular Interest LT-AA, REMIC 1 Regular Interest LT-M4 and REMIC 1 Regular
Interest LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC 1 Regular Interest LT-M4 has been reduced to zero; fifth, to
the Uncertificated Principal Balances of REMIC 1 Regular Interest LT-AA, REMIC 1
Regular Interest LT-M3 and REMIC 1 Regular Interest LT-ZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC 1 Regular
Interest LT-M3 has been reduced to zero; sixth, to the Uncertificated Principal
Balances of REMIC 1 Regular Interest LT-AA, REMIC 1 Regular Interest LT-M2 and
REMIC 1 Regular Interest LT-ZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT-M2 has been
reduced to zero; seventh, to the Uncertificated Principal Balances of REMIC 1
Regular Interest LT-AA, REMIC 1 Regular Interest LT-M1 and REMIC 1 Regular
Interest LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC 1 Regular Interest LT-M1 has been reduced to zero; and eighth,
to the Uncertificated Principal Balances of REMIC 1 Regular Interest LT-AA,
REMIC 1 Regular Interest LT-AV3 and REMIC 1 Regular Interest LT-ZZ, 98%, 1% and
1%, respectively, until the Uncertificated Principal Balance of REMIC 1 Regular
Interest LT-AV3 has been reduced to zero.

     Section 4.06.             Information Reports to Be Filed by the Servicer.


                                       83

<PAGE>



     The Servicer shall file information reports with respect, to the extent set
forth in the Servicing Agreements, to the receipt of mortgage interest received
in a trade or business, foreclosures and abandonments of any Mortgaged Property
and the information returns relating to cancellation of indebtedness income with
respect to any Mortgaged Property required by Sections 6050H, 6050J and 6050P of
the Code, respectively, and deliver to the Securities Administrator an Officers'
Certificate stating that such reports have been filed. Such reports shall be in
form and substance sufficient to meet the reporting requirements imposed by such
Sections 6050H, 6050J and 6050P of the Code.

     Section 4.07.             Compliance with Withholding Requirements.

     Notwithstanding any other provision of this Agreement the Securities
Administrator shall comply with all federal withholding requirements respecting
payments to Certificateholders of interest or original issue discount on the
Mortgage Loans, that the Securities Administrator reasonably believes are
applicable under the Code. The consent of Certificateholders shall not be
required for such withholding. In the event the Securities Administrator
withholds any amount from interest or original issue discount payments or
advances thereof to any Certificateholder pursuant to federal withholding
requirements, the Securities Administrator shall, together with its monthly
report to such Certificateholders pursuant to Section 4.02 hereof, indicate such
amount withheld.

     Section 4.08.             Basis Risk Shortfall Reserve Fund.

         (a) On the Closing Date, the Securities Administrator shall establish
and maintain in its name, in trust for the benefit of Offered Certificates, the
Basis Risk Shortfall Reserve Fund.

     (b) On each Distribution Date, the Securities Administrator shall transfer
from the Certificate Account to the Basis Risk Shortfall Reserve Fund the
amounts specified pursuant to Sections 4.01(c)(v) and (g). On each Distribution
Date, to the extent required, the Securities Administrator shall make
withdrawals from the Basis Risk Shortfall Reserve Fund and use the amounts in
the Basis Risk Shortfall Reserve Fund to make distributions to the Offered
Certificates in an amount equal to the amount of any Basis Risk Shortfall
Carry-Forward Amount on such Certificates. Any such amounts from the Corridor
Contracts shall be distributed in the same order of priority set forth in
Section 4.01(g) above. Any such amounts from the Net Monthly Excess Cashflow
shall be distributed first, to the Class A Certificates, in the same order of
priority set forth in Section 4.01(d) above and second, sequentially to the
Class M-1, Class M-2, Class M-3, Class M-4 and Class M-5 Certificates, in that
order, in each case until the related Basis Risk Shortfall Carry-Forward Amount
has been reduced to zero. Any such amounts distributed to the Class AV-2
Certificates will be distributed to the Class AV-2A, Class AV-2B and Class AV-2C
Certificates, in that order, in each case until the related Basis Risk Shortfall
Carry-Forward Amount has been reduced to zero. Any such amounts transferred
shall be treated for federal tax purposes as amounts distributed by REMIC 2 to
the Holder of the Class C Interest and from REMIC 3 to the Holders of the Class
C Certificates. On the 30th Distribution Date, after the distributions described
in the preceding sentence, the Securities Administrator shall withdraw from the
Basis Risk Shortfall Reserve Fund (to the extent of funds available on deposit
therein) any remaining amounts and distribute them to the Holders of the Class C
Certificates, not in respect of any REMIC.



                                       84

<PAGE>



     (c) The Basis Risk Shortfall Reserve Fund shall be an Eligible Account.
Amounts held in the Basis Risk Shortfall Reserve Fund from time to time shall
continue to constitute assets of the Trust Fund, but not of the REMICs, until
released from the Basis Risk Shortfall Reserve Fund pursuant to this Section
4.08. The Basis Risk Shortfall Reserve Fund constitutes an "outside reserve
fund" within the meaning of Treasury Regulation ss. 1.860G-2(h) and is not an
asset of any REMIC. The Holders of the Class C Certificates shall be the owner
of the Basis Risk Shortfall Reserve Fund. The Securities Administrator shall
keep records that accurately reflect the funds on deposit in the Basis Risk
Shortfall Reserve Fund. The Securities Administrator shall, at the written
direction of the holder of the Majority Class C Certificateholder, invest
amounts on deposit in the Basis Risk Shortfall Reserve Fund in Permitted
Investments. In the absence of written direction to the Securities Administrator
from the Majority Class C Certificateholder, all funds in the Basis Risk
Shortfall Reserve Fund shall remain uninvested. On each Distribution Date, the
Securities Administrator shall distribute, not in respect of any REMIC, any
interest earned on the Basis Risk Shortfall Reserve Fund to the Holders of the
Class C Certificates.

     (d) For federal tax return and information reporting, the value of the
right of the Holders of the Offered Certificates to receive payments from the
reserve fund in respect of any Basis Risk Shortfall Carry-Forward Amount will be
$2,835,000.00 and $620,000.00 with respect to the Class A Certificates and Class
M Certificates, respectively. Such information will be provided to the Trustee
by the Underwriter on or prior to the Closing Date.



                                       85

<PAGE>




                                    ARTICLE V
                                THE CERTIFICATES

     Section 5.01.             The Certificates.

     (a) The Certificates will be substantially in the respective forms annexed
hereto as Exhibits A and B-1 through B-4. The Certificates will be issuable in
registered form only. The Certificates (other than the Class P Certificates, the
Class C Certificates and the Class R Certificates) will be issued in minimum
denominations of $25,000 Initial Certificate Principal Balance and integral
multiples of $1 in excess thereof. The Class C Certificates will be issued in
minimum denominations of $1.00 Initial Notional Amount and integral multiples of
$1.00 in excess thereof. The Class P Certificates and the Class R Certificates
will each be issuable in minimum denominations of any Percentage Interest
representing 20.00% and multiples of 0.01% in excess thereof.

     Upon original issue, the Certificates shall, upon the written request of
the Company executed by an officer of the Company, be executed and delivered by
the Securities Administrator, authenticated by the Securities Administrator and
delivered to or upon the order of the Company upon receipt by the Securities
Administrator of the documents specified in Section 2.01. The Certificates shall
be executed by manual or facsimile signature on behalf of the Securities
Administrator by a Responsible Officer. Certificates bearing the manual or
facsimile signatures of individuals who were at the time they signed the proper
officers of the Securities Administrator shall bind the Securities
Administrator, notwithstanding that such individuals or any of them have ceased
to hold such offices prior to the authentication and delivery of such
Certificates or did not hold such offices at the date of such Certificates. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless there appears on such Certificate a certificate of
authentication substantially in the form provided for herein executed by the
Securities Administrator by manual signature, and such certificate upon any
Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder. All
Certificates issued on the Closing Date shall be dated the Closing Date and any
Certificates delivered thereafter shall be dated the date of their
authentication.

     (b) The Class A Certificates and the Class M Certificates shall initially
be issued as one or more Certificates registered in the name of the Company or
its nominee and, except as provided below, registration of such Certificates may
not be transferred by the Securities Administrator except to another Company
that agrees to hold such Certificates for the respective Certificate Owners with
Ownership Interests therein. The Certificate Owners shall hold their respective
Ownership Interests in and to each of such Book-Entry Certificates through the
book-entry facilities of the Company and, except as provided below, shall not be
entitled to Definitive Certificates in respect of such Ownership Interests. All
transfers by Certificate Owners of their respective Ownership Interests in the
Book-Entry Certificates shall be made in accordance with the procedures
established by the Company Participant or brokerage firm representing such
Certificate Owner. Each Company Participant shall transfer the Ownership
Interests only in the Book-Entry Certificates of Certificate Owners it
represents or of brokerage firms for which it acts as agent in accordance with
the


                                       86

<PAGE>



Company's normal procedures. The Securities Administrator shall not be required
to monitor, determine or inquire as to compliance with the transfer restrictions
with respect to the Book-Entry Certificates, and the Securities Administrator
shall have no liability for transfers of Ownership Interests in the Book Entry
Certificates made through the book-entry facilities of the Depositary or between
or among Depositary Participants or Certificate Owners, made in violation of the
applicable restrictions.

     The Trustee, the Securities Administrator, the Master Servicer and the
Company may for all purposes (including the making of payments due on the
respective Classes of Book-Entry Certificates) deal with the Company as the
authorized representative of the Certificate Owners with respect to the
respective Classes of Book-Entry Certificates for the purposes of exercising the
rights of Certificateholders hereunder. The rights of Certificate Owners with
respect to the respective Classes of Book-Entry Certificates shall be limited to
those established by law and agreements between such Certificate Owners and the
Company Participants and brokerage firms representing such Certificate Owners.
Multiple requests and directions from, and votes of, the Company as Holder of
any Class of Book-Entry Certificates with respect to any particular matter shall
not be deemed inconsistent if they are made with respect to different
Certificate Owners. The Securities Administrator may establish a reasonable
record date in connection with solicitations of consents from or voting by
Certificateholders and shall give notice to the Company of such record date.

     If (i)(A) the Company advises the Securities Administrator in writing that
the Company is no longer willing or able to properly discharge its
responsibilities as Company and (B) the Company is unable to locate a qualified
successor or (ii) the Company at its option advises the Securities Administrator
in writing that it elects to terminate the book-entry system through the
Company, the Securities Administrator shall notify all Certificate Owners,
through the Company, of the occurrence of any such event and of the availability
of Definitive Certificates to Certificate Owners requesting the same. Upon
surrender to the Securities Administrator of the Book-Entry Certificates by the
Company, accompanied by registration instructions from the Company for
registration of transfer, the Securities Administrator shall, at the expense of
the Company, issue the Definitive Certificates. Neither the Company, the Master
Servicer nor the Securities Administrator shall be liable for any actions taken
by the Company or its nominee, including, without limitation, any delay in
delivery of such instructions and may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of Definitive
Certificates the Trustee, the Securities Administrator and the Master Servicer
shall recognize the Holders of the Definitive Certificates as Certificateholders
hereunder.

     (c) Each Certificate is intended to be a "security" governed by Article 8
of the Uniform Commercial Code as in effect in the State of New York and any
other applicable jurisdiction, to the extent that any of such laws may be
applicable.

     Section 5.02.             Registration of Transfer and Exchange of
                               Certificates.

     (a) The Securities Administrator shall maintain a Certificate Register in
which, subject to such reasonable regulations as it may prescribe, the
Securities Administrator shall provide for the registration of Certificates and
of transfers and exchanges of Certificates as herein provided.


                                       87

<PAGE>

     (b) Except as provided in Section 5.02(c), no transfer, sale, pledge or
other disposition of a Class P, Class C or Class R Certificate shall be made
unless such transfer, sale, pledge or other disposition is exempt from the
registration requirements of the Securities Act of 1933, as amended (the "Act"),
and any applicable state securities laws or is made in accordance with said Act
and laws. In the event that a transfer of a Class P, Class C or Class R
Certificate is to be made under this Section 5.02(b), (i) the Securities
Administrator shall require an Opinion of Counsel acceptable to and in form and
substance satisfactory to the Securities Administrator that such transfer shall
be made pursuant to an exemption, describing the applicable exemption and the
basis therefor, from said Act and laws or is being made pursuant to said Act and
laws, which Opinion of Counsel shall not be an expense of the Securities
Administrator, the Trustee, the Company or the Master Servicer, provided that
such Opinion of Counsel will not be required in connection with the initial
transfer of any such Certificate by the Company or any affiliate thereof, to a
non-affiliate of the Company and (ii) the Securities Administrator shall require
the transferee to execute a representation letter, substantially in the form of
Exhibit G-1 hereto, and the Securities Administrator shall require the
transferor to execute a representation letter, substantially in the form of
Exhibit G-2 hereto, each acceptable to and in form and substance satisfactory to
the Securities Administrator certifying to the Company and the Securities
Administrator the facts surrounding such transfer, which representation letters
shall not be an expense of the Securities Administrator, the Trustee, the
Company or the Master Servicer; provided, however, that such representation
letters will not be required in connection with any transfer of any such
Certificate by the Company to an affiliate of the Company and the Securities
Administrator shall be entitled to conclusively rely upon a representation
(which, upon the request of the Securities Administrator, shall be a written
representation) from the Company of the status of such transferee as an
affiliate of the Company. Any such Certificateholder desiring to effect such
transfer shall, and does hereby agree to, indemnify the Securities
Administrator, the Trustee, the Company and the Master Servicer against any
liability that may result if the transfer is not so exempt or is not made in
accordance with such applicable federal and state laws.

     (c) Notwithstanding the requirements of Section 5.02(b), transfers of Class
P, Class C and Class R Certificates may be made in accordance with this Section
5.02(c) if the prospective transferee of a Certificate provides the Securities
Administrator and the Company with an investment letter substantially in the
form of Exhibit G-3 attached hereto, which investment letter shall not be an
expense of the Securities Administrator, the Trustee, the Company or the Master
Servicer, and which investment letter states that, among other things, such
transferee is a "qualified institutional buyer" as defined under Rule 144A. Such
transfers shall be deemed to have complied with the requirements of Section
5.02(b) hereof; provided, however, that no Transfer of any of the Class P
Certificates, Class C Certificates or Class R Certificates may be made pursuant
to this Section 5.02(c) by the Company. Any such Certificateholder desiring to
effect such transfer shall, and does hereby agree to, indemnify the Securities
Administrator, the Trustee, the Company and the Master Servicer against any
liability that may result if the transfer is not so exempt or is not made in
accordance with such applicable federal and state laws.

     The Securities Administrator shall require an Opinion of Counsel, on which
the Securities Administrator, Trustee, Company or Master Servicer may rely, from
a prospective transferee prior to the transfer of any Class P, Class C, Class R
or Class R-X Certificate to any employee benefit plan or other retirement
arrangement, including an individual retirement account or Keogh plan, that is


                                       88

<PAGE>



subject to the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or Section 4975 of the Code (any of the foregoing, a "Plan"), to a
trustee or other Person acting on behalf of any Plan, or to any other person who
is using "plan assets" of any Plan to effect such acquisition (including any
insurance company using funds in its general or separate accounts that may
constitute "plan assets"). Such Opinion of Counsel must establish to the
satisfaction of the Securities Administrator that such transfer is permissible
under applicable law, will not constitute or result in a prohibited transaction
under Section 406 of ERISA or Section 4975 of the Code, and will not subject the
Securities Administrator, the Trustee, the Master Servicer or the Company to any
obligation in addition to those undertaken in this Agreement. None of the
Company, the Master Servicer, Securities Administrator or the Trustee will be
required to obtain such Opinion of Counsel on behalf of any prospective
transferee.

     Each beneficial owner of a Class M Certificate or any interest therein
shall be deemed to have represented, by virtue of its acquisition or holding of
that certificate or interest therein, that either (i) it is not a Plan or a
trustee or other Person acting on behalf of a Plan or using "plan assets" of a
Plan to effect such acquisition (including any insurance company using funds in
its general or separate accounts that may constitute "plan assets"), (ii) it has
acquired and is holding such certificate in reliance on Prohibited Transaction
Exemption 2002-41 as amended from time to time (the "Exemption"), and that it
understands that there are certain conditions to the availability of the
Exemption, including that the certificate must be rated, at the time of
purchase, not lower than "BBB-"(or its equivalent) by S&P, Fitch Ratings or
Moody's, and the certificate is so rated or (iii) (1) it is an insurance
company, (2) the source of funds used to acquire or hold the certificate or
interest therein is an "insurance company general account," as such term is
defined in Prohibited Transaction Class Exemption ("PTCE") 95-60, and (3) the
conditions in Sections I and III of PTCE 95-60 have been satisfied.

     (d) [Reserved]

     (e) (i) Each Person who has or who acquires any Ownership Interest in a
Class R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and to
have irrevocably authorized the Trustee or its designee under clause (iii)(A)
below to deliver payments to a Person other than such Person and to negotiate
the terms of any mandatory sale under clause (iii)(B) below and to execute all
instruments of transfer and to do all other things necessary in connection with
any such sale. The rights of each Person acquiring any Ownership Interest in a
Class R Certificate are expressly subject to the following provisions:

         (A) Each Person holding or acquiring any Ownership Interest in a Class
R Certificate shall be a Permitted Transferee and shall promptly notify the
Securities Administrator of any change or impending change in its status as a
Permitted Transferee.

         (B) In connection with any proposed Transfer of any Ownership Interest
in a Class R Certificate, the Securities Administrator shall require delivery to
it, and shall not register the Transfer of any Class R Certificate until its
receipt of (I) an affidavit and agreement (a "Transfer Affidavit and Agreement"
in the form attached hereto as Exhibit G-5) from the proposed Transferee, in
form and


                                       89

<PAGE>




substance satisfactory to the Securities Administrator representing and
warranting, among other things, that it is a Permitted Transferee, that it is
not acquiring its Ownership Interest in the Class R Certificate that is the
subject of the proposed Transfer as a nominee, trustee or agent for any Person
who is not a Permitted Transferee, that for so long as it retains its Ownership
Interest in a Class R Certificate, it will endeavor to remain a Permitted
Transferee, and that it has reviewed the provisions of this Section 5.02 and
agrees to be bound by them, and (II) a certificate, in the form attached hereto
as Exhibit G-4, from the Holder wishing to transfer the Class R Certificate, in
form and substance satisfactory to the Securities Administrator representing and
warranting, among other things, that no purpose of the proposed Transfer is to
impede the assessment or collection of tax.

         (C) Notwithstanding the delivery of a Transfer Affidavit and Agreement
by a proposed Transferee under clause (B) above, if a Responsible Officer of the
Securities Administrator assigned to this transaction has actual knowledge that
the proposed Transferee is not a Permitted Transferee, no Transfer of an
Ownership Interest in a Class R Certificate to such proposed Transferee shall be
effected.

         (D) Each Person holding or acquiring any Ownership Interest in a Class
R Certificate shall agree (x) to require a Transfer Affidavit and Agreement from
any other Person to whom such Person attempts to transfer its Ownership Interest
in a Class R Certificate and (y) not to transfer its Ownership Interest unless
it provides a certificate to the Securities Administrator in the form attached
hereto as Exhibit G-4.

         (E) Each Person holding or acquiring an Ownership Interest in a Class R
Certificate, by purchasing an Ownership Interest in such Certificate, agrees to
give the Securities Administrator written notice that it is a "pass-through
interest holder" within the meaning of Temporary Treasury Regulations Section
1.67-3T(a)(2)(i)(A) immediately upon acquiring an Ownership Interest in a Class
R Certificate, if it is "a pass-through interest holder", or is holding an
Ownership Interest in a Class R Certificate on behalf of a "pass-through
interest holder."

     (ii)The Securities Administrator will register the Transfer of any Class R
Certificate only if it shall have received the Transfer Affidavit and Agreement
in the form attached hereto as Exhibit G-5, a certificate of the Holder
requesting such transfer in the form attached hereto as Exhibit G-4 and all of
such other documents as shall have been reasonably required by the Securities
Administrator as a condition to such registration. Transfers of the Class R
Certificates other than to Permitted Transferees are prohibited.

     (iii) (A) If any Person other than a Permitted Transferee shall become a
Holder of a Class R Certificate, then the last preceding Permitted Transferee
shall be restored, to the extent permitted by law, to all rights and obligations
as Holder thereof retroactive to the date of registration of such Transfer of
such Class R Certificate. If a Non-United States Person shall become a Holder of
a Class R Certificate, then the last preceding Permitted Transferee shall be
restored, to the extent permitted by law, to all rights and obligations as
Holder thereof retroactive to the date of registration of such Transfer of such
Class R Certificate. If a transfer of a Class R Certificate is disregarded
pursuant to the provisions of Treasury Regulations Section 1.860E-1 or Section
1.860G-3, then the last preceding Permitted Transferee shall be restored, to the
extent permitted by law, to all rights and

                                       90

<PAGE>


obligations as Holder thereof retroactive to the date of registration of such
transfer of such Class R Certificate. The prior Holder shall be entitled to
recover from any purported Holder of a Class R Certificate that was in fact not
a Permitted Transferee under this Section 5.05(b) at the time it became a Holder
all payments made on such Class R Certificate. Each Holder of a Class R
Certificate, by acceptance thereof, shall be deemed for all purposes to have
consented to the provisions of this clause (b) and to any amendment of this
Agreement deemed necessary (whether as a result of new legislation or otherwise)
by counsel of the Company to ensure that the Class R Certificates are not
transferred to any Person who is not a Permitted Transferee and that any
transfer of such Class R Certificates will not cause the imposition of a tax
upon the Trust or cause any such REMIC to fail to qualify as a REMIC. The
Securities Administrator shall be under no liability to any Person for any
registration of Transfer of a Class R Certificate that is in fact not permitted
by this Section 5.02 or for making any payments due on such Certificate to the
Holder thereof or for taking any other action with respect to such Holder under
the provisions of this Agreement.

         (B) If any purported Transferee shall become a Holder of a Class R
Certificate in violation of the restrictions in this Section 5.02 and to the
extent that the retroactive restoration of the rights of the Holder of such
Class R Certificate as described in clause (iii)(A) above shall be invalid,
illegal or unenforceable, then the Securities Administrator shall have the
right, without notice to the Holder or any prior Holder of such Class R
Certificate, to sell such Class R Certificate to a purchaser selected by the
Securities Administrator on such terms as the Securities Administrator may
choose. Such purported Transferee shall promptly endorse and deliver each Class
R Certificate in accordance with the instructions of the Securities
Administrator. Such purchaser may be the Securities Administrator itself. The
proceeds of such sale, net of the commissions (which may include commissions
payable to the Securities Administrator), expenses and taxes due, if any, will
be remitted by the Securities Administrator to such purported Transferee. The
terms and conditions of any sale under this clause (iii)(B) shall be determined
in the sole discretion of the Securities Administrator, and the Securities
Administrator shall not be liable to any Person having an Ownership Interest in
a Class R Certificate as a result of its exercise of such discretion.

     (iv) The Securities Administrator shall make available to the Internal
Revenue Service and those Persons specified by the REMIC Provisions, all
information necessary to compute any tax imposed (A) as a result of the transfer
of an ownership interest in a Class R Certificate to any Person who is a
Disqualified Organization, including the information regarding "excess
inclusions" of such Class R Certificates required to be provided to the Internal
Revenue Service and certain Persons as described in Treasury Regulations
Sections 1.860D-1(b)(5) and 1.860E-2(a)(5), and (B) as a result of any regulated
investment company, real estate investment trust, common trust fund,
partnership, trust, estate or organization described in Section 1381 of the Code
that holds an Ownership Interest in a Class R Certificate having as among its
record Holders at any time any Person who is a Disqualified Organization. The
Securities Administrator may charge and shall be entitled to reasonable
compensation for providing such information as may be required from those
Persons which may have had a tax imposed upon them as specified in clauses (A)
and (B) of this paragraph for providing such information.

     (v) Subject to the preceding paragraphs, upon surrender for registration of
transfer of any Certificate at the office of the Securities Administrator
maintained for such purpose, the Securities

                                       91

<PAGE>


Administrator shall execute and the Securities Administrator shall authenticate
and deliver, in the name of the designated transferee or transferees, one or
more new Certificates of the same Class of a like aggregate Percentage Interest.
Every Certificate surrendered for transfer shall be accompanied by notification
of the account of the designated transferee or transferees for the purpose of
receiving distributions pursuant to Section 4.01 by wire transfer, if any such
transferee desires and is eligible for distribution by wire transfer.

     (vi) At the option of the Certificateholders, Certificates may be exchanged
for other Certificates of authorized denominations of the same Class of a like
aggregate Percentage Interest, upon surrender of the Certificates to be
exchanged at the office of the Securities Administrator. Whenever any
Certificates are so surrendered for exchange the Securities Administrator shall
execute, authenticate and deliver the Certificates which the Certificateholder
making the exchange is entitled to receive. Every Certificate presented or
surrendered for transfer or exchange shall (if so required by the Trustee) be
duly endorsed by, or be accompanied by a written instrument of transfer in the
form satisfactory to the Trustee duly executed by, the Holder thereof or his
attorney duly authorized in writing. In addition, with respect to each Class R
Certificate, the Holder thereof may exchange, in the manner described above,
such Class R Certificate for three separate Certificates, each representing such
Holder's respective Percentage Interest in the Class R-1 Interest, the Class R-2
Interest and the Class R-3 Interest, respectively, in each case that was
evidenced by the Class R Certificate being exchanged.

     (vii) No service charge shall be made to the Certificateholders for any
transfer or exchange of Certificates, but the Securities Administrator may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.

     (viii) All Certificates surrendered for transfer and exchange shall be
canceled and retained by the Securities Administrator in accordance with the
Securities Administrator's standard procedures.

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

     If (i) any mutilated Certificate is surrendered to the Securities
Administrator and the Securities Administrator receives evidence to its
satisfaction of the destruction, loss or theft of any Certificate, and (ii)
there is delivered to the Securities Administrator such security or indemnity as
may be required by it to save it harmless, then, in the absence of notice to the
Securities Administrator that such Certificate has been acquired by a bona fide
purchaser, the Securities Administrator shall execute, authenticate and deliver,
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of the same Class and Percentage Interest. Upon
the issuance of any new Certificate under this Section 5.03, the Securities
Administrator may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Securities Administrator)
connected therewith. Any replacement Certificate issued pursuant to this Section
shall constitute complete and indefeasible evidence of ownership in the Trust
Fund, as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.


                                       92

<PAGE>



     Section 5.04.             Persons Deemed Owners.

     The Company, the Master Servicer, Securities Administrator, the Trustee and
any agent of any of them may treat the person in whose name any Certificate is
registered as the owner of such Certificate for the purpose of receiving
distributions pursuant to Section 4.01 and for all other purposes whatsoever,
and neither the Company, the Master Servicer, the Trustee nor any agent of any
of them shall be affected by notice to the contrary.

     Section 5.05.             Rule 144A Information.

     For so long as any Class P, Class C and Class R Certificates are
outstanding and are "restricted securities" within the meaning of Rule 144(a)(3)
of the Securities Act, (1) the Company will provide or cause to be provided to
any Holder of such Certificates and any prospective purchaser thereof designated
by such a Holder, upon the request of such Holder or prospective purchaser, the
information required to be provided to such Holder or prospective purchaser by
Rule 144A(d)(4) under the Securities Act; and (2) the Company shall update such
information from time to time in order to prevent such information from becoming
false and misleading and will take such other actions as are necessary to ensure
that the safe harbor exemption from the registration requirements of the
Securities Act under Rule 144A is and will be available for resales of such
Certificates conducted in accordance with Rule 144A. The Master Servicer shall
cooperate with the Company and furnish the Company such information in the
Master Servicer's possession as the Company may reasonably request.



                                       93

<PAGE>



                                   ARTICLE VI
                       THE COMPANY AND THE MASTER SERVICER

     Section 6.01.             Liability of the Company and the Master Servicer.

     The Company and the Master Servicer each shall be liable in accordance
herewith only to the extent of the obligations specifically imposed upon and
undertaken by the Company and the Master Servicer herein. Only the Master
Servicer, any successor Master Servicer or the Trustee acting as Master Servicer
shall be liable with respect to the master servicing of the Mortgage Loans and
the REO Property for actions taken by any such Person in contravention of the
Master Servicer's duties hereunder.

     Section 6.02.             Merger, Consolidation or Conversion of the
                               Company or the Master Servicer.

     The Company and the Master Servicer each will keep in full effect its
existence, rights and franchises as a corporation under the laws of the state of
its incorporation, and each will obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the Certificates or any of the Mortgage Loans
and to perform its respective duties under this Agreement.

     Any Person into which the Company or the Master Servicer may be merged,
consolidated or converted, or any corporation resulting from any merger or
consolidation to which the Company or the Master Servicer shall be a party, or
any Person succeeding to the business of the Company or the Master Servicer,
shall be the successor of the Company or the Master Servicer, as the case may
be, hereunder, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor or surviving Person to
the Master Servicer or an affiliate thereof shall be qualified to service
mortgage loans for Fannie Mae or Freddie Mac.

     Section 6.03.             Limitation on Liability of the Company, the
                               Master Servicer, the Securities Administrator and
                               Others.

     Neither the Company, the Master Servicer nor any of the directors,
officers, employees or agents of the Company or the Master Servicer shall be
under any liability to the Trust Fund or the Certificateholders for any action
taken or for refraining from the taking of any action in good faith pursuant to
this Agreement, or for errors in judgment; provided, however, that this
provision shall not protect the Company or the Master Servicer (but this
provision shall protect the above described persons) against any breach of
warranties or representations made herein, or against any specific liability
imposed on the Master Servicer pursuant to Section 3.01 or any other Section
hereof; and provided further that this provision shall not protect the Company,
the Master Servicer or any such person, against any liability which would
otherwise be imposed by reason of willful misfeasance, bad faith or gross
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder. The Company, the Master Servicer and any
director, officer, employee or agent of the Company or the Master Servicer may
rely in good faith on any document of any kind PRIMA FACIE properly executed and
submitted by any Person respecting any matters


                                       94

<PAGE>



arising hereunder. The Company, the Custodian, the Master Servicer, the
Securities Administrator and any director, officer, employee or agent of the
Company, the Custodian, the Master Servicer or the Securities Administrator
shall be indemnified and held harmless by the Trust Fund against any loss,
liability or expense incurred in connection with this Agreement, the Custodial
Agreement or the Certificates or the Mortgage Loans (including reasonable legal
fees and disbursements of counsel), other than (a) any loss, liability or
expense related to Master Servicer's master servicing obligations with respect
to any specific Mortgage Loan or Mortgage Loans (except as any such loss,
liability or expense shall be otherwise reimbursable pursuant to this Agreement)
or related to the Master Servicer's obligations under Section 3.01, or to the
Custodian's failure to perform its duties under the Custodial Agreement,
respectively, or (b) any loss, liability or expense incurred by reason of
willful misfeasance, bad faith or gross negligence in the performance of duties
hereunder or by reason of reckless disregard of obligations and duties
hereunder. None of the Company, the Master Servicer, the Custodian or the
Securities Administrator shall be under any obligation to appear in, prosecute
or defend any legal action which is not incidental to its respective duties
under this Agreement and which in its opinion may involve it in any expense or
liability; provided, however, that the Company, the Master Servicer, the
Custodian or the Securities Administrator may in its sole discretion undertake
any such action which it may deem necessary or desirable with respect to this
Agreement and the rights and duties of the parties hereto and the interests of
the Certificateholders hereunder. In such event, the legal expenses and costs of
such action and any liability resulting therefrom (except any action or
liability related to the Master Servicer's obligations under Section 3.01) shall
be expenses, costs and liabilities of the Trust Fund, and the Company, the
Custodian, the Master Servicer and the Securities Administrator shall be
entitled to be reimbursed therefor from the Certificate Account as provided in
Section 3.18, any such right of reimbursement being prior to the rights of
Certificateholders to receive any amount in the Certificate Account.

     Section 6.04.             Limitation on Resignation of the Master Servicer.

     The Master Servicer shall not resign from the obligations and duties hereby
imposed on it except (a) upon appointment of a successor master servicer
reasonably acceptable to the Trustee upon receipt by the Trustee of a letter
from each Rating Agency (obtained by the Master Servicer and at its expense)
that such a resignation and appointment will not, in and of itself, result in a
downgrading of the Certificates or (b) upon determination that its duties
hereunder are no longer permissible under applicable law. Any such determination
described in (b) above permitting the resignation of the Master Servicer shall
be evidenced by an Opinion of Counsel (at the expense of the resigning Master
Servicer) to such effect delivered to the Trustee. No such resignation shall
become effective until the Trustee or a successor servicer shall have assumed
the Master Servicer's responsibilities, duties, liabilities and obligations
hereunder. Any resignation of the Master Servicer shall result in the automatic
resignation of the Securities Administrator.

     Section 6.05.             Sale and Assignment of Master Servicing.

     The Master Servicer may sell and assign its rights and delegate its duties
and obligations in their entirety as Master Servicer under this Agreement;
provided, however, that: (i) the purchaser or transferee accepting such
assignment and delegation (a) shall be a Person which shall be qualified to
service mortgage loans for Fannie Mae or Freddie Mac; (b) shall, in the case of
successor master


                                       95

<PAGE>



servicers only, have a net worth of not less than $10,000,000 (unless otherwise
approved by each Rating Agency pursuant to clause (ii) below); (c) shall be
reasonably satisfactory to the Trustee (as evidenced in a writing signed by the
Trustee) as having a comparable master servicing ability to that of the Master
Servicer on the Closing Date; (d) shall execute and deliver to the Trustee an
agreement, in form and substance reasonably satisfactory to the Trustee, which
contains an assumption by such Person of the due and punctual performance and
observance of each covenant and condition to be performed or observed by it as
master servicer under this Agreement and any custodial agreement, from and after
the effective date of such agreement; (ii) each Rating Agency shall be given
prior written notice of the identity of the proposed successor to the Master
Servicer and each Rating Agency's rating of the Certificates in effect
immediately prior to such assignment, sale and delegation will not be downgraded
or withdrawn as a result of such assignment, sale and delegation, as evidenced
by a letter to such effect obtained by the Master Servicer at its expense and
delivered to the Trustee; and (iii) the Master Servicer assigning and selling
the master servicing shall deliver to the Trustee an Officer's Certificate and
an Opinion of Counsel (at the expense of the Master Servicer), each stating that
all conditions precedent to such action under this Agreement have been completed
and such action is permitted by and complies with the terms of this Agreement.
No such assignment or delegation shall affect any liability of the Master
Servicer arising prior to the effective date thereof.


                                       96

<PAGE>



                                   ARTICLE VII
                                     DEFAULT

     Section 7.01.             Events of Default.

     "Event of Default", wherever used herein, means any one of the following
events:

     (i) any failure by the Master Servicer to deposit into the Certificate
Account on each Certificate Account Deposit Date the amounts required to be
deposited therein (other than an Advance) under the terms of this Agreement
which continues unremedied for one (1) Business Day after such amount was
required to be remitted; or

     (ii)any failure on the part of the Master Servicer duly to observe or
perform in any material respect any other of the covenants or agreements on the
part of the Master Servicer contained in the Certificates or in this Agreement
(including any breach of the Master Servicer's representations and warranties
pursuant to Section 2.03(a) which materially and adversely affects the interests
of the Certificateholders) which continues unremedied for a period of 60 days
after the date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Master Servicer by the Trustee or to the
Master Servicer and the Trustee by the Holders of Certificates entitled to at
least 25% of the Voting Rights; or

     (iii) a decree or order of a court or agency or supervisory authority
having jurisdiction in an involuntary case under any present or future federal
or state bankruptcy, insolvency or similar law or the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against the
Master Servicer and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 consecutive days; or

     (iv) the Master Servicer shall consent to the appointment of a conservator
or receiver or liquidator in any insolvency, readjustment of debt, marshaling of
assets and liabilities or similar proceedings of or relating to the Master
Servicer or of or relating to all or substantially all of its property; or

     (v) the Master Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of or
otherwise voluntarily commence a case or proceeding under any applicable
bankruptcy, insolvency, reorganization or other similar statute, make an
assignment for the benefit of its creditors, or voluntarily suspend payment of
its obligations; or

     (vi) the Master Servicer shall fail to deposit in the Certificate Account
on any Certificate Account Deposit Date an amount equal to any required Advance
which continues unremedied for a period of one (1) Business Day after the
Business Day immediately preceding the related Distribution Date.

     If an Event of Default described in clauses (i) - (vi) of this Section
shall occur, then, and in each and every such case, so long as such Event of
Default shall not have been remedied, the Trustee or the Holders of Certificates
entitled to at least 51% of the Voting Rights, by notice in writing to the


                                       97

<PAGE>



Master Servicer (and to the Trustee if given by such Holders of Certificates),
with a copy to the Rating Agencies, may terminate all of the rights and
obligations (but not the liabilities) of the Master Servicer under this
Agreement and in and to the Trust Fund, other than its rights as a
Certificateholder hereunder; provided, however, that the successor to the Master
Servicer appointed pursuant to Section 7.02 shall have accepted the duties of
Master Servicer effective upon the resignation or termination of the Master
Servicer. On or after the receipt by the Master Servicer of such notice, all
authority and power of the Master Servicer under this Agreement, whether with
respect to the Certificates (other than as a Holder thereof) or the Mortgage
Loans or otherwise, shall pass to and be vested in the Trustee pursuant to and
under this Section, and, without limitation, the Trustee is hereby authorized
and empowered to execute and deliver, on behalf of the Master Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments, and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Mortgage Loans and related documents, or
otherwise at the expense of the Master Servicer. The Master Servicer agrees to
cooperate with (and pay any related costs and expenses of) the Trustee in
effecting the termination of the Master Servicer's responsibilities and rights
hereunder, including, without limitation, the transfer to the Trustee or the
successor Master Servicer for administration by it of (i) the property and
amounts which are then or should be part of the Trust Fund or which thereafter
become part of the Trust Fund; (ii) originals or copies of all documents of the
Master Servicer reasonably requested by the Trustee to enable it to assume the
Master Servicer's duties thereunder; (iii) the rights and obligations of the
Master Servicer under the Subservicing Agreements with respect to the Mortgage
Loans; and (iv) all cash amounts which shall at the time be deposited by the
Master Servicer or should have been deposited to the Custodial or the
Certificate Account or thereafter be received with respect to the Mortgage
Loans. The Trustee shall not be deemed to have breached any obligation hereunder
as a result of a failure to make or delay in making any distribution as and when
required hereunder caused by the failure of the Master Servicer to remit any
amounts received by it or to deliver any documents held by it with respect to
the Mortgage Loans. For purposes of this Section 7.01, the Trustee shall not be
deemed to have knowledge of an Event of Default unless a Responsible Officer of
the Trustee has actual knowledge thereof or unless notice of any event which is
in fact such an Event of Default is received by the Trustee as provided in
Section 11.05 and such notice references the Certificates, the Trust Fund or
this Agreement.

     Section 7.02.             Trustee to Act; Appointment of Successor.

     Within 90 days of the time the Master Servicer receives a notice of
termination pursuant to Section 7.01(i) - (vi), the Trustee or its appointed
agent shall be the successor in all respects to the Master Servicer in its
capacity as Master Servicer under this Agreement and the transactions set forth
or provided for herein and shall be subject thereafter to all the
responsibilities, duties and liabilities relating thereto placed on the Master
Servicer including the obligation to make Advances which have been or will be
required to be made (except for the responsibilities, duties and liabilities
contained in Section 2.03 and its obligations to deposit amounts in respect of
losses pursuant to 4.01(i)) by the terms and provisions hereof; and provided
further, that any failure to perform such duties or responsibilities caused by
the Master Servicer's failure to provide information required by Section 4.03
shall not be considered a default by the Trustee hereunder. As compensation
therefor, the Trustee shall be entitled to all funds relating to the Mortgage
Loans which the Master Servicer would


                                       98

<PAGE>



have been entitled to charge to the Custodial Account and the Certificate
Account if the Master Servicer had continued to act hereunder. If the Trustee
has become the successor to the Master Servicer in accordance with Section 6.04
or Section 7.02, then notwithstanding the above, if the Trustee shall be
unwilling to so act, or shall be unable to so act, the Trustee may appoint, or
petition a court of competent jurisdiction to appoint, any established housing
and home finance institution, which is also a Fannie Mae- or Freddie
Mac-approved mortgage servicing institution, having a net worth of not less than
$10,000,000 as the successor to the Master Servicer hereunder in the assumption
of all or any part of the responsibilities, duties or liabilities of the Master
Servicer hereunder. Pending appointment of a successor to the Master Servicer
hereunder, the Trustee shall act in such capacity as herein above provided. In
connection with such appointment and assumption, the Trustee may make such
arrangements for the compensation of such successor out of payments on Mortgage
Loans as it and such successor shall agree; provided, however, that no such
compensation shall be in excess of that permitted the Master Servicer hereunder.
Each of the Company, the Trustee and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession. In no event shall the successor Master Servicer be liable for the
acts or omissions of the predecessor Master Servicer.

     In connection with the termination or resignation of the Master Servicer
hereunder, either (i) the successor Master Servicer, including the Trustee if
the Trustee is acting as successor Master Servicer, shall represent and warrant
that it is a member of MERS in good standing and shall agree to comply in all
material respects with the rules and procedures of MERS in connection with the
servicing of the Mortgage Loans that are registered with MERS, in which case the
predecessor Master Servicer shall cooperate with the successor Master Servicer
in causing MERS to revise its records to reflect the transfer of servicing to
the successor Master Servicer as necessary under MERS' rules and regulations, or
(ii) the predecessor Master Servicer shall cooperate with the successor Master
Servicer in causing MERS to execute and deliver an assignment of Mortgage in
recordable form to transfer the Mortgage from MERS to the Trustee and to execute
and deliver such other notices, documents and other instruments as may be
necessary or desirable to effect a transfer of such Mortgage Loan or servicing
of such Mortgage Loan on the MERS(R) System to the successor Master Servicer.
The predecessor Master Servicer shall file or cause to be filed any such
assignment in the appropriate recording office. The predecessor Master Servicer
shall bear any and all fees of MERS, costs of preparing any assignments of
Mortgage, and fees and costs of filing any assignments of Mortgage that may be
required under this Section 7.02. The successor Master Servicer shall cause such
assignment to be delivered to the Trustee promptly upon receipt of the original
with evidence of recording thereon or a copy certified by the public recording
office in which such assignment was recorded.

     Any successor, including the Trustee, to the Master Servicer shall maintain
in force during its term as master servicer hereunder policies and fidelity
bonds to the same extent as the Master Servicer is so required pursuant to
Section 3.18.

     Notwithstanding anything else herein to the contrary, in no event shall the
Trustee be liable for any Master Servicing Fee or for any differential in the
amount of the Master Servicing Fee paid hereunder and the amount necessary to
induce any successor Master Servicer to act as successor Master Servicer under
this Agreement and the transactions set forth or provided for herein.


                                       99

<PAGE>



     Section 7.03.             Notification to Certificateholders.

     (a) Upon any such termination or appointment of a successor to the Master
Servicer, the Trustee shall give prompt notice thereof to Certificateholders and
to the Rating Agencies.

     (b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Holders of Certificates notice of each
such Event of Default hereunder known to the Trustee, unless such Event of
Default shall have been cured or waived.

     Section 7.04.             Waiver of Events of Default.

     The Holders representing at least 51% of the Voting Rights of Certificates
affected by a default or Event of Default hereunder, may waive such default or
Event of Default (other than an Event of Default set forth in Section 7.01(vi));
provided, however, that (a) a default or Event of Default under clause (i) of
Section 7.01 may be waived only by all of the Holders of Certificates affected
by such default or Event of Default and (b) no waiver pursuant to this Section
7.04 shall affect the Holders of Certificates in the manner set forth in the
second paragraph of Section 11.01 or materially adversely affect any
non-consenting Certificateholder. Upon any such waiver of a default or Event of
Default by the Holders representing the requisite percentage of Voting Rights of
Certificates affected by such default or Event of Default, such default or Event
of Default shall cease to exist and shall be deemed to have been remedied for
every purpose hereunder. No such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon except to the
extent expressly so waived. The Master Servicer shall give notice of any such
waiver to the Rating Agencies.

     Section 7.05.             List of Certificateholders.

     Upon written request of three or more Certificateholders of record, for
purposes of communicating with other Certificateholders with respect to their
rights under this Agreement, the Securities Administrator will afford such
Certificateholders access during business hours to the most recent list of
Certificateholders held by the Securities Administrator.


                                       100

<PAGE>



                                  ARTICLE VIII
               CONCERNING THE TRUSTEE AND SECURITIES ADMINISTRATOR

     Section 8.01.           Duties of Trustee and the Securities Administrator.

     The Trustee, prior to the occurrence of an Event of Default and after the
curing or waiver of all Events of Default which may have occurred, and the
Securities Administrator each undertake to perform such duties and only such
duties as are specifically set forth in this Agreement as duties of the Trustee
and the Securities Administrator, respectively. If an Event of Default occurs,
is continuing and has not been waived, the Trustee shall exercise such of the
rights and powers vested in it by this Agreement, and use the same degree of
care and skill in their exercise as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs. Any permissive right of the
Trustee enumerated in this Agreement shall not be construed as a duty.

     The Trustee and the Securities Administrator, upon receipt of all
resolutions, certificates, statements, opinions, reports, documents, orders or
other instruments furnished to the Trustee and the Securities Administrator
which are specifically required to be furnished pursuant to any provision of
this Agreement, the Trustee and the Securities Administrator, respectively,
shall examine them in accordance with the requirements of this Agreement. If any
such instrument is found not to conform to the requirements of this Agreement in
a material manner, the Trustee or the Securities Administrator, as applicable,
shall take such action as it deems appropriate to have the instrument corrected,
and if the instrument is not corrected to the Trustee's or the Securities
Administrator's, as applicable, satisfaction, the Trustee or the Securities
Administrator, as applicable, will provide notice thereof to the
Certificateholders. Notwithstanding the foregoing, neither the Trustee nor the
Securities Administrator shall be responsible for the accuracy or content of any
resolution, certificate, statement, opinion, report, document, order or other
instrument furnished by the Master Servicer hereunder or any Opinion of Counsel
required hereunder.

     The Securities Administrator shall prepare and file or cause to be filed on
behalf of the Trust Fund any tax return that is required with respect to any
Trust REMIC pursuant to applicable federal, state or local tax laws.

     The Securities Administrator covenants and agrees that it shall perform its
obligations hereunder in a manner so as to maintain the status of any Trust
REMIC under the REMIC Provisions and to prevent the imposition of any federal,
state or local income, prohibited transaction, contribution or other tax on any
of any Trust REMIC to the extent that maintaining such status and avoiding such
taxes are within the control of the Securities Administrator and are reasonably
within the scope of its duties under this Agreement.

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

     (i) The duties and obligations of the Trustee prior to the occurrence of an
Event of Default, and after the curing or waiver of all such Events of Default
which may have occurred and the Securities


                                       101

<PAGE>



Administrator, at all times, shall be determined solely by the express
provisions of this Agreement, neither the Trustee nor the Securities
Administrator shall be liable except for the performance of such duties and
obligations as are specifically set forth in this Agreement, no implied
covenants or obligations shall be read into this Agreement against the Trustee
or the Securities Administrator and, in the absence of bad faith on the part of
the Trustee or the Securities Administrator, respectively, the Trustee or the
Securities Administrator may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee or the Securities
Administrator and conforming to the requirements of this Agreement;

     (ii)Neither the Trustee nor the Securities Administrator shall be liable
for an error of judgment made in good faith by a Responsible Officer or
Responsible Officers of the Trustee or of the Securities Administrator, as
applicable, unless it shall be proved that the Trustee or Securities
Administrator, respectively, was negligent in ascertaining the pertinent facts;
and

     (iii) Neither the Trustee nor the Securities Administrator shall be liable
with respect to any action taken, suffered or omitted to be taken by it in good
faith in accordance with the direction of the Holders of Certificates entitled
to at least 25% of the Voting Rights relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee or the
Securities Administrator, respectively, or exercising any trust or power
conferred upon the Trustee or the Securities Administrator, respectively, under
this Agreement.

     Section 8.02.             Certain Matters Affecting the Trustee and the
                               Securities Administrator.

     Except as otherwise provided in Section 8.01:

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

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

     (c) Neither the Trustee nor the Securities Administrator shall be under any
obligation to exercise any of the trusts or powers vested in it by this
Agreement, other than its obligation to give notice pursuant to this Agreement,
or to institute, conduct or defend any litigation hereunder or in relation
hereto at the request, order or direction of any of the Certificateholders,
pursuant to the provisions of this Agreement, unless such Certificateholders
shall have offered to the Trustee or Securities Administrator security or
indemnity satisfactory to it against the costs, expenses and liabilities which
may be incurred therein or thereby; nothing contained herein shall, however,
relieve the Trustee of the obligation, upon the occurrence of an Event of
Default of which a Responsible Officer of the Trustee's corporate trust
department has actual knowledge (which has not been waived or cured), to
exercise such of the rights and powers vested in it by this Agreement, and to
use the same degree


                                       102

<PAGE>



of care and skill in their exercise as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs;

     (d) Neither the Trustee nor the Securities Administrator shall be liable
for any action taken, suffered or omitted by it in good faith and believed by it
to be authorized or within the discretion or rights or powers conferred upon it
by this Agreement;

     (e) Neither the Trustee prior to the occurrence of an Event of Default
hereunder and after the curing or waiver of all Events of Default which may have
occurred, nor the Securities Administrator, at any time, shall be bound to make
any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request, consent,
order, approval, bond or other paper or document, unless requested in writing to
do so by the Holders of Certificates entitled to at least 25% of the Voting
Rights; provided, however, that if the payment within a reasonable time to the
Trustee or Securities Administrator, as applicable, of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation is,
in the opinion of the Trustee or Securities Administrator, as applicable,
reasonably assured to the Trustee or the Securities Administrator, as
applicable, by the security afforded to it by the terms of this Agreement
reasonable expense of every such examination shall be paid by the
Certificateholders requesting the investigation;

     (f) The Trustee and the Securities Administrator may execute any of the
trusts or powers hereunder or perform any duties hereunder either directly or by
or through agents, nominees, custodians or attorneys appointed with due care,
and shall not be responsible for any willful misconduct or negligence on the
part of any agent, attorney, custodian or nominee so appointed;

     (g) Neither the Trustee nor the Securities Administrator shall be required
to give any bond or surety with respect to the execution of the trust created
hereby or the powers granted hereunder; and

     (h) Whenever in the administration of the provisions of this Agreement the
Trustee and the Securities Administrator shall deem it necessary or desirable
that a matter be proved or established prior to taking or suffering any action
to be taken hereunder, such matter (unless other evidence in respect thereof be
herein specifically prescribed) may, in the absence of gross negligence or bad
faith on the part of the Trustee or the Securities Administrator, as applicable,
be deemed to be conclusively proved and established by a certificate signed and
delivered to the Trustee or Securities Administrator, as applicable, and such
certificate, in the absence of gross negligence or bad faith on the part of the
Trustee or Securities Administrator, as applicable, shall be full warrant to the
Trustee or Securities Administrator, as applicable, for any action taken,
suffered or omitted by it under the provisions of this Agreement upon the faith
thereof.

     Neither the Trustee nor the Securities Administrator shall have any
obligation to invest and reinvest any cash held. The Trustee and the Securities
Administrator shall have no liability in respect of losses incurred as a result
of the liquidation of any investment incurred as a result of the liquidation of
any investment prior to its stated maturity.

     Section 8.03.             Trustee and Securities Administrator Not Liable
                               for Certificates or


                                       103

<PAGE>



Mortgage Loans.

     The recitals contained herein and in the Certificates (other than the
signature of the Securities Administrator, the authentication of the Securities
Administrator on the Certificates, the acknowledgments of the Securities
Administrator contained in Article II) shall be taken as the statements of the
Company and neither the Trustee nor the Securities Administrator assumes any
responsibility for their correctness. Neither the Trustee nor the Securities
Administrator makes any representations or warranties as to the validity or
sufficiency of this Agreement or of the Certificates (other than the signature
and authentication of the Trustee on the Certificates) or of any Mortgage Loan
or related document, or of MERS or the MERS(R) System. Neither the Trustee nor
the Securities Administrator shall be accountable for the use or application by
the Company of any of the Certificates or of the proceeds of such Certificates,
or for the use or application of any funds paid to the Company or the Master
Servicer in respect of the Mortgage Loans or deposited in or withdrawn from the
Custodial Account by the Master Servicer.

     Section 8.04.             Trustee and Securities Administrator May Own
                               Certificates.

     Each of the Trustee and the Securities Administrator in its individual or
any other capacity (other than as Trustee hereunder) may become the owner or
pledgee of Certificates with the same rights it would have if it were not
Trustee or the Securities Administrator, as applicable, and may otherwise deal
with the parties hereto.

     Section 8.05.             Trustee's and Securities Administrator's Fees.

     Each of the Trustee and Securities Administrator shall be compensated by
the Master Servicer. Such compensation (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express trust)
shall be paid for all services rendered by it in the execution of the trusts
hereby created and in the exercise and performance of any of the powers and
duties hereunder or of the Trustee and the Securities Administrator. Except as
otherwise provided in this Agreement, the Trustee and any director, officer,
employee or agent of the Trustee shall be indemnified and held harmless by the
Trust Fund against any claim, loss, liability, fee or expense incurred in
connection with any Event of Default, any breach of this Agreement or any claim
or legal action (including any pending or threatened claim or legal action)
relating to the acceptance or administration of its trusts hereunder or the
Trustee's performance under the Certificates, other than any claim, loss,
liability or expense (i) sustained in connection with this Agreement related to
the willful misfeasance, bad faith or negligence of the Master Servicer in the
performance of its duties hereunder or (ii) incurred in connection with a breach
constituting willful misfeasance, bad faith or negligence of the Trustee in the
performance of its duties hereunder or by reason of reckless disregard of its
obligations and duties hereunder.

     The Master Servicer shall indemnify the Company, the Trustee and the
Securities Administrator and any director, officer, employee or agent of the
Company, the Trustee or the Securities Administrator against any such claim or
legal action (including any pending or threatened claim or legal action), loss,
liability, fee or expense that may be sustained in connection with this
Agreement related to the willful misfeasance, bad faith, or negligence in the
performance of the Master


                                       104

<PAGE>



Servicer's duties hereunder.

     The provisions of this Section 8.05 shall survive the resignation or
removal of the Trustee or the Securities Administrator or the termination of
this Agreement.

     Section 8.06.             Eligibility Requirements for Trustee and the
                               Securities Administrator.

     The Trustee and the Securities Administrator hereunder shall at all times
be a corporation or a national banking association organized and doing business
under the laws of any state or the United States of America or the District of
Columbia, authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least $50,000,000 and subject to
supervision or examination by federal or state authority. In addition, the
Trustee and the Securities Administrator shall at all times be acceptable to the
Rating Agency rating the Certificates. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. In case at any time the Trustee or the Securities
Administrator shall cease to be eligible in accordance with the provisions of
this Section, the Trustee or the Securities Administrator, as applicable, shall
resign immediately in the manner and with the effect specified in Section 8.07.
The corporation or national banking association serving as Trustee or Securities
Administrator may have normal banking and trust relationships with the Seller
and their affiliates or the Master Servicer and its affiliates; provided,
however, that such corporation cannot be an affiliate of the Master Servicer
other than the Trustee in its role as successor to the Master Servicer.

     Section 8.07.             Resignation and Removal of the Trustee and the
                               Securities Administrator.

     The Trustee and the Securities Administrator may at any time resign and be
discharged from the trusts hereby created by giving written notice thereof to
the Master Servicer; with a copy to the Rating Agencies; provided, that such
resignation shall not be effective until a successor trustee is appointed and
accepts appointment in accordance with the following provisions; provided,
however, that the resigning Trustee or Securities Administrator, as applicable,
shall not resign and be discharged from the trusts hereby created until such
time as the Rating Agency rating the Certificates approves the successor trustee
or successor securities administrator. Any resignation or removal of the
Securities Administrator shall result in the automatic removal of the Master
Servicer. Upon receiving such notice of resignation of the Trustee, the Master
Servicer shall promptly appoint a successor trustee who meets the eligibility
requirements of Section 8.06 by written instrument, in triplicate, one copy of
which instrument shall be delivered to the resigning Trustee, and to the
successor trustee. Upon receiving notice of the resignation of the Securities
Administrator, the Trustee shall promptly appoint a successor securities
administrator who meets the eligibility requirements of Section 8.06 by written
instrument, in triplicate, copies of which instrument shall be delivered to the
resigning securities administrator and the successor securities administrator.
If no successor trustee or successor securities administrator shall have been so
appointed and have accepted appointment within 30 days after the giving of such
notice of resignation, the resigning Trustee or resigning Securities
Administrator, as applicable may petition any court of competent


                                       105

<PAGE>



jurisdiction for the appointment of a successor trustee or successor  securities
administrator, as applicable.

     If at any time the Trustee or the Securities Administrator shall cease to
be eligible in accordance with the provisions of Section 8.06 and shall fail to
resign after written request therefor by the Master Servicer, or if at any time
the Trustee or the Securities Administrator shall become incapable of acting, or
shall be adjudged bankrupt or insolvent, or a receiver of the Trustee or
Securities Administrator, as applicable, or of its property shall be appointed,
or any public officer shall take charge or control of the Trustee or Securities
Administrator, as applicable, or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, the Master Servicer may remove the
Trustee, or the Trustee shall remove the Securities Administrator, as
applicable, and appoint a successor trustee or successor securities
administrator, as applicable, who meets the eligibility requirements of Section
8.06 by written instrument, in triplicate, which instrument shall be delivered
to the Trustee or Securities Administrator, as applicable, so removed and to the
successor trustee or successor securities administrator, as applicable.

     The Holders of Certificates entitled to at least 51% of the Voting Rights,
may at any time remove the Trustee or Securities Administrator and appoint a
successor trustee or successor securities administrator by written instrument or
instruments, in triplicate, signed by such Holders or their attorneys-in-fact
duly authorized, one complete set of which instruments shall be delivered to the
Master Servicer (if the Trustee is removed), the Securities Administrator (if
the Trustee is removed), and the Trustee (if the Securities Administrator is
removed), one complete set to the Trustee or Securities Administrator so removed
and one complete set to the successor so appointed. A copy of such instrument
shall be delivered to the Certificateholders and the Company by the Master
Servicer (if the Trustee is removed) and by the Trustee (if the Securities
Administrator is removed).

     Any resignation or removal of the Trustee or Securities Administrator and
appointment of a successor trustee or successor securities administrator
pursuant to any of the provisions of this Section shall not become effective
until acceptance of appointment by the successor trustee or successor securities
administrator as provided in Section 8.08.

     Section 8.08.     Successor Trustee and Successor Securities Administrator.

     Any successor trustee or successor securities administrator appointed as
provided in Section 8.07 shall execute, acknowledge and deliver to the Master
Servicer and to its predecessor trustee or predecessor securities administrator
an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor trustee or predecessor securities
administrator shall become effective and such successor trustee or successor
securities administrator, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with the like effect as if originally named as trustee
herein. The predecessor trustee or predecessor securities administrator shall
after payment of its outstanding fees and expenses, promptly deliver to the
successor trustee or successor securities administrator all assets and records
of the Trust Fund held by it hereunder, and the Master Servicer and the
predecessor trustee or predecessor securities administrator shall execute and
deliver all such instruments and do such other things as may reasonably be
required for more fully and certainly


                                       106

<PAGE>



vesting and confirming in the successor trustee or successor securities
administrator all such rights, powers, duties and obligations.

     No successor trustee or successor securities administrator shall accept
appointment as provided in this Section unless at the time of such acceptance
such successor trustee or successor securities administrator shall be eligible
under the provisions of Section 8.06.

     Upon acceptance of appointment by a successor trustee or successor
securities administrator as provided in this Section, the Master Servicer (in
the case of a successor trustee) and the Trustee (in the case of a successor
securities administrator) shall mail notice of the succession of such trustee or
securities administrator hereunder to all Holders of Certificates at their
addresses as shown in the Certificate Register. If the Master Servicer (in the
case of a successor trustee) and the Trustee (in the case of a successor
securities administrator) fails to mail such notice within ten days after
acceptance of appointment by the successor trustee successor securities
administrator, the successor trustee successor securities administrator shall
cause such notice to be mailed at the expense of the Master Servicer or Trustee,
as the case may be.

     Section 8.09.             Merger or Consolidation of Trustee or Securities
                               Administrator.

     Any state bank or trust company or corporation or national banking
association into which the Trustee or Securities Administrator may be merged or
converted or with which it may be consolidated or any state bank or trust
company or national banking association resulting from any merger, conversion or
consolidation to which the Trustee or Securities Administrator shall be a party,
or any state bank or trust company or corporation or national banking
association succeeding to all or substantially all of the corporate trust
business of the Trustee or Securities Administrator, shall be the successor of
the Trustee or Securities Administrator hereunder, provided such state bank or
trust company or corporation or national banking association shall be eligible
under the provisions of Section 8.06 without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.

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

     Notwithstanding any other provisions hereof, at any time, for the purpose
of meeting any legal requirements of any jurisdiction in which any part of the
Trust Fund or property securing the same may at the time be located, the Master
Servicer and the Trustee acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by the
Trustee to act as co-trustee or co-trustees, jointly with the Trustee, or
separate trustee or separate trustees, of all or any part of the Trust Fund, and
to vest in such Person or Persons, in such capacity, such title to the Trust
Fund, or any part thereof, and, subject to the other provisions of this Section
8.10, such powers, duties, obligations, rights and trusts as the Master Servicer
and the Trustee may consider necessary or desirable. If the Master Servicer
shall not have joined in such appointment within 15 days after the receipt by it
of a request so to do, or in case an Event of Default shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment
without the Master Servicer. No co-trustee or separate trustee hereunder shall
be required to meet the terms of eligibility as a successor trustee under
Section 8.06 hereunder and no notice to Holders of


                                       107

<PAGE>



Certificates of the appointment of co-trustee(s) or separate trustee(s) shall be
required under Section 8.08 hereof.

     In the case of any appointment of a co-trustee or separate trustee pursuant
to this Section 8.10, all rights, powers, duties and obligations conferred or
imposed upon the Trustee and required to be conferred or such co-trustee shall
be conferred or imposed upon and exercised or performed by the Trustee and such
separate trustee or co-trustee jointly, except to the extent that under any law
of any jurisdiction in which any particular act or acts are to be performed
(whether as Trustee hereunder or as successor to the Master Servicer hereunder),
the Trustee shall be incompetent or unqualified to perform such act or acts, in
which event such rights, powers, duties and obligations (including the holding
of title to the Trust Fund or any portion thereof in any such jurisdiction)
shall be exercised and performed by such separate trustee or co-trustee at the
direction of the Trustee.

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

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



                                       108

<PAGE>



                                   ARTICLE IX
                                   TERMINATION

     Section 9.01.             Termination Upon Repurchase or Liquidation of All
                               Mortgage Loans or upon Purchase of Certificates.

     (a) Subject to Section 9.03, the respective obligations and
responsibilities of the Company, the Master Servicer, the Securities
Administrator and the Trustee created hereby (other than the obligations of the
Master Servicer to the Trustee pursuant to Section 8.05 and of the Master
Servicer to provide for and the Securities Administrator to make payments to
Certificateholders as hereafter set forth) shall terminate upon payment to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them hereunder following the earlier to occur of (i) the
repurchase by the Servicer, or its designee (or if the Servicer fails to
exercise such option, the Master Servicer) of all Mortgage Loans and each REO
Property in respect thereof remaining in the Trust Fund at a price equal to (a)
100% of the unpaid principal balance of each Mortgage Loan (other than one as to
which a REO Property was acquired) on the day of repurchase together with
accrued interest on such unpaid principal balance at the Net Mortgage Rate to
the first day of the month in which the proceeds of such repurchase are to be
distributed, plus (b) the appraised value of any REO Property (but not more than
the unpaid principal balance of the related Mortgage Loan, together with accrued
interest on that balance at the Net Mortgage Rate to the first day of the month
such repurchase price is distributed), less the good faith estimate of the
Servicer or the Master Servicer, as applicable, of liquidation expenses to be
incurred in connection with its disposal thereof, such appraisal to be conducted
by an appraiser mutually agreed upon by the Servicer or the Master Servicer, as
applicable, and the Master Servicer on behalf of the Trustee at the expense of
the terminating party, and (ii) the final payment or other liquidation (or any
Advance with respect thereto) of the last Mortgage Loan remaining in the Trust
Fund (or the disposition of all REO Property in respect thereof); provided,
however, that in no event shall the trust created hereby continue beyond the
earlier of (i) the Distribution Date occurring in July 2034 and (ii) the
expiration of 21 years from the death of the last survivor of the descendants of
Joseph P. Kennedy, the late ambassador of the United States to the Court of St.
James, living on the date hereof, and provided further, that the purchase price
set forth above shall be increased as is necessary, as determined by the
Servicer, the Master Servicer or the Master Servicer, as applicable, to avoid
disqualification of any of any Trust REMIC as a REMIC. In the case of any
repurchase by the Servicer or the Master Servicer, as applicable, pursuant to
clause (i), the Master Servicer shall exercise reasonable efforts to cooperate
fully with the Trustee in effecting such repurchase and the transfer of the
Mortgage Loans and related Mortgage Files and related records to the Servicer or
the Master Servicer, as applicable; provided, however, such option may only be
exercised if (i) the purchase price is sufficient to pay all interest accrued
on, as well as amounts necessary to retire the principal balance of, each class
of notes secured primarily by the Class C Certificates and the Class P
Certificates.

     The right of the Servicer or its designee to repurchase all Mortgage Loans
pursuant to (i) above shall be conditioned upon the aggregate Stated Principal
Balance of such Mortgage Loans at the time of any such repurchase aggregating an
amount equal to or less than 10% of the aggregate Stated Principal Balance of
the Mortgage Loans at the Cut-off Date. If such right is exercised, the Servicer
upon such repurchase shall provide to the Trustee and Securities Administrator,
notice of such


                                       109

<PAGE>



exercise prior to the Determination Date in the month preceding the month of
purchase and the certification required by Section 3.16.

     The right of the Master Servicer, or its designee to repurchase all
Mortgage Loans pursuant to (i) in the second preceding paragraph shall be
conditioned upon the aggregate Stated Principal Balance of such Mortgage Loans
at the time of any such repurchase aggregating an amount equal to or less than
5% of the aggregate Stated Principal Balance of the Mortgage Loans at the
Cut-off Date. If such right is exercised, the Master Servicer, upon such
repurchase shall provide to the Trustee and Securities Administrator, notice of
such exercise prior to the Determination Date in the month preceding the month
of purchase and the certification required by Section 3.16.

     Written notice of any termination, specifying the Distribution Date upon
which the Certificateholders may surrender their Certificates to the Securities
Administrator for payment of the final distribution and cancellation, shall be
given promptly by the Securities Administrator by letter to the
Certificateholders mailed (a) in the event such notice is given in connection
with the Servicer's or the Master Servicer's, as applicable, election to
repurchase, not earlier than the 15th day and not later than the 25th day of the
month next preceding the month of such final distribution or (b) otherwise
during the month of such final distribution on or before the Determination Date
in such month, in each case specifying (i) the Distribution Date upon which
final payment of the Certificates will be made upon presentation and surrender
of Certificates at the office of the Securities Administrator therein
designated, (ii) the amount of any such final payment and (iii) that the Record
Date otherwise applicable to such Distribution Date is not applicable, payments
being made only upon presentation and surrender of the Certificates at the
office of the Securities Administrator therein specified. In the event such
notice is given in connection with the Servicer or the Master Servicer, as
applicable, or its designee's election to repurchase, the Servicer or the Master
Servicer, as applicable, or its designee shall deliver to the Securities
Administrator for deposit in the Certificate Account on the Business Day
immediately preceding the Distribution Date specified in such notice an amount
equal to the above-described repurchase price payable out of its own funds. Upon
presentation and surrender of the Certificates by the Certificateholders, the
Securities Administrator shall first pay any amounts owing to the Trustee,
Master Servicer, Custodian, Servicer and Securities Administrator, as
applicable, under this Agreement, and second, distribute to the
Certificateholders (i) the amount otherwise distributable on such Distribution
Date, if not in connection with the Servicer's or the Master Servicer's, as
applicable, election to repurchase, or (ii) if the Servicer or the Master
Servicer, as applicable, elected to so repurchase, an amount determined as
follows: with respect to each Regular Certificate, the outstanding Certificate
Principal Balance thereof, plus with respect to each Class A, Class M or Class C
Certificate, one month's interest thereon at the applicable Pass-Through Rate
and any Unpaid Interest Shortfall Amount, plus with respect to each Class M
Certificate, any unpaid Allocated Realized Loss Amount; and with respect to each
Class R Certificate, the Percentage Interest evidenced thereby multiplied by the
difference, if any, between the above described repurchase price and the
aggregate amount to be distributed to the Holders of the Regular Certificates,
subject to the priorities set forth in Section 4.01. Notwithstanding the
foregoing, by acceptance of the Class R Certificates, the Holders of the Class R
Certificates agree, in connection with any termination hereunder, to assign and
transfer any amounts received in respect of such termination to the Holders of
the Class C Certificates and to pay any such amounts to the Holders of the Class
C Certificates. Upon certification to the Custodian by


                                       110

<PAGE>



a Servicing Officer, following such final deposit, the Custodian shall promptly
release the Mortgage Files as directed by the Servicer or the Master Servicer,
as applicable, for the remaining Mortgage Loans, and the Trustee shall execute
all assignments, endorsements and other instruments required by the Servicer or
the Master Servicer, as applicable, as being necessary to effectuate such
transfer.

     In the event that all of the Certificateholders shall not surrender their
Certificates for cancellation within six months after the time specified in the
above-mentioned notice, the Securities Administrator shall give a second notice
to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
six months after the second notice all of the Certificates shall not have been
surrendered for cancellation, the Securities Administrator shall take reasonable
steps as directed by the Company in writing, or appoint an agent to take
reasonable steps, to contact the remaining Certificateholders concerning
surrender of their Certificates, and the cost thereof shall be paid out of the
funds and other assets which remain subject hereto. If within nine months after
the second notice all the Certificates shall not have been surrendered for
cancellation, the Class R Certificateholders shall be entitled to all unclaimed
funds and other assets which remain subject hereto.

     Section 9.02.             Termination of REMIC 2, REMIC 3 and REMIC 4.

     REMIC 2 shall be terminated on the earlier of the Final Distribution Date
and the date on which it is deemed to receive the last deemed distributions on
the REMIC 1 Regular Interests and the last distribution due on the Regular
Certificates and the Class R Certificates (in respect of the Class R-2 Interest)
is made. REMIC 3 shall be terminated on the earlier of the Final Distribution
Date and the date on which it is deemed to receive the last deemed distributions
on the Class C Interest and the last distribution due on the Class C
Certificates and the Class R-X Certificates (in respect of the Class R-3
Interest) is made. REMIC 4 shall be terminated on the earlier of the Final
Distribution Date and the date on which it is deemed to receive the last deemed
distributions on the Class P Interest and the last distribution due on the Class
P Certificates and the Class R-X Certificates (in respect of the Class R-4
Interest) is made.

     Section 9.03.             Additional Termination Requirements.

     (a) In the event the Servicer or the Master Servicer, as applicable,
repurchases the Mortgage Loans as provided in Section 9.01, the Trust Fund shall
be terminated in accordance with the following additional requirements, unless
the Servicer or the Master Servicer, as applicable, at its own expense, obtains
for the Trustee and the Securities Administrator an Opinion of Counsel to the
effect that the failure of the Trust Fund to comply with the requirements of
this Section 9.03 will not (i) result in the imposition on the Trust of taxes on
"prohibited transactions," as described in Section 860F of the Code, or (ii)
cause either any Trust REMIC to fail to qualify as a REMIC at any time that any
Certificate is outstanding:

         (i) The Securities Administrator shall establish a 90-day liquidation
period for REMIC 1 and REMIC 2, as the case may be, and specify the first day of
such period in a statement attached to the Trust Fund's final Tax Return
pursuant to Treasury regulations Section 1.860F-1. The Securities Administrator
also shall satisfy all of the requirements of a qualified liquidation for each


                                       111

<PAGE>



Trust REMIC, as the case may be, under Section 860F of the Code and regulations
thereunder; and

         (ii) The Servicer shall notify the Trustee and the Securities
Administrator at the commencement of such 90-day liquidation period and, at or
prior to the time of making of the final payment on the Certificates, the
Trustee shall sell or otherwise dispose of all of the remaining assets of the
Trust Fund in accordance with the terms hereof.

     (b) Each Holder of a Certificate and the Trustee hereby irrevocably
approves and appoints the Securities Administrator as its attorney-in-fact to
adopt a plan of complete liquidation for each Trust REMIC at the expense of the
Trust Fund in accordance with the terms and conditions of this Agreement.




                                       112

<PAGE>



                                    ARTICLE X
                                REMIC PROVISIONS

     Section 10.01.            REMIC Administration.

     (a) The Securities Administrator shall make an election to treat the Trust
Fund as four REMICs under the Code and, if necessary, under applicable state
law. Each such election will be made on Form 1066 or other appropriate federal
tax or information return (including Form 8811) or any appropriate state return
for the taxable year ending on the last day of the calendar year in which the
Certificates are issued. For the purposes of the REMIC elections in respect of
the Trust Fund, (i) the REMIC 1 Regular Interests will represent the "regular
interests" in REMIC 1, the Class R-1 Interest will constitute the sole class of
"residual interests" in REMIC 1, (ii) the Class A and Class M Certificates
(exclusive of any right to receive payments from the Basis Risk Shortfall
Reserve Fund) the Class C Interest and the Class P Interest shall be designated
as the "regular interests" in REMIC 2 and the Class R-2 Interest will constitute
the sole class of "residual interests" in REMIC 2, (iii) the Class C
Certificates shall be designated as the "regular interests" in REMIC 3 and the
Class R-3 Interest will constitute the sole class of "residual interests" in
REMIC 3 and (iv) the Class P Certificates shall be designated as the "regular
interests" in REMIC 4 and the Class R-4 Interest will constitute the sole class
of "residual interests" in REMIC 4. The Securities Administrator and the Trustee
shall not permit the creation of any "interests" (within the meaning of Section
860G of the Code) other than the REMIC Regular Interests, the Class R-1
Interest, the Class R-2 Interest, the Class R-3 Interest or the Class R-4
Interest. The Securities Administrator will apply for an Employee Identification
Number from the IRS via form SS-4 or any other acceptable method for each Trust
REMIC.

     (b) The Closing Date is hereby designated as the "startup day" of the Trust
Fund within the meaning of Section 860G(a)(9) of the Code.

     (c) The Securities Administrator shall pay out of its own funds, without
any right of reimbursement, any and all expenses relating to any tax audit of
the REMICs (including, but not limited to, any professional fees or any
administrative or judicial proceedings with respect to the REMICs that involve
the Internal Revenue Service or state tax authorities), other than the expense
of obtaining any tax-related Opinion of Counsel except as specified herein. The
Securities Administrator, as agent for the REMICs' tax matters person, shall (i)
act on behalf of the REMICs in relation to any tax matter or controversy
involving the Trust Fund and (ii) represent the Trust Fund in any administrative
or judicial proceeding relating to an examination or audit by any governmental
taxing authority with respect thereto. By their acceptance thereof, the Holder
of the largest Percentage Interest of the Class R Certificates hereby agrees to
irrevocably appoint the Securities Administrator or an Affiliate as its agent to
perform all of the duties of the tax matters person for the REMICs.

     (d) The Securities Administrator shall prepare and file or cause to be
filed, and the Trustee shall sign, all of the Tax Returns (including Form 8811,
which must be filed within 30 days of the Closing Date) in respect of the REMICs
created hereunder. The expenses of preparing and filing such returns shall be
borne by the Securities Administrator without any right of reimbursement
therefor. The


                                       113

<PAGE>



Master Servicer shall provide on a timely basis to the Securities Administrator
or its designee such information with respect to the assets of the REMICs as is
in its possession and reasonably required by the Securities Administrator to
enable it to perform its obligations under this Article X.

     (e) The Securities Administrator shall perform on behalf of the REMICs all
reporting and other tax compliance duties that are the responsibility of the
REMICs under the Code, the REMIC Provisions or other compliance guidance issued
by the Internal Revenue Service or any state or local taxing authority. Among
its other duties, as required by the Code, the REMIC Provisions or other such
compliance guidance, the Securities Administrator shall provide (i) to any
Transferor of a Class R Certificate such information as is necessary for the
application of any tax relating to the transfer of a Class R Certificate to any
Person who is not a Permitted Transferee, (ii) to the Certificateholders such
information or reports as are required by the Code or the REMIC Provisions
including reports relating to interest, original issue discount and market
discount or premium (using the Prepayment Assumption as required) and (iii) to
the Internal Revenue Service the name, title, address and telephone number of
the person who will serve as the representative of the REMICs. The Master
Servicer shall provide on a timely basis to the Securities Administrator such
information with respect to the assets of the REMICs, including, without
limitation, the Mortgage Loans, as is in its possession and reasonably required
by the Securities Administrator to enable it to perform its obligations under
this subsection. In addition, the Company shall provide or cause to be provided
to the Securities Administrator, within ten (10) days after the Closing Date,
all information or data that the Securities Administrator reasonably determines
to be relevant for tax purposes as to the valuations and issue prices of the
Certificates, including, without limitation, the price, yield, prepayment
assumption and projected cash flow of the Certificates.

     (f) The Securities Administrator shall take such action and shall cause the
REMICs created hereunder to take such action as shall be necessary to create or
maintain the status thereof as REMICs under the REMIC Provisions (and the Master
Servicer shall assist it, to the extent reasonably requested by it). The
Securities Administrator shall not take any action, cause the Trust Fund to take
any action or fail to take (or fail to cause to be taken) any action that, under
the REMIC Provisions, if taken or not taken, as the case may be, could (i)
endanger the status of the REMIC 1 or REMIC 2 as REMICs or (ii) result in the
imposition of a tax upon the REMICs (including but not limited to the tax on
prohibited transactions as defined in Section 860F(a)(2) of the Code and the tax
on contributions to a REMIC set forth in Section 860G(d) of the Code) (either
such event, an "Adverse REMIC Event") unless the Securities Administrator has
received an Opinion of Counsel, addressed to the Securities Administrator (at
the expense of the party seeking to take such action but in no event at the
expense of the Securities Administrator) to the effect that the contemplated
action will not, with respect to the REMICs created hereunder, endanger such
status or result in the imposition of such a tax, nor shall the Master Servicer
take or fail to take any action (whether or not authorized hereunder) as to
which the Securities Administrator has advised it in writing that each has
received an Opinion of Counsel to the effect that an Adverse REMIC Event could
occur with respect to such action. In addition, prior to taking any action with
respect to the REMICs or the assets of the REMICs, or causing the REMICs to take
any action, which is not contemplated under the terms of this Agreement, the
Master Servicer will consult with the Securities Administrator or its designee,
in writing, with respect to whether such action could cause an Adverse REMIC
Event to occur with respect to the Trust Fund, and the Master Servicer shall not
take any such action or


                                       114

<PAGE>



cause the Trust Fund to take any such action as to which the Securities
Administrator has advised it in writing that an Adverse REMIC Event could occur.
The Securities Administrator may consult with counsel to make such written
advice, and the cost of same shall be borne by the party seeking to take the
action not permitted by this Agreement, but in no event shall such cost be an
expense of the Securities Administrator. At all times as may be required by the
Code, the Securities Administrator will ensure that substantially all of the
assets of the REMICs created hereunder will consist of "qualified mortgages" as
defined in Section 860G(a)(3) of the Code and "permitted investments" as defined
in Section 860G(a)(5) of the Code.

     (g) In the event that any tax is imposed on "prohibited transactions" of
the REMICs created hereunder as defined in Section 860F(a)(2) of the Code, on
the "net income from foreclosure property" of the REMICs as defined in Section
860G(c) of the Code, on any contributions to the REMICs after the Startup Day
therefor pursuant to Section 860G(d) of the Code, or any other tax is imposed by
the Code or any applicable provisions of state or local tax laws, such tax shall
be charged (i) to the Securities Administrator pursuant to Section 10.03 hereof,
if such tax arises out of or results from a breach by the Securities
Administrator of any of its obligations under this Article X, (ii) to the Master
Servicer pursuant to Section 10.03 hereof, if such tax arises out of or results
from a breach by the Master Servicer of any of its obligations under Article III
or this Article X, or otherwise, (iii) to the Master Servicer as provided in
Section 3.05, if applicable, (iv) to the Class R Certificateholder to the extent
of any funds distributed to such Certificateholder, (v) otherwise against
amounts on deposit in the Certificate Account and shall be paid by withdrawal
therefrom to the extent not required to be paid by the Master Servicer, the
Securities Administrator or the Class R Certificateholder pursuant to another
provision of this Agreement.

     (h) On or before April 15 of each calendar year, commencing April 15, 2005,
the Securities Administrator shall deliver to the Master Servicer and the Rating
Agency a Certificate from a Responsible Officer of the Securities Administrator
stating the Securities Administrator's compliance with its obligations under
this Article X.

     (i) The Securities Administrator shall, for federal income tax purposes,
maintain books and records with respect to the REMICs on a calendar year and on
an accrual basis.

     (j) Following the Startup Day, the Securities Administrator shall not
accept any contributions of assets to the REMICs other than in connection with
any Qualified Substitute Mortgage Loan delivered in accordance with Section 2.04
unless it shall have received an Opinion of Counsel to the effect that the
inclusion of such assets in the REMICs will not cause any Trust REMIC to fail to
qualify as REMICs at any time that any Certificates are outstanding or subject
any Trust REMIC to any tax under the REMIC Provisions or other applicable
provisions of federal, state and local law or ordinances.

     (k) Neither the Securities Administrator nor the Master Servicer shall
enter into any arrangement by which the REMICs will receive a fee or other
compensation for services nor permit the REMICs to receive any income from
assets other than "qualified mortgages" as defined in Section 860G(a)(3) of the
Code or "permitted investments" as defined in Section 860G(a)(5) of the Code.



                                       115

<PAGE>



     (l) The Securities Administrator shall treat the rights of the
Certificateholders (other than the Class P Certificateholders and Residual
Certificateholders) to receive payments from the Basis Risk Shortfall Reserve
Fund as rights in Corridor Contracts written by the Corridor Contract
Counterparty with respect to the Basis Risk Shortfall Carry-Forward Amounts
funded by the Corridor Contracts and Excess Cashflow, in favor of the
Certificateholders (other than the Holders of the Class P Certificates and
Residual Certificates). For federal tax return and information reporting, the
right of the Holders of the Class A and Class M Certificates to receive payments
from the Carryover Reserve Fund in respect of any Basis Risk Carry-Forward
Amount may be obtained from the Securities Administrator upon request. For
purposes of determining the issue price of the REMIC 2 Regular Interests, the
Securities Administrator shall assume that the Corridor Contracts have values of
$2,835,000 and $620,000, respectively.

     Section 10.02.            Prohibited Transactions and Activities.

     None of the Company, the Master Servicer, the Securities Administrator or
the Trustee shall sell, dispose of or substitute for any of the Mortgage Loans
(except in connection with (i) the foreclosure of a Mortgage Loan, including but
not limited to, the acquisition or sale of a Mortgaged Property acquired by deed
in lieu of foreclosure, (ii) the bankruptcy of the Trust Fund, (iii) the
termination of any Trust REMIC pursuant to Article IX of this Agreement, (iv) a
substitution pursuant to Article II of this Agreement or (v) a purchase of
Mortgage Loans pursuant to Article II or III of this Agreement), nor acquire any
assets for the Trust Fund (other than REO Property acquired in respect of a
defaulted Mortgage Loan), nor sell or dispose of any investments in the
Custodial Account or the Certificate Account for gain, nor accept any
contributions to the REMICs after the Closing Date (other than a Qualified
Substitute Mortgage Loan delivered in accordance with Section 2.04), unless each
such party have received an Opinion of Counsel, addressed to the Trustee and
Securities Administrator (at the expense of the party seeking to cause such
sale, disposition, substitution, acquisition or contribution but in no event at
the expense of the Trustee) that such sale, disposition, substitution,
acquisition or contribution will not (a) affect adversely the status of any
Trust REMIC as REMICs or (b) cause the Trust Fund to be subject to a tax on
"prohibited transactions" or "contributions" pursuant to the REMIC Provisions.

     Section 10.03.            Master Servicer, Securities Administrator and
                               Trustee Indemnification.

     (a) The Securities Administrator agrees to indemnify the Trust Fund, the
Company and the Master Servicer for any taxes and costs including, without
limitation, any reasonable attorneys' fees imposed on or incurred by the Trust
Fund, the Company or the Master Servicer, as a result of (i) a breach of the
Securities Administrator's covenants set forth in this Article X or (ii) any
state, local or franchise taxes imposed upon the Trust Fund as a result of the
location of the Securities Administrator.

     (b) The Master Servicer agrees to indemnify the Trust Fund, the Company and
the Trustee for any taxes and costs including, without limitation, any
reasonable attorneys' fees imposed on or incurred by the Trust Fund, the Company
or the Trustee, as a result of (i) a breach of the Master Servicer's covenants
set forth in Article III or this Article X with respect to compliance with the
REMIC Provisions or (ii) any state, local or franchise taxes imposed upon the
Trust Fund as a result


                                       116

<PAGE>



of the location of the Master Servicer.

     (c) The Seller agrees to indemnify the Trust Fund and the Company for any
taxes and costs including, without limitation, any reasonable attorneys' fees
imposed on or incurred by the Trust Fund or the Company, as a result of any
state, local or franchise taxes imposed upon the Trust Fund as a result of the
location of the Trustee, the Servicer or the Subservicers.


                                   ARTICLE XI
                            MISCELLANEOUS PROVISIONS

     Section 11.01.            Amendment.

     This Agreement may be amended from time to time by the Company, the Master
Servicer, the Securities Administrator and the Trustee, without the consent of
any of the Certificateholders, (i) to cure any ambiguity, (ii) to correct or
supplement any provisions herein which may be defective or inconsistent with any
other provisions herein or to correct any error, (iii) to amend this Agreement
in any respect subject to the provisions in clauses (A) and (B) below, or (iv)
if such amendment, as evidenced by an Opinion of Counsel (provided by the Person
requesting such amendment) delivered to the Trustee, is reasonably necessary to
comply with any requirements imposed by the Code or any successor or amendatory
statute or any temporary or final regulation, revenue ruling, revenue procedure
or other written official announcement or interpretation relating to federal
income tax laws or any proposed such action which, if made effective, would
apply retroactively to the Trust Fund at least from the effective date of such
amendment; provided that such action (except any amendment described in (iv)
above) shall not adversely affect in any material respect the interests of any
Certificateholder (other than Certificateholders who shall consent to such
amendment), as evidenced by (A) an Opinion of Counsel (provided by the Person
requesting such amendment) delivered to the Trustee, and (B) a letter from each
Rating Agency, confirming that such amendment shall not cause it to lower its
rating on any of the Certificates.

     This Agreement may also be amended from time to time by the Company, the
Master Servicer, the Securities Administrator and the Trustee with the consent
of the Holders of Certificates entitled to at least 66-2/3% of the Voting Rights
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Holders of Certificates; provided, however, that no
such amendment shall (i) reduce in any manner the amount of, or delay the timing
of, payments received on Mortgage Loans which are required to be distributed on
any Certificate without the consent of the Holder of such Certificate, (ii)
adversely affect in any material respect the interests of the Holders of any
Class of Certificates in a manner other than as described in (i), without the
consent of the Holders of Certificates of such Class evidencing at least 66-2/3%
of the Voting Rights of such Class, or (iii) reduce the aforesaid percentage of
Certificates the Holders of which are required to consent to any such amendment,
without the consent of the Holders of all Certificates then outstanding.
Notwithstanding any other provision of this Agreement, for purposes of the
giving or withholding of consents pursuant to this





                                       117

<PAGE>



Section 11.01, Certificates registered in the name of the Seller, the Trustee,
the Securities Administrator or the Master Servicer or any affiliate thereof
shall be entitled to Voting Rights with respect to matters described in (i),
(ii) and (iii) of this paragraph.

     Notwithstanding any contrary provision of this Agreement, the Trustee shall
not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel (provided by the Person requesting such
amendment) and addressed to the Trustee and the Securities Administrator to the
effect that such amendment will not result in the imposition of any tax on any
Trust REMIC pursuant to the REMIC Provisions or cause any Trust REMIC to fail to
qualify as a REMIC at any time that any Certificates are outstanding.

     Promptly after the execution of any such amendment the Trustee shall
furnish a copy of such amendment or a written statement describing the amendment
to each Certificateholder, with a copy to the Rating Agencies.

     It shall not be necessary for the consent of Certificateholders under this
Section 11.01 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.

     Prior to executing any amendment pursuant to this Section, the Trustee
shall be entitled to receive an Opinion of Counsel (provided by the Person
requesting such amendment) to the effect that such amendment is authorized or
permitted by this Agreement. The cost of any Opinion of Counsel delivered
pursuant to this Section 11.01 shall be an expense of the party requesting such
amendment, but in any case shall not be an expense of the Trustee.

     Each of the Trustee and the Securities Administrator may, but shall not be
obligated to, enter into any amendment pursuant to this Section that affects its
rights, duties and immunities under this Agreement or otherwise.

     Section 11.02.            Recordation of Agreement; Counterparts.

     To the extent permitted by applicable law, this Agreement is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Master Servicer at the expense of the Certificateholders, but only upon
direction of the Company accompanied by an Opinion of Counsel to the effect that
such recordation materially and beneficially affects the interests of the
Certificateholders.

     For the purpose of facilitating the recordation of this Agreement as herein
provided and for other purposes, this Agreement may be executed simultaneously
in any number of counterparts, each of





                                       118

<PAGE>



which counterparts shall be deemed to be an original, and such counterparts
shall constitute but one and the same instrument.

     Section 11.03.            Limitation on Rights of Certificateholders.

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

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

     No Certificateholder shall have any right by virtue of any provision of
this Agreement to institute any suit, action or proceeding in equity or at law
upon or under or with respect to this Agreement, unless such Holder previously
shall have given to the Trustee a notice of an Event of Default, or of a default
by the Seller or the Trustee in the performance of any obligation hereunder, and
of the continuance thereof, as hereinbefore provided, and unless also the
Holders of Certificates entitled to at least 51% of the Voting Rights shall have
made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for 60 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding. It is
understood and intended, and expressly covenanted by each Certificateholder with
every other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, or to enforce any right
under this Agreement, except in the manner herein provided and for the equal,
ratable and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section, each and every Certificateholder
and the Trustee shall be entitled to such relief as can be given either at law
or in equity.

     Section 11.04.            Governing Law.

     This Agreement and the Certificates shall be construed in accordance with
the laws of the State of New York and the obligations, rights and remedies of
the parties hereunder shall be determined in accordance with such laws.






                                       119

<PAGE>



     Section 11.05.            Notices.

     All demands, notices and direction hereunder shall be in writing and shall
be deemed effective upon receipt when delivered to (a) in the case of the
Company, Homestar Mortgage Acceptance Corp., W. 115 Century Road, Paramus, New
Jersey 07652, Attention: General Counsel, or such other address as may hereafter
be furnished to the other parties hereto in writing; (b) in the case of Master
Servicer, Wells Fargo Bank, N.A., P.O. Box 98, Columbia Maryland 21046 (or, in
the case of overnight deliveries, 9062 Old Annapolis Road, Columbia, Maryland
21045) (Attention: Corporate Trust Services - HMAC 2004-3), facsimile no.: (410)
715-2380, or such other address as may hereafter be furnished to the other
parties hereto in writing; (c) in the case of the securities administrator, the
Corporate Trust Office; (d) in the case of the Trustee, to its Corporate Trust
Office, or such other address as may hereafter be furnished to the other parties
hereto in writing; or (e) in the case of the Rating Agencies, Standard & Poor's,
55 Water Street, 41st Floor, New York, NY 10041, Attention: Asset Backed
Surveillance Department; and Moody's, Moody's Investors Service, Inc.,
Residential Mortgage Monitoring Department, 99 Church Street, New York, New York
10007. Any notice required or permitted to be mailed to a Certificateholder
shall be given by first class mail, postage prepaid, at the address of such
Holder as shown in the Certificate Register. Any notice so mailed within the
time prescribed in this Agreement shall be conclusively presumed to have been
duly given, whether or not the Certificateholder receives such notice.

     Section 11.06.            Severability of Provisions.

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

     Section 11.07.            Successors and Assigns.

     The provisions of this Agreement shall be binding upon and inure to the
benefit of the respective successors and assigns of the parties hereto, and all
such provisions shall inure to the benefit of the Trustee and the
Certificateholders.

     Section 11.08.            Article and Section Headings.

     The article and Section headings herein are for convenience of reference
only, and shall not limit or otherwise affect the meaning hereof.

     Section 11.09.            Notice to Rating Agencies.

     The Trustee shall use its best efforts to promptly provide notice to each
Rating Agency referred to below with respect to each of the following of which
it has actual knowledge:





                                       120

<PAGE>



     1. Any material change or amendment to this Agreement;

     2. The occurrence of any Event of Default that has not been cured;

     3. The resignation or termination of the Master Servicer, the Securities
Administrator or the Trustee;

     4. The repurchase or substitution of Mortgage Loans pursuant to Section
2.04;

     5. The final payment to Certificateholders; and

     6. Any change in the location of the Custodial Account or the Certificate
Account.

     In addition, the Trustee shall promptly furnish to the Rating Agency copies
of each report to Certificateholders described in Section 4.02; and the Master
Servicer shall promptly furnish to the Rating Agency copies of each annual
independent public accountants' servicing report received as described in
Section 3.20.

     Any such notice pursuant to this Section 11.09 shall be in writing and
shall be deemed to have been duly given if personally delivered or mailed by
first class mail, postage prepaid, or by express delivery service to (i) in the
case of Standard & Poor's, 55 Water Street, 41st Floor, New York, New York
10041, Attention: Asset Backed Surveillance Department and (ii) in the case of
Moody's, Residential Mortgage Monitoring Department, 99 Church Street, New York,
New York 10007, or, in each case, such other address as either such Rating
Agency may designate in writing to the parties thereto.

     Section 11.10.            Third Party Rights.

     The Seller shall be deemed a third-party beneficiary of Section 3.25 this
Agreement to the same extent as if it were a party hereto, and shall have the
right to enforce the provisions of such Section. The Servicer shall be deemed a
third-party beneficiary of Section 3.25 of this Agreement to the same extent as
if it were a party hereto, and shall have the right to enforce the provisions of
such Section.





                                       121

<PAGE>



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

                                          HOMESTAR MORTGAGE ACCEPTANCE
                                          CORP.,
                                          Company


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


                                          WELLS FARGO BANK, N.A.,
                                          Master Servicer


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

                                          Name:
                                          Title:


                                          HSBC BANK USA,
                                          Trustee


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

                                          Name:
                                          Title:


                                          WELLS FARGO BANK, N.A.,
                                          Securities Administrator


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

                                          Name:
                                          Title:




                                       122

<PAGE>



STATE OF MARYLAND                )
                                 )  ss.:
COUNTY OF BERGEN                 )

     On the 1st day of July, 2004, before me, a notary public in and for said
State, personally appeared ______________, known to me to be the _____________
of Homestar Mortgage Acceptance Corp., one of the corporations that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.

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

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


[Notarial Seal]






                                       123

<PAGE>




STATE OF MARYLAND                )
                                 )  ss.:
COUNTY OF HOWARD                 )


     On the 1st day of July, 2004, before me, a notary public in and for said
State, personally appeared ___________, known to me to be a _____________ of
Wells Fargo Bank, N.A., the entity that executed the within instrument, and also
known to me to be the person who executed it on behalf of said entity, and
acknowledged to me that such entity executed the within instrument.

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

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


[Notarial Seal]





                                       124

<PAGE>


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


     On the 1st day of July, 2004, before me, a notary public in and for said
State, personally appeared Richard Wu, known to me to be a Vice President of
HSBC Bank USA, the entity that executed the within instrument, and also known to
me to be the person who executed it on behalf of said entity, and acknowledged
to me that such entity executed the within instrument.

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

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


[Notarial Seal]





                                       125

<PAGE>



STATE OF MARYLAND                )
                                 )  ss.:
COUNTY OF HOWARD                 )


     On the 1st day of July, 2004, before me, a notary public in and for said
State, personally appeared ______________, known to me to be a _____________ of
Wells Fargo Bank, N.A., the entity that executed the within instrument, and also
known to me to be the person who executed it on behalf of said entity, and
acknowledged to me that such entity executed the within instrument.

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

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


[Notarial Seal]




                                       126

<PAGE>


                                    EXHIBIT A

                       FORM OF CLASS AV-[_][_] CERTIFICATE

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

      THIS CERTIFICATE SHALL INITIALLY BE ISSUED AS ONE OR MORE CERTIFICATES
REGISTERED IN THE NAME OF THE DEPOSITORY OR ITS NOMINEE AND, EXCEPT AS PROVIDED
BELOW, REGISTRATION OF SUCH CERTIFICATES MAY NOT BE TRANSFERRED BY THE TRUSTEE
EXCEPT TO ANOTHER DEPOSITORY THAT AGREES TO HOLD SUCH CERTIFICATES FOR THE
RESPECTIVE CERTIFICATE OWNERS WITH OWNERSHIP INTERESTS THEREIN. THE CERTIFICATE
OWNERS SHALL HOLD THEIR RESPECTIVE OWNERSHIP INTERESTS IN AND TO EACH OF SUCH
BOOK-ENTRY CERTIFICATES THROUGH THE BOOK-ENTRY FACILITIES OF THE DEPOSITORY AND,
EXCEPT AS PROVIDED BELOW, SHALL NOT BE ENTITLED TO DEFINITIVE CERTIFICATES IN
RESPECT OF SUCH OWNERSHIP INTERESTS. ALL TRANSFERS BY CERTIFICATE OWNERS OF
THEIR RESPECTIVE OWNERSHIP IN THE BOOK-ENTRY CERTIFICATES SHALL BE MADE IN
ACCORDANCE WITH THE PROCEDURES ESTABLISHED BY THE DEPOSITORY PARTICIPANT OR
BROKERAGE FIRM REPRESENTING SUCH CERTIFICATE OWNER. EACH DEPOSITORY PARTICIPANT
SHALL TRANSFER THE OWNERSHIP INTERESTS ONLY IN THE BOOK-ENTRY CERTIFICATES OF
CERTIFICATE OWNERS IT REPRESENTS OR OF BROKERAGE FIRMS FOR WHICH IT ACTS AS
AGENT IN ACCORDANCE WITH THE DEPOSITORY'S NORMAL PROCEDURES. THE TRUSTEE SHALL
NOT BE REQUIRED TO MONITOR, DETERMINE OR INQUIRE AS TO COMPLIANCE WITH THE
TRANSFER RESTRICTIONS WITH RESPECT TO THE BOOK-ENTRY CERTIFICATES, AND THE
TRUSTEE SHALL HAVE NO LIABILITY FOR TRANSFERS OF OWNERSHIP INTERESTS IN THE
BOOK-ENTRY CERTIFICATES MADE THROUGH THE BOOK-ENTRY FACILITIES OF THE DEPOSITORY
OR BETWEEN OR AMONG DEPOSITORY PARTICIPANTS OR CERTIFICATE OWNERS, MADE IN
VIOLATION OF THE APPLICABLE RESTRICTIONS.




                                       A-1

<PAGE>



<TABLE>
<CAPTION>
<S>                                     <C>
Certificate No. 1                   Adjustable Pass-Through Rate
Class AV-[_][_]

Date of Pooling and Servicing       Percentage Interest: 100%
Agreement and Cut-off Date:
June 1, 2004

First Distribution Date:            Aggregate Initial Certificate Principal Balance
July 26, 2004                       of the Class AV-[_][_] Certificates:
                                    $______________

Master Servicer:                    Initial Certificate Principal
Wells Fargo Bank, National AssociatiBalance of this Certificate:
                                    $______________

Assumed Final                       CUSIP:__________
Distribution Date:
[____________], 2034
</TABLE>




                      ASSET-BACKED PASS-THROUGH CERTIFICATE
                                  SERIES 2004-3

      evidencing a percentage interest in the distributions allocable to the
      Class AV-[_][_] Certificates with respect to a Trust Fund consisting
      primarily of a pool of one- to four-family adjustable and fixed-rate first
      lien mortgage loans formed and sold by HOMESTAR MORTGAGE ACCEPTANCE CORP.

      This Certificate is payable solely from the assets of the Trust Fund, and
does not represent an obligation of or interest in Homestar Mortgage Acceptance
Corp., the Master Servicer, the Securities Administrator, the Trustee referred
to below or any of their affiliates. Neither this Certificate nor the underlying
Mortgage Loans are guaranteed or insured by any governmental agency or
instrumentality or by Homestar Mortgage Acceptance Corp., the Master Servicer,
the Securities Administrator, the Trustee or any of their affiliates. None of
the Company, the Master Servicer, the Securities Administrator or any of their
affiliates will have any obligation with respect to any certificate or other
obligation secured by or payable from payments on the Certificates.

      This certifies that Cede & Co. is the registered owner of the Percentage
Interest evidenced by this Certificate (obtained by dividing the Initial
Certificate Principal Balance of this Certificate by the aggregate Initial
Certificate Principal Balance of all Class AV-[_][_] Certificates, both as
specified above) in certain distributions with respect to the Trust Fund
consisting primarily of an interest in a pool of one- to four-family fixed-rate
and adjustable-rate first lien mortgage loans (the "Mortgage Loans"), sold by
Homestar Mortgage Acceptance Corp. (hereinafter called the "Company," which term
includes any successor entity under the Agreement referred to below). The


                                       A-2

<PAGE>



Trust Fund was created pursuant to a Pooling and Servicing Agreement dated as
specified above (the "Agreement") among the Company, the Master Servicer, the
Securities Administrator and HSBC Bank USA, as trustee (the "Trustee"), a
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.

            Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the Distribution Date"), commencing as
described in the Agreement, to the Person in whose name this Certificate is
registered at the close of business on the last Business Day of the month
immediately preceding the month of such Distribution Date (the "Record Date"),
from the Available Distribution Amount in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount of interest and
principal, if any , required to be distributed to Holders of Class AV-[_][_]
Certificates on such Distribution Date.

            Distributions on this Certificate will be made by the Securities
Administrator either in immediately available funds (by wire transfer or
otherwise) for the account of the Person entitled thereto if such Person shall
have so notified the Securities Administrator and the Trustee at least 5
Business Days prior to the related Record Date, or by check mailed to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register.

            Any transferee shall be deemed to have made the representation set
forth in Section 5.02(c) of the Agreement.

            Notwithstanding the above, the final distribution on this
Certificate will be made after due notice of the pendency of such distribution
and only upon presentation and surrender of this Certificate at the office or
agency appointed by the Securities Administrator for that purpose in the City of
Minneapolis and State of Minnesota. The Initial Certificate Principal Balance of
this Certificate is set forth above. The Certificate Principal Balance hereof
will be reduced to the extent of distributions allocable to principal.

            This Certificate is one of a duly authorized issue of Certificates
issued in several Classes designated as Asset-Backed Pass-Through Certificates
of the Series specified hereon (herein collectively called the "Certificates").

            The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. In the event Master Servicer
funds are advanced with respect to any Mortgage Loan, such advance is
reimbursable to the Master Servicer, to the extent provided in the Agreement,
from related recoveries on such Mortgage Loan or from other cash that would have
been distributable to Certificateholders.


                                       A-3

<PAGE>



            As provided in the Agreement, withdrawals from the Custodial Account
and/or the Certificate Account created for the benefit of Certificateholders may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement to the Trustee, the Company and the Master Servicer of advances
made, or certain expenses incurred, by either of them.

            The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Company, the Master Servicer, the Securities Administrator and the Trustee
and the rights of the Certificateholders under the Agreement at any time by the
Company, the Master Servicer, the Securities Administrator and the Trustee with
the consent of the Holders of Certificates evidencing in the aggregate not less
than 66-2/3% of the Percentage Interests of each Class of Certificates affected
thereby. Any such consent by the Holder of this Certificate shall be conclusive
and binding on such Holder and upon all future holders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon the
Certificate. The Agreement also permits the amendment thereof in certain
circumstances without the consent of the Holders of any of the Certificates and,
in certain additional circumstances, without the consent of the Holders of
certain Classes of Certificates.

            As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable with the
Securities Administrator upon surrender of this Certificate for registration of
transfer at the offices or agencies maintained by the Securities Administrator,
duly endorsed by, or accompanied by an assignment in the form below or other
written instrument of transfer in form satisfactory to the Trustee and the
Securities Administrator duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of authorized denominations evidencing the same Class and aggregate Percentage
Interest will be issued to the designated transferee or transferees.

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

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

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


                                       A-4

<PAGE>



            This Certificate shall be governed by and construed in accordance
with the laws of the State of New York.

            The obligations created by the Agreement in respect of the
Certificates and the Trust Fund created thereby shall terminate upon the payment
to Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the purchase by the Servicer or its designee or the Master Servicer from the
Trust Fund of all remaining Mortgage Loans and each REO Property in respect
thereof remaining in the Trust Fund, thereby effecting early retirement of the
Certificates and (ii) the final payment or other liquidation (or any Advance
with respect thereto) of the last Mortgage Loan remaining in the Trust Fund (or
the disposition of all REO Property in respect thereof). The Agreement permits,
but does not require, the Servicer or the Master Servicer to purchase at a price
determined as provided in the Agreement all remaining Mortgage Loans and all REO
Property; provided, that any such option may only be exercised on or after the
first Distribution Date on which the aggregate unpaid balance of the Mortgage
Loans is less than or equal to ten percent of the aggregate Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date with respect to a purchase
by the Servicer, or on or after the first Distribution Date on which the
aggregate unpaid principal balance of the Mortgage Loans is less than or equal
to five percent of the aggregate Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date with respect to a purchase by the Master Servicer.

            Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.




                                       A-5

<PAGE>



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


Dated:July __, 2004               WELLS FARGO BANK, NATIONAL
                                  ASSOCIATION,
                                  as Securities Administrator

                                  By:______________________________________
                                  Authorized Signatory



                          CERTIFICATE OF AUTHENTICATION

      This is one of the Class AV-[_][_] Certificates referred to in the
within-mentioned Agreement.


                                  WELLS FARGO BANK, NATIONAL
                                  ASSOCIATION,
                                  as Securities Administrator

                                  By:______________________________________
                                  Authorized Signatory







                                       A-6

<PAGE>



                                   ASSIGNMENT


            FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Mortgage Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.

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







Dated:                 _________________________________________________________
                                  Signature by or on behalf of assignor



                                  ______________________________________________
                                          Signature Guaranteed





                                       A-7

<PAGE>



                          DISTRIBUTION INSTRUCTIONS


            The assignee should include the following for purposes of
distribution:

            Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ___________________________________for the
account of __________________ account number _______________, or, if mailed by
check, to ________________________. Applicable statements should be mailed
to____________________________________________.

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






                                       A-8

<PAGE>



                                   EXHIBIT B-1
                           FORM OF CLASS M CERTIFICATE

      THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR
CERTIFICATES, [THE CLASS M-1 CERTIFICATES] [AND THE CLASS M-2 CERTIFICATES][AND
THE CLASS M-3 CERTIFICATES] [AND THE CLASS M-4 CERTIFICATES] AS DESCRIBED IN THE
AGREEMENT (AS DEFINED BELOW).

      THIS CERTIFICATE SHALL INITIALLY BE ISSUED AS ONE OR MORE CERTIFICATES
REGISTERED IN THE NAME OF THE DEPOSITORY OR ITS NOMINEE AND, EXCEPT AS PROVIDED
BELOW, REGISTRATION OF SUCH CERTIFICATES MAY NOT BE TRANSFERRED BY THE TRUSTEE
EXCEPT TO ANOTHER DEPOSITORY THAT AGREES TO HOLD SUCH CERTIFICATES FOR THE
RESPECTIVE CERTIFICATE OWNERS WITH OWNERSHIP INTERESTS THEREIN. THE CERTIFICATE
OWNERS SHALL HOLD THEIR RESPECTIVE OWNERSHIP INTERESTS IN AND TO EACH OF SUCH
BOOK-ENTRY CERTIFICATES THROUGH THE BOOK-ENTRY FACILITIES OF THE DEPOSITORY AND,
EXCEPT AS PROVIDED BELOW, SHALL NOT BE ENTITLED TO DEFINITIVE CERTIFICATES IN
RESPECT OF SUCH OWNERSHIP INTERESTS. ALL TRANSFERS BY CERTIFICATE OWNERS OF
THEIR RESPECTIVE OWNERSHIP IN THE BOOK-ENTRY CERTIFICATES SHALL BE MADE IN
ACCORDANCE WITH THE PROCEDURES ESTABLISHED BY THE DEPOSITORY PARTICIPANT OR
BROKERAGE FIRM REPRESENTING SUCH CERTIFICATE OWNER. EACH DEPOSITORY PARTICIPANT
SHALL TRANSFER THE OWNERSHIP INTERESTS ONLY IN THE BOOK-ENTRY CERTIFICATES OF
CERTIFICATE OWNERS IT REPRESENTS OR OF BROKERAGE FIRMS FOR WHICH IT ACTS AS
AGENT IN ACCORDANCE WITH THE DEPOSITORY'S NORMAL PROCEDURES. THE TRUSTEE SHALL
NOT BE REQUIRED TO MONITOR, DETERMINE OR INQUIRE AS TO COMPLIANCE WITH THE
TRANSFER RESTRICTIONS WITH RESPECT TO THE BOOK-ENTRY CERTIFICATES, AND THE
TRUSTEE SHALL HAVE NO LIABILITY FOR TRANSFERS OF OWNERSHIP INTERESTS IN THE
BOOK-ENTRY CERTIFICATES MADE THROUGH THE BOOK-ENTRY FACILITIES OF THE DEPOSITORY
OR BETWEEN OR AMONG DEPOSITORY PARTICIPANTS OR CERTIFICATE OWNERS, MADE IN
VIOLATION OF THE APPLICABLE RESTRICTIONS.

      ANY TRANSFEREE SHALL BE DEEMED TO HAVE MADE THE REPRESENTATION SET FORTH
IN SECTION 5.02(C) OF THE POOLING AND SERVICING AGREEMENT.



                                      B-1-1

<PAGE>



<TABLE>
<CAPTION>
<S>                                     <C>
Certificate No.______                 Adjustable Pass-Through Rate

Class [M-__][Mezzanine]               Aggregate Initial Certificate Principal
                                      Balance of the Class [M-__]
                                      Certificates:
                                      $____________

Date of Pooling and Servicing         Initial Certificate Principal Balance of this
Agreement and Cut-off Date:           Certificate:
June 1, 2004                          $__________________

First Distribution Date:              CUSIP:______________
July 26, 2004

Master Servicer:
Wells Fargo Bank, National Association

Assumed Final Distribution Date:
_____________
</TABLE>



                      ASSET-BACKED PASS-THROUGH CERTIFICATE
                                  SERIES 2004-3

      evidencing a percentage interest in any distributions allocable to the
      Class M-__ Certificates with respect to the Trust Fund consisting
      primarily of a pool of one- to four-family adjustable and fixed-rate first
      lien mortgage loans formed and sold by HOMESTAR MORTGAGE ACCEPTANCE CORP.

            This Certificate is payable solely from the assets of the Trust
Fund, and does not represent an obligation of or interest in Homestar Mortgage
Acceptance Corp., the Master Servicer, the Servicer, the Seller, the Securities
Administrator, the Trustee referred to below or any of their affiliates. Neither
this Certificate nor the underlying Mortgage Loans are guaranteed or insured by
any governmental agency or instrumentality or by Homestar Mortgage Acceptance
Corp., the Master Servicer, the Servicer, the Seller, the Securities
Administrator, the Trustee or any of their affiliates. None of Homestar Mortgage
Acceptance Corp., the Master Servicer, the Servicer, the Seller, the Securities
Administrator or any of their affiliates will have any obligation with respect
to any certificate or other obligation secured by or payable from payments on
the Certificates.

            This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
Initial Certificate Principal Balance of this Certificate by the aggregate
Initial Certificate Principal Balance of all Class M-__ Certificates, both as
specified above) in certain distributions with respect to the Trust Fund
consisting primarily of an interest in a pool of one- to four-family fixed-rate
and adjustable-rate first lien mortgage loans (the "Mortgage Loans"), sold by
Homestar Mortgage Acceptance Corp. (hereinafter called the


                                      B-1-2

<PAGE>



"Company," which term includes any successor entity under the Agreement referred
to below). The Trust Fund was created pursuant to a Pooling and Servicing
Agreement dated as specified above (the "Agreement") among the Company, the
Master Servicer, the Securities Administrator and HSBC Bank USA, as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

            Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the Distribution Date"), commencing as
described in the Agreement, to the Person in whose name this Certificate is
registered at the close of business on the last Business Day of the month
immediately preceding the month of such Distribution Date (the "Record Date"),
from the Available Distribution Amount in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount of interest and
principal, if any , required to be distributed to Holders of Class M-__
Certificates on such Distribution Date.

            Distributions on this Certificate will be made by the Securities
Administrator either in immediately available funds (by wire transfer or
otherwise) for the account of the Person entitled thereto if such Person shall
have so notified the Securities Administrator and the Trustee at least 5
Business Days prior to the related Record Date, or by check mailed to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register.

            Any transferee shall be deemed to have made the representation set
forth in Section 5.02(c) of the Agreement.

            Notwithstanding the above, the final distribution on this
Certificate will be made after due notice of the pendency of such distribution
and only upon presentation and surrender of this Certificate at the office or
agency appointed by the Securities Administrator for that purpose in the City of
Minneapolis and State of Minnesota. The Initial Certificate Principal Balance of
this Certificate is set forth above. The Certificate Principal Balance hereof
will be reduced to the extent of distributions allocable to principal.

            This Certificate is one of a duly authorized issue of Certificates
issued in several Classes designated as Asset-Backed Pass-Through Certificates
of the Series specified hereon (herein collectively called the "Certificates").

            The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. In the event Master Servicer
funds are advanced with respect to any Mortgage Loan, such advance is
reimbursable to the Master Servicer, to the extent provided in the Agreement,
from related recoveries on such Mortgage Loan or from other cash that would have
been distributable to Certificateholders.


                                      B-1-3

<PAGE>



            As provided in the Agreement, withdrawals from the Custodial Account
and/or the Certificate Account created for the benefit of Certificateholders may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement to the Trustee, the Company and the Master Servicer of advances
made, or certain expenses incurred, by either of them.

            The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Company, the Master Servicer, the Securities Administrator and the Trustee
and the rights of the Certificateholders under the Agreement at any time by the
Company, the Master Servicer, the Securities Administrator and the Trustee with
the consent of the Holders of Certificates evidencing in the aggregate not less
than 66-2/3% of the Percentage Interests of each Class of Certificates affected
thereby. Any such consent by the Holder of this Certificate shall be conclusive
and binding on such Holder and upon all future holders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon the
Certificate. The Agreement also permits the amendment thereof in certain
circumstances without the consent of the Holders of any of the Certificates and,
in certain additional circumstances, without the consent of the Holders of
certain Classes of Certificates.

            As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable with the
Securities Administrator upon surrender of this Certificate for registration of
transfer at the offices or agencies maintained by the Securities Administrator,
duly endorsed by, or accompanied by an assignment in the form below or other
written instrument of transfer in form satisfactory to the Trustee and the
Securities Administrator duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of authorized denominations evidencing the same Class and aggregate Percentage
Interest will be issued to the designated transferee or transferees.

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

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

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


                                      B-1-4

<PAGE>



            This Certificate shall be governed by and construed in accordance
with the laws of the State of New York.

            The obligations created by the Agreement in respect of the
Certificates and the Trust Fund created thereby shall terminate upon the payment
to Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the purchase by the Servicer or its designee or the Master Servicer from the
Trust Fund of all remaining Mortgage Loans and each REO Property in respect
thereof remaining in the Trust Fund, thereby effecting early retirement of the
Certificates and (ii) the final payment or other liquidation (or any Advance
with respect thereto) of the last Mortgage Loan remaining in the Trust Fund (or
the disposition of all REO Property in respect thereof). The Agreement permits,
but does not require, the Servicer or the Master Servicer to purchase at a price
determined as provided in the Agreement all remaining Mortgage Loans and all REO
Property; provided, that any such option may only be exercised on or after the
first Distribution Date on which the aggregate unpaid balance of the Mortgage
Loans is less than or equal to ten percent of the aggregate Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date with respect to a purchase
by the Servicer, or on or after the first Distribution Date on which the
aggregate unpaid principal balance of the Mortgage Loans is less than or equal
to five percent of the aggregate Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date with respect to a purchase by the Master Servicer.

            Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.




                                      B-1-5

<PAGE>



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


Dated:July __, 2004               WELLS FARGO BANK, NATIONAL
                                  ASSOCIATION,
                                  as Securities Administrator

                                  By:___________________________________________
                                  Authorized Signatory



                          CERTIFICATE OF AUTHENTICATION

      This is one of the Class M-_ Certificates referred to in the
within-mentioned Agreement.


                                  WELLS FARGO BANK, NATIONAL
                                  ASSOCIATION,
                                  as Securities Administrator

                                  By:___________________________________________
                                  Authorized Signatory






                                      B-1-6

<PAGE>



                                   ASSIGNMENT


      FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Mortgage Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.

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




Dated:                 _________________________________________________________
                                  Signature by or on behalf of assignor



                                  ______________________________________________
                                          Signature Guaranteed






                                      B-1-7

<PAGE>



                            DISTRIBUTION INSTRUCTIONS


            The assignee should include the following for purposes of
distribution:

            Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ___________________________________for the
account of __________________ account number _______________, or, if mailed by
check, to ________________________. Applicable statements should be mailed
to____________________________________________.

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







                                      B-1-8

<PAGE>



                                   EXHIBIT B-2
                          FORM OF CLASS C CERTIFICATES


      THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE
CLASS AV-[_][_], AND CLASS M CERTIFICATES AS DESCRIBED IN THE
AGREEMENT (AS DEFINED BELOW).

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

      THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.

      NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE
WITH THE PROCEDURES DESCRIBED HEREIN.





                                      B-2-1

<PAGE>




Certificate No. 1
Class C                                 Aggregate Initial Notional Amount of the
                                        Class C Certificates:
                                        $_________________

Date of Pooling and Servicing           Initial Notional Amount
Agreement and Cut-off Date:             of this Certificate ("Denomination"):
June 1, 2004                            $______________

First Distribution Date:                Initial Certificate Principal Balance of
July 26, 2004                           this Certificate ("Denomination"):
                                        $______________

Master Servicer:
Wells Fargo Bank, National Association
Assumed Final Distribution Date:
______________


                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 2004-3

      evidencing percentage interest in the distributions allocable to the Class
      C Certificates with respect to a Trust Fund consisting primarily of a pool
      of one- to four- family adjustable and fixed-rate first lien mortgage
      loans formed and sold by HOMESTAR MORTGAGE ACCEPTANCE CORP.

            This Certificate is payable solely from the assets of the Trust
Fund, and does not represent an obligation of or interest in Homestar Mortgage
Acceptance Corp., the Master Servicer, the Servicer, the Seller, the Securities
Administrator, the Trustee referred to below or any of their affiliates. Neither
this Certificate nor the underlying Mortgage Loans are guaranteed or insured by
any governmental agency or instrumentality or by Homestar Mortgage Acceptance
Corp., the Master Servicer, the Servicer, the Seller, the Securities
Administrator, the Trustee or any of their affiliates. None of Homestar Mortgage
Acceptance Corp., the Master Servicer, the Servicer, the Seller, the Securities
Administrator or any of their affiliates will have any obligation with respect
to any certificate or other obligation secured by or payable from payments on
the Certificates.

            This certifies that ___________________ is the registered owner of
the Percentage Interest evidenced by this Certificate (obtained by dividing the
Original Class C Certificate by the Original Class Certificate Principal
Balance) in certain distributions with respect to the Trust Fund consisting
primarily of an interest in a pool of one- to four-family fixed-rate and
adjustable-rate first lien mortgage loans (the "Mortgage Loans"), sold by
Homestar Mortgage Acceptance Corp. (hereinafter called the "Company," which term
includes any successor entity under the Agreement


                                      B-2-2

<PAGE>



referred to below). The Trust Fund was created pursuant to a Pooling and
Servicing Agreement dated as specified above (the "Agreement") among the
Company, the Master Servicer, the Securities Administrator and HSBC Bank USA, as
trustee (the "Trustee"), a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Class C
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.

            Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the Distribution Date"), commencing as
described in the Agreement, to the Person in whose name this Certificate is
registered at the close of business on the last Business Day of the month
immediately preceding the month of such Distribution Date (the "Record Date"),
from the Available Distribution Amount in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount of interest and
principal, if any , required to be distributed to Holders of Class C
Certificates on such Distribution Date.

            Distributions on this Certificate will be made by the Securities
Administrator either in immediately available funds (by wire transfer or
otherwise) for the account of the Person entitled thereto if such Person shall
have so notified the Securities Administrator and the Trustee at least 5
Business Days prior to the related Record Date, or by check mailed to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register.

            Notwithstanding the above, the final distribution on this
Certificate will be made after due notice of the pendency of such distribution
and only upon presentation and surrender of this Certificate at the office or
agency appointed by the Securities Administrator for that purpose in the City of
Minneapolis and State of Minnesota.

            This Certificate is one of a duly authorized issue of Certificates
issued in several Classes designated as Asset-Backed Pass-Through Certificates
of the Series specified hereon (herein collectively called the "Certificates").

            The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. In the event Master Servicer
funds are advanced with respect to any Mortgage Loan, such advance is
reimbursable to the Master Servicer, to the extent provided in the Agreement,
from related recoveries on such Mortgage Loan or from other cash that would have
been distributable to Certificateholders.

            As provided in the Agreement, withdrawals from the Custodial Account
and/or the Certificate Account created for the benefit of Certificateholders may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement to the Trustee, the Company and the Master Servicer of advances
made, or certain expenses incurred, by either of them.


                                      B-2-3

<PAGE>



            No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Company in writing the facts surrounding the
transfer. In the event that such a transfer is not to be made pursuant to Rule
144A of the act, there shall be delivered to the Trustee and the Company of an
Opinion of Counsel that such transfer may be made pursuant to an exemption from
the Act, which Opinion of Counsel shall not be obtained at the expense of the
Trustee, the Master Servicer or the Company; or there shall be delivered to the
Trustee and the Company a transferor certificate by the transferor and an
investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Company against any liability that may result if the transfer is
not so exempt or is not made in accordance with such federal and state laws.

            No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any person using Plan Assets to acquire this Certificate
shall be made except in accordance with Section 5.02(c) of the Agreement.

            The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Company, the Master Servicer, the Securities Administrator and the Trustee
and the rights of the Certificateholders under the Agreement at any time by the
Company, the Master Servicer, the Securities Administrator and the Trustee with
the consent of the Holders of Certificates evidencing in the aggregate not less
than 66-2/3% of the Percentage Interests of each Class of Certificates affected
thereby. Any such consent by the Holder of this Certificate shall be conclusive
and binding on such Holder and upon all future holders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon the
Certificate. The Agreement also permits the amendment thereof in certain
circumstances without the consent of the Holders of any of the Certificates and,
in certain additional circumstances, without the consent of the Holders of
certain Classes of Certificates.

            As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable with the
Securities Administrator upon surrender of this Certificate for registration of
transfer at the offices or agencies maintained by the Securities Administrator,
duly endorsed by, or accompanied by an assignment in the form below or other
written instrument of transfer in form satisfactory to the Trustee and the
Securities Administrator duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of authorized denominations evidencing the same Class and aggregate Percentage
Interest will be issued to the designated transferee or transferees.


                                      B-2-4

<PAGE>



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

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

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

            This Certificate shall be governed by and construed in accordance
with the laws of the State of New York.

            The obligations created by the Agreement in respect of the
Certificates and the Trust Fund created thereby shall terminate upon the payment
to Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the purchase by the Servicer or its designee or the Master Servicer from the
Trust Fund of all remaining Mortgage Loans and each REO Property in respect
thereof remaining in the Trust Fund, thereby effecting early retirement of the
Certificates and (ii) the final payment or other liquidation (or any Advance
with respect thereto) of the last Mortgage Loan remaining in the Trust Fund (or
the disposition of all REO Property in respect thereof). The Agreement permits,
but does not require, the Servicer or the Master Servicer to purchase at a price
determined as provided in the Agreement all remaining Mortgage Loans and all REO
Property; provided, that any such option may only be exercised on or after the
first Distribution Date on which the aggregate unpaid balance of the Mortgage
Loans is less than or equal to ten percent of the aggregate Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date with respect to a purchase
by the Servicer, or on or after the first Distribution Date on which the
aggregate unpaid principal balance of the Mortgage Loans is less than or equal
to five percent of the aggregate Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date with respect to a purchase by the Master Servicer.

            Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.


                                      B-2-5

<PAGE>



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


Dated:July __, 2004               WELLS FARGO BANK, NATIONAL
                                  ASSOCIATION,
                                  as Securities Administrator

                                  By:___________________________________________
                                  Authorized Signatory



                          CERTIFICATE OF AUTHENTICATION

      This is one of the Class C Certificates referred to in the
within-mentioned Agreement.


                                  WELLS FARGO BANK, NATIONAL
                                  ASSOCIATION,
                                  as Securities Administrator

                                  By:___________________________________________
                                  Authorized Signatory






                                      B-2-6

<PAGE>



                                   ASSIGNMENT


      FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________ (Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Mortgage Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.

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




Dated:                 _________________________________________________________
                                  Signature by or on behalf of assignor



                                  ______________________________________________
                                          Signature Guaranteed







                                      B-2-7

<PAGE>



                            DISTRIBUTION INSTRUCTIONS


      The assignee should include the following for purposes of distribution:

      Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to______________________________________________________________
________________________________________________________________________________
for the account of ____________________________________________________________,
account number __________________, or, if mailed by check, to _________________.
________________________________________________________________________________
Applicable statements should be mailed to .



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





                                      B-2-8

<PAGE>



                                   EXHIBIT B-3
                           FORM OF CLASS P CERTIFICATE


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

      THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.

      NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE
WITH THE PROCEDURES DESCRIBED HEREIN.





                                      B-3-1

<PAGE>




Certificate No. 1

Class P                                 Aggregate Initial Certificate Principal
                                        Balance of the Class P Certificates:
                                        $100.00

Date of Pooling and Servicing           Initial Certificate Principal Balance
Agreement and Cut-off Date:             of this Certificate ("Denomination"):
June 1, 2004                            $100.00

First Distribution Date:                Percentage Interest of this Certificate:
July 26, 2004                           100.00%

Master Servicer:
Wells Fargo Bank, National Association

Assumed Final Distribution Date:
_______________


                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 2004-3


      evidencing a percentage interest in any distributions allocable to the
      Class P Certificates with respect to the Trust Fund consisting primarily
      of a pool of one- to four-family adjustable and fixed-rate first lien
      mortgage loans formed and sold by HOMESTAR MORTGAGE ACCEPTANCE CORP.

            This Certificate is payable solely from the assets of the Trust
Fund, and does not represent an obligation of or interest in Homestar Mortgage
Acceptance Corp., the Master Servicer, the Servicer, the Seller, the Securities
Administrator, the Trustee referred to below or any of their affiliates. Neither
this Certificate nor the underlying Mortgage Loans are guaranteed or insured by
any governmental agency or instrumentality or by Homestar Mortgage Acceptance
Corp., the Master Servicer, the Servicer, the Seller, the Securities
Administrator, the Trustee or any of their affiliates. None of Homestar Mortgage
Acceptance Corp., the Master Servicer, the Servicer, the Seller, the Securities
Administrator or any of their affiliates will have any obligation with respect
to any certificate or other obligation secured by or payable from payments on
the Certificates.

            This certifies that ___________________ is the registered owner of
the Percentage Interest evidenced by this Class P Certificate (obtained by
dividing the Denomination of this Class P Certificate by the Original Class
Certificate Principal Balance) in certain distributions with respect to the
Trust Fund consisting primarily of an interest in a pool of one- to four-family
fixed-rate and adjustable-rate first lien mortgage loans (the "Mortgage Loans"),
sold by Homestar Mortgage Acceptance Corp. (hereinafter called the "Company,"
which term includes any successor entity under


                                      B-3-2

<PAGE>



the Agreement referred to below). The Trust Fund was created pursuant to a
Pooling and Servicing Agreement dated as specified above (the "Agreement") among
the Company, the Master Servicer, the Securities Administrator and HSBC Bank
USA, as trustee (the "Trustee"), a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.

            Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the Distribution Date"), commencing as
described in the Agreement, to the Person in whose name this Certificate is
registered at the close of business on the last Business Day of the month
immediately preceding the month of such Distribution Date (the "Record Date"),
from the Available Distribution Amount in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount of interest and
principal, if any , required to be distributed to Holders of Class P
Certificates on such Distribution Date.

            Distributions on this Certificate will be made by the Securities
Administrator either in immediately available funds (by wire transfer or
otherwise) for the account of the Person entitled thereto if such Person shall
have so notified the Securities Administrator and the Trustee at least 5
Business Days prior to the related Record Date, or by check mailed to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register.

            Notwithstanding the above, the final distribution on this
Certificate will be made after due notice of the pendency of such distribution
and only upon presentation and surrender of this Certificate at the office or
agency appointed by the Securities Administrator for that purpose in the City of
Minneapolis and State of Minnesota. The Initial Certificate Principal Balance of
this Certificate is set forth above. The Certificate Principal Balance hereof
will be reduced to the extent of distributions allocable to principal. This
Certificate is one of a duly authorized issue of Certificates issued in several
Classes designated as Asset-Backed Pass-Through Certificates of the Series
specified hereon (herein collectively called the "Certificates").

            The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. In the event Master Servicer
funds are advanced with respect to any Mortgage Loan, such advance is
reimbursable to the Master Servicer, to the extent provided in the Agreement,
from related recoveries on such Mortgage Loan or from other cash that would have
been distributable to Certificateholders.

            As provided in the Agreement, withdrawals from the Custodial Account
and/or the Certificate Account created for the benefit of Certificateholders may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including


                                      B-3-3

<PAGE>



without limitation reimbursement to the Trustee, the Company and the Master
Servicer of advances made, or certain expenses incurred, by either of them.

            No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Company in writing the facts surrounding the
transfer. In the event that such a transfer is not to be made pursuant to Rule
144A of the Act, there shall be delivered to the Trustee and the Company of an
Opinion of Counsel that such transfer may be made pursuant to an exemption from
the Act, which Opinion of Counsel shall not be obtained at the expense of the
Trustee, the Master Servicer or the Company; or there shall be delivered to the
Trustee and the Company a transferor certificate by the transferor and an
investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Company against any liability that may result if the transfer is
not so exempt or is not made in accordance with such federal and state laws.

            No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any person using Plan Assets to acquire this Certificate
shall be made except in accordance with Section 5.02(c) of the Agreement.


            The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Company, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Company, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66-2/3% of the Percentage Interests of
each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates and, in certain additional circumstances, without the
consent of the Holders of certain Classes of Certificates.

            As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable with the
Securities Administrator upon surrender of this Certificate for registration of
transfer at the offices or agencies maintained by the Securities Administrator,
duly endorsed by, or accompanied by an assignment in the form below or other
written instrument of transfer in form satisfactory to the Trustee and the
Securities Administrator duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and


                                      B-3-4

<PAGE>



thereupon one or more new Certificates of authorized denominations evidencing
the same Class and aggregate Percentage Interest will be issued to the
designated transferee or transferees.

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

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

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

            This Certificate shall be governed by and construed in accordance
with the laws of the State of New York.

            The obligations created by the Agreement in respect of the
Certificates and the Trust Fund created thereby shall terminate upon the payment
to Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the purchase by the Servicer or its designee or the Master Servicer from the
Trust Fund of all remaining Mortgage Loans and each REO Property in respect
thereof remaining in the Trust Fund, thereby effecting early retirement of the
Certificates and (ii) the final payment or other liquidation (or any Advance
with respect thereto) of the last Mortgage Loan remaining in the Trust Fund (or
the disposition of all REO Property in respect thereof). The Agreement permits,
but does not require, the Servicer or the Master Servicer to purchase at a price
determined as provided in the Agreement all remaining Mortgage Loans and all REO
Property; provided, that any such option may only be exercised on or after the
first Distribution Date on which the aggregate unpaid balance of the Mortgage
Loans is less than or equal to ten percent of the aggregate Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date with respect to a purchase
by the Servicer, or on or after the first Distribution Date on which the
aggregate unpaid principal balance of the Mortgage Loans is less than or equal
to five percent of the aggregate Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date with respect to a purchase by the Master Servicer.

            Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.


                                      B-3-5

<PAGE>



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


Dated:July __, 2004               WELLS FARGO BANK, NATIONAL
                                  ASSOCIATION,
                                  as Securities Administrator

                                  By:___________________________________________
                                  Authorized Signatory



                          CERTIFICATE OF AUTHENTICATION

      This is one of the Class P Certificates referred to in the
within-mentioned Agreement.


                                  WELLS FARGO BANK, NATIONAL
                                  ASSOCIATION,
                                  as Securities Administrator

                                  By:___________________________________________
                                  Authorized Signatory






                                      B-3-6

<PAGE>



                                   ASSIGNMENT


      FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
          (Please print or typewrite name and address including postal
           zip code of assignee)

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

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


Dated:________________


                                  ______________________________________________
                                    Signature by or on behalf of assignor





                                      B-3-7

<PAGE>



                            DISTRIBUTION INSTRUCTIONS


      The assignee should include the following for purposes of distribution:

      Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
for the account of ____________________________________________________________,
account number __________________, or, if mailed by check, to _________________.
Applicable statements should be mailed to _____________________________________.
________________________________________________________________________________


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






                                      B-3-8

<PAGE>



                                   EXHIBIT B-4
                           FORM OF CLASS R CERTIFICATE

      THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A NON-UNITED STATES
PERSON OR A DISQUALIFIED ORGANIZATION (AS DEFINED BELOW).

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

      NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE
TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION 5.02(C) OF THE
AGREEMENT OR AN OPINION OF COUNSEL AS PROVIDED IN SECTION 5.02(C) THAT THE
PURCHASE OF THIS CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT
CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE MASTER SERVICER, THE
SECURITIES ADMINISTRATOR, THE COMPANY OR THE TRUSTEE TO ANY OBLIGATION OR
LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE POOLING AND SERVICING AGREEMENT
(THE "AGREEMENT").

      THIS CLASS R CERTIFICATE HAS NO PRINCIPAL BALANCE, DOES NOT
BEAR INTEREST AND WILL NOT RECEIVE ANY DISTRIBUTIONS EXCEPT AS
PROVIDED HEREIN.

      ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE
ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE MASTER
SERVICER AND THE TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT (A) THE UNITED STATES,
ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY
INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE
FOREGOING, (B) ANY ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED IN SECTION
521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE
UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE
CODE, (C) ANY ORGANIZATION DESCRIBED IN SECTION 1381(A)(2)(C) OF THE CODE, (ANY
SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B) OR (C) BEING HEREIN
REFERRED TO AS A "DISQUALIFIED ORGANIZATION") OR (D) AN AGENT OF A DISQUALIFIED
ORGANIZATION, (2) NO PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE ASSESSMENT OR
COLLECTION OF TAX AND (3) SUCH TRANSFEREE


                                      B-4-1

<PAGE>



SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL CONDITION OF
THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE
REGISTER OR ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS CERTIFICATE TO A
DISQUALIFIED ORGANIZATION OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH
REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND
SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE
HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
CERTIFICATE, EACH HOLDER OF THIS CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE
SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH.






                                      B-4-2

<PAGE>




Certificate No. 1


Class R[-1][-2][-X]

Date of Pooling and, Servicing
Agreement and Cut-off Date:
June 1, 2004                            Percentage Interest:  100%


First Distribution Date:
July 26, 2004


Master Servicer:
Wells Fargo Bank, National Association


Assumed Final Distribution Date:
________________



                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 2004-3

      evidencing a percentage interest in any distributions allocable to the
      Class R[-1][-2][- X] Certificates with respect to a Trust Fund consisting
      primarily of a pool of one- to four-family adjustable and fixed-rate first
      lien mortgage loans formed and sold by HOMESTAR MORTGAGE ACCEPTANCE CORP.

            This Certificate is payable solely from the assets of the Trust
Fund, and does not represent an obligation of or interest in Homestar Mortgage
Acceptance Corp., the Master Servicer, the Servicer, the Seller, the Securities
Administrator, the Trustee referred to below or any of their affiliates. Neither
this Certificate nor the underlying Mortgage Loans are guaranteed or insured by
any governmental agency or instrumentality or by Homestar Mortgage Acceptance
Corp., the Master Servicer, the Servicer, the Seller, the Securities
Administrator, the Trustee or any of their affiliates. None of Homestar Mortgage
Acceptance Corp., the Master Servicer, the Servicer, the Seller, the Securities
Administrator or any of their affiliates will have any obligation with respect
to any certificate or other obligation secured by or payable from payments on
the Certificates.




                                      B-4-3

<PAGE>



            This certifies that ___________________ is the registered owner of
the Percentage Interest evidenced by this Certificate in certain distributions
with respect to the Trust Fund consisting primarily of an interest in a pool of
one- to four-family fixed-rate and adjustable-rate first lien mortgage loans
(the "Mortgage Loans"), sold by Homestar Mortgage Acceptance Corp. (hereinafter
called the "Company," which term includes any successor entity under the
Agreement referred to below). The Trust Fund was created pursuant to a Pooling
and Servicing Agreement dated as specified above (the "Agreement") among the
Company, the Master Servicer, the Securities Administrator and HSBC Bank USA, as
trustee (the "Trustee"), a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

            Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the Distribution Date"), commencing as
described in the Agreement, to the Person in whose name this Certificate is
registered at the close of business on the last Business Day of the month
immediately preceding the month of such Distribution Date (the "Record Date"),
from the Available Distribution Amount in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount of interest and
principal, if any , required to be distributed to Holders of Class R
Certificates on such Distribution Date.

            Each Holder of this Certificate will be deemed to have agreed to be
bound by the restrictions set forth in the Agreement to the effect that (i) each
person holding or acquiring any Ownership Interest in this Certificate must be a
United States Person and a Permitted Transferee, (ii) the transfer of any
Ownership Interest in this Certificate will be conditioned upon the delivery to
the Trustee of, among other things, an affidavit to the effect that it is a
United States Person and Permitted Transferee, (iii) any attempted or purported
transfer of any Ownership Interest in this Certificate in violation of such
restrictions will be absolutely null and void and will vest no rights in the
purported transferee, and (iv) if any person other than a United States Person
and a Permitted Transferee acquires any Ownership Interest in this Certificate
in violation of such restrictions, then the Company will have the right, in its
sole discretion and without notice to the Holder of this Certificate, to sell
this Certificate to a purchaser selected by the Company, which purchaser may be
the Company, or any affiliate of the Company, on such terms and conditions as
the Company may choose.
      Notwithstanding the above, the final distribution on this Certificate will
be made after due notice of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Securities Administrator for that purpose in the City of Minneapolis and
State of Minnesota.

            In connection with any transfer of this Certificate, the Trustee
will also require either (i) an opinion of counsel acceptable to and in form and
substance satisfactory to the Trustee with


                                      B-4-4

<PAGE>



respect to the permissibility of such transfer under the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") and Section 4975 of the
Internal Revenue Code (the "Code") and stating, among other things, that the
transferee's acquisition of a Class R Certificate will not constitute or result
in a non-exempt prohibited transaction under Section 406 of ERISA or Section
4975 of the Code or (ii) a representation letter, in the form as described by
the Agreement, stating that the transferee is not an employee benefit or other
plan subject to the prohibited transaction provisions of ERISA or Section 4975
of the Code (a "Plan"), or any other person (including an investment manager, a
named fiduciary or a trustee of any Plan) acting, directly or indirectly, on
behalf of or purchasing any Certificate with "plan assets" of any Plan.

            This Certificate is one of a duly authorized issue of Certificates
issued in several Classes designated as Asset-Backed Pass-Through Certificates
of the Series specified hereon (herein collectively called the "Certificates").

            The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. In the event Master Servicer
funds are advanced with respect to any Mortgage Loan, such advance is
reimbursable to the Master Servicer, to the extent provided in the Agreement,
from related recoveries on such Mortgage Loan or from other cash that would have
been distributable to Certificateholders.

            As provided in the Agreement, withdrawals from the Custodial Account
and/or the Certificate Account created for the benefit of Certificateholders may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement to the Trustee, the Company and the Master Servicer of advances
made, or certain expenses incurred, by either of them.

            The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Company, the Master Servicer, the Securities Administrator and the Trustee
and the rights of the Certificateholders under the Agreement at any time by the
Company, the Master Servicer, the Securities Administrator and the Trustee with
the consent of the Holders of Certificates evidencing in the aggregate not less
than 66-2/3% of the Percentage Interests of each Class of Certificates affected
thereby. Any such consent by the Holder of this Certificate shall be conclusive
and binding on such Holder and upon all future holders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon the
Certificate. The Agreement also permits the amendment thereof in certain
circumstances without the consent of the Holders of any of the Certificates and,
in certain additional circumstances, without the consent of the Holders of
certain Classes of Certificates.

            As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable with the
Securities Administrator upon surrender of this Certificate for registration of
transfer at the offices or agencies maintained by the Securities Administrator,
duly endorsed by, or accompanied by an assignment in the form below or other


                                      B-4-5

<PAGE>



written instrument of transfer in form satisfactory to the Trustee and the
Securities Administrator duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of authorized denominations evidencing the same Class and aggregate Percentage
Interest will be issued to the designated transferee or transferees.

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

            No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
      The Company, the Master Servicer, the Securities Administrator, the
Servicer and the Trustee and any agent of the Company, the Master Servicer, the
Securities Administrator, the Servicer or the Trustee may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and neither the Company, the Master Servicer, the Securities Administrator, the
Servicer, the Trustee nor any such agent shall be affected by notice to the
contrary.

            This Certificate shall be governed by and construed in accordance
with the laws of the State of New York.

            The obligations created by the Agreement in respect of the
Certificates and the Trust Fund created thereby shall terminate upon the payment
to Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the purchase by the Servicer or its designee or the Master Servicer from the
Trust Fund of all remaining Mortgage Loans and each REO Property in respect
thereof remaining in the Trust Fund, thereby effecting early retirement of the
Certificates and (ii) the final payment or other liquidation (or any Advance
with respect thereto) of the last Mortgage Loan remaining in the Trust Fund (or
the disposition of all REO Property in respect thereof). The Agreement permits,
but does not require, the Servicer or the Master Servicer to purchase at a price
determined as provided in the Agreement all remaining Mortgage Loans and all REO
Property; provided, that any such option may only be exercised on or after the
first Distribution Date on which the aggregate unpaid balance of the Mortgage
Loans is less than or equal to ten percent of the aggregate Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date with respect to a purchase
by the Servicer, or on or after the first Distribution Date on which the
aggregate unpaid principal balance of the Mortgage Loans is less than or equal
to five percent of the aggregate Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date with respect to a purchase by the Master Servicer.


                                      B-4-6

<PAGE>



            Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purpose have the same effect as if set forth at this place.

            Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.


                                      B-4-7

<PAGE>



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


Dated:July __, 2004               WELLS FARGO BANK, NATIONAL
                                  ASSOCIATION,
                                  as Securities Administrator

                                  By:___________________________________________
                                  Authorized Signatory



                          CERTIFICATE OF AUTHENTICATION

      This is one of the Class R[-1][-2][-X] Certificates referred to in the
within-mentioned Agreement.


                                  WELLS FARGO BANK, NATIONAL
                                  ASSOCIATION,
                                  as Securities Administrator

                                  By:___________________________________________
                                  Authorized Signatory





                                      B-4-8

<PAGE>



                                   ASSIGNMENT


      FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
                (Please print or typewrite name and address including
                 postal zip code of assignee)

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

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



Dated:________________


                                  ______________________________________________
                                    Signature by or on behalf of assignor





                                      B-4-9

<PAGE>



                            DISTRIBUTION INSTRUCTIONS


      The assignee should include the following for purposes of distribution:

      Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to for _________________________________________________________
the account of , account number ________________, or, if mailed by check, to ___
_______________________________________________________________________________.
Applicable statements should be mailed to _____________________________________.
________________________________________________________________________________


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




                                       D-1

<PAGE>



                                    EXHIBIT C

                     FORM OF CUSTODIAN INITIAL CERTIFICATION


                                                      July __, 2004



HSBC Bank USA, N.A.                    Homestar Mortgage Acceptance Corp.
452 Fifth Avenue                       W. 115 Century Road
New York, New York 10018               Paramus, New Jersey 07652


      Attention: Homestar Mortgage Acceptance Corp.,
      HMAC Mortgage Trust 2004-3, Asset-Backed Pass-Through Certificates,
      Series 2004-3

      Re:   Custodial Agreement, dated as of July 1, 2004, by and among HSBC
            Bank USA, N.A., Homestar Mortgage Acceptance Corp. and Wells Fargo
            Bank, National Association relating to HMAC Mortgage Trust 2004-3,
            Asset-Backed Pass-Through Certificates, Series 2004-3
            ------------------------------------------------------------------

Ladies and Gentlemen:

            In accordance with Section 2.3 of the above-captioned Custodial
Agreement and subject to Section 2.02 of the Pooling and Servicing Agreement,
dated as of July 1, 2004 among Homestar Mortgage Acceptance Corp., HSBC Bank
USA, N.A., and Wells Fargo Bank, National Association, the undersigned, as
custodian (the "Custodian"), hereby certifies that as to each Mortgage Loan
listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full
or listed on the attachment hereto) it has reviewed the Mortgage File, and has
determined that: (1) all documents required to be included in the Mortgage File
are in its possession and (2) such documents have been reviewed by it and appear
regular on their face and relate to such Mortgage Loan.

            The Custodian has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Custodial and Pooling and Servicing Agreements. The Custodian
makes no representations as to and shall not be responsible to verify: (i) the
validity, legality, sufficiency, enforceability, due authorization,
recordability or genuineness of any of the documents contained in each Mortgage
File of any of the Mortgage Loans identified on the Mortgage Loan Schedule, (ii)
the collectability, insurability, effectiveness or suitability of any such
Mortgage Loan, or (iii) the existence of any assumption, modification, written
assurance or substitution agreement with respect to any Mortgage File if no such
documents appear in the Mortgage File delivered to the Custodian.


                                       C-1

<PAGE>




            Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Custodial Agreement.

                                          WELLS FARGO BANK, NATIONAL
                                          ASSOCIATION, as Custodian


                                          By:___________________________________
                                          Name:
                                          Title:




                                       C-2

<PAGE>



                                    EXHIBIT D

                      FORM OF CUSTODIAN FINAL CERTIFICATION



                                                      _______, 20__



HSBC Bank USA, N.A.                    Homestar Mortgage Acceptance Corp.
452 Fifth Avenue                       W. 115 Century Road
New York, New York 10018               Paramus, New Jersey 07652


      Attention: Homestar Mortgage Acceptance Corp., HMAC Mortgage Trust 2004-3,
      Mortgage Pass-Through Certificates, Series 2004-3

      Re:   Custodial Agreement, dated as of July 1, 2004, by and among HSBC
            Bank USA, N.A., Homestar Mortgage Acceptance Corp. and Wells Fargo
            Bank, National Association relating to HMAC Mortgage Trust 2004-3,
            Asset- Backed Pass-Through Certificates, Series 2004-3

Ladies and Gentlemen:

            In accordance with Section 2.3 of the above-captioned Custodial
Agreement and subject to Section 2.02 of the Pooling and Servicing Agreement,
the undersigned, as Custodian, hereby certifies that it has received a Mortgage
File with respect to each Mortgage Loan listed in the Mortgage Loan Schedule
containing with respect to each Mortgage Loan:

            (i) the original Mortgage Note (including all riders thereto)
      bearing all intervening endorsements necessary to show a complete chain of
      endorsements from the original payee, endorsed "Pay to the order of HSBC
      Bank USA without recourse", via original signature, and, if previously
      endorsed, signed in the name of the last endorsee by a duly qualified
      officer of the last endorsee. If the Mortgage Loan was acquired by the
      last endorsee in a merger, the endorsement must be by "[name of last
      endorsee], successor by merger to [name of the predecessor]." If the
      Mortgage Loan was acquired or originated by the last endorsee while doing
      business under another name, the endorsement must be by "[name of last
      endorsee], formerly known as [previous name].";

            (ii) The original recorded Mortgage, noting the presence of the MIN
      of the Mortgage Loan and either language indicating that the Mortgage Loan
      is a MOM loan or if the Mortgage Loan was not a MOM loan at origination,
      the original Mortgage and the assignment thereof to MERS, with evidence of
      recording indicated thereon; provided that


                                       D-1

<PAGE>



      if such document is not included because of a delay by the public
      recording office where such document has been delivered for recordation or
      such office as a matter of policy does not return the original of such
      document or if such original Mortgage has been lost, the Seller shall
      include or cause to be included a copy thereof certified by the
      appropriate recording office, if available;

            (iii) the original Assignment of Mortgage in blank, in form and
      substance acceptable for recordation in the jurisdiction in which the
      related mortgage property is located and signed in the name of the Last
      Endorsee by an authorized officer; unless the Mortgage Loan is registered
      on the MERS system;

            (iv) The original intervening Assignments, if any and if available,
      with evidence of recording thereon, showing an unbroken chain of title to
      the Mortgage from the originator thereof to Person assigning it to the
      Trustee (or to MERS, if the Mortgage Loan is registered on the MERS(R)
      System); provided that if such document is not included because of a delay
      by the public recording office where such document has been delivered for
      recordation or such office as a matter of policy does not return the
      original of such document, the Seller shall include or cause to be
      included a copy thereof certified by the appropriate recording office, if
      available;

            (v) The originals of each assumption, modification or substitution
      agreement, if any and if available, relating to the Mortgage Loan; and

            (vi) the original title insurance policy, or, if such policy has not
      been issued, any one of an original or a copy of the preliminary title
      report, title binder or title commitment on the Mortgaged Property with
      the original policy of the insurance to be delivered promptly following
      the receipt thereof;

            Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Custodial Agreement or in the
Pooling and Servicing Agreement, as applicable.

                                                WELLS FARGO BANK, NATIONAL
                                                ASSOCIATION, as Custodian



                                                By:___________________________
                                                Name:_________________________
                                                Title:________________________






                                       E-1

<PAGE>



                                    EXHIBIT E

                            FORM OF REMITTANCE REPORT

                             (Provided Upon Request)






                                       E-2


<PAGE>



                                    EXHIBIT F

                    FORM OF REQUEST FOR RELEASE OF DOCUMENTS

To:   HSBC Bank USA
      452 Fifth Avenue
      New York, New York 10018

      Re:   Pooling and Servicing Agreement, dated as of June 1, 2004, by and
            among HSBC Bank USA, Homestar Mortgage Acceptance Corp. and Wells
            Fargo Bank, National Association relating to HMAC Mortgage Trust
            2004-3, Asset-Backed Pass-Through Certificates, Series 2004-3

      In connection with the administration of the Mortgage Loans held by you
pursuant to the above-captioned Pooling and Servicing Agreement, we request the
release, and hereby acknowledge receipt, of the Mortgage File for the Mortgage
Loan described below, for the reason indicated.

Mortgage Loan Number:

Mortgagor Name, Address & Zip Code:

Reason for Requesting Documents (check one):

_____       1.    Mortgage Paid in Full and proceeds have been deposited into
                  the Custodial Account

_____       2.    Foreclosure

_____       3.    Substitution

_____       4.    Other Liquidation

_____       5.    Nonliquidation                Reason:_________________________

_____       6.    California Mortgage Loan paid in full


                                          By:___________________________________
                                                (authorized signer)

                                          Issuer:_______________________________
                                          Address:______________________________
                                          Date:_________________________________


                                       F-1

<PAGE>



                                   EXHIBIT G-1

                     FORM OF INVESTOR REPRESENTATION LETTER

                                ___________,200__

Homestar Mortgage Acceptance Corp.
W. 115 Century Road
Paramus, New Jersey 07652

HSBC Bank USA
452 Fifth Avenue
New York, New York 10018
Attention: Homestar Mortgage Acceptance Corp. Series 2004-3

      Re:   Homestar Mortgage Acceptance Corp.
            Asset-Backed Pass-Through Certificates Series 2004-3, Class [___]

Ladies and Gentlemen:

      ______________ (the "Purchaser") intends to purchase from ______________
(the "Seller") $_________ Initial Certificate Principal Balance of Asset-Backed
Pass-Through Certificates, Series 2004-3, Class _____ (the "Certificates"),
issued pursuant to the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of June 1, 2004 among Homestar Mortgage
Acceptance Corp., as company (the "Company"), Wells Fargo Bank, National
Association, as master servicer (in such capacity, the "Master Servicer") and as
securities administrator (in such capacity, the "Securities Administrator") and
HSBC Bank USA, as trustee (the "Trustee"). All terms used herein and not
otherwise defined shall have the meanings set forth in the Pooling and Servicing
Agreement. The Purchaser hereby certifies, represents and warrants to, and
covenants with, the Company and the Trustee that:

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

                  2. The Purchaser is acquiring the Certificates for its own
            account for investment only and not with a view to or for sale in
            connection with any


                                      G-1-1

<PAGE>



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

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

                  4. The Purchaser has been furnished with, and has had an
            opportunity to review a copy of the Pooling and Servicing Agreement
            and such other information concerning the Certificates, the Mortgage
            Loans and the Company as has been requested by the Purchaser from
            the Company or the Seller and is relevant to the Purchaser's
            decision to purchase the Certificates. The Purchaser has had any
            questions arising from such review answered by the Company or the
            Seller to the satisfaction of the Purchaser.

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


                                        Very truly yours,


                                        ____________________________________
                                        (Purchaser)
                                        By:_________________________________
                                        Name:_______________________________
                                        Title:______________________________



                                     G-1-2

<PAGE>




                                  EXHIBIT G-2

                    FORM OF TRANSFEROR REPRESENTATION LETTER



                              ______________,200___



Homestar Mortgage Acceptance Corp.
W. 115 Century Road
Paramus, New Jersey 07652

HSBC Bank USA
452 Fifth Avenue
New York, New York 10018
Attention: Homestar Mortgage Acceptance Corp. Series 2004-3

            Re:   Homestar Mortgage Acceptance Corp.
                  Asset-Backed Pass-Through Certificates, Series 2004-3, Class
                  --------------------------------------------------------------

Ladies and Gentlemen:

      In connection with the sale by ___________ (the "Seller") to ________ (the
"Purchaser") of $_________ Initial Certificate Principal Balance of Asset-Backed
Pass-Through Certificates, Series 2004-3, Class _____ (the "Certificates"),
issued pursuant to the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of June 1, 2004 among Homestar Mortgage
Acceptance Corp., as company (the "Company"), Wells Fargo Bank, National
Association, as master servicer (in such capacity, the "Master Servicer") and as
securities administrator (in such capacity, the "Securities Administrator") and
HSBC Bank USA, as trustee (the "Trustee"). The Seller hereby certifies,
represents and warrants to, and covenants with, the Company and the Trustee
that:

      Neither the Seller nor anyone acting on its behalf has (a) offered,
pledged, sold, disposed of or otherwise transferred any Certificate, any
interest in any Certificate or any other similar security to any person in any
manner, (b) has solicited any offer to buy or to accept a pledge, disposition or
other transfer of any Certificate, any interest in any Certificate or any other
similar security from any person in any manner, (c) has otherwise approached or
negotiated with respect to any Certificate, any interest in any Certificate or
any other similar security with any person in any manner, (d) has made any
general solicitation by means of general advertising or in any other manner, or
(e) has taken any other action, that (as to any of (a) through (e) above) would
constitute a distribution of the Certificates under the Securities Act of 1933
(the "Act"), that would render the


                                    G-2-1

<PAGE>



disposition of any Certificate a violation of Section 5 of the Act or any state
securities law, or that would require registration or qualification pursuant
thereto. The Seller will not act in any manner set forth in the foregoing
sentence with respect to any Certificate. The Seller has not and will not sell
or otherwise transfer any of the Certificates, except in compliance with the
provisions of the Pooling and Servicing Agreement.


                                        Very truly yours,


                                        ____________________________________
                                        (Seller)

                                        By:_________________________________
                                        Name:_______________________________
                                        Title:______________________________





                                      G-2-2

<PAGE>



                                   EXHIBIT G-3

                   FORM OF RULE 144A INVESTMENT REPRESENTATION


             Description of Rule 144A Securities, including numbers:

                       Homestar Mortgage Acceptance Corp.
                     Asset-Backed Pass-Through Certificates
                       Series 2004-3, Class ____, No. ____


            The undersigned seller, as registered holder (the "Transferor"),
intends to transfer the Rule 144A Securities described above to the undersigned
buyer (the "Buyer").

            1. In connection with such transfer and in accordance with the
agreements pursuant to which the Rule 144A Securities were issued, the
Transferor hereby certifies the following facts: Neither the Transferor nor
anyone acting on its behalf has offered, transferred, pledged, sold or otherwise
disposed of the Rule 144A Securities, any interest in the Rule 144A Securities
or any other similar security to, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Rule 144A Securities, or otherwise
approached or negotiated with respect to the Rule 144A Securities, any interest
in the Rule 144A Securities or any other similar security with, any person in
any manner, or made any general solicitation by means of general advertising or
in any other manner, or taken any other action, which would constitute a
distribution of the Rule 144A Securities under the Securities Act of 1933, as
amended (the "1933 Act"), or which would render the disposition of the Rule 144A
Securities a violation of Section 5 of the 1933 Act or require registration
pursuant thereto, and that the Transferor has not offered the Rule 144A
Securities to any person other than the Buyer or another "qualified
institutional buyer" as defined in Rule 144A under the 1933 Act.

            2. The Buyer warrants and represents to, and covenants with, the
Transferor, the Trustee and the Master Servicer pursuant to Section 5.02 of the
Pooling and Servicing Agreement as follows:

                  a. The Buyer understands that the Rule 144A Securities have
            not been registered under the 1933 Act or the securities laws of any
            state.

                  b. The Buyer considers itself a substantial, sophisticated
            institutional investor having such knowledge and experience in
            financial and business matters that it is capable of evaluating the
            merits and risks of investment in the Rule 144A Securities.



                                      G-3-1

<PAGE>



                  c. The Buyer has been furnished with all information regarding
            the Rule 144A Securities that it has requested from the Transferor,
            the Trustee or the Master Servicer.

                  d. Neither the Buyer nor anyone acting on its behalf has
            offered, transferred, pledged, sold or otherwise disposed of the
            Rule 144A Securities, any interest in the Rule 144A Securities or
            any other similar security to, or solicited any offer to buy or
            accept a transfer, pledge or other disposition of the Rule 144A
            Securities, any interest in the Rule 144A Securities or any other
            similar security from, or otherwise approached or negotiated with
            respect to the Rule 144A Securities, any interest in the Rule 144A
            Securities or any other similar security with, any person in any
            manner, or made any general solicitation by means of general
            advertising or in any other manner, or taken any other action, that
            would constitute a distribution of the Rule 144A Securities under
            the 1933 Act or that would render the disposition of the Rule 144A
            Securities a violation of Section 5 of the 1933 Act or require
            registration pursuant thereto, nor will it act, nor has it
            authorized or will it authorize any person to act, in such manner
            with respect to the Rule 144A Securities.

                  e. The Buyer is a "qualified institutional buyer" as that term
            is defined in Rule 144 under the 1933 Act and has completed either
            of the forms of certification to that effect attached hereto as
            Annex 1 or Annex 2. The Buyer is aware that the sale to it is being
            made in reliance on Rule 144A. The Buyer is acquiring the Rule 144A
            Securities for its own account or the account of other qualified
            institutional buyers, understands that such Rule 144 Securities may
            be resold, pledged or transferred only (i) to a person reasonably
            believed to be a qualified institutional buyer that purchases for
            its own account or for the account of a qualified institutional
            buyer to whom notice is given that the resale, pledge or transfer is
            being made in reliance on Rule 144A, or (ii) pursuant to another
            exemption from registration under the 1933 Act.

            3. The Buyer warrants and represents to, and covenants with, the
Transferor, the Servicer and the Company that either (1) the Buyer is not an
employee benefit plan within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") ("Plan"), or a plan
within the meaning of Section 4975(e)(1) of the Internal Revenue Code of 1986
(the "Code") (also a "Plan"), and the Buyer is not directly or indirectly
purchasing the Rule 144A Securities on behalf of, as investment manager of, as
named fiduciary of, as trustee of, or with assets of a Plan, or (2) the Buyer
has provided the Trustee with the opinion letter required by section 5.02(c) of
the Pooling and Servicing Agreement.

            4. This document may be executed in one or more counterparts and by
the different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same document.



                                      G-3-2

<PAGE>



            IN WITNESS WHEREOF, each of the parties has executed this document
as of the date set forth below.





----------------------------------      ----------------------------------
      Print Name of Transferor                Print Name of Buyer

By:_______________________________      By:_______________________________
Name:_____________________________      Name:_____________________________
Title:____________________________      Title:____________________________



Taxpayer Identification:                Taxpayer Identification:

No._______________________________      No._______________________________

Date:_____________________________      Date:_____________________________





                                      G-3-3

<PAGE>



                             ANNEX 1 TO EXHIBIT G-3


            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

             [For Buyers Other Than Registered Investment Companies]

      The undersigned hereby certifies as follows in connection with the Rule
144A Investment Representation to which this Certification is attached:

      1. As indicated below, the undersigned is the President, Chief Financial
Officer, Senior Vice President or other executive officer of the Buyer.

      2. In connection with purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933 ("Rule 144A") because (i) the Buyer owned and/or invested on a
discretionary basis $____________________1 in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A) and (ii)
the Buyer satisfies the criteria in the category marked below.

____  CORPORATION, ETC. The Buyer is a corporation (other than a bank, savings
      and loan association or similar institution), Massachusetts or similar
      business trust, partnership, or charitable organization described in
      Section 501(c)(3) of the Internal Revenue Code.

____  BANK. The Buyer (a) is a national bank or banking institution organized
      under the laws of any State, territory or the District of Columbia, the
      business of which is substantially confined to banking and is supervised
      by the State or territorial banking commission or similar official or is a
      foreign bank or equivalent institution, and (b) has an audited net worth
      of at least $25,000,000 as demonstrated in its latest annual financial
      statement, a copy of which is attached hereto.

____  SAVINGS AND LOAN. The Buyer (a) is a savings and loan association,
      building and loan association, cooperative bank, homestead association or
      similar institution, which is supervised and examined by a State or
      Federal authority having supervision over any such institutions or is a
      foreign savings and loan association or equivalent institution and (b) has
      an audited net worth of at least $25,000,000 as demonstrated in its latest
      annual financial statements.


--------
      1 Buyer must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Buyer is a dealer, and, in that case, Buyer
must own and/or invest on a discretionary basis at least $10,000,000 in
securities.


                                      G-3-4

<PAGE>



____  BROKER-DEALER.  The Buyer is a dealer registered pursuant to Section 15 of
      the Securities Exchange Act of 1934.

____  INSURANCE COMPANY. The Buyer is an insurance company whose primary and
      predominant business activity is the writing of insurance or the
      reinsuring of risks underwritten by insurance companies and which is
      subject to supervision by the insurance commissioner or a similar official
      or agency of a State, territory or the District of Columbia.

____  STATE OR LOCAL PLAN. The Buyer is a plan established and maintained by a
      State, its political subdivisions, or any agency or instrumentality of the
      State or its political subdivisions, for the benefit of its employees.

____  ERISA PLAN. The Buyer is an employee benefit plan within the meaning of
      Title I of the Employee Retirement Income Security Act of 1974.

____  INVESTMENT ADVISER. The Buyer is an investment adviser registered under
      the Investment Advisers Act of 1940.

____  SBIC. The Buyer is a Small Business Investment Company licensed by the
      U.S. Small Business Administration under Section 301(c) or (d) of the
      Small Business Investment Act of 1958.

____  BUSINESS DEVELOPMENT COMPANY. The Buyer is a business development company
      as defined in Section 202(a)(22) of the Investment Advisers Act of 1940.

____  TRUST FUND. The Buyer is a trust fund whose trustee is a bank or trust
      company and whose participants are exclusively (a) plans established and
      maintained by a State, its political subdivisions, or any agency or
      instrumentality of the State or its political subdivisions, for the
      benefit of its employees, or (b) employee benefit plans within the meaning
      of Title I of the Employee Retirement Income Security Act of 1974, but is
      not a trust fund that includes as participants individual retirement
      accounts or H.R. 10 plans.

      3. The term "SECURITIES" as used herein DOES NOT INCLUDE (i) securities of
issuers that are affiliated with the Buyer, (ii) securities that are part of an
unsold allotment to or subscription by the Buyer, if the Buyer is a dealer,
(iii) bank deposit notes and certificates of deposit, (iv) loan participations,
(v) repurchase agreements, (vi) securities owned but subject to a repurchase
agreement and (vii) currency, interest rate and commodity swaps.

      4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in


                                      G-3-5

<PAGE>



accordance with generally accepted accounting principles and if the investments
of such subsidiaries are managed under the Buyer's direction. However, such
securities were not included if the Buyer is a majority-owned, consolidated
subsidiary of another enterprise and the Buyer is not itself a reporting company
under the Securities Exchange Act of 1934.

      5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.

___   ___              Will the Buyer be purchasing the Rule 144A
Yes   No               Securities only for the Buyer's own account?

      6. If the answer to the foregoing question is "no", the Buyer agrees that,
in connection with any purchase of securities sold to the Buyer for the account
of a third party (including any separate account) in reliance on Rule 144A, the
Buyer will only purchase for the account of a third party that at the time is a
"qualified institutional buyer" within the meaning of Rule 144A. In addition,
the Buyer agrees that the Buyer will not purchase securities for a third party
unless the Buyer has obtained a current representation letter from such third
party or taken other appropriate steps contemplated by Rule 144A to conclude
that such third party independently meets the definition of "qualified
institutional buyer" set forth in Rule 144A.

      7. The Buyer will notify each of the parties to which this certification
is made of any changes in the information and conclusions herein. Until such
notice is given, the Buyer's purchase of Rule 144A Securities will constitute a
reaffirmation of this certification as of the date of such purchase.




                                        ____________________________________
                                        Print Name of Buyer

                                        By:_________________________________
                                        Name:
                                        Title:

                                        Date:_______________________________





                                      G-3-6

<PAGE>



                             ANNEX 2 TO EXHIBIT G-3

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

              [For Buyers That Are Registered Investment Companies]


            The undersigned hereby certifies as follows in connection with the
Rule 144A Investment Representation to which this Certification is attached:

            1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933 ("Rule 144A") because Buyer is part of a Family of
Investment Companies (as defined below), is such an officer of the Adviser.

            2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, and (ii)
as marked below, the Buyer alone, or the Buyer's Family of Investment Companies,
owned at least $100,000,000 in securities (other than the excluded securities
referred to below) as of the end of the Buyer's most recent fiscal year. For
purposes of determining the amount of securities owned by the Buyer or the
Buyer's Family of Investment Companies, the cost of such securities was used.

____        The Buyer owned $_______________ in securities (other than the
            excluded securities referred to below) as of the end of the Buyer's
            most recent fiscal year (such amount being calculated in accordance
            with Rule 144A).

____        The Buyer is part of a Family of Investment Companies which owned in
            the aggregate $____________ in securities (other than the excluded
            securities referred to below) as of the end of the Buyer's most
            recent fiscal year (such amount being calculated in accordance with
            Rule 144A).

            3. The term "Family of Investment Companies" as used herein means
two or more registered investment companies (or series thereof) that have the
same investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).

            4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) bank deposit notes and certificates
of deposit, (iii) loan participations, (iv) repurchase agreements, (v)
securities owned but subject to a repurchase agreement and (vi) currency,
interest rate and commodity swaps.



                                      G-3-7

<PAGE>



            5. The Buyer is familiar with Rule 144A and understands that each of
the parties to which this certification is made are relying and will continue to
rely on the statements made herein because one or more sales to the Buyer will
be in reliance on Rule 144A. In addition, the Buyer will only purchase for the
Buyer's own account.

            6. The undersigned will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice, the Buyer's purchase of Rule 144A Securities will constitute
a reaffirmation of this certification by the undersigned as of the date of such
purchase.



                                        ------------------------------------
                                        Print Name of Buyer

                                        By:_________________________________
                                        Name:
                                        Title:


                                        IF AN ADVISER:

                                        ____________________________________
                                        Print Name of Buyer

                                        Date:_______________________________





                                      G-3-8

<PAGE>



                                   EXHIBIT G-4

                         FORM OF TRANSFEROR CERTIFICATE

                              ______________, 200__


Homestar Mortgage Acceptance Corp.
W. 115 Century Road
Paramus, New Jersey 07652

HSBC Bank USA
452 Fifth Avenue
New York, New York 10018

Attention: Homestar Mortgage Acceptance Corp. Series 2004-3

            Re:   Homestar Mortgage Acceptance Corp.
                  Asset-Backed Pass-Through Certificates
                  Series 2004-3, Class R-[__]
                  ---------------------------------------

Ladies and Gentlemen:

            This letter is delivered to you in connection with the sale by
________________________ (the "Seller") to
__________________________________________ (the "Purchaser") of a ____%
Percentage Interest in the Asset-Backed Pass-Through Certificates, Series
2004-3, Class R-[_] Certificates (the "Certificates"), issued pursuant to
Section 5.02 of the Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement") dated as of June 1, 2004, among Homestar Mortgage Acceptance Corp.,
as company (the "Company"), Wells Fargo Bank, National Association, as master
servicer (in such capacity, the "Master Servicer") and as securities
administrator (in such capacity, the "Securities Administrator") and HSBC Bank
USA, as trustee (the "Trustee"). All terms used herein and not otherwise defined
shall have the meaning set forth in the Pooling and Servicing Agreement. The
Seller hereby certifies, represents and warrants to, and covenants with, the
Company and the Trustee that:

            1. No purpose of the Seller relating to the sale of the Certificates
by the Seller to the Purchaser is or will be to impede the assessment or
collection of any tax.

            2. The Seller understands that the Purchaser has delivered to the
Trustee and the Master Servicer a transfer affidavit and agreement in the form
attached to the Pooling and Servicing Agreement as Exhibit E-5. The Seller does
not know or believe that any representation contained therein is false.



                                      G-4-1

<PAGE>



            3. The Seller has at the time of the transfer conducted a reasonable
investigation of the financial condition of the Purchaser as contemplated by
Treasury Regulations Section 1.860E-1(c)(4)(i) and, as a result of that
investigation, the Seller has determined that the Purchaser has historically
paid its debts as they have become due and has found no significant evidence to
indicate that the Purchaser will not continue to pay its debts as they become
due in the future. The Seller understands that the transfer of the Certificates
may not be respected for United States income tax purposes (and the Seller may
continue to be liable for United States income taxes associated therewith)
unless the Seller has conducted such an investigation.

            4. The Seller has no actual knowledge that the proposed Transferee
is a Disqualified Organization, an agent of a Disqualified Organization or a
Non-United States Person.


                                        Very truly yours,


                                        ----------------------------------------
                                        (Seller)

                                        By:_____________________________________
                                        Name:___________________________________
                                        Title:__________________________________





                                      G-4-2

<PAGE>



                                   EXHIBIT G-5

                    FORM OF TRANSFER AFFIDAVIT AND AGREEMENT


STATE OF                )
                  :ss.:
COUNTY OF               )


      ___________________, being first duly sworn, deposes, represents and
warrants:

      1. That he/she is [Title of Officer] of [Name of Owner], a [savings
institution] [corporation] duly organized and existing under the laws of [the
State of __________] [the United States], (the "Owner"), (record or beneficial
owner of the Class R-[_] Certificates (the "Class R Certificates") on behalf of
which he/she makes this affidavit and agreement). This Class R Certificates were
issued pursuant to the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement") dated as of June 1, 2004 among Homestar Mortgage
Acceptance Corp., as company, Wells Fargo Bank, National Association, as master
servicer (in such capacity, the "Master Servicer") and as securities
administrator (in such capacity, the "Securities Administrator"), and HSBC Bank
USA, as trustee (the "Trustee").

      2. That the Owner (i) is not and will not be a "disqualified organization"
as of _____________ [date of transfer] within the meaning of Section 860E(e)(5)
of the Internal Revenue Code of 1986, as amended (the "Code"), (ii) will
endeavor to remain other than a disqualified organization for so long as it
retains its ownership interest in the Class R Certificates, and (iii) is
acquiring the Class R Certificates for its own account or for the account of
another Owner from which it has received an affidavit and agreement in
substantially the same form as this affidavit and agreement. (For this purpose,
a "disqualified organization" means the United States, any state or political
subdivision thereof, any agency or instrumentality of any of the foregoing
(other than an instrumentality all of the activities of which are subject to tax
and, except for Freddie Mac, a majority of whose board of directors is not
selected by any such governmental entity) or any foreign government,
international organization or any agency or instrumentality of such foreign
government or organization, any rural electric or telephone cooperative, or any
organization (other than certain farmers' cooperatives) that is generally exempt
from federal income tax unless such organization is subject to the tax on
unrelated business taxable income).

      3. That the Owner is aware (i) of the tax that would be imposed on
transfers of Class R Certificates to disqualified organizations under the Code,
that applies to all transfers of Class R Certificates after March 31, 1988; (ii)
that such tax would be on the transferor, or, if such transfer is through an
agent (which person includes a broker, nominee or middleman) for a disqualified
organization, on the agent; (iii) that the person otherwise liable for the tax
shall be relieved of liability for the tax if the transferee furnishes to such
person an affidavit that the transferee is not


                                      G-5-1

<PAGE>



a disqualified organization and, at the time of transfer, such person does not
have actual knowledge that the affidavit is false; and (iv) that the Class R
Certificates may be "noneconomic residual interests" within the meaning of
Treasury regulations promulgated pursuant to the Code and that the transferor of
a noneconomic residual interest will remain liable for any taxes due with
respect to the income on such residual interest, unless no significant purpose
of the transfer was to impede the assessment or collection of tax.

      4. That the Owner is aware of the tax imposed on a "pass-through entity"
holding Class R Certificates if at any time during the taxable year of the
pass-through entity a disqualified organization is the record holder of an
interest in such entity. (For this purpose, a "pass through entity" includes a
regulated investment company, a real estate investment trust or common trust
fund, a partnership, trust or estate, and certain cooperatives.)

      5. That the Owner is aware that the Trustee will not register the transfer
of any Class R Certificates unless the transferee, or the transferee's agent,
delivers to it an affidavit and agreement, among other things, in substantially
the same form as this affidavit and agreement. The Owner expressly agrees that
it will not consummate any such transfer if it knows or believes that any of the
representations contained in such affidavit and agreement are false.

      6. That the Owner has reviewed the restrictions set forth on the face of
the Class R Certificates and the provisions of Section 5.02(f) of the Pooling
and Servicing Agreement under which the Class R Certificates were issued (in
particular, clause (iii)(A) and (iii)(B) of Section 5.02(f) which authorize the
Trustee to deliver payments to a person other than the Owner and negotiate a
mandatory sale by the Trustee in the event the Owner holds such Certificates in
violation of Section 5.02(f)). The Owner expressly agrees to be bound by and to
comply with such restrictions and provisions.

      7. That the Owner consents to any additional restrictions or arrangements
that shall be deemed necessary upon advice of counsel to constitute a reasonable
arrangement to ensure that the Class R Certificates will only be owned, directly
or indirectly, by an Owner that is not a disqualified organization.

      8.    The Owner's Taxpayer Identification Number is _____________________.

      9. This affidavit and agreement relates only to the Class R Certificates
held by the owner and not to any other holder of the Class R Certificates. The
Owner understands that the liabilities described herein relate only to the Class
R Certificates.

      10. That no purpose of the Owner relating to the transfer of any of the
Class R Certificates by the Owner is or will be to impede the assessment or
collection of any tax.

      11. That the Owner has no present knowledge or expectation that it will be
unable to pay any United States taxes owed by it so long as any of the
Certificates remain outstanding. In this


                                      G-5-2

<PAGE>



regard, the Owner hereby represents to and for the benefit of the person from
whom it acquired the Class R Certificate that the Owner intends to pay taxes
associated with holding such Class R Certificate as they become due, fully
understanding that it may incur tax liabilities in excess of any cash flows
generated by the Class R Certificate.

      12. That the Owner has no present knowledge or expectation that it will
become insolvent or subject to a bankruptcy proceeding for so long as any of the
Class R Certificates remain outstanding.

      13. The Owner is 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 political subdivision thereof, provided that
with respect to any partnership or other entity treated as a partnership for
United States federal income tax purposes, all persons that own an interest in
such partnership either directly or through any entity that is not a corporation
for United States federal income tax purposes are required by the applicable
operative agreement to be United States Persons, or an estate or trust whose
income from sources without the United States is includible in gross income for
United States federal income tax purposes regardless of its connection with the
conduct of a trade or business within the United States.

      14. (a) The Certificates (i) are not being acquired by, and will not be
transferred to, any employee benefit plan within the meaning of section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA") or
other retirement arrangement, including individual retirement accounts and
annuities, Keogh plans and bank collective investment funds and insurance
company general or separate accounts in which such plans, accounts or
arrangements are invested, that is subject to ERISA or Section 4975 of the
Internal Revenue Code of 1986 (the "Code") (any of the foregoing, a "Plan"),
(ii) are not being acquired with "plan assets" of a Plan within the meaning of
the Department of Labor ("DOL") regulation, 29 C.F.R. ss. 2510.3-101 or
otherwise under ERISA, and (iii) will not be transferred to any entity that is
deemed to be investing in plan assets within the meaning of the DOL regulation,
29 C.F.R. ss. 2510.3-101 or otherwise under ERISA; or

            (b) The Owner will provide the Trustee with an opinion of counsel,
as specified in Section 5.02(c) of the Pooling and Servicing Agreement,
acceptable to and in form and substance satisfactory to the Trustee to the
effect that the purchase of Certificates is permissible under applicable law,
will not constitute or result in any non-exempt prohibited transaction under
ERISA or Section 4975 of the Code and will not subject the Trustee, the Company,
the Securities Administrator or the Master Servicer to any obligation or
liability (including obligations or liabilities under ERISA or Section 4975 of
the Code) in addition to those undertaken in the Pooling and Servicing
Agreement.

      In addition, the Owner hereby certifies, represents and warrants to, and
covenants with, the Company, the Trustee, the Securities Administrator and the
Master Servicer that the Owner will not


                                      G-5-3

<PAGE>



transfer such Certificates to any Plan or person unless either such Plan or
person meets the requirements set forth in either (a) or (b) above.

      Capitalized terms used but not defined herein shall have the meanings
assigned in the Pooling and Servicing Agreement.




                                      G-5-4

<PAGE>



      IN WITNESS WHEREOF, the Owner has caused this instrument to be executed on
its behalf, by its [Title of Officer] and its corporate seal to be hereunto
attached, attested by its [Assistant] Secretary, this ______ day of
_____________, _____.



                                        [NAME OF OWNER]


                                        By:_____________________________________
                                              [Name of Officer]
                                              [Title of Officer]

[Corporate Seal]

ATTEST:


___________________________
[Assistant] Secretary

      Personally appeared before me the above-named [Name of Officer], known or
proved to me to be the same person who executed the foregoing instrument and to
be the [Title of Officer] of the Owner, and acknowledged to me that such person
executed the same as such person's free act and deed and the free act and deed
of the Owner.

      Subscribed and sworn before me this ____ day of ___________, 200__.





                                        ________________________________________
                                              NOTARY PUBLIC

                                        COUNTY OF_________________________
                                        STATE OF___________________________
                                        My Commission expires the ____ day of
                                        __________, 200__.





                                      G-5-5

<PAGE>



                                    EXHIBIT H

                             MORTGAGE LOAN SCHEDULE
                                (Filed Manually)

(In accordance with Rule 202 of Regulation S-T, this Mortgage Loan Schedule, is
being filed in paper pursuant to a continuing hardship exemption.)









                                       H-1

<PAGE>



                                    EXHIBIT I

                                   [RESERVED]











                                       I-1

<PAGE>



                                    EXHIBIT J

                                   [RESERVED]












                                       J-1

<PAGE>



                                    EXHIBIT K

                          FORM OF ASSIGNMENT AGREEMENT

      This Assignment, Assumption and Recognition Agreement (the "AAR
Agreement") is made and entered into as of July __, 2004 (the "Closing Date"),
among Homestar Mortgage Acceptance Corp. (the "Assignor"), HSBC Bank USA, N.A.,
as trustee for the holders of Homestar Mortgage Acceptance Corp., Asset-Backed
Pass-Through Certificates, Series 2004-3 (the "Assignee") and Home Star Mortgage
Services, LLC (the "Company").

      Whereas, Wells Fargo Bank, N.A. (the "Master Servicer") and the Company
entered into that certain Servicing Agreement, dated as of March 5, 2004 (the
"Cenlar Servicing Agreement"), pursuant to which the Company agreed to service
certain mortgage loans (the "Cenlar Mortgage Loans") for the benefit of the
Assignee; and

      Whereas, the Assignor and the Company entered into that certain Servicing
Agreement, dated as of March 5, 2004 (the "Option One Servicing Agreement",
together with the Cenlar Servicing Agreement, the "Servicing Agreements"),
pursuant to which the Company agreed to service certain other mortgage loans
(the "Option One Mortgage Loans", together with the Cenlar Mortgage Loans, the
"Mortgage Loans") on behalf of the Assignor.

      In consideration of the mutual promises and agreements contained herein,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree that the Mortgage Loans
listed on Attachment 1 annexed hereto (the "Assigned Loans") shall be subject to
the terms of this AAR Agreement. Any capitalized term used and not otherwise
defined herein shall have the meaning assigned to such term in the Servicing
Agreements or the Pooling and Servicing Agreement (as defined below).

                            Assignment and Assumption

      1. Except as expressly provided for herein, the Assignor hereby grants,
transfers and assigns to the Assignee all of its right, title and interest as
in, to and under the Assigned Loans, and as they relate to the Assigned Loans,
the Servicing Agreements. Notwithstanding anything to the contrary contained
herein, the Assignor is not assigning to the Assignee any of its right, title
and interest, to and under the Servicing Agreements with respect to any other
mortgage loan other than the Assigned Loans. Except as is otherwise expressly
provided herein, the Assignor makes no representations, warranties or covenants
to the Assignee and the Assignee acknowledges that the Assignor has no
obligations to the Assignee under the terms of the Servicing Agreements or
otherwise relating to the transaction contemplated herein (including, but not
limited to, any obligation to indemnify the Assignee).



                                       K-1

<PAGE>



            Assignor acknowledges and agrees that upon execution of this
Agreement, with respect to the Assigned Loans, all representations, warranties
and covenants by the Company under the Servicing Agreements shall accrue to
Assignee by virtue of this Agreement.

                    Representations, Warranties and Covenants

      2. Assignor warrants and represents to, and covenants with, Assignee and
      Company as of the date hereof that:

      a. Attached hereto as Attachment 2 are true and correct copies of the
      Servicing Agreements, which Servicing Agreements are in full force and
      effect as of the date hereof and the provisions of which have not been
      waived, amended or modified in any respect, nor has any notice of
      termination been given thereunder;

      b. Assignor was the lawful owner of the Assigned Loans with full right to
      transfer the Assigned Loans and any and all of its interests, rights and
      obligations under the Servicing Agreements they relate to the Assigned
      Loans, free and clear from any and all claims and encumbrances; and upon
      the transfer of the Assigned Loans to Assignee as contemplated herein,
      Assignee shall have good title to each and every Assigned Loan, as well as
      any and all of Assignee's interests, rights and obligations under the
      Servicing Agreements as they relate to the Assigned Loans, free and clear
      of any and all liens, claims and encumbrances;

      c. There are no offsets, counterclaims or other defenses available to the
      Company with respect to the Servicing Agreements;

      d. Assignor has no knowledge of, and has not received notice of, any
      waivers under, or any modification of, any Assigned Loan;

      e. Assignor is duly organized, validly existing and in good standing under
      the laws of the jurisdiction of its incorporation, and has all requisite
      power and authority to acquire, own and sell the Assigned Loans;

      f. Assignor has full corporate power and authority to execute, deliver and
      perform its obligations under this AAR Agreement, and to consummate the
      transactions set forth herein. The consummation of the transactions
      contemplated by this AAR Agreement is in the ordinary course of Assignor's
      business and will not conflict with, or result in a breach of, any of the
      terms, conditions or provisions of Assignor's charter or by-laws or any
      legal restriction, or any material agreement or instrument to which
      Assignor is now a party or by which it is bound, or result in the
      violation of any law, rule, regulation, order, judgment or decree to which
      Assignor or its property is subject. The execution, delivery and
      performance by Assignor of this AAR Agreement and the consummation by it
      of the transactions contemplated hereby, have been duly authorized by all
      necessary corporate action on part of Assignor. This AAR Agreement has
      been duly executed and delivered by Assignor and,


                                       K-2

<PAGE>



      upon the due authorization, execution and delivery by Assignee and the
      parties hereto, will constitute the valid and legally binding obligation
      of Assignor enforceable against Assignor in accordance with its terms
      except as enforceability may be limited by bankruptcy, reorganization,
      insolvency, moratorium or other similar laws now or hereafter in effect
      relating to creditors' rights generally, and by general principles of
      equity regardless of whether enforceability is considered in a proceeding
      in equity or at law;

      g. No consent, approval, order or authorization of, or declaration, filing
      or registration with, any governmental entity is required to be obtained
      or made by Assignor in connection with the execution, delivery or
      performance by Assignor of this AAR Agreement, or the consummation by it
      of the transactions contemplated hereby. Neither Assignor nor anyone
      acting on its behalf has offered, transferred, pledged, sold or otherwise
      disposed of the Assigned Loans or any interest in the Assigned Loans, or
      solicited any offer to buy or accept a transfer, pledge or other
      disposition of the Assigned Loans, or any interest in the Assigned Loans
      or otherwise approached or negotiated with respect to the Assigned Loans,
      or any interest in the Assigned Loans with any Person in any manner, or
      made any general solicitation by means of general advertising or in any
      other manner, or taken any other action which would constitute a
      distribution of the Assigned Loans under the Securities Act of 1933, as
      amended (the "1933 Act") or which would render the disposition of the
      Assigned Loans a violation of Section 5 of the 1933 Act or require
      registration pursuant thereto; and

      h. There is no action, suit, proceeding, investigation or litigation
      pending or, to Assignor's knowledge, threatened, which either in any
      instance or in the aggregate, if determined adversely to Assignor, would
      adversely affect Assignor's execution or delivery of, or the
      enforceability of, this AAR Agreement, or the Assignor's ability to
      perform its obligations under this AAR Agreement.

      3. The Assignee warrants and represents to, and covenants with, the
      Assignor and the Company as of the date hereof that:

      a. Assignee is duly organized, validly existing and in good standing under
      the laws of the jurisdiction of its organization and has all requisite
      power and authority to hold the Assigned Loans as trustee on behalf of the
      holders of Homestar Mortgage Acceptance Corp., Asset-Backed Pass-Through
      Certificates, Series 2004-3;

      b. Assignee has full power and authority to execute, deliver and perform
      its obligations under this AAR Agreement, and to consummate the
      transactions set forth herein. The consummation of the transactions
      contemplated by this AAR Agreement is in the ordinary course of Assignee's
      business and will not conflict with, or result in a breach of, any of the
      terms, conditions or provisions of Assignee's charter or by-laws or any
      legal restriction, or any material agreement or instrument to which
      Assignee is now a party or by which it is bound, or result in the
      violation of any law, rule, regulation, order, judgment or decree to


                                       K-3

<PAGE>



      which Assignee or its property is subject. The execution, delivery and
      performance by Assignee of this AAR Agreement and the consummation by it
      of the transactions contemplated hereby, have been duly authorized by all
      necessary corporate action on part of Assignee. This AAR Agreement has
      been duly executed and delivered by Assignee and, upon the due
      authorization, execution and delivery by Assignor and the parties hereto,
      will constitute the valid and legally binding obligation of Assignee
      enforceable against Assignee in accordance with its terms except as
      enforceability may be limited by bankruptcy, reorganization, insolvency,
      moratorium or other similar laws now or hereafter in effect relating to
      creditors' rights generally, and by general principles of equity
      regardless of whether enforceability is considered in a proceeding in
      equity or at law;

      c. No consent, approval, order or authorization of, or declaration, filing
      or registration with, any governmental entity is required to be obtained
      or made by Assignee in connection with the execution, delivery or
      performance by Assignee of this AAR Agreement, or the consummation by it
      of the transactions contemplated hereby;

      d. There is no action, suit, proceeding, investigation or litigation
      pending or, to Assignee's knowledge, threatened, which either in any
      instance or in the aggregate, if determined adversely to Assignee, would
      adversely affect Assignee's execution or delivery of, or the
      enforceability of, this AAR Agreement, or the Assignee's ability to
      perform its obligations under this AAR Agreement; and

      e. Assignee assumes for the benefit of each of Assignor and Company all of
      Assignor's rights under the Servicing Agreements but solely with respect
      to the Assigned Loans.

      4. Company warrants and represents to, and covenants with, Assignee and
      Assignor, as of the date hereof, that:

      a. Attached hereto as Attachment 2 are true and accurate copies of the
      Servicing Agreements, which agreements are in full force and effect as of
      the date hereof and the provisions of which have not been waived, amended
      or modified in any respect, nor has any notice of termination been given
      thereunder;

      b. Company is duly organized, validly existing and in good standing under
      the laws of the jurisdiction of its formation, and has all requisite power
      and authority to service the Assigned Loans and otherwise to perform its
      obligations under the Servicing Agreements;

      c. Company has full power and authority to execute, deliver and perform
      its obligations under this AAR Agreement, and to consummate the
      transactions set forth herein. The consummation of the transactions
      contemplated by this AAR Agreement is in the ordinary course of Company's
      business and will not conflict with, or result in a breach of, any of the
      terms, conditions or provisions of Company's charter or by-laws or any
      legal restriction, or any material agreement or instrument to which
      Company is now a party or by which it is


                                       K-4

<PAGE>



      bound, or result in the violation of any law, rule, regulation, order,
      judgment or decree to which Company or its property is subject. The
      execution, delivery and performance by Company of this AAR Agreement and
      the consummation by it of the transactions contemplated hereby, have been
      duly authorized by all necessary corporate action on part of Company. This
      AAR Agreement has been duly executed and delivered by Company, and, upon
      the due authorization, execution and delivery by Assignor and Assignee,
      will constitute the valid and legally binding obligation of Company,
      enforceable against Company in accordance with its terms except as
      enforceability may be limited by bankruptcy, reorganization, insolvency,
      moratorium or other similar laws now or hereafter in effect relating to
      creditors' rights generally, and by general principles of equity
      regardless of whether enforceability is considered in a proceeding in
      equity or at law;

      d. No consent, approval, order or authorization of, or declaration, filing
      or registration with, any governmental entity is required to be obtained
      or made by Company in connection with the execution, delivery or
      performance by Company of this AAR Agreement, or the consummation by it of
      the transactions contemplated hereby;

      e. Company shall establish a Custodial Account and an Escrow Account under
      the Servicing Agreements in favor of Assignee with respect to the Assigned
      Loans separate from the Custodial Account and Escrow Account previously
      established under the Servicing Agreements in favor of Assignor;

      f. Pursuant to Section 6.01 of the Cenlar Servicing Agreement, the Company
      hereby restates the representations and warranties set forth in Section
      6.01 of the Cenlar Servicing Agreement with respect to the Company; and

      g. Neither this AAR Agreement nor any certification, statement, report or
      other agreement, document or instrument furnished or to be furnished by
      the Company pursuant to this AAR Agreement contains or will contain any
      materially untrue statement of fact or omits or will omit to state a fact
      necessary to make the statements contained therein not misleading.

      5. Assignor hereby agrees to indemnify and hold the Assignee (and its
      successors and assigns) harmless against any and all claims, losses,
      penalties, fines, forfeitures, legal fees and related costs, judgments,
      and any other costs, fees and expenses that Assignee (and its successors
      and assigns) may sustain in any way related to any breach of the
      representations or warranties of Assignor set forth in this AAR Agreement
      or the breach of any covenant or condition contained herein.

                             Recognition of Assignee

      6. From and after the date hereof, Company shall recognize Assignee as
owner of the Assigned Loans, and acknowledges that the Assigned Loans will be
part of a REMIC, and will


                                       K-5

<PAGE>



service the Assigned Loans in accordance with the Servicing Agreements but in no
event in a manner that would (i) cause any REMIC to fail to qualify as a REMIC
or (ii) result in the imposition of a tax upon any REMIC (including but not
limited to the tax on prohibited transactions as defined in Section 860F(a)(2)
of the Code and the tax on contributions to a REMIC set forth in Section 860G(d)
of the Code). It is the intention of Assignor, Company and Assignee that this
AAR Agreement shall be binding upon and for the benefit of the respective
successors and assigns of the parties hereto. Neither Company nor Assignor shall
amend or agree to amend, modify, waiver, or otherwise alter any of the terms or
provisions of the Servicing Agreements which amendment, modification, waiver or
other alteration would in any way affect the Assigned Loans without the prior
written consent of Assignee.

7. Modification of Option One Servicing Agreement:

      The Company and Assignor hereby amend the Option One Servicing Agreement
as follows:

a. The definition of "Custodial Account" shall be deleted and replaced with the
following definition:

Custodial Account:The separate demand account or accounts created and maintained
pursuant to Section 4.04 which shall be entitled "Home Star Mortgage Services,
LLC Custodial Account in trust for HSBC Bank USA, N.A., as trustee for the
holders of Homestar Mortgage Acceptance Corp., Asset-Backed Pass-Through
Certificates, Series 2004-3" and shall be established at a Qualified Depository.

b. The definition of "Custodial Agreement" shall be amended by deleting the date
"March 1, 2004" and replacing it with the date "[________]".

c. The definition of "Effective Date" shall be amended by deleting the date
"March 5, 2004" and replacing it with the date "[________]".

d. The definition of "Escrow Account" shall be deleted and replaced with the
following definition:

Escrow Account: The separate trust account or accounts created and maintained
pursuant to Section 4.06 which shall be entitled "Home Star Mortgage Services,
LLC Escrow Account in trust for HSBC Bank USA, N.A., as trustee for the holders
of Homestar Mortgage Acceptance Corp., Asset-Backed Pass-Through Certificates,
Series 2004-3" and shall be established at a Qualified Depository.

e. The definition of "Mortgage Loan Schedule" shall be deleted and replaced with
the following definition:



                                       K-6

<PAGE>



Mortgage Loan ScheThe schedule of Mortgage Loans attached as Attachment 1 to the
Assignment, Assumption and Recognition Agreement, dated as of [________], among
Homestar Mortgage Acceptance Corp., HSBC Bank USA, N.A., as trustee for the
holders of Homestar Mortgage Acceptance Corp., Asset-Backed Pass-Through
Certificates, Series 2004-3 and Home Star Mortgage Services, LLC.

f. The definition of "Remittance Date" shall be amended by deleting the date
"April 16, 2004" and replacing it with the date "[_________]".

                                  Miscellaneous

      8.    All demands, notices and communications related to the Assigned
            Loans, the Servicing Agreements and this AAR Agreement shall be in
            writing and shall be deemed to have been duly given if personally
            delivered at or mailed by registered mail, postage prepaid, as
            follows:

      a.    In the case of Company,
            Home Star Mortgage Services, LLC
            W. 115 Century Road Paramus, New Jersey 07652

      b.    In the case of Assignor,
            Homestar Mortgage Acceptance Corp.
            W. 115 Century Road
            Paramus, New Jersey 07652

      c.    In the case of Assignee,
            HSBC Bank USA, N.A.
            as Trustee
            452 Fifth Avenue
            New York, New York 10018
            Attention: HMAC 2004-3
            Telecopier No.:

      9.    The Company hereby acknowledges that Wells Fargo Bank, N.A. (the
            "Master Servicer") has been appointed as the master servicer of the
            Assigned Loans pursuant to the Pooling and Servicing Agreement,
            dated as of June 1, 2004, among the Assignor, the Assignee and the
            Master Servicer, and therefor has the right to enforce all
            obligations of the Company, as they relate to the Assigned Loans,
            under the Servicing Agreements. Each reference to the Owner in the
            Option One Servicing Agreement shall be a reference to the Assignee.
            Such right will include, without limitation, the right to terminate
            the Company under the Servicing Agreements upon the occurrence of an
            event of default thereunder, the right to receive all remittances
            required to be made by the Company under the Servicing Agreements,
            the right to receive all monthly reports and other data required to
            be delivered by the Company under the Servicing Agreements, the
            right to examine the


                                       K-7

<PAGE>



books and records of the Company, indemnification rights, and the right to
exercise certain rights of consent and approval relating to actions taken by the
Company. The Company shall make all distributions under the Servicing
Agreements, as they relate to the Assigned Loans, to the Master Servicer by wire
transfer of immediately available funds to:

            HMAC Trust 2004-3
            Wells Fargo Bank, National Association
            ABA# 121000248
            SAS Clearing
            Account # 3970771416
            For Further Credit to: HMAC 2004-3, Account # [________]_____

and the Company shall deliver all reports required to be delivered under the
Servicing Agreements, as they relate to the Assigned Loans, to the Assignee at
the address set forth in Section 8 herein and to the Master Servicer at:

            Wells Fargo Bank, National Association
            9062 Old Annapolis Road
            Columbia, Maryland 21045.
            Attention: HMAC 2004-3

      10. THIS AAR AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.

      11. No term or provision of this AAR Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party against
whom such waiver or modification is sought to be enforced.

      12. This AAR Agreement shall inure to the benefit of the successors and
assigns of the parties hereto. Any entity into which Assignor, Assignee or
Company may be merged or consolidated shall, without the requirement for any
further writing, be deemed Assignor, Assignee or Company, respectively,
hereunder.

      13. This AAR Agreement shall survive the conveyance of the Assigned Loans,
the assignment of the Servicing Agreements to the extent of the Assigned Loans
by Assignor to Assignee and the termination of the Servicing Agreements.

      14. This AAR Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original and all such
counterparts shall constitute one and the same instrument.



                                       K-8

<PAGE>



      15. In the event that any provision of this AAR Agreement conflicts with
any provision of the Servicing Agreements with respect to the Assigned Loans,
the terms of this AAR Agreement shall control.




                                       K-9

<PAGE>



      IN WITNESS WHEREOF, the parties hereto have executed this AAR Agreement on
the date first above written.


HOMESTAR MORTGAGE ACCEPTANCE CORP.,
the Assignor

By:
Its:


HSBC BANK USA, N.A., as trustee for the holders of Homestar Mortgage Acceptance
Corp., Asset-Backed Pass-Through Certificates, Series 2004-3, the Assignee
By:
Its:

HOME STAR MORTGAGE SERVICES, LLC,
the Company

By:
Its:

Acknowledged and Agreed:
WELLS FARGO BANK, N.A.

By:
Its:



                                      K-10

<PAGE>



                                  Attachment I

                                 Assigned Loans








                                      K-11

<PAGE>



                                  Attachment II

                              Servicing Agreements












                                      K-12

<PAGE>



                                   EXHIBIT L-1

            FORM CERTIFICATION TO BE PROVIDED BY THE MASTER SERVICER
                                 WITH FORM 10-K

            Re:   Homestar Mortgage Acceptance Corp.,
                  Mortgage Pass-Through Certificates, Series 2004-3

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

            1. I have reviewed this annual report on Form 10-K, and all reports
on Form 8-K containing distribution or servicing reports filed in respect of
periods included in the year covered by this annual report, of Homestar Mortgage
Acceptance Corp.;

            2. Based on my knowledge, the information in these reports, taken as
a whole, does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading as of the
last day of the period covered by this annual report;

            3. Based on my knowledge, the distribution or servicing information
required to be provided to the trustee by the servicer under the pooling and
servicing, or similar, agreement, for inclusion in these reports is included in
these reports;

            4. I am responsible for reviewing the activities performed by the
servicer under the pooling and servicing, or similar, agreement and based upon
my knowledge and the annual compliance review required under that agreement, and
except as disclosed in the reports, the servicer has fulfilled its obligations
under that agreement; and

            5. The reports disclose all significant deficiencies relating to the
servicer's compliance with the minimum servicing standards based upon the report
provided by an independent public accountant, after conducting a review in
compliance with the Uniform Single Attestation Program for Mortgage Bankers or
similar procedure, as set forth in the pooling and servicing, or similar,
agreement, that is included in these reports.

      In giving the certifications above, I have reasonably relied on
information provided to me by the following unaffiliated parties: [the Trustee
and Sub-Servicers]

Date: __________________
_______________________
[Signature]
[Title]
[Company]


                                       L-1

<PAGE>



                                   EXHIBIT L-2

                            FORM CERTIFICATION TO BE
                   PROVIDED TO MASTER SERVICER BY THE TRUSTEE

                     Re: Homestar Mortgage Acceptance Corp.,
                         Mortgage Pass-Through Certificates, Series 2004-3

            I, [Identify the certifying individual], a [______________] of HSBC
Bank USA, as Trustee, hereby certify to Wells Fargo Bank, National Association
and its officers, directors and affiliates, and with the knowledge and intent
that they will rely upon this certification, that:

            1. I have reviewed the annual report on Form 10-K for the fiscal
year [__], and all reports on Form 8-K containing distribution reports filed in
respect of periods included in the year covered by that annual report, of the
Issuer relating to the above-referenced trust;

            2. Based on my knowledge, the information in these distribution
reports prepared by the Trustee, taken as a whole, does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading as of the last day of the period covered by that
annual report; and

            3. Based on my knowledge, the distribution information required to
be provided by the Trustee under the Agreement is included in these distribution
reports.

            Capitalized terms used but not defined herein have the meanings
ascribed to them in the Pooling and Servicing Agreement, dated June 1, 2004 (the
"Agreement"), among Homestar Mortgage Acceptance Corp., as Company, Wells Fargo
Bank, National Association, (in such capacity, the "Master Servicer") and as
securities administrator (in such capacity, the "Securities Administrator"), and
HSBC Bank USA, as Trustee.

                                        HSBC BANK USA, as Trustee

                                        By:__________________________
                                        Name:
                                        Title:
                                        Date:




                                       L-2

<PAGE>



                                   EXHIBIT L-3

                            FORM CERTIFICATION TO BE
                   PROVIDED TO MASTER SERVICER BY THE TRUSTEE

            Re:   Homestar Mortgage Acceptance Corp.,
                  Mortgage Pass-Through Certificates, Series 2004-3


            I, [Identify the certifying individual], a [_________________] of
HSBC Bank USA, as Trustee, hereby certify to Wells Fargo Bank, National
Association and its officers, directors and affiliates, and with the knowledge
and intent that they will rely upon this certification, that:

            1. Based on my knowledge, the distribution information required to
be provided by the Trustee under the Agreement is included in these distribution
reports.

      Capitalized terms used but not defined herein have the meanings ascribed
to them in the Pooling and Servicing Agreement, dated June 1, 2004 (the
"Agreement"), among Homestar Mortgage Acceptance Corp., as Company, Wells Fargo
Bank, National Association, (in such capacity, the "Master Servicer") and as
securities administrator (in such capacity, the "Securities Administrator"), and
HSBC Bank USA, as Trustee.

                                        HSBC BANK USA, as Trustee

                                        By:__________________________
                                        Name:
                                        Title:
                                        Date:




                                       L-3

<PAGE>



                                   EXHIBIT M-1

                       SERVICING AGREEMENT FOR ALT-A LOANS


      THIS SERVICING AGREEMENT (this "Agreement"), entered into as of the 5th
day of March, 2004, by and among HOME STAR MORTGAGE SERVICES, LLC, a Delaware
corporation ("Home Star"), in its capacity as seller (the "Seller"), Home Star,
in its capacity as servicer (the "Servicer") and WELLS FARGO BANK, NATIONAL
ASSOCIATION, as master servicer (the "Master Servicer"), recites and provides as
follows:

                                    RECITALS

      WHEREAS, Home Star owns and services certain residential Mortgage Loans
(the "Mortgage Loans");

      WHEREAS, CENLAR FSB, a federal savings bank (the "Sub-Servicer")
sub-services certain of the Mortgage Loans for Home Star pursuant to that
certain [Sub-Servicing Agreement, dated as of March 1, 2004], by and between
Home Star and the Sub-Servicer, (the "Superseded Sub-Servicing Agreement");

      WHEREAS, Home Star, as Seller, from time to time may convey certain of the
Mortgage Loans, on a servicing-retained basis, to one or more Trusts, as defined
herein, under one or more Trust Agreements, as defined herein, in connection
with a Pass-Through Transfer, as defined herein, with Wells Fargo Bank, National
Association as the Master Servicer;

      WHEREAS, upon the Effective Date, as defined herein, of any such
Pass-Through Transfer, the Mortgage Loans shall become Securitized Loans, as
defined herein;

      WHEREAS, in connection with any such Pass-Through Transfer, the Seller and
the Master Servicer desire that the Servicer service any Securitized Loans
pursuant to this Agreement, and the Servicer has agreed to do so, subject to the
rights of the Seller and the Master Servicer to terminate the rights and
obligations of the Servicer hereunder as provided herein;

      WHEREAS, the Master Servicer shall be obligated under each Trust
Agreement, among other things, to supervise the servicing of the Securitized
Loans subject to the Trust Agreement on behalf of the related Trust, and shall
have the right to terminate the rights and obligations of the Servicer under
this Agreement or under the Agreement relating to specified Securitized Loans
upon the occurrence and continuance of an Event of Default as provided herein;

      WHEREAS, the Seller, the Servicer and the Master Servicer intend that the
NIMs Insurer and each Trustee be a third party beneficiary of this Agreement;



                                      M-1-1

<PAGE>



      WHEREAS, the Seller and the Servicer acknowledge and agree that the Seller
will assign all of its rights and delegate all of its obligations hereunder with
regard to specified Securitized Loans (exclusive of the Seller's rights and
obligations as owner of the servicing rights relating to such Securitized Loans)
to the related Trust or Trustee, and that each reference herein to the Seller
with regard to specified Securitized Loans is intended, unless otherwise
specified, to mean the Seller or such Trust or Trustee, as assignee of the
specified Securitized Loans;

      WHEREAS, this Agreement shall supersede the Superseded Sub-Servicing
Agreement in its entirety with respect to any Securitized Loans;

      WHEREAS, the parties hereto mutually acknowledge and agree that, pursuant
to Section 7.04 of this Agreement, the Sub-Servicer will contemporaneously
herewith enter into a Sub-Servicing Acknowledgment Agreement (the "Sub-Servicing
Agreement") of even date herewith, pursuant to which the Sub-Servicer will
sub-service the Securitized Loans on behalf of the Servicer in accordance with
the terms of this Agreement and will have the benefit of certain rights of the
Servicer under this Agreement, other than those under Section 7.04 hereof.

      NOW, THEREFORE, in consideration of the mutual agreements hereinafter set
forth and for other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the Master Servicer, the Seller and the Servicer
hereby agree as follows:

                                   ARTICLE I.

                                   DEFINITIONS

      The following terms are defined as follows (except as otherwise agreed in
writing by the parties):

      Accepted Servicing Practices: With respect to any Securitized Loan, those
mortgage servicing practices that prudent mortgage lending institutions would
employ in servicing their own portfolio of mortgage loans of the same type as
the Securitized Loans in the jurisdiction where the related Mortgaged Property
is located, giving due consideration to customary and usual standards of
practice of mortgage lenders and loan servicers administering similar mortgage
loans.

      Adjustable Rate Securitized Loan: A Securitized Loan under which the
Mortgage Interest Rate is adjusted from time to time in accordance with the
terms and provisions of the related Mortgage Note.

      Adverse REMIC Event: Taking (or causing to be taken) any action, or
failure to take (or failure to cause to be taken) any action, that, under the
REMIC Provisions, if taken or not taken, as the case may be, could (i) endanger
the status of such REMIC as a REMIC or (ii) result in the imposition of a tax
upon such REMIC (including but not limited to the tax on prohibited


                                      M-1-2

<PAGE>



transactions as defined in Section 860F(a)(2) of the Code and the tax on
prohibited contributions set forth on Section 860G(d) of the Code).

      Advancing Person:  As defined in Section 4.03 hereof.

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

      Ancillary Income: All income derived from the Securitized Loans (other
than the (i) Servicing Fee or (ii) Prepayment Charges or Servicer Prepayment
Charge Payment Amounts attributable to the Securitized Loans), including but not
limited to late charges, penalty interest, any interest paid on funds deposited
in the Custodial Account and Escrow Account (other than interest on escrowed
funds required by law to be paid to the Mortgagor), fees received with respect
to checks or bank drafts returned by the related bank for non-sufficient funds,
assumption fees, modification fees, optional insurance administrative fees and
all other incidental fees and charges.

      Assignment of Mortgage: An assignment of a Mortgage, notice of transfer or
equivalent instrument in recordable form, sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect the
transfer of such Mortgage to the party indicated therein, which assignment,
notice of transfer or equivalent instrument may be in the form of one or more
blanket assignments covering the Securitized Loans secured by Mortgaged
Properties located in the same jurisdiction, if permitted by law.

      Balloon Securitized Loan: Any Securitized Loan that by its original terms
or by virtue of any modification provides for an amortization schedule extending
beyond its originally scheduled Maturity Date and which has a final scheduled
payment that is proportionately large in comparison to other scheduled payments.

      Balloon Payment: The final scheduled payment in respect of a Balloon
Securitized Loan.

      Business Day: Any day other than (i) a Saturday or Sunday or (ii) a day on
which banking and savings and loan institutions in the States of New York,
Maryland, Minnesota and, with respect to any Trust, the jurisdiction in which
the related Trustee conducts its trust business, are authorized or obligated by
law or executive order to be closed.

      Certificates: Any or all of the certificates or other securities issued
pursuant to a Trust Agreement.

      Certificate Registrar: The registrar appointed pursuant to the Trust
Agreement.

      Closing Date: The actual date of closing of any Pass-Through Transfer,
without regard to the Effective Date thereof.


                                      M-1-3

<PAGE>



      Code: The Internal Revenue Code of 1986, as it may be amended from time to
time or any successor statute thereto, and applicable U.S. Department of the
Treasury regulations issued pursuant thereto.

      Condemnation Proceeds: All awards of settlements in respect of a Mortgaged
Property, whether permanent or temporary, partial or entire, by exercise of the
power of eminent domain or condemnation, to the extent not required to be
released to a Mortgagor in accordance with the terms of the related Securitized
Loan documents.

      Conventional Loan: A conventional residential first or second lien fixed
or adjustable rate Securitized Loan that is neither FHA insured nor VA
guaranteed.

      Costs: For any Person, any claims, losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments,
and other costs and expenses of such Person.

      Credit Risk Manager: With respect to Securitized Loans covered by a Trust
Agreement, any credit risk manager or loss mitigation advisor under such Trust
Agreement.

      Custodial Account: The account created and maintained by the Servicer
pursuant to Section 3.03.

      Custodial Agreement: With respect to Securitized Loans covered by a Trust
Agreement, the custodial agreement relating to custody of such Securitized Loans
between a Custodian and the related Trustee, as acknowledged by the Servicer,
dated as of the related Effective Date.

      Custodian: A custodian of Securitized Loans under any Custodial Agreement.

      Delinquent: For reporting purposes, a Securitized Loan is "delinquent"
when any payment contractually due thereon has not been made by the close of
business on the Due Date therefor. Such Securitized Loan is "30 days Delinquent"
if such payment has not been received by the close of business on the
corresponding day of the month immediately succeeding the month in which such
payment was first due, or, if there is not such corresponding day (e.g., as when
a 30-day month follows a 31-day month in which a payment was due on the 31st day
of such month), then on the last day of such immediately succeeding month.
Similarly for "60 days Delinquent" and the second immediately succeeding month
and "90 days Delinquent" and the third immediately succeeding month.

      Determination Date: With respect to each Remittance Date, the 15th day of
the month in which such Remittance Date occurs, or, if such 15th day is not a
Business Day, the immediately preceding Business Day.



                                      M-1-4

<PAGE>



      Depositor: With respect to Securitized Loans covered by a Trust Agreement,
the Person to which the Seller transfers Mortgage Loans, or any successor in
interest to such Person, which Person in turn transfers such Mortgage Loans to a
Trustee in a Pass-Through Transfer.

      Distressed Securitized Loan: As of any Effective Date, any related
Securitized Loan that was Delinquent in payment for a period of 90 days or more
as of the first calendar day of the month in which such Effective Date occurs,
without giving effect to any grace period permitted by the related Mortgage Note
or for which the Servicer has accepted a deed in lieu of foreclosure. No
Securitized Loan shall be considered delinquent for the purpose of this
definition by virtue of the related Mortgagor having made payment to the prior
servicer.

      Due Date: The day of the calendar month on which the Monthly Payment is
due on a Securitized Loan, exclusive of any days of grace. With respect to the
Securitized Loans for which payment from the Mortgagor is due on a day other
than the first day of the calendar month, such Securitized Loans will be treated
as if the Monthly Payment is due on the first day of the immediately succeeding
month.

      Due Period: With respect to each Remittance Date, the period commencing on
the second day of the month immediately preceding the month of the Remittance
Date and ending on the first day of the month of the Remittance Date.

      Effective Date: The effective date of any Pass-Through Transfer as set
forth in the Transfer Notice.

      Eligible Investments: Any one or more of the obligations and securities
listed below which investment provides for a date of maturity not later than the
Determination Date in each month:

            (i) direct obligations of, and obligations fully guaranteed as to
timely payment of principal and interest by, the United States of America or any
agency or instrumentality of the United States of America the obligations of
which are backed by the full faith and credit of the United States of America,
including Federal Housing Administration debentures, but excluding any of such
securities whose terms do not provide for a payment of a fixed dollar amount
upon maturity or call for redemption ("Direct Obligations") and Freddie Mac
senior debt obligations;

            (ii) federal funds, or demand and time deposits in, certificates of
deposits of, or bankers' acceptances issued by, any depository institution or
trust company (including U.S. subsidiaries of foreign depositories, a Trustee,
the Master Servicer or any agent of a Trustee or the Master Servicer, acting in
its respective commercial capacity) incorporated or organized under the laws of
the United States of America or any state thereof and subject to supervision and
examination by federal or state banking authorities, so long as at the time of
investment or the contractual commitment providing for such investment the
commercial paper or other short term debt obligations of such depository
institution or trust company (or, in the case of a depository


                                      M-1-5

<PAGE>



institution or trust company which is the principal subsidiary of a holding
company, the commercial paper or other short term debt or deposit obligations of
such holding company or deposit institution, as the case may be) have been rated
by each related Rating Agency in its highest short-term rating category or one
of its two highest long-term rating categories;

            (iii) repurchase agreements collateralized by direct obligations of,
or securities guaranteed by, Ginnie Mae or Freddie Mac with any registered
broker/dealer subject to Securities Investors' Protection Corporation
jurisdiction or any commercial bank insured by the FDIC, if such broker/dealer
or bank has an uninsured, unsecured and unguaranteed obligation rated by each
related Rating Agency in its highest short-term rating category;

            (iv) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of America or any
state thereof which have a credit rating from each related Rating Agency, at the
time of investment or the contractual commitment providing for such investment,
at least equal to one of the two highest long term credit rating categories of
each related Rating Agency; provided, however, that securities issued by any
particular corporation will not be Eligible Investments to the extent that
investment therein will cause the then outstanding principal amount of
securities issued by such corporation and held as part of the Custodial Account
to exceed 20% of the aggregate principal amount of all Eligible Investments in
the Custodial Account; provided, further, that such securities will not be
Eligible Investments if they are published as being under review with negative
implications from any Rating Agency;

            (v) commercial paper (including both non-interest-bearing discount
obligations and interest bearing obligations payable on demand or on a specified
date not more than 180 days after the date of issuance thereof) rated by each
related Rating Agency in its highest short-term rating category;

            (vi) a Qualified GIC (as defined in the Trust Agreement);

            (vii) certificates or receipts representing direct ownership
interests in future interest or principal payments on obligations of the United
States of America or its agencies or instrumentalities (which obligations are
backed by the full faith and credit of the United States of America) held by a
custodian in safekeeping on behalf of the holders of such receipts; and

            (viii)any other demand, money market, common trust fund or time
deposit or obligation, or interest bearing or other security or investment,
rated in the highest rating category by each related Rating Agency. Such
investments in this subsection (viii) may include money market mutual funds or
common trust funds, including any fund for which a Trustee, the Master Servicer
or any affiliate thereof serves as an investment advisor, administrator,
shareholder servicing agent, and/or custodian or subcustodian, notwithstanding
that (x) the related Trustee, the Master Servicer or any affiliate thereof
charges and collects fees and expenses from such funds for services rendered,
(y) a Trustee, the Master Servicer or any affiliate thereof charges and


                                      M-1-6

<PAGE>



collects fees and expenses for services rendered pursuant to this Agreement or a
Trust Agreement, and (z) services performed for such funds and pursuant to this
Agreement may converge at any time;

provided, however, that no such instrument shall be an Eligible Investment if
such instrument evidences either (i) a right to receive only interest payments
with respect to the obligations underlying such instrument, or (ii) 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 of greater than 120% of the yield to
maturity at par of such underlying obligations.

      Errors and Omissions Insurance: Errors and Omissions Insurance to be
maintained by the Servicer in accordance with the Master Servicing Guide.

      Escrow Account: The separate account or accounts created and maintained
pursuant to Section 3.05.

      Escrow Payments: With respect to any Securitized Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.

      Event of Default: Any of the events which may result in a termination for
cause set forth in Section 8.01.

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

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

      FHA: The Federal Housing Administration, an agency within HUD or any
successor thereto and including the Federal Housing Commissioner and the
Secretary of HUD where appropriate under the FHA Regulation.

      Fidelity Bond: A fidelity bond to be maintained by the Servicer in
accordance with the Master Servicing Guide.

      Fixed Rate Securitized Loan: Any Securitized Loan as to which the Mortgage
Interest Rate set forth in the Mortgage Note is fixed for the term of such
Securitized Loan.

      Final Recovery Determination: With respect to any defaulted Securitized
Loan or any REO Property (other than any Securitized Loan or REO Property
repurchased from the Trust), a determination made by the Servicer that all
Insurance Proceeds, Liquidation Proceeds and other


                                      M-1-7

<PAGE>



payments or recoveries which the Servicer, in its reasonable good faith
judgment, expect to be finally recoverable in respect thereof have been so
recovered.

      Fitch:  Fitch, Inc., or any successor in interest.

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

      Ginnie Mae: The Government National Mortgage Association, or any successor
thereto.

      Holder or Certificateholder: The registered owner of any Certificate as
recorded on the books of the Certificate Registrar provided for in the related
Trust Agreement.

      Home Star:  As defined in the first paragraph of this Agreement.

      Homestar Mortgage Securities Trusts: One or more trusts to be formed by a
Trust Agreement as part of a Pass-Through Transfer, pursuant to each of which a
numbered series of Certificates will be issued.

      HUD: The Department of Housing and Urban Development, or any federal
agency or official thereof which may from time to time succeed to the functions
thereof with regard to FHA Mortgage Insurance. The term "HUD," for purposes of
this Agreement, is also deemed to include subdivisions thereof such as the FHA
and Ginnie Mae.

      Insurance Proceeds: With respect to each Securitized Loan, proceeds of
insurance policies insuring the Securitized Loan or the related Mortgaged
Property, including, but not limited to, proceeds from any PMI Policy, to the
extent any such proceeds are not to be applied to the restoration and repair of
the related Mortgaged Property or released to the Mortgagor in accordance with
the procedures that the Servicer would follow in servicing mortgage loans for
its own account, subject to the terms and conditions of the related Mortgage
Note and Mortgage.

      Issuer:  The issuer of any Certificates pursuant to the Trust Agreement.

      LIBOR: The three-month London InterBank Offered Rate as published in the
Wall Street Journal on the first Business Day of the month of any Remittance
Date.

      Liquidation Proceeds: Cash received in connection with the liquidation of
a defaulted Securitized Loan, whether through the sale or assignment of such
Securitized Loan, trustee's sale, foreclosure sale or otherwise, or the sale of
the related REO Property, if the Mortgaged Property is acquired in satisfaction
of the Securitized Loan.

      Master Servicer: With respect to each Trust Agreement, Wells Fargo Bank,
National Association, or any successor in interest, or if any successor Master
Servicer shall be appointed as provided in such Trust Agreement, then such
successor Master Servicer.


                                      M-1-8

<PAGE>



      Master Servicing Guide: The Wells Fargo Bank, N.A. Master Servicing Guide,
original dated January, 1997, as amended July, 2001, and all amendments or
additions thereto, including as amended hereby.

      MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, or any successor in interest thereto.

      MERS Eligible Securitized Loan: Any Securitized Loan that has been
designated by the Servicer as recordable in the name of MERS, as nominee.

      MERS Securitized Loan: Any Securitized Loan as to which the related
Mortgage, or an Assignment of Mortgage, has been or will be recorded in the name
of MERS, as nominee for the holder from time to time of the related Mortgage
Note.

      Monthly Advance: With respect to each Remittance Date and each Securitized
Loan, an amount equal to the Monthly Payment (with the interest portion of such
Monthly Payment adjusted to the Securitized Loan Remittance Rate) that was due
on the Securitized Loan, and that was Delinquent at the close of business on the
first day of the month in which such Remittance Date occurs, but only to the
extent that such amount is expected, in the reasonable judgment of the Servicer,
to be recoverable from collections or other recoveries (including Liquidation
Proceeds and Insurance Proceeds) in respect of such Securitized Loan. To the
extent that the Servicer determines that any such amount is not recoverable from
collections or other recoveries in respect of such Securitized Loan, such
determination shall be evidenced by a certificate of a Servicing Officer
delivered to the Master Servicer setting forth such determination and the
procedures and considerations of the Servicer forming the basis of such
determination.

      Monthly Payment: The scheduled monthly payment of principal and interest
on a Securitized Loan.

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

      Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first or second lien on a fee simple estate in
real property securing the Mortgage Note.

      Mortgage Interest Rate: The annual rate of interest borne on a Mortgage
Note net of any Relief Act Reduction.

      Mortgage Note: The original, executed note or other evidence of the
indebtedness of a Mortgagor secured by a Mortgage.

      Mortgaged Property: The real property securing repayment of the debt
evidenced by a Mortgage Note.


                                      M-1-9

<PAGE>



      Mortgagor:  The obligor on a Mortgage Note.

      Net Sale Proceeds: The proceeds from the sale of REO Property, net of all
expenses and advances incurred by the Servicer in connection with such sale,
including, without limitation, legal fees and expenses, referral fees, brokerage
commissions, conveyance taxes and any other related expense.

      Non-MERS Eligible Securitized Loan: Any Securitized Loan other than a MERS
Eligible Securitized Loan.

      Non-MERS Securitized Loan: Any Securitized Loan other than a MERS
Securitized Loan.

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

      Opinion of Counsel: A written opinion of counsel, who may be an employee
of the Servicer, reasonably acceptable to the related Trustee, the Master
Servicer, and the Seller, provided that any Opinion of Counsel relating to
qualification of the Securitized Loans in a REMIC or compliance with the REMIC
Provisions must be an opinion of counsel acceptable to the related Trustee, the
Master Servicer, and the Seller, who (i) is in fact independent of the Seller
and the Servicer, (ii) does not have any material direct or indirect financial
interest in either the Seller or the Servicer or any affiliate of any such
entity and (iii) is not connected with either the Seller or the Servicer as an
officer, employee, director or person performing similar functions.

      Pass-Through Transfer: The sale or transfer by Home Star of some or all of
the Securitized Loans to a Depositor for transfer to a Trust to be formed as
part of a publicly-issued and/or privately placed, rated or unrated, mortgage
pass-through transaction or similar transaction, in each case in which Home Star
is retained as a Servicer thereunder, with Wells Fargo Bank, National
Association as the Master Servicer.

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

      PMI Insurer: Any Qualified Insurer issuing a PMI Policy with respect to a
Securitized Loan.



                                     M-1-10

<PAGE>



      PMI Policy: A policy of primary mortgage guaranty insurance issued by a
Qualified Insurer, as required by this Agreement and the Trust Agreement with
respect to certain Securitized Loans.

      Prepayment Charge: With respect to any Securitized Loan and Remittance
Date, the charges or premiums, as specified in the Prepayment Charge Schedule,
if any, due in connection with a full or partial prepayment of such Securitized
Loan during the immediately preceding Prepayment Period in accordance with the
terms thereof (but excluding any Servicer Prepayment Charge Payment Amount).

      Prepayment Charge Schedule: A data field in the schedule of Securitized
Loans to be attached to the Transfer Notice, the form of which is attached
hereto as Exhibit A, which sets forth the amount of the Prepayment Charge and
the term during which the Prepayment Charge is imposed with respect to a
Securitized Loan.

      Prepayment Interest Shortfall Amount: With respect to any Securitized Loan
that was subject to a Principal Prepayment in full or in part during any Due
Period, which Principal Prepayment was applied to such Securitized Loan prior to
such Securitized Loan's Due Date in such Due Period, the amount of interest that
would have accrued on the amount of such Principal Prepayment during the period
commencing on the date as of which such Principal Prepayment was applied to such
Securitized Loan and ending on the day immediately preceding such Due Date,
inclusive.

      Prepayment Period: With respect to each Remittance Date and any full or
partial Principal Prepayments, the calendar month immediately preceding the
month in which the related Remittance Date occurs.

      Principal Prepayment: Any payment by a Mortgagor of principal (other than
a Balloon Payment) or other recovery of principal on a Securitized Loan that is
recognized as having been received or recovered in advance of its scheduled Due
Date and applied to reduce the principal balance of the Securitized Loan in
accordance with the terms of the Mortgage Note.

      Qualified Depository: With respect to each Pass-Through Transfer, any of
(i) a depository the accounts of which are insured by the FDIC (to the limits
established by such corporation) and the debt obligations of which are rated P-1
(or its equivalent) or better by each Rating Agency rating the related
Certificates; or (ii) the corporate trust department of any bank the debt
obligations of which are rated A-2 (or its equivalent) or better by each such
Rating Agency.

      Qualified Insurer: A mortgage guaranty insurance company duly authorized
and licensed where required by law to transact mortgage guaranty insurance
business and approved as an insurer by Freddie Mac and Fannie Mae.



                                     M-1-11

<PAGE>



      Qualifying Substitute Mortgage Loan: A mortgage loan permitted under the
terms of a Trust Agreement to be substituted for a related Securitized Loan.

      Rating Agency: With respect to Certificates issued by or in connection
with a Trust, any of Fitch, Moody's or S&P which assigns a rating to such
Certificates, and their successors. If such agencies or their successors are no
longer in existence, "Rating Agencies" shall be such nationally recognized
statistical rating agencies, or other comparable Person, designated by the
Seller, written notice of which designation shall be given to the related
Trustee, the Master Servicer and the Servicer.

      Relief Act Reduction: With respect to any Securitized Loan as to which
there has been a reduction in the amount of the interest collectible thereon as
a result of the application of the Servicemembers Civil Relief Act, any amount
by which interest collectible on such Securitized Loan for the Due Date in the
related Due Period is less than the interest accrued thereon for the applicable
one-month period at the Mortgage Interest Rate without giving effect to such
reduction.

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

      Remittance Date: The 18th day (or if such 18th day is not a Business Day,
the first Business Day immediately preceding Business Day) of any calendar
month.

      REO Disposition: The final sale or other disposition by the Servicer of
any REO Property.

      REO Disposition Proceeds: All amounts received with respect to an REO
Disposition pursuant to Section 3.12.

      REO Property: A Mortgaged Property acquired by the Servicer on behalf of
the Trust through foreclosure or by deed in lieu of foreclosure pursuant to
Section 3.12 hereof.

      Residual Certificate: Any residual certificate or "Class R" Certificate
issued under any Trust Agreement.

      S&P: Standard & Poor's Rating Services, a division of The McGraw Hill
Companies, Inc., or any successor in interest.

      Securitized Loan: An individual Mortgage Loan that from time to time
becomes subject to this Agreement pursuant to a Pass-Through Transfer, each
Securitized Loan subject to this Agreement being identified on a schedule to the
Transfer Notice, the form of which is attached as Exhibit A hereto, which
Securitized Loan includes without limitation the Securitized Loan documents, the
Monthly Payments, Principal Prepayments, Liquidation Proceeds, Condemnation


                                     M-1-12

<PAGE>



Proceeds, Insurance Proceeds, REO Disposition Proceeds, and all other rights,
benefits, proceeds and obligations arising from or in connection with such
Securitized Loan.

      Securitized Loan Remittance Rate: With respect to each Securitized Loan,
the annual rate of interest remitted to the Master Servicer, which shall be
equal to the Mortgage Interest Rate minus the Servicing Fee Rate.

      Securitized Loan Schedule: The schedule of Securitized Loans to be
attached to the Transfer Notice, a form of which is attached hereto as Exhibit
A, setting forth information with respect to such Securitized Loans as agreed to
by the Seller, the Servicer and the Master Servicer, including, but not limited
to (i) any MERS identification number (if available) with respect to each MERS
Securitized Loan or MERS Eligible Securitized Loan, (ii) a data field indicating
whether such Securitized Loan is insured under a PMI Policy and identifying the
related Qualified Insurer, (iii) a Prepayment Charge Schedule and (iv) the
Servicing Fee Rate.

      Servicer: Home Star or its successor in interest or assigns or any
successor to the Servicer under this Agreement as herein provided.

      Servicer Prepayment Charge Payment Amount: The amount payable by the
Servicer in respect of any waived Prepayment Charges pursuant to Section 3.15
hereof.

      Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses other than Monthly Advances (including reasonable
attorneys' fees and disbursements) incurred in the performance by the Servicer
of its servicing obligations, including, but not limited to, the cost of (a) the
preservation, inspection, restoration and protection of the Mortgaged Property,
(b) any enforcement of administrative or judicial proceedings, including
foreclosures, (c) the management and liquidation of the Mortgaged Property
(including costs incurred in connection with environmental inspections or other
related costs of foreclosure of Mortgaged Property potentially contaminated by
hazardous or toxic substance or wastes in accordance with Section 3.12 hereof)
if the Mortgaged Property is acquired in satisfaction of the Mortgage, (d)
taxes, assessments, water rates, sewer rents and other charges which are or may
become a lien upon the Mortgaged Property, and PMI Policy premiums and fire and
hazard insurance coverage and (e) any losses sustained by the Servicer with
respect to the liquidation of the Mortgaged Property.

      Servicing Fee: With respect to each Due Period and any Securitized Loan,
an amount equal to one-twelfth the product of (i) the Servicing Fee Rate and
(ii) the Scheduled Balance of such Securitized Loan as of the related
Determination Date. The obligation of the Trustee to pay the Servicing Fee is
limited to, and the Servicing Fee is payable solely from, the interest portion
(including recoveries with respect to interest from Liquidation Proceeds to the
extent permitted by Section 3.02 of this Agreement) of such Monthly Payments
collected by the Servicer, or as otherwise provided under this Agreement, and
the Servicing Fee is subject to reduction for compensating interest under
Section 4.04 hereof.


                                     M-1-13

<PAGE>



      Servicing Fee Rate: The servicing fee rate, stated as either a number of
basis points or as a percentage, for each Securitized Loan, as reflected in the
schedule of Securitized Loans to be attached to the Transfer Notice, the form of
which is attached hereto as Exhibit A.

      Servicing File: The items pertaining to a particular Securitized Loan
including, but not limited to, the computer files, data disks, books, records,
data tapes, notes, and all additional documents generated as a result of or
utilized in originating and/or servicing each Securitized Loan, which are held
in trust for the related Trust by the Servicer.

      Servicing Officer: Any officer of the Servicer involved in or responsible
for, the administration and servicing of the Securitized Loans whose name
appears on a list of servicing officers furnished by the Servicer to the Master
Servicer upon request, as such list may from time to time be amended.

      Sub-Servicer: Cenlar FSB, a federal savings bank, pursuant to the
Sub-Servicing Agreement, or its successor in interest.

      Sub-Servicing Agreement: That certain Sub-Servicing Acknowledgment
Agreement of even date with this Agreement, by and between the Servicer and the
Sub-Servicer.

      Superseded Sub-Servicing Agreement: That certain Sub-Servicing Agreement,
dated as of [March 1, 2004], by and between Home Star and the Sub-Servicer.

      Transfer Notice: The Transfer Notice referred to in Section 2.01 hereof,
in the form attached hereto as Exhibit A.

      Trust: The trust established by the Trust Agreement, the assets of which
consist of the transferred Securitized Loans and any other assets provided for
in the related Trust Agreement.

      Trust Agreement: Any trust agreement, pooling and servicing agreement,
indenture or comparable documents by and among some or all of the Issuer, the
Master Servicer, the Depositor and a Trustee (and which may include other
parties) creating a Trust and/or otherwise effectuating a Pass-Through Transfer.

      Trustee: Any trustee or trust with respect to the transferred Securitized
Loans in any Pass-Through Transfer, or any successor in interest, or if any
successor trustee or co-trustee shall be appointed as provided in the Trust
Agreement, then such successor trustee or such co-trustee, as the case may be.

      VA: The Veterans Administration, an agency of the United States of
America, or any successor thereto, including the Administration of Veterans
Affairs.



                                     M-1-14

<PAGE>



      ANY CAPITALIZED TERMS USED AND NOT DEFINED IN THIS AGREEMENT SHALL HAVE
THE MEANINGS ASCRIBED TO SUCH TERMS IN THE RELATED TRUST AGREEMENT SPECIFIED IN
THE TRANSFER NOTICE.




                                     M-1-15

<PAGE>



                                   ARTICLE II.

           PASS- THROUGH TRANSFERS; SELLER'S ENGAGEMENT OF SERVICER TO
                       PERFORM SERVICING RESPONSIBILITIES

      Section 2.01Pass-Through Transfers.

      (a) The Seller and the Servicer agree that from time to time the Seller
shall effect the sale or transfer of some or all of the Mortgage Loans to a
Trust to be formed as part of a Pass-Through Transfer. The Servicer shall
cooperate with the Seller in connection with any Pass-Through Transfer
contemplated by the Seller pursuant to this Section 2.01, including without
limitation providing requested information and reports to, and otherwise
cooperating with, any Credit Risk Manager. In connection therewith, the Servicer
shall provide to the Seller and any Trustee, Trust, Depositor, underwriter,
initial purchaser, NIMs Insurer or Credit Risk Manager in connection with a
Pass-Through Transfer, as the case may be: (i) any and all information and
appropriate verification of information which may be reasonably available to the
Servicer, including the Servicer's foreclosure, delinquency experience and the
Servicer's underwriting standards, whether through letters of its auditors and
counsel or otherwise, as such parties shall reasonably request; and (ii) such
additional representations, warranties, covenants, opinions of counsel, letters
from auditors, and certificates of public officials or officers of the Servicer
as are reasonably believed necessary by the Seller and any Trustee, Trust,
Depositor, underwriter, initial purchaser, NIMs Insurer or Credit Risk Manager,
as the case may be, in connection with such Pass-Through Transfer. The Servicer
shall indemnify the Depositor for any material misstatements or omissions or
alleged material misstatements or omissions contained in the information
provided pursuant to this Section 2.01(a). The Seller shall provide the Servicer
with a Transfer Notice with respect to any such Pass-Through Transfer, including
a schedule of Mortgage Loans which have been transferred, the Effective Date of
the Pass-Through Transfer and the name and address of the related Trustee. Upon
the Effective Date of such a Pass-Through Transfer, (A) the Servicer and the
Seller agree that the provisions of this Agreement shall go into effect with
respect to the Securitized Loans to which the Transfer Notice relates, and (B)
the Servicer agrees to recognize the Trustee and Trust with respect to the
transferred Mortgage Loans in the Pass-Through Transfer, or the Master Servicer
acting on their behalf, as having the same rights under this Agreement as the
Seller with respect to such transferred Mortgage Loans, including without
limitation the right to terminate the Servicer under this Agreement.

      Section 2.02  Contract for Servicing; Possession of Servicing Files.

      The Seller, by execution and delivery of this Agreement, does hereby
contract with the Servicer, subject to the terms of this Agreement, for the
servicing of the Securitized Loans. On or before each Closing Date, the Seller
shall cause to be delivered to the Servicer or to the Sub-Servicer the Servicing
Files with respect to the Securitized Loans listed in the schedule attached to
the applicable Transfer Notice. Each Servicing File delivered to the Servicer
shall be


                                     M-1-16

<PAGE>



held in trust by the Servicer for the benefit of the Trust; provided, however,
that the Servicer shall have no liability for any Servicing Files (or portions
thereof) not delivered by the Seller. The Servicer's possession of any portion
of the Securitized Loan documents shall be on behalf of the Trust for the sole
purpose of facilitating servicing of the related Securitized Loan pursuant to
this Agreement, and such retention and possession by the Servicer shall be in a
custodial capacity only. The ownership of each Mortgage Note, Mortgage, and the
contents of the Servicing File shall be vested in the Trust and the ownership of
all records and documents with respect to the related Securitized Loan prepared
by or which come into the possession of the Servicer shall immediately vest in
the Trust and shall be retained and maintained, in trust, by the Servicer on
behalf of the Trust in such custodial capacity only. The portion of each
Servicing File retained by the Servicer pursuant to this Agreement shall be
segregated from the other books and records of the Servicer and shall be
appropriately marked to clearly reflect the ownership of the related Securitized
Loan by the Trust. The Servicer shall release from its custody the contents of
any Servicing File retained by it only in accordance with this Agreement.

      Section 2.03 Books and Records.

      (a) Subject to Section 3.01(a) hereof, as soon as practicable after the
Closing Date or the date on which a Qualifying Substitute Mortgage Loan is
delivered pursuant to a Trust Agreement, as applicable (but in no event more
than 90 days thereafter except to the extent delays are caused by the applicable
recording office), the Servicer, at the expense of the Seller, shall cause the
Mortgage or Assignment of Mortgage, as applicable, with respect to each related
MERS Eligible Securitized Loan, to be properly recorded in the name of MERS in
the public recording office in the applicable jurisdiction, or shall ascertain
that such have previously been so recorded.

      (b) Subject to Section 3.01(a) hereof, an Assignment of Mortgage in favor
of the Trustee on behalf of the Trust shall be recorded as to each Non-MERS
Securitized Loan, unless instructions to the contrary are delivered to the
Servicer, in writing, by the Trustee, or the Servicer obtains an Opinion of
Counsel that recordation of such Assignment of Mortgage is not required. Subject
to the preceding sentence, as soon as practicable after the Closing Date (but in
no event more than 90 days thereafter except to the extent delays are caused by
the applicable recording office), the Servicer, at the expense of the Seller,
shall cause such related Assignment of Mortgage to be properly recorded in each
public recording office where such Non-MERS Eligible Securitized Loans are
recorded, unless the Servicer obtains an Opinion of Counsel that recordation of
such an Assignment of Mortgage is not required.

      (c) Additionally, the Servicer shall prepare and execute, at the direction
of the Trustee, any note endorsements relating to any of the related Non-MERS
Securitized Loans.

      (d) All rights arising out of the Securitized Loans shall be vested in the
related Trust, subject to the Servicer's right to service and administer the
Securitized Loans hereunder in accordance with the terms of this Agreement. All
funds received on or in connection with a


                                     M-1-17

<PAGE>



Securitized Loan, other than the Servicing Fee and other compensation to which
the Servicer is entitled as set forth herein, including but not limited to that
compensation as set forth in Section 5.01 below, shall be received and held by
the Servicer in trust for the benefit of the related Trust pursuant to the terms
of this Agreement.

      (e) Any out-of-pocket costs incurred by the Servicer pursuant to this
Section 2.03 and Section 3.01(a), including any recording or other fees in
connection with the Servicer's obtaining the necessary powers of attorney (and
which are specified herein to be an expense of the Seller), shall be reimbursed
to the Servicer by the Seller within five (5) Business Days of receipt by the
Seller of an invoice for reimbursement. The Trust shall not reimburse the Seller
for any such reimbursement to the Servicer.

                                  ARTICLE III.

                       SERVICING OF THE SECURITIZED LOANS

      Section 3.01 Servicer to Service.

      The Servicer, as an independent contractor, shall service and administer
the Securitized Loans from and after the Closing Date and shall have full power
and authority, acting alone, to do any and all things in connection with such
servicing and administration which the Servicer may deem necessary or desirable,
consistent with the terms of this Agreement and with Accepted Servicing
Practices. The Servicer may designate the sub-servicer to perform the
obligations hereunder, provided that such designation shall not relieve the
Servicer of such obligations.

      The Seller and the Servicer additionally agree as follows:

      (a) The Servicer shall (A) record or cause to be recorded the Mortgage or
the Assignment of Mortgage, as applicable, with respect to all MERS Eligible
Securitized Loans, in the name of MERS, or shall ascertain that such have
previously been so recorded; (B) prepare or cause to be prepared all Assignments
of Mortgage with respect to all Non-MERS Eligible Securitized Loans; (C) prepare
for recording or cause to be recorded, subject to Section 2.03(b) hereof, all
Assignments of Mortgage with respect to Non-MERS Securitized Loans in the name
of the related Trust; (D) pay the recording costs pursuant to Section 2.03
hereof; and/or (E) track such Mortgages and Assignments of Mortgage to ensure
they have been recorded. The Servicer shall be entitled to be paid by the Seller
its out-of-pocket costs for the preparation and recordation of the Mortgages and
Assignments of Mortgage. After the expenses of such recording costs pursuant to
Section 2.03 hereof shall have been paid by the Servicer, the Servicer shall
submit to the Seller a reasonably detailed invoice for reimbursement of
recording costs it incurred hereunder.

      (b) If applicable, the Servicer shall, in accordance with the relevant
provisions of the Cranston-Gonzales National Affordable Housing Act of 1990, as
the same may be amended from


                                     M-1-18

<PAGE>



time to time, and the regulations provided in accordance with the Real Estate
Settlement Procedures Act, provide notice to the Mortgagor of each Securitized
Loan of the transfer of the servicing thereto to the Servicer.

      (c) The Servicer shall be responsible for the preparation of and costs
associated with notifications to Mortgagors of the assumption of servicing by
the Servicer.

      Consistent with the terms of this Agreement and except as provided in
Section 3.15 hereof, the Servicer may waive any late payment charge, assumption
fee or other fee (other than a Prepayment Charge) that may be collected in the
ordinary course of servicing the Securitized Loans. The Servicer shall not make
any future advances to any Mortgagor under any Securitized Loan, and (unless the
Mortgagor is in default with respect to the Securitized Loan or such default is,
in the judgment of the Servicer, reasonably foreseeable) the Servicer shall not
permit any modification of any material term of any Securitized Loan, including
any modification that would change the Mortgage Interest Rate, defer or forgive
the payment of principal or interest, reduce or increase the outstanding
principal balance (except for actual payments of principal) or change the final
maturity date on such Securitized Loan. The NIMs Insurer's prior written consent
shall be required for any modification, waiver or amendment if the aggregate
number of outstanding Securitized Loans which have been modified, waived or
amended exceeds 5% of the number of Securitized Loans in the related Trust as of
the Effective Date. In the event of any such modification which permits the
deferral of interest or principal payments on any Securitized Loan, the Servicer
shall, on the Business Day immediately preceding the Remittance Date in any
month in which any such principal or interest payment has been deferred, make a
Monthly Advance in accordance with Section 4.03, in an amount equal to the
difference between (a) such month's principal and one month's interest at the
Securitized Loan Remittance Rate on the unpaid principal balance of such
Securitized Loan and (b) the amount paid by the Mortgagor. The Servicer shall be
entitled to reimbursement for such advances to the same extent as for all other
advances made pursuant to Section 4.03. The Servicer may permit modifications to
a Securitized Loan, with the consent of the NIMs Insurer, which are authorized
by the express terms of either an allonge to the related Mortgage Note or an
addendum to the related Mortgage in existence as of the Effective Date. If Home
Star wishes to make a modification to a Securitized Loan which is not permitted
under this Section 3.01, then Home Star must repurchase such Securitized Loan
from the related Trust on the terms and conditions provided in the Trust
Agreement. Without limiting the generality of the foregoing, the Servicer shall
continue, and is hereby authorized and empowered, to execute and deliver on
behalf of itself and the related Trust, all instruments of satisfaction or
cancellation, or of partial or full release, discharge and all other comparable
instruments, with respect to the Securitized Loans and with respect to the
Mortgaged Properties. Upon the written request of the Servicer, the Trustee
shall execute and deliver to the Servicer, within the later of fifteen days from
the Closing Date or within fifteen days of such Servicer request, any powers of
attorney (one for each county in which any of the Mortgaged Properties are
located) and other documents, furnished to it by the Servicer and reasonably
satisfactory to the Trustee, necessary or appropriate to enable the Servicer to
carry out its servicing and administrative duties under this Agreement.


                                     M-1-19

<PAGE>



      Notwithstanding anything in this Agreement to the contrary, the Servicer
(a) shall not permit any modification with respect to any Mortgage Loan that
would change the Mortgage Interest Rate and (b) shall not (unless the Mortgagor
is in default with respect to the Mortgage Loan or such default is, in the
judgment of the Servicer, reasonably foreseeable) make or permit any
modification, waiver or amendment of any term of any Mortgage Loan that would
both (i) effect an exchange or reissuance of such Mortgage Loan under Section
1001 of the Code (or Treasury regulations promulgated thereunder) and (ii) cause
the Trust Fund to fail to qualify as a REMIC under the Code or the imposition of
any tax on "prohibited transactions" or "contributions" after the startup date
under the REMIC Provisions.

      Prior to taking any action with respect to the Mortgage Loans which is not
contemplated under the terms of this Agreement, the Servicer will obtain an
Opinion of Counsel acceptable to the NIMs Insurer and the Trustee or the Master
Servicer on its behalf with respect to whether such action could result in the
imposition of a tax upon the REMIC (including but not limited to the tax on
prohibited transactions as defined in Section 860F(a)(2) of the Code and the tax
on contributions to a REMIC set forth in Section 860G(d) of the Code) (either
such event, an "Adverse REMIC Event"), and the Servicer shall not take any such
action or cause the Trust Fund to take any such action as to which it has been
advised that an Adverse REMIC Event could occur.

      The Servicer shall not permit the creation of any "interests" (within the
meaning of Section 860G of the Code) in the REMIC. The Servicer shall not enter
into any arrangement by which the REMIC will receive a fee or other compensation
for services nor permit the REMIC to receive any income from assets other than
"qualified mortgages" as defined in Section 860G(a)(3) of the Code or "permitted
investments" as defined in Section 860G(a)(5) of the Code.

      Section 3.02  Collection of Securitized Loan Payments.

      Continuously from the Closing Date until the date each Securitized Loan
ceases to be subject to this Agreement, the Servicer shall proceed diligently to
collect all payments due under each of the Securitized Loans when the same shall
become due and payable and shall take special care in ascertaining and
estimating Escrow Payments and all other charges that will become due and
payable with respect to the Securitized Loans and each related Mortgaged
Property, to the end that the installments payable by the Mortgagors will be
sufficient to pay such charges as and when they become due and payable.

      Section 3.03  Establishment of and Deposits to Custodial Account.

      (a) The Servicer shall segregate and hold all funds collected and received
pursuant to the Securitized Loans separate and apart from any of its own funds
and general assets and shall establish and maintain for each related Trust a
Custodial Account, in the form of a time deposit or demand account, titled "Home
Star Mortgage Services, LLC in trust for [Name of Trust]." The Custodial Account
shall be established with a Qualified Depository. Any funds deposited in


                                     M-1-20

<PAGE>



the Custodial Account may be invested in Eligible Investments subject to the
provisions of Section 3.11 hereof. Funds deposited in the Custodial Account may
be drawn on by the Servicer in accordance with Section 3.04 hereof. The creation
of the Custodial Account shall be evidenced by a letter agreement in the form of
Exhibit B. A copy of such letter agreement shall be furnished to each Trustee,
each NIMS Insurer and the Master Servicer. The NIMs Insurer and the Trustee
shall also be notified of any change in the location of the Custodial Account.

      (b) The Servicer shall deposit in the Custodial Account on a daily basis,
and retain therein, the following collections received by the Servicer and
payments made by the Servicer after the Closing Date:

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

            (ii) all payments on account of interest received on the Securitized
Loans adjusted to the applicable Securitized Loan Remittance Rate;

            (iii) all Prepayment Charges received or any Servicer Prepayment
Charge Payment Amounts to be paid by the Servicer to the related Trust;

            (iv) all Liquidation Proceeds;

            (v) all Insurance Proceeds (other than any amounts immediately
applied to the restoration or repair of the Mortgaged Property or immediately
released to the Mortgagor);

            (vi) all Condemnation Proceeds that are not applied to the
restoration or repair of the Mortgaged Property or released to the Mortgagor;

            (vii) any Prepayment Interest Shortfall Amount required to be paid
by the Servicer pursuant to Section 4.04;

            (viii)all Monthly Advances made by the Servicer or an Advancing
Person pursuant to Section 4.03;

            (ix) any amounts required to be deposited by the Servicer in
connection with the deductible clause in any blanket hazard insurance policy;

            (x) any amounts received with respect to or related to any REO
Property or REO Disposition Proceeds;

            (xi) any amounts required to be deposited pursuant to Section 3.11
in connection with any losses realized on Eligible Investments with respect to
funds held in the Custodial Account;


                                     M-1-21

<PAGE>



            (xii) any amounts required to be deposited by the Servicer pursuant
to Section 3.16(a) in connection with any unpaid claims that are a result of a
breach by the Servicer or any sub-servicer of its obligations hereunder or under
a PMI Policy;

            (xiii)any amounts received by it under any PMI Policy; and

            (xiv) any other amount required hereunder to be deposited by the
Servicer in the Custodial Account.

      Notwithstanding the foregoing clause (viii), no Monthly Advances or
Servicing Advances shall be required to be made by the Servicer if such Monthly
Advance or Servicing Advance would, if made, be, in the Servicer's reasonable
judgment, nonrecoverable. The determination by the Servicer that it has made a
nonrecoverable Monthly Advance or Servicing Advance, or that any proposed
Monthly Advance or Servicing Advance would be a nonrecoverable advance, shall be
evidenced by an Officer's Certificate of the Servicer delivered to the Master
Servicer and the NIMs Insurer.

      The foregoing requirements for deposit into the Custodial Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of (i) late payment charges, penalty
interest and insufficient fund charges, (ii) assumption and modification fees,
(iii) other Ancillary Income and (iv) the Servicing Fee need not be deposited by
the Servicer into the Custodial Account.

      Any interest paid on funds deposited in the Custodial Account by the
depository institution shall accrue to the benefit of the Servicer as additional
servicing compensation and the Servicer shall be entitled to retain and withdraw
such interest from the Custodial Account pursuant to Section 3.04 of this
Agreement. Additionally, any other benefit derived from the Custodial Account
associated with the receipt, disbursement and accumulation of principal,
interest, taxes, hazard insurance, mortgage insurance, etc. shall accrue for the
benefit of the Servicer.

      Section 3.04  Permitted Withdrawals From Custodial Account.

      The Servicer shall, from time to time, withdraw funds from the Custodial
Account for the following purposes:

            (i) to make payments to the Master Servicer in the amounts and in
the manner provided for in Section 4.01;

            (ii) in the event the Servicer has elected not to retain the
Servicing Fee out of any Mortgagor payments on account of interest or other
recovery of interest with respect to a particular Securitized Loan (including
late collections of interest on such Securitized Loan, or interest portions of
Insurance Proceeds, Liquidation Proceeds or Condemnation Proceeds) prior


                                     M-1-22

<PAGE>



to the deposit of such Mortgagor payment or recovery in the Custodial Account,
to pay to itself the related Servicing Fee from all such Mortgagor payments on
account of interest or other such recovery for interest with respect to that
Securitized Loan;

            (iii) to pay itself investment earnings on funds deposited in the
Custodial Account;

            (iv) to transfer funds to another Qualified Depository in accordance
with Section 3.11 hereof;

            (v) to invest funds in certain Eligible Investments in accordance
with Section 3.11 hereof;

            (vi) to reimburse itself to the extent of funds held in the
Custodial Account for Monthly Advances of the Servicer's funds made pursuant to
Section 4.03. The Servicer's right to reimburse itself pursuant to this
subclause (vi) with respect to any Securitized Loan shall be limited to amounts
received on or in respect of the related Securitized Loan which represent late
recoveries of payments of principal or interest with respect to which a Monthly
Advance was made, it being understood that in the case of any such reimbursement
the Servicer's right thereto shall be prior to the rights of the related Trust;
provided, however, that following the final liquidation of a Securitized Loan,
the Servicer may reimburse itself for previously unreimbursed Monthly Advances
in excess of Liquidation Proceeds or Insurance Proceeds with respect to such
Securitized Loan from any funds in the Custodial Account relating to Securitized
Loans in the same Trust, it being understood, in the case of any such
reimbursement, that the Servicer's right thereto shall be prior to the rights of
the related Trust. The Servicer may recover at any time from amounts on deposit
in the Custodial Account with respect to Securitized Loans in the same Trust the
amount of any Monthly Advances that the Servicer deems nonrecoverable or that
remain unreimbursed to the Servicer from related Liquidation Proceeds after the
final liquidation of the related Securitized Loan. In addition, the Servicer
may, at any time, withdraw from the Custodial Account funds that are held for
future distribution (i.e., were not included in the principal and interest for
the preceding Remittance Date) to reimburse itself for Monthly Advances
previously made by the Servicer;

            (vii) to reimburse itself for unreimbursed Servicing Advances, and
for any unpaid Servicing Fees, the Servicer's right to reimburse itself pursuant
to this subclause (vii) with respect to any Securitized Loan being limited to
related Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds, REO
Disposition Proceeds and other amounts received in respect of the related REO
Property, and such other amounts as may be collected by the Servicer from the
Mortgagor or otherwise relating to the Securitized Loan, it being understood
that, in the case of any such reimbursement, the Servicer's right thereto shall
be prior to the rights of the related Trust;



                                     M-1-23

<PAGE>



            (viii)to reimburse the Servicer for expenses incurred by, and
reimbursable to, the Servicer pursuant to Section 6.03, but only to extent such
amounts are determined to be reimbursable by the related Trust pursuant to
Section 6.03;

            (ix) to reimburse itself for expenses incurred or reimbursable to
the Servicer pursuant to Section 3.12 from funds with respect to Securitized
Loans in the same Trust to the extent not previously reimbursed under clause
(vii) of this Section 3.04;

            (x) to withdraw funds with respect to Securitized Loans in the same
Trust necessary for the operation, management and maintenance of any REO related
property to the extent not previously reimbursed under clause (vii) of this
Section 3.04;

            (xi) to withdraw any funds deposited to the Custodial Account in
error; and,

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

            (xiii)to reimburse the Trustee or the NIMs Insurer for enforcement
expenses incurred in respect of a breach of a representation or warranty.

      Section 3.05  Establishment of and Deposits to Escrow Account.

      The Servicer shall segregate and hold all funds collected and received
pursuant to a Securitized Loan constituting Escrow Payments separate and apart
from any of its own funds and general assets and shall establish and maintain an
Escrow Account, in the form of a time deposit or demand account, titled "Home
Star Mortgage Services, LLC in trust for one or more Homestar Mortgage
Securities Trusts." The Escrow Account shall be established with a Qualified
Depository in a manner that shall provide maximum available insurance
thereunder. Funds deposited in the Escrow Account may be drawn on by the
Servicer in accordance with Section 3.06. The creation of the Escrow Account
shall be evidenced by a letter agreement in the form of Exhibit C. A copy of
such certification or letter agreement shall be furnished to each Trustee and
the Master Servicer.

      The Servicer shall deposit in the Escrow Account or Accounts on a daily
basis, and retain therein:

            (i) all Escrow Payments collected on account of the Securitized
Loans, for the purpose of effecting timely payment of any such items as required
under the terms of this Agreement; and

            (ii) all amounts representing Insurance Proceeds or Condemnation
Proceeds that are to be applied to the restoration or repair of any Mortgaged
Property.



                                     M-1-24

<PAGE>



      The Servicer shall make withdrawals from the Escrow Account only to effect
such payments as are required under this Agreement, as set forth in Section
3.06. The Servicer shall retain any interest paid on funds deposited in the
Escrow Account by the depository institution, other than interest on escrowed
funds required by law to be paid to the related Mortgagor. Additionally, any
other benefit derived from the Escrow Account associated with the receipt,
disbursement and accumulation of principal, interest, taxes, hazard insurance,
mortgage insurance, etc. shall accrue to the Servicer. To the extent required by
law, the Servicer shall pay interest on escrowed funds to the related Mortgagor
notwithstanding that the Escrow Account may be non-interest bearing or that
interest paid thereon is insufficient for such purposes.

      Section 3.06  Permitted Withdrawals From Escrow Account.

      Withdrawals from the Escrow Account or Accounts may be made by the
Servicer only:

            (i) to effect payments of ground rents, taxes, assessments, water
rates, sewer rents, mortgage insurance premiums, condominium charges, fire and
hazard insurance premiums or other items constituting Escrow Payments for the
related Mortgage;

            (ii) to refund to any related Mortgagor any funds found to be in
excess of the amounts required under the terms of the related Securitized Loan;

            (iii) as permitted by applicable state law, for transfer to the
Custodial Account and application to reduce the principal balance of the related
Securitized Loan in accordance with the terms of the related Mortgage and
Mortgage Note;

            (iv) for application to restore or repair the related Mortgaged
Property in accordance with the Master Servicing Guide;

            (v) to pay to the Servicer, or the related Mortgagor to the extent
required by law, any interest paid on the funds with respect to a Securitized
Loan deposited in the Escrow Account; and

            (vi) to reimburse itself for any Servicing Advances made with
respect to Escrow Payments for a Securitized Loan or the related Mortgaged
Properties, but only from amounts received on the related Securitized Loan which
represent late collections of Escrow Payments thereunder;

            (vii) to withdraw any funds deposited into the Escrow Account in
error; and

            (viii)to clear and terminate the Escrow Account on the termination
of this Agreement.



                                     M-1-25

<PAGE>



      The Servicer will be responsible for the administration of the Escrow
Accounts and will be obligated to make Servicing Advances to the Escrow Account
in respect of its obligations under this Section 3.06, reimbursable from the
Escrow Accounts or Custodial Account to the extent not collected from a
Mortgagor, anything to the contrary notwithstanding, when and as necessary to
avoid the lapse of insurance coverage on the related Mortgaged Property, or
which the Servicer knows, or in the exercise of the required standard of care of
the Servicer hereunder should know, is necessary to avoid the loss of such
Mortgaged Property due to a tax sale or the foreclosure as a result of a tax
lien. If any such payment has not been made and the Servicer receives notice of
a tax lien with respect to such Mortgaged Property being imposed, the Servicer
will, within ten (10) Business Days of such notice, advance or cause to be
advanced funds necessary to discharge such lien on such Mortgaged Property.

      Section 3.07  Restoration of Mortgaged Property.

      The Servicer need not obtain the approval of the Master Servicer prior to
releasing any Insurance Proceeds or Condemnation Proceeds to the Mortgagor to be
applied to the restoration or repair of the related Mortgaged Property if such
release is in accordance with Accepted Servicing Practices. At a minimum, with
respect to claims of $10,000 or more, the Servicer shall comply with the
following conditions in connection with any such release of Insurance Proceeds
or Condemnation Proceeds:

            (i) the Servicer shall receive satisfactory independent verification
of completion of repairs and issuance of any required approvals with respect
thereto;

            (ii) the Servicer shall take all steps necessary to preserve the
priority of the lien of the Mortgage, including, but not limited to requiring
waivers with respect to mechanics' and materialmen's liens.

            (iii) the Servicer shall verify that the Securitized Loan is not 60
or more days delinquent; and

            (iv) pending repairs or restoration, the Servicer shall place the
Insurance Proceeds or Condemnation Proceeds in the Escrow Account.

      With respect to claims of less than $10,000, the Servicer shall comply
with the following conditions in connection with any such release of Insurance
Proceeds or Condemnation Proceeds:

            (v) the related Mortgagor shall provide an affidavit verifying the
completion of repairs and issuance of any required approvals with respect
thereto;

            (vi) the Servicer shall verify the total amount of the claim with
the applicable insurance company; and



                                     M-1-26

<PAGE>



            (vii) pending repairs or restoration, the Servicer shall place the
Insurance Proceeds or Condemnation Proceeds in the Escrow Account.

      If the Trustee is named as an additional loss payee, the Servicer is
hereby empowered to endorse any loss draft issued in respect of such a claim in
the name of the related Trust.

      Section 3.08  Fidelity Bond and Errors and Omissions Insurance.

      The Servicer shall keep in force and shall cause each sub-servicer to keep
in force during the term of this Agreement a Fidelity Bond and Errors and
Omissions Insurance the minimum coverage of which shall be at least equal to the
coverage required by the Master Servicer in the Master Servicing Guide (unless a
waiver of such requirement has been obtained by the Servicer from the Master
Servicer and NIMs Insurer). Such Fidelity Bond and Errors and Omissions
Insurance shall be maintained with recognized insurers, shall be in such form
and amount as would permit the Servicer to be qualified with the Master Servicer
as a servicer, and shall by its terms not be cancelable without thirty days'
prior written notice to the Trustee, the NIMs Insurer and the Master Servicer.
The Servicer and each sub-servicer shall be deemed to have complied with this
provision if an affiliate of the Servicer has such errors and omissions and
fidelity bond coverage and, by the terms of such insurance policy or fidelity
bond, the coverage afforded thereunder extends to the Servicer. The Servicer
shall furnish and shall cause each sub-servicer to furnish to the Trustee, each
NIMs Insurer (upon reasonable request) and the Master Servicer a copy of each
such bond and insurance policy upon their request.

      Section 3.09  Notification of Adjustments.

      With respect to each Adjustable Rate Securitized Loan, the Servicer shall
adjust the Mortgage Interest Rate on the related interest rate adjustment date
and shall adjust the Monthly Payment on the related mortgage payment adjustment
date, if applicable, in compliance with the requirements of applicable law and
the related Mortgage and Mortgage Note. The Servicer shall execute and deliver
any and all necessary notices required under applicable law and the terms of the
related Mortgage Note and Mortgage regarding the Mortgage Interest Rate and
Monthly Payment adjustments. The Servicer shall promptly, upon written request
therefor, deliver to the Master Servicer such notifications and any additional
applicable data regarding such adjustments and the methods used to calculate and
implement such adjustments. Upon the discovery by the Servicer or the receipt of
notice from the Master Servicer that the Servicer has failed to adjust a
Mortgage Interest Rate or Monthly Payment in accordance with the terms of the
related Mortgage Note, the Servicer shall immediately deposit in the Custodial
Account from its own funds the amount of any interest loss or deferral caused
thereby and shall indemnify the Trust in respect of any liability as a result of
such shortfall.

      Section 3.10  Payment of Taxes, Insurance and Other Charges.



                                     M-1-27

<PAGE>



      With respect to each Securitized Loan, the Servicer shall maintain
accurate records reflecting the status of ground rents, taxes, assessments,
water rates and other charges which are or may become a lien upon the Mortgaged
Property and the status of fire and hazard insurance coverage and shall obtain,
from time to time, all bills for the payment of such charges (including renewal
premiums) and shall effect payment thereof prior to the applicable penalty or
termination date and at a time appropriate for securing maximum discounts
allowable, employing for such purpose deposits of the Mortgagor in the Escrow
Account which shall have been estimated and accumulated by the Servicer in
amounts sufficient for such purposes, as allowed under the terms of the Mortgage
or applicable regulations. The Servicer assumes full responsibility for the
payment of all such bills and shall effect payments of all such bills
irrespective of the Mortgagor's faithful performance in the payment of same or
the making of the Escrow Payments and shall make advances from its own funds to
effect such payments. The Servicer shall employ Accepted Servicing Practices to
ensure that the related Mortgaged Property is not subjected to a tax lien as a
result of nonpayment and that such Mortgaged Property is not left uninsured.

      Section 3.11  Protection of Accounts.

      The Servicer may transfer the Custodial Account or the Escrow Account to a
different Qualified Depository from time to time. The Servicer shall give
written notice to the Trustee and the NIMs Insurer and the Master Servicer of
the location of the Custodial Account maintained by it with respect to the
Securitized Loans when established and prior to any change thereof.

      The Servicer shall bear any expenses, losses or damages sustained by the
Trustee or the Master Servicer if the Custodial Account and/or the Escrow
Account are not demand deposit accounts.

      Amounts on deposit in the Custodial Account and the Escrow Account may at
the option of the Servicer be invested in Eligible Investments; provided that in
the event that amounts on deposit in the Custodial Account or the Escrow Account
exceed the amount fully insured by the FDIC (the "Insured Amount"), the Servicer
shall be obligated to invest the excess amount over the Insured Amount in
Eligible Investments on the same Business Day as such excess amount becomes
present in the Custodial Account or the Escrow Account. Any such Eligible
Investment shall mature no later than the Business Day immediately preceding the
related Remittance Date or other date on which funds are needed to be disbursed.
Any such Eligible Investment shall be made in the name of the Servicer in trust
for the benefit of one or more Homestar Mortgage Securities Trusts, as their
interests may appear. All income on or gain realized from any such Eligible
Investment shall be for the benefit of the Servicer and may be withdrawn at any
time by the Servicer. Any losses incurred in respect of any such investment
shall be deposited in the Custodial Account or the Escrow Account by the
Servicer out of its own funds immediately as realized.

      Section 3.12   Title, Management and Disposition of REO Property.



                                     M-1-28

<PAGE>



      In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be taken in the name of the related Trust, or in the event the related
Trust is not authorized or permitted to hold title to real property in the state
where the REO Property is located, or would be adversely affected under the
"doing business" or tax laws of such state by so holding title, the deed or
certificate of sale shall be taken in the name of such Person or Persons as
shall be consistent with an Opinion of Counsel obtained by the Servicer from any
attorney duly licensed to practice law in the state where the REO Property is
located. The Person or Persons holding such title other than the related Trust
shall acknowledge in writing that such title is being held as nominee for the
related Trust.

      The Servicer shall manage, conserve, protect and operate each REO Property
for the related Trust solely for the purpose of its prompt disposition and sale.
The Servicer, either itself or through an agent selected by the Servicer, shall
manage, conserve, protect and operate such REO Property in the same manner that
it manages, conserves, protects and operates other foreclosed property for its
own account, and in the same manner that similar property in the same locality
as the REO Property is managed. The Servicer shall attempt to sell the same (and
may temporarily rent the same for a period not greater than one year, except as
otherwise provided below) on such terms and conditions as the Servicer deems to
be in the best interest of the related Trust.

      Notwithstanding anything to the contrary contained in this Section 3.12,
in connection with a foreclosure or acceptance of a deed in lieu of foreclosure,
in the event the Servicer has reasonable cause to believe that a Mortgaged
Property is contaminated by hazardous or toxic substances or wastes, or if the
Master Servicer otherwise requests, an environmental inspection or review of
such Mortgaged Property to be conducted by a qualified inspector shall be
arranged by the Servicer. Upon completion of the inspection, the Servicer shall
provide the Master Servicer and the NIMs Insurer with a written report of such
environmental inspection. In the event that the environmental inspection report
indicates that the Mortgaged Property is contaminated by hazardous or toxic
substances or wastes, the Servicer shall not proceed with foreclosure or
acceptance of a deed in lieu of foreclosure. In the event that the environmental
inspection report is inconclusive as to the whether or not the Mortgaged
Property is contaminated by hazardous or toxic substances or wastes, the
Servicer shall not, without the prior written approval of the Master Servicer
and the NIMs Insurer, proceed with foreclosure or acceptance of a deed in lieu
of foreclosure. The Servicer shall be reimbursed for all Servicing Advances made
pursuant to this paragraph with respect to the related Mortgaged Property from
the amounts on deposit in the Custodial Account with respect to Securitized
Loans in the same Trust.

      In the event that a Trust which has made one or more REMIC elections
acquires any REO Property in connection with a default or imminent default on a
Securitized Loan, the Servicer shall dispose of such REO Property not later than
the end of the third taxable year after the year of its acquisition by the
related Trust unless the Servicer has applied for and received a grant of
extension from the Internal Revenue Service (and provides a copy of the same to
the Master Servicer) to the effect that, under the REMIC Provisions and any
relevant proposed legislation


                                     M-1-29

<PAGE>



and under applicable state law, a REMIC elected by such Trust may hold REO
Property for a longer period without adversely affecting the REMIC status of
such REMIC or causing the imposition of a federal or state tax upon such REMIC.
If the Servicer has received such an extension (and provided a copy of the same
to the Master Servicer), then the Servicer shall continue to attempt to sell the
REO Property for its fair market value for such period longer than three years
as such extension permits (the "Extended Period"). If the Servicer has not
received such an extension, and the Servicer is unable to sell the REO Property
within the period ending 3 months before the end of such third taxable year
after its acquisition by the related Trust or if the Servicer has received such
an extension, and the Servicer is unable to sell the REO Property within the
period ending three months before the close of the Extended Period, the Servicer
shall, before the end of the three-year period or the Extended Period, as
applicable, (i) purchase such REO Property at a price equal to the REO
Property's fair market value or (ii) auction the REO Property to the highest
bidder (which may be the Servicer) in an auction reasonably designed to produce
a fair price prior to the expiration of the three-year period or the Extended
Period, as the case may be. The related Trustee shall sign any document or take
any other action reasonably requested by the Servicer which would enable the
Servicer, on behalf of the related Trust, to request such grant of extension.

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

      The Servicer shall also maintain on each REO Property hazard insurance
with extended coverage in an amount which is at least equal to the lesser of (i)
the maximum insurable value of the improvements which are a part of such
property and (ii) the outstanding Principal Balance of the Securitized Loan at
the time it becomes REO Property, to the extent required and available under the
Flood Disaster Protection Act of 1973, as amended, flood insurance in the amount
required above.

      The disposition of REO Property shall be carried out by the Servicer at
such price, and upon such terms and conditions, as the Servicer deems to be in
the best interests of the related Trust. The proceeds of sale of the REO
Property shall be promptly deposited in the Custodial Account. After the
expenses of such disposition shall have been paid, the Servicer shall reimburse
itself pursuant to Section 3.04 hereof for any Servicing Advances it incurred
with respect to such REO Property.

      The Servicer shall withdraw from the amounts on deposit in the Custodial
Account with respect to Securitized Loans in the same Trust funds necessary for
the proper operation,


                                     M-1-30

<PAGE>



management and maintenance of the REO Property, including the cost of
maintaining any hazard insurance pursuant to the Master Servicing Guide. The
Servicer shall make monthly distributions on each Remittance Date to the Trustee
of the net cash flow from the REO Property (which shall equal the revenues from
such REO Property net of the expenses described in this Section 3.12 and of any
reserves reasonably required from time to time to be maintained to satisfy
anticipated liabilities for such expenses).

      Section 3.13  Real Estate Owned Reports.

      Together with the statement furnished pursuant to Section 4.02, the
Servicer shall furnish by electronic transmission to the Master Servicer and the
NIMs Insurer on or before the Remittance Date each month a statement with
respect to any REO Property covering the operation of such REO Property for the
previous month and the Servicer's efforts in connection with the sale of such
REO Property and any rental of such REO Property incidental to the sale thereof
for the previous month. That statement shall be accompanied by such other
information as the Master Servicer shall reasonably request.

      Section 3.14   MERS.

      (a) The Servicer shall take such actions as are necessary to cause the
related Trust to be clearly identified as the owner of each MERS Securitized
Loan on the records of MERS for purposes of the system of recording transfers of
beneficial ownership of mortgages maintained by MERS.

      (b) The Servicer shall maintain in good standing its membership in MERS.
In addition, the Servicer shall comply with all rules, policies and procedures
of MERS, including the Rules of Membership, as amended, and the MERS Procedures
Manual, as amended.

      (c) With respect to all MERS Securitized Loans serviced hereunder, the
Servicer shall promptly notify MERS as to any transfer of beneficial ownership
or release of any security interest in such Securitized Loans.

      (d) With respect to all MERS Securitized Loans serviced hereunder, the
Servicer shall notify MERS as to any transfer of servicing pursuant to Section
9.01 within 10 Business Days of such transfer of servicing. The Servicer shall
cooperate with each Trustee and any successor servicer to the extent necessary
to ensure that such transfer of servicing is appropriately reflected on the MERS
system.

      Section 3.15  Waiver of Prepayment Penalties.

      Except as provided below, the Servicer or any designee of the Servicer
shall not waive any Prepayment Charge with respect to any Securitized Loan. If
the Servicer or its designee fails to collect a Prepayment Charge at the time of
the related prepayment of any Securitized Loan


                                     M-1-31

<PAGE>



subject to such Prepayment Charge, the Servicer shall pay to the Trust at such
time (by deposit to the Custodial Account) an amount equal to the amount of the
Prepayment Charge not collected. The Seller warrants that the schedule of
Prepayment Charges listed in each Transfer Notice shall be complete, true and
accurate and may be relied on by the Servicer in its calculation of Prepayment
Charges. Notwithstanding the above, the Servicer or its designee may waive a
Prepayment Charge only if (i) the related prepayment is not the result of a
refinancing by the Servicer or its designee, (ii) such waiver relates to a
defaulted Securitized Loan or a reasonably foreseeable default, (iii) such
waiver is standard and customary in servicing similar mortgage loans to the
Securitized Loans, and (iv) such waiver, in the reasonable judgment of the
Servicer, would maximize recovery of total proceeds from the Securitized Loan,
taking into account the amount of such Prepayment Charge and the related
Securitized Loan. If a Prepayment Charge is waived as permitted by meeting the
standards described above, then the Servicer is required to pay the amount of
such waived Prepayment Charge, for the benefit of the holders of the Class P
Certificates (as defined in the related Trust Agreement), by depositing such
amount into the Custodial Account together with and at the time that the amount
prepaid on the related Securitized Loan is required to be deposited into the
Custodial Account.

      Within 90 days of the earlier of discovery by the Servicer or receipt of
notice by the Servicer of the breach of the representation or covenant of the
Servicer set forth in this Section 3.15 which materially and adversely affects
the interests of the Holders of the Class P Certificates in any Prepayment
Charge, the Servicer shall remedy such breach as follows: if any of the
covenants made by the Servicer in this Section 3.15 is breached, the Servicer
must pay the amount of such waived Prepayment Charge, for the benefit of the
Holders of the Class P Certificates, by depositing such amount into the
Custodial Account.

      Section 3.16  Servicing and Administration of PMI Policies.

      (a) The Servicer shall take all such actions on behalf of the Trustee as
are necessary to service, maintain and administer PMI Policies and to perform
and enforce the rights under such Policies for the benefit of the related Trust.
Except as expressly set forth herein, the Servicer shall have full authority on
behalf of the related Trust to do anything it reasonably deems appropriate or
desirable in connection with the servicing, maintenance and administration of
the PMI Policies. The Servicer shall not take, or permit any sub-servicer to
modify or assume a Securitized Loan covered by a PMI Policy or take any other
action with respect to such Securitized Loan which would result in non-coverage
under any PMI Policy of any loss which, but for the actions of the Servicer or
the Sub-Servicer, would have been covered thereunder. If a PMI Insurer fails to
pay a claim under a PMI Policy as a result of breach by the Servicer or a
sub-servicer of its obligations hereunder or under a PMI Policy, the Servicer
shall be required to deposit in the Custodial Account on or prior to the next
succeeding Remittance Date an amount equal to such unpaid claim from its own
funds without any right to reimbursement from the related Trust. To the extent
coverage is available, the Servicer shall keep or cause to be kept in full force
and effect the Insurance Policies for as long as any Certificates issued by the
related Trust are outstanding. The Servicer shall cooperate with each PMI
Insurer and shall use its best


                                     M-1-32

<PAGE>



efforts to furnish all reasonable aid, evidence and information in the
possession of the Servicer to which the Servicer has access with respect to any
Securitized Loan; provided, however, notwithstanding anything to the contrary
contained in a PMI Policy, the Servicer shall not be required to submit any
reports to a PMI Insurer until a reporting date that is at least 15 days after
the Servicer has received sufficient loan level information from the Seller to
appropriately code its servicing system in accordance with such PMI Insurer's
requirements.

      (b) The Servicer shall deposit into the Custodial Account pursuant to
Section 3.03(xiii) hereof all Insurance Proceeds received from the PMI Insurer
under the terms of a PMI Policy.

      (c) Notwithstanding the provisions of (a) and (b) above, the Servicer
shall not take any action in regard to any PMI Policy inconsistent with the
interests of the related Trust or the related Certificateholders or with the
rights and interests of the related Trust or the related Certificateholders
under this Agreement.

      (d) The related Trustee shall furnish the Servicer with any powers of
attorney and other documents (within fifteen (15) days upon request from the
Servicer) in form as provided to it necessary or appropriate to enable the
Servicer to service and administer any PMI Policy; provided, however, that the
related Trustee shall not be liable for the actions of the Servicer under such
powers of attorney.

      Section 3.17  Maintenance of Hazard Insurance.

      The Servicer shall cause to be maintained for each Securitized Loan hazard
insurance such that all buildings upon the related Mortgaged Property are
insured by a generally acceptable insurer against loss by fire, hazards of
extended coverage and such other hazards as are customary in the area where such
Mortgaged Property is located in an amount which is at least equal to the lesser
of (i) the current principal balance of such Securitized Loan and (ii) the
amount necessary to fully compensate for any damage or loss to the improvements
that are a part of such property on a replacement cost basis, in each case in an
amount not less than the amount as is necessary to avoid the application of any
co-insurance clause contained in the related hazard insurance policy.

      Any payments by the Servicer for hazard insurance, other than as set forth
in the last paragraph of this Section 3.17, shall be deemed Servicing Advances,
reimbursable in accordance with Section 3.04(vii) or (x), to the extent not
collected from the related Mortgagor. The Servicer will comply in the
performance of this Agreement with all reasonable rules and requirements of each
insurer under any such hazard policies. Any amounts to be collected by the
Servicer under any such policies (other than amounts to be applied to the
restoration or repair of the property or amounts to be released to the Mortgagor
subject to the terms and conditions of the related Mortgage and Mortgage Note)
shall be deposited in the Custodial Account, subject to withdrawal pursuant to
Section 3.04, if received in respect of a Securitized Loan. Any cost


                                     M-1-33

<PAGE>



incurred by the Servicer in maintaining any such insurance shall not, for the
purpose of calculating distributions to Certificateholders, be added to the
unpaid principal balance of the related Securitized Loan, notwithstanding that
the terms of such Securitized Loan so permit. It is understood and agreed that
no earthquake or other additional insurance is to be required of any Mortgagor
other than pursuant to such applicable laws and regulations as shall at any time
be in force and as shall require such additional insurance. If a Mortgaged
Property or REO Property is at any time in an area identified in the Federal
Register by the Federal Emergency Management Agency as having special flood
hazards and flood insurance has been made available, the Servicer will cause to
be maintained a flood insurance policy in respect thereof. Such flood insurance
shall be in an amount equal to the lesser of (i) the unpaid principal balance of
the related Securitized Loan and (ii) the maximum amount of such insurance
available for the related Mortgaged Property under the national flood insurance
program (assuming that the area in which such Mortgaged Property is located is
participating in such program).

      In the event that the Servicer or the Sub-Servicer shall obtain and
maintain a blanket policy with an insurer having a General Policy Rating of
B:III or better in Best's Key Rating Guide (or such other rating that is
comparable to such rating) insuring against hazard losses on all of the
Securitized Loans in a Trust, it shall conclusively be deemed to have satisfied
its obligations as set forth in the first two sentences of this Section 3.17
with respect to the Securitized Loans in such Trust, it being understood and
agreed that such policy may contain a deductible clause, in which case the
Servicer shall, in the event that there shall not have been maintained on the
related Mortgaged Property or REO Property a policy complying with the first two
sentences of this Section 3.17, and there shall have been one or more losses
which would have been covered by such policy, deposit to the Custodial Account
from its own funds without right of reimbursement the amount not otherwise
payable under the blanket policy because of such deductible clause for the
benefit of the related Trust. In connection with its activities as administrator
and servicer of the Securitized Loans, the Servicer agrees to prepare and
present, on behalf of itself, the Trust and the Certificateholders, claims under
any such blanket policy in a timely fashion in accordance with the terms of such
policy. Copies of such claims shall be provided to the NIMs Insurer.

      Section 3.18  Realization Upon Defaulted Securitized Loans.

      (a) The Servicer shall use its best efforts and, consistent with Accepted
Servicing Practices, foreclose upon or otherwise comparably convert the
ownership of properties securing such of the Securitized Loans (including
selling any such Securitized Loans other than converting the ownership of the
related properties) as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments. The
Servicer shall be responsible for all costs and expenses incurred by it in any
such proceedings; provided, however, that such costs and expenses will be
recoverable as Servicing Advances by the Servicer as contemplated in Section
3.04. The foregoing is subject to the provision that, in any case in which a
Mortgaged Property shall have suffered damage from an uninsured cause, the
Servicer shall not be required to expend its own funds toward the restoration of
such Mortgaged Property


                                     M-1-34

<PAGE>



unless it has determined that such restoration will increase the proceeds of
liquidation of the related Securitized Loan after reimbursement to itself for
such expenses. In instituting foreclosures or other similar proceedings, the
Servicer shall institute such proceedings in its own name on behalf of the
related Trust, unless otherwise required by applicable law or otherwise
appropriate.

      (b) If the Servicer determines that it is in the best economic interest of
a Trust and the Certificateholders to sell a Distressed Securitized Loan rather
than foreclosing, the Servicer may effect such a sale. The net proceeds of such
sale shall be Liquidation Proceeds.

      (c) Proceeds received in connection with any Final Recovery Determination,
as well as any recovery resulting from a partial collection of Insurance
Proceeds, Liquidation Proceeds or Condemnation Proceeds, in respect of any
Securitized Loan, will be applied in the following order of priority: first, to
unpaid Servicing Fees; second, to reimburse the Servicer or any sub-servicer for
any related unreimbursed Servicing Advances and Monthly Advances pursuant to
Section 3.04; third, to accrued and unpaid interest on the Securitized Loan, to
the date of the Final Recovery Determination, or to the Due Date prior to the
Remittance Date on which such amounts are to be remitted to the Master Servicer
if not in connection with a Final Recovery Determination; and fourth, as a
recovery of principal of the Securitized Loan. The portion of the recovery so
allocated to any unpaid Servicing Fee shall be reimbursed to the Servicer or any
sub-servicer pursuant to Section 3.04.

      Section 3.19  Enforcement of Due-On-Sale Clauses; Assumption Agreement.

      The Servicer will, to the extent it has knowledge of any conveyance or
prospective conveyance of any Mortgaged Property by any Mortgagor (whether by
absolute conveyance or contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Securitized Loan under
the "due-on-sale" clause, if any, applicable thereto; provided, however, that
the Servicer shall not be required to take such action if in its sole business
judgment the Servicer believes it is not in the best interests of the related
Trust and shall not exercise any such rights if prohibited by law from doing so.
If the Servicer reasonably believes it is unable under applicable law to enforce
such "due-on-sale" clause, or if any of the other conditions set forth in the
proviso to the preceding sentence apply, the Servicer will enter into an
assumption and modification agreement from or with the person to whom such
property has been conveyed or is proposed to be conveyed, pursuant to which such
person becomes liable under the Mortgage Note and, to the extent permitted by
applicable state law, the Mortgagor remains liable thereon. The Servicer is also
authorized to enter into a substitution of liability agreement with such person,
pursuant to which the original Mortgagor is released from liability and such
person is substituted as the Mortgagor and becomes liable under the Mortgage
Note, provided that no such substitution shall be effective unless such person
satisfies the underwriting criteria of the Servicer and has a credit risk rating
at least equal to that of the original Mortgagor. In connection with any
assumption or substitution, the Servicer shall apply such underwriting standards
and


                                     M-1-35

<PAGE>



follow such practices and procedures as shall be normal and usual in its general
mortgage servicing activities and as it applies to other mortgage loans owned
solely by it. The Servicer shall not take or enter into any assumption and
modification agreement, however, unless (to the extent practicable in the
circumstances) it shall have received confirmation, in writing, of the continued
effectiveness of any applicable hazard insurance policy. Any fee collected by
the Servicer in respect of an assumption, modification or substitution of
liability agreement shall be retained by the Servicer as additional servicing
compensation. In connection with any such assumption, no material term of the
Mortgage Note (including but not limited to the related Mortgage Interest Rate
and the amount of the Monthly Payment) may be amended or modified, except as
otherwise required pursuant to the terms thereof. The Servicer shall notify the
related Trustee that any such substitution, modification or assumption agreement
has been completed by the Servicer, and the Servicer shall deliver to the
Custodian the executed original of such substitution, modification or assumption
agreement, which document shall be added to the related Mortgage File and shall,
for all purposes, be considered a part of such Mortgage File to the same extent
as all other documents and instruments constituting a part thereof, and the
Servicer shall also deliver to the Trustee a copy of the executed substitution,
modification or assumption agreement.

      Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any assumption of a
Securitized Loan by operation of law or by the terms of the Mortgage Note or any
assumption which the Servicer may be restricted by law from preventing, for any
reason whatever. For purposes of this Section 3.19, the term "assumption" is
deemed to also include a sale (of the Mortgaged Property) subject to the
Mortgage that is not accompanied by an assumption or substitution of liability
agreement.

      Section 3.20  Credit Risk Manager.

      The Servicer acknowledges and agrees that, under any Trust Agreement, a
Credit Risk Manager may be required to provide certain credit risk management
services as provided therein. If so, the Servicer hereby agrees to cooperate
with the Credit Risk Manager in connection with all reasonable requests made by
the Credit Risk Manager, including, without limitation, promptly providing
copies of any servicing reports and remittance advices required under this
Agreement to the Credit Risk Manager.

      Section 3.21  Compliance with Applicable Laws.

      All requirements of any federal, state or local law (including usury,
truth in lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity, disclosure or recording, predatory and abusive lending
laws) applicable to the servicing of the Mortgage Loans will be complied with by
the Servicer in all material respects.

                                   ARTICLE IV.



                                     M-1-36

<PAGE>



                           PAYMENTS TO MASTER SERVICER

      Section 4.01  Remittances.

      On each Remittance Date, no later than 3:00 p.m. New York City time, the
Servicer shall remit on a scheduled/scheduled basis by wire transfer of
immediately available funds to the Master Servicer (a) all amounts deposited in
the Custodial Account as of the close of business on the Determination Date (net
of charges against or withdrawals from the Custodial Account pursuant to Section
3.04), plus (b) all Monthly Advances, if any, which the Servicer or other
Advancing Person is obligated to make pursuant to Section 4.03, minus (c) any
amounts attributable to Principal Prepayments, Liquidation Proceeds, Insurance
Proceeds, Condemnation Proceeds or REO Disposition Proceeds received after the
applicable Due Period, which amounts shall be remitted on the following
Remittance Date, together with any additional interest required to be deposited
in the Custodial Account in connection with such Principal Prepayment in
accordance with Section 3.03 (iii) and (vii), and minus (d) any amounts
attributable to Monthly Payments collected but due on a Due Date or Due Dates
subsequent to the first day of the month in which such Remittance Date occurs,
which amounts shall be remitted on the Remittance Date next succeeding the Due
Date related to such Monthly Payment.

      With respect to any remittance received by the Master Servicer after the
Business Day on which such payment was due, the Servicer shall pay to the Master
Servicer interest on any such late payment at an annual rate equal to LIBOR,
adjusted as of the date of each change, plus four (4) percentage points, but in
no event greater than the maximum amount permitted by applicable law. Such
interest shall be deposited in the Custodial Account by the Servicer on the date
such late payment is made and shall cover the period commencing with the day
following the Remittance Date and ending with the Business Day on which such
payment is made, both inclusive. Such interest shall be remitted along with the
distribution payable on the next succeeding Remittance Date. The payment by the
Servicer of any such interest shall not be deemed an extension of time for
payment or a waiver of any Event of Default by the Master Servicer or any
applicable Trustee.

      All remittances required to be made to the Master Servicer shall be made
on a scheduled/scheduled basis to the following wire account or to such other
account as may be specified by the Master Servicer from time to time:

            Wells Fargo Bank, National Association
            Minneapolis, Minnesota
            ABA# 121000248
            Account Name:  SAS Clearing 3970771416
            For further credit to:  Collection Account No. 18150300

      Section 4.02  Statements to Master Servicer.



                                     M-1-37

<PAGE>



      Not later than the 10th calendar day of each month (or if such calendar
day is not a Business Day, the immediately succeeding Business Day), the
Servicer shall furnish to the Master Servicer and the NIMs Insurer with respect
to each related Trust, or as the Servicer and the Master Servicer may otherwise
agree (a) a monthly remittance advice in the format set forth at Exhibit D
hereto with regard to monthly loan remittance data, Exhibit E with regard to
default mortgage loans, and Exhibit F with regard to realized losses or gains
for the period ending on the first day of such calendar month (i.e., the Due
Period) and (b) all such information required pursuant to clause (a) above in an
electronic file or other similar media reasonably acceptable to the Master
Servicer. The Servicer shall also furnish to the Master Servicer and the NIMs
Insurer (in such format mutually agreed to by the Servicer and the Master
Servicer) a monthly report detailing loan level Prepayment Charges collected
and/or waived by the Servicer in accordance with Section 3.15.

      Such monthly remittance advice shall also be accompanied with a
supplemental report provided to the Master Servicer which includes on an
aggregate basis for the previous Due Period (i) the amount of claims filed, (ii)
the amount of any claim payments made, (iii) the amount of claims denied or
curtailed and (iv) policies cancelled with respect to those Securitized Loans
covered by any PMI Policy or any other provider of primary mortgage insurance
purchased by the Trust. Notwithstanding anything to the contrary contained in a
PMI Policy, the Servicer shall not be required to submit any supplemental
reports including the foregoing data with respect to a PMI Policy until a
reporting date that is at least 15 days after the Servicer has received
sufficient loan level information from the Seller to appropriately code its
servicing system in accordance with requirements.

      In addition, not more than 60 days after the end of each calendar year,
commencing December 31, 2004, the Servicer shall provide (as such information
becomes reasonably available to the Servicer) to the Master Servicer such
information concerning the Securitized Loans and annual remittances to the
Master Servicer with respect to the Securitized Loans in each Trust as is
necessary for each Certificateholder and the NIMs Insurer to prepare its federal
income tax return. Such obligation of the Servicer shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Servicer to the Master Servicer and pursuant to any requirements
of the Code as from time to time are in force.

      Beginning with calendar year 2004, the Servicer shall provide the Master
Servicer and each Trustee with such information concerning the related
Securitized Loans as is necessary for such Trustee to prepare the related
Trust's federal income tax return and for any investor in the related
Certificates to prepare any required tax return.

      Section 4.03  Monthly Advances by Servicer.

      On the Business Day immediately preceding each Remittance Date, the
Servicer shall deposit in the Custodial Account from its own funds or from
amounts held for future distribution, or both, an amount equal to the aggregate
of all Monthly Advances relating to Monthly Payments


                                     M-1-38

<PAGE>



which were due on the Securitized Loans during the applicable Due Period and
which were delinquent at the close of business on the immediately preceding
Determination Date. Any amounts held for future distribution and so used shall
be replaced by the Servicer by deposit in the Custodial Account on or before any
future Remittance Date if funds in the Custodial Account on such Remittance Date
shall be less than remittances to the Master Servicer required to be made on
such Remittance Date. The Servicer shall keep appropriate records of such
amounts and will provide such records to the Master Servicer upon request. No
provision in this Agreement shall be construed as limiting the Servicer's right
to (i) pass through late collections on the related Securitized Loans in lieu of
making Monthly Advances (ii) reimburse itself for such Monthly Advances from
late collections on the related Securitized Loans or (iii) utilize an Advancing
Person (as defined below).

      The Servicer's obligation to make such Monthly Advances as to any Mortgage
Loan will continue through the last Monthly Payment due prior to the payment in
full of the Mortgage Loan, or through the last Remittance Date prior to the
Remittance Date for the distribution of all Liquidation Proceeds and other
payments or recoveries (including REO Disposition Proceeds, Insurance Proceeds
and Condemnation Proceeds) with respect to the Mortgage Loan; provided, however,
that such obligation shall cease if the Servicer determines, in its sole
reasonable opinion, that advances with respect to such Mortgage Loan are
non-recoverable by the Servicer from Liquidation Proceeds, Insurance Proceeds,
Condemnation Proceeds, or otherwise with respect to a particular Mortgage Loan.

      The Servicer, with the consent of the NIMs Insurer, may enter into a
facility with any person including the Sub-Servicer which provides that such
person (an "Advancing Person") may fund Monthly Advances required under this
Section 4.03 and/or Servicing Advances, although no such facility shall reduce
or otherwise affect the Servicer's obligation to fund such Monthly Advances
and/or Servicing Advances. Any Monthly Advances and/or Servicing Advances made
by an Advancing Person shall be reimbursed to the Advancing Person in the same
manner as reimbursements would be made to the Servicer under Section 3.04 if
such Monthly Advances or Servicing Advance were funded by the Servicer.

      Section 4.04  Compensating Interest.

      The Servicer shall be required to deposit in the Custodial Account, and
retain therein with respect to each Principal Prepayment, the Prepayment
Interest Shortfall Amount, if any, for the related Due Period. Such deposit
shall be made from the Servicer's own funds, without reimbursement therefor, up
to an amount equal to the lesser of with respect to the Securitized Loans in
each Trust (i) the Prepayment Interest Shortfall Amount or (ii) the Servicing
Fee, in each case, with respect to the Securitized Loans in such Trust. The
Servicer shall not be obligated to pay any Prepayment Interest Shortfall Amount
with respect to any Relief Act Reduction or bankruptcy.

      Section 4.05  Credit Reporting.


                                    M-1-39

<PAGE>



      For each Securitized Loan, in accordance with its current servicing
practices, the Servicer will accurately and fully report its underlying borrower
credit files to each of the following credit repositories or their successors:
Equifax Credit Information Services, Inc., Trans Union, LLC and Experian
Information Solution, Inc., on a monthly basis in a timely manner.

                                   ARTICLE V.

                          GENERAL SERVICING PROCEDURES

      Section 5.01  Servicing Compensation.

      As consideration for servicing the Securitized Loans subject to this
Agreement, the Servicer shall retain (a) the Servicing Fee for each Securitized
Loan remaining subject to this Agreement during any month and (b) Ancillary
Income. The Servicing Fee shall be payable monthly.

      The aggregate of the Servicing Fees for any month with respect to the
Securitized Loans in a Trust shall be reduced by any Prepayment Interest
Shortfall Amount with respect to the Securitized Loans in such Trust with
respect to such month. The Servicer shall be entitled to recover any unpaid
Servicing Fee out of Insurance Proceeds, Condemnation Proceeds or Liquidation
Proceeds to the extent permitted in Section 3.04 and out of amounts derived from
the operation and sale of an REO Property to the extent permitted by Section
3.12.

      Additional servicing compensation in the form of Ancillary Income shall be
retained by the Servicer only to the extent such fees or charges are received by
the Servicer. The Servicer shall also be entitled pursuant to Section 3.04 and
Section 3.06 to withdraw from the Custodial Account and Escrow Account,
respectively, as additional servicing compensation, interest or other income
earned on deposits therein, subject to Section 3.11.

      The Servicer shall be required to pay all expenses incurred by it in
connection with its servicing activities hereunder, including any fees due to
sub-servicers, and shall not be entitled to reimbursement thereof except as
specifically provided for herein.

      Section 5.02Annual Audit Report.

      The Servicer shall, at its own expense, using its best efforts by February
28 of each year, but in no event later than May 1 of each year, cause a firm of
independent public accountants (who may also render other services to Servicer),
which is a member of the American Institute of Certified Public Accountants, to
furnish to the Seller and the Master Servicer (i) year-end audited (if
available) financial statements of the Servicer and (ii) a statement to the
effect that such firm has examined certain documents and records for the
preceding fiscal year (or during the period from the date of commencement of
such Servicer's duties hereunder until the end of such preceding fiscal year in
the case of the first such certificate) and that, on the basis of such


                                     M-1-40

<PAGE>



examination conducted substantially in compliance with the Uniform Single
Attestation Program for Mortgage Bankers, such firm is of the opinion that
Servicer's overall servicing operations have been conducted in compliance with
the Uniform Single Attestation Program for Mortgage Bankers except for such
exceptions that, in the opinion of such firm, the Uniform Single Attestation
Program for Mortgage Bankers requires it to report, in which case such
exceptions shall be set forth in such statement.

      Section 5.03  Annual Officer's Certificate.

      The Servicer, at its own expense, will, using its best efforts by February
28 of each year, but in no event later than May 1 of each year, deliver to the
Seller and the Master Servicer a Servicing Officer's certificate stating, as to
each signer thereof, that (i) a review of the activities of the Servicer during
such preceding fiscal year and of performance under this Agreement has been made
under such officers' supervision, and (ii) to the best of such officers'
knowledge, based on such review, the Servicer has fulfilled all its obligations
under this Agreement for such year, or, if there has been a default in the
fulfillment of all such obligations, specifying each such default known to such
officers and the nature and status thereof including the steps being taken by
the Servicer to remedy such default.

      Section 5.04  Servicer's Certification.

      (a) An officer of the Servicer shall, using its best efforts by February
28 of each year, but no later than May 1 of each year, (or if not a Business
Day, the immediately preceding Business Day), or at any other time upon thirty
(30) days written request, execute and deliver an Officer's Certificate to the
Master Servicer for the benefit of such Master Servicer and its officers,
directors, agents and affiliates, certifying as to the following matters:

            (i) Based on my knowledge, the information in the annual statement
of compliance furnished pursuant to Section 5.03, the annual independent public
accountant's servicing report furnished pursuant to Section 5.02 and all
servicing reports, officer's certificates and other information relating to the
servicing of the Securitized Loans submitted to the Master Servicer taken as a
whole, does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading as of the
date of this certification;

            (ii) The servicing information required to be provided to the Master
Servicer by the Servicer under this Agreement has been provided to the Master
Servicer;

            (iii) I am responsible for reviewing the activities performed by the
Servicer under the Agreement and based upon the review required by the
Agreement, and except as disclosed in the annual statement of compliance, the
annual independent public accountant's servicing report and all servicing
reports, officer's certificates and other information relating to


                                     M-1-41

<PAGE>



the servicing of the Securitized Loans submitted to the Master Servicer, the
Servicer has, as of the date of this certification fulfilled its obligations
under the Agreement; and

            (iv) I have disclosed to the Master Servicer all significant
deficiencies relating to the Servicer's compliance with the minimum servicing
standards in accordance with a review conducted in compliance with the Uniform
Single Attestation Program for Mortgage Bankers or similar standard as set forth
in the Agreement.

      (b) The Servicer shall indemnify and hold harmless the Master Servicer and
its officers, directors, agents and affiliates from and against any losses,
damages, penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments and other costs and expenses arising out of or based upon a breach by
the Servicer or any of its officers, directors, agents or affiliates of its
obligations under Sections 5.02, 5.03 or 5.04 or the negligence, bad faith or
willful misconduct of the Servicer in connection therewith. If the
indemnification provided for herein is unavailable or insufficient to hold
harmless the Master Servicer, then the Servicer agrees that it shall contribute
to the amount paid or payable by the Master Servicer as a result of losses,
claims, damages or liabilities of the Master Servicer in such proportion as is
appropriate to reflect the relative fault of the Master Servicer on the one hand
and the Servicer on the other in connection with a breach of the Servicer's
obligations under Sections 5.02, 5.03 or 5.04 or the Servicer's negligence, bad
faith or willful misconduct in connection therewith.

      Section 5.05  Access to Servicer Records.

      The Seller or the NIMs Insurer shall have the right to examine and audit,
at its expense, upon reasonable notice to the Servicer, during business hours or
at such other times as might be reasonable under applicable circumstances, any
and all of the books, records, documentation or other information of the
Servicer, or held by another for the Servicer or on its behalf or otherwise,
which relate to the performance or observance by the Servicer of the terms,
covenants or conditions of this Agreement.

      The Servicer shall provide to the Seller, the NIMs Insurer and any
supervisory agents or examiners representing a state or federal governmental
agency having jurisdiction over the Seller access to any documentation regarding
the Mortgage Loans in the possession of the Servicer which may be required by
any applicable regulations. Such access shall be afforded without charge, upon
reasonable request, during normal business hours and at the offices of the
Servicer, and in accordance with the applicable federal or state government
regulations.

                                   ARTICLE VI.

                           REPRESENTATIONS, WARRANTIES
                                 AND AGREEMENTS

     Section 6.01 Representations, Warranties and Agreements of the Servicer.


                                     M-1-42

<PAGE>



      The Servicer, as a condition to the consummation of the transactions
contemplated hereby, hereby makes the following representations and warranties
to the Seller, the Depositor, the Trustee and the Master Servicer as of the
Closing Date:

      (a) Due Organization and Authority. The Servicer is duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has all licenses necessary to carry on its business as now being conducted
and either it or its designated sub-servicer is licensed, qualified and in good
standing in each state where a Mortgaged Property is located if the laws of such
state require licensing or qualification in order to conduct a servicing
business of the type provided for herein, and in any event the Servicer or its
designated sub-servicer is in compliance with the laws of any such state to the
extent necessary to ensure the enforceability of the terms of this Agreement;
the Servicer has the full power and authority to execute and deliver this
Agreement and, together with such sub-servicer, to perform in accordance
herewith; the execution, delivery and performance of this Agreement (including
all instruments of transfer to be delivered pursuant to this Agreement) by the
Servicer and the consummation of the transactions contemplated hereby have been
duly and validly authorized; this Agreement evidences the valid, binding and
enforceable obligation of the Servicer and all requisite action has been taken
by the Servicer to make this Agreement valid and binding upon the Servicer in
accordance with its terms;

      (b) Ordinary Course of Business. The consummation of the transactions
contemplated by this Agreement, taking into account the role of its
sub-servicer, is in the ordinary course of business of the Servicer;

      (c) No Conflicts. Neither the execution and delivery of this Agreement,
the acquisition of the servicing responsibilities by the Servicer or the
transactions contemplated hereby, nor the fulfillment of or compliance with the
terms and conditions of this Agreement, will conflict with or result in a breach
of any of the terms, conditions or provisions of the Servicer's organizational
documents or any legal restriction or any agreement or instrument to which the
Servicer is now a party or by which it is bound, or constitute a default or
result in an acceleration under any of the foregoing, or, taking into account
the role of its designated sub-servicer, result in the violation of any law,
rule, regulation, order, judgment or decree to which the Servicer or its
property is subject, or impair the ability of the Servicer to service the
Securitized Loans, or impair the value of the Securitized Loans;

      (d) Ability to Perform. The Servicer does not believe, nor does it have
any reason or cause to believe, that it, together with the Sub-Servicer, cannot
perform each and every covenant contained in this Agreement;

      (e) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or, to the best of our knowledge, threatened against the
Servicer which, either in any one instance or in the aggregate, may result in
any material adverse change in the business, operations, financial condition,
properties or assets of the Servicer, or in any material impairment


                                     M-1-43

<PAGE>



of the right or ability of the Servicer to carry on its business substantially
as now conducted, or in any material liability on the part of the Servicer, or
which would draw into question the validity of this Agreement or of any action
taken or to be taken in connection with the obligations of the Servicer
contemplated herein, or which would be likely to impair materially the ability
of the Servicer together with the Sub-Servicer to perform under the terms of
this Agreement;

      (f) No Consent Required. No consent, approval, authorization or order of
any court or governmental agency or body is required for the execution, delivery
and performance by the Servicer together with the Sub-Servicer of or compliance
by the Servicer together with the Sub-Servicer with this Agreement;

      (g) Ability to Service. The Servicer is an approved seller/servicer of
conventional residential Securitized Loans for Fannie Mae and Freddie Mac, and,
together with those of its designated sub-servicer, shall ensure that there are
the facilities, procedures, and experienced personnel necessary for the sound
servicing of the Securitized Loans. The Servicer is in good standing to service
Securitized Loans for Freddie Mac. The Servicer is a member in good standing of
the MERS system, if applicable;

      (h) No Untrue Information. Neither this Agreement nor any statement,
report or other document furnished or to be furnished by the Servicer pursuant
to this Agreement or in connection with the transactions contemplated hereby
contains any untrue material statement of fact or omits to state a material fact
necessary to make the statements contained therein not misleading;

      (i) No Commissions to Third Parties. The Servicer has not dealt with any
broker or agent or anyone else, other than the Sub-Servicer, who might be
entitled to a fee or commission in connection with this transaction other than
the Seller; and

      (j) No Waiver of Prepayment Charges. The Servicer will not waive any
Prepayment Charge unless it is waived in accordance with the standard set forth
in Section 3.15.

      Section 6.02 Remedies for Breach of Representations and Warranties of the
Servicer.

      It is understood and agreed that the representations and warranties set
forth in Section 6.01 shall survive the engagement of the Servicer to perform
the servicing responsibilities as of any Closing Date hereunder and the delivery
of the Servicing Files to the Servicer and shall inure to the benefit of the
Seller, any Depositor, the Master Servicer and each Trust, NIMs Insurer and
Trustee. Upon discovery by any of the Servicer, the Master Servicer, the
Trustee, NIMs Insurer, any Depositor or the Seller of a breach of any of the
foregoing representations and warranties which materially and adversely affects
the ability of the Servicer, together with its designated sub-servicer, to
perform its duties and obligations under this Agreement or otherwise materially
and adversely affects the value of the Securitized Loans, the Mortgaged
Property, the priority of the security interest on such Mortgaged Property or
the interest of the Seller, any Depositor, the


                                     M-1-44

<PAGE>



Master Servicer, NIMs Insurer, the related Trust or the related Trustee, the
party discovering such breach shall give prompt written notice to the others.

      Within 60 days of the earlier of either discovery by or notice to the
Servicer of a breach of a representation or warranty set forth in Section 6.01
which materially and adversely affects the ability of the Servicer, together
with its designated sub-servicer, to perform its duties and obligations under
this Agreement or otherwise materially and adversely affects the value of the
Securitized Loans, the Mortgaged Property or the priority of the security
interest on such Mortgaged Property, the Servicer shall use its best efforts
promptly to cure such breach in all material respects and, if such breach cannot
be cured, the Servicer shall, at the option of the Trustee, assign the
Servicer's rights and obligations under this Agreement (or respecting the
affected Securitized Loans) with respect to a Trust to a successor servicer
selected by the related Trustee with the prior consent and approval of the
Master Servicer. Such assignment shall be made in accordance with Section 9.01
and 9.02.

      In addition, the Servicer shall indemnify the Seller, the Master Servicer,
NIMs Insurer, any Depositor and each Trustee and hold each of them harmless
against any Costs resulting from any claim, demand, defense or assertion based
on or grounded upon, or resulting from, a breach of the Servicer's
representations and warranties contained in this Agreement. It is understood and
agreed that the remedies set forth in this Section 6.02 constitute the sole
remedies of the Seller, the Master Servicer, any Depositor, and each Trust and
Trustee hereunder respecting a breach of the foregoing representations and
warranties.

      Any cause of action against the Servicer relating to or arising out of the
breach of any representations and warranties made in Section 6.01 shall accrue
upon (i) discovery of such breach by the Servicer or notice thereof by the
Seller, the Master Servicer, NIMs Insurer, any Depositor or a Trustee to the
Servicer, (ii) failure by the Servicer to cure such breach within the applicable
cure period, and (iii) demand upon the Servicer by the Seller, any Depositor,
NIMs Insurer, the Master Servicer or a Trustee for compliance with this
Agreement.

      Section 6.03Additional Indemnification by the Servicer; Third Party
Claims.

      The Servicer shall indemnify the Seller, any Depositor, NIMs Insurer, each
Trustee, the Master Servicer and each Trust and hold them harmless against any
and all Costs that any such indemnified party may sustain in any way related to
(i) the failure of the Servicer to perform its duties and service the related
Securitized Loans in material compliance with the terms of this Agreement or
(ii) the failure of the Servicer to cause any event to occur which would have
occurred if the Servicer were applying Accepted Servicing Practices under this
Agreement. The Servicer shall immediately notify the Seller, any related
Depositor, NIMs Insurer, the Master Servicer, the related Trustee or any other
relevant party if a claim is made by a third party with respect to this
Agreement or the related Securitized Loans, assume (with the prior written
consent of the indemnified party) the defense of any such claim and pay all
expenses in connection therewith, including counsel fees, promptly pay,
discharge and satisfy any judgment or decree


                                     M-1-45

<PAGE>



which may be entered against it or any indemnified party in respect of such
claim and follow any written instructions received from such indemnified party
in connection with such claim. The Servicer shall be promptly reimbursed by the
related Trust or Trusts for all amounts advanced by it pursuant to the preceding
sentence except when the claim is in any way related to the Servicer's
indemnification pursuant to Section 6.02, or the failure of the Servicer,
together with its designated sub-servicer, to service and administer the
Securitized Loans in material compliance with the terms of this Agreement. In
the event a dispute arises between an indemnified party and the Servicer with
respect to any of the rights and obligations of the parties pursuant to this
Agreement, and such dispute is adjudicated in a court of law, by an arbitration
panel or any other judicial process, then the losing party shall indemnify and
reimburse the winning party for all attorneys' fees and other costs and expenses
related to the adjudication of said dispute.

      Section 6.04 Indemnification with Respect to Certain Taxes and Loss of
REMIC Status.

      In the event that any REMIC elected by a Trust fails to qualify as a
REMIC, loses its status as a REMIC, or incurs federal, state or local taxes as a
result of a prohibited transaction or prohibited contribution under the REMIC
Provisions due to the negligent performance by the Servicer of its duties and
obligations set forth herein, the Servicer shall indemnify the Holder of the
related Residual Certificate, the Master Servicer, the related Trustee and the
related Trust against any and all losses, claims, damages, liabilities or
expenses ("Losses") resulting from such negligence; provided, however, that the
Servicer shall not be liable for any such Losses attributable to the action or
inaction of the related Trustee, any related Depositor, the Master Servicer or
the Holder of such Residual Certificate, as applicable, nor for any such Losses
resulting from misinformation provided by the Holder of such Residual
Certificate or any such other party on which the Servicer has relied. The
foregoing shall not be deemed to limit or restrict the rights and remedies of
the Holder of such Residual Certificate or the related Trust now or hereafter
existing at law or in equity or otherwise. Notwithstanding the foregoing,
however, in no event shall the Servicer have any liability (1) for any action or
omission that is taken in accordance with and in compliance with the express
terms of, or which is expressly permitted by the terms of, this Agreement, (2)
for any Losses other than arising out of a negligent performance by the Servicer
of its duties and obligations set forth herein, and (3) for any special or
consequential damages to the related Certificateholders.

                                  ARTICLE VII.

                                  THE SERVICER

      Section 7.01  Merger or Consolidation of the Servicer.

      The Servicer shall keep in full effect its existence, rights and
franchises as a limited liability company, and shall obtain and preserve its
qualification to do business as a foreign entity in each jurisdiction in which
such qualification is or shall be necessary to perform its obligations as
contemplated by this Agreement.


                                     M-1-46

<PAGE>



      Any Person into which the Servicer may be merged or consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Servicer shall be a party, or any Person succeeding to the business of the
Servicer, shall, with the prior written consent of the Master Servicer, be the
successor of the Servicer hereunder, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding; provided, however, that the successor or
surviving Person shall be an institution (i) having a net worth of not less than
$25,000,000, and (ii) which is a Freddie Mac-approved or Fannie Mae-approved
servicer in good standing.

      Section 7.02  Limitation on Liability of the Servicer and Others.

      Neither the Servicer nor any of the directors, officers, employees or
agents of the Servicer shall be under any liability to the Seller, the Master
Servicer, any Depositor, any Trust or any Trustee hereunder for any action taken
or for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Servicer or any such person against any breach of
warranties or representations made herein, or failure to perform its obligations
in strict compliance with any standard of care set forth in this Agreement, or
any liability which would otherwise be imposed by reason of any breach of the
terms and conditions of this Agreement. The Servicer and any director, officer,
employee or agent of the Servicer may rely in good faith on any document of any
kind prima facie properly executed and submitted by any Person respecting any
matters arising hereunder. The Servicer shall not be under any obligation to
appear in, prosecute or defend any legal action which is not incidental to its
duties to service the Securitized Loans in accordance with this Agreement and
which in its opinion may involve it in any expense or liability; provided,
however, that the Servicer may, with the consent of the related Trustee, NIMs
Insurer and the Master Servicer, undertake any such action which it deems
necessary or desirable in respect of this Agreement and the rights and duties of
the parties hereto. In such event, the Servicer shall be entitled to
reimbursement from the related Trust for the reasonable legal expenses and costs
of such action.

      Section 7.03  Limitation on Resignation and Assignment by the Servicer.

      The Servicer shall neither assign its rights under this Agreement or the
servicing hereunder nor delegate its duties hereunder or any portion thereof, or
sell or otherwise dispose of all or substantially all of its property or assets
without, in each case, the prior written consent of the Seller, the Master
Servicer and the related Trustee and the NIMs Insurer, which consent, in the
case of an assignment of rights or delegation of duties, shall be granted or
withheld in the discretion of the Seller, the Master Servicer and the related
Trustee, and which consent, in the case of a sale or disposition of all or
substantially all of the property or assets of the Servicer, shall not be
unreasonably withheld; provided, that in each case, there must be delivered to
the Seller, the Master Servicer and the related Trustee and NIMs Insurer a
letter from the applicable Rating Agency or Rating Agencies to the effect that
such transfer of servicing or sale or disposition of assets will not result in a
qualification, withdrawal or downgrade of the


                                     M-1-47

<PAGE>



then-current rating of any of the Certificates, and provided further, without
any consent or notice the Servicer may delegate its servicing duties hereunder
to the Sub-Servicer pursuant to the Sub-Servicing Agreement. Notwithstanding the
foregoing, the Servicer, without the consent of the Seller, the Master Servicer
and the related Trustee, may retain third-party contractors to perform certain
servicing and loan administration functions, including without limitation,
hazard insurance administration, tax payment and administration, flood
certification and administration, collection services and similar functions;
provided, however, that the retention of such contractors by Servicer shall not
limit the obligation of the Servicer to service the Securitized Loans pursuant
to the terms and conditions of this Agreement.

      The Servicer shall not resign from the obligations and duties hereby
imposed on it with respect to the Securitized Loans in a Trust except by mutual
consent of the Seller, the Master Servicer and the related Trustee, with the
consent of the NIMs Insurer, or upon the determination that its duties hereunder
are no longer permissible under applicable law and such incapacity cannot be
cured by the Servicer. Any such determination permitting the resignation of the
Servicer shall be evidenced by an Opinion of Counsel to such effect delivered to
the Seller, the Master Servicer and the related Trustee and NIMs Insurer which
Opinion of Counsel shall be in form and substance acceptable to the Seller, the
Master Servicer and the related Trustee and NIMs Insurer. No such resignation
shall become effective until a successor acceptable to the Master Servicer shall
have assumed the Servicer's responsibilities and obligations hereunder in the
manner provided in Section 9.01.

      Without in any way limiting the generality of this Section 7.03, in the
event that the Servicer either shall assign this Agreement or the servicing
responsibilities hereunder or delegate its duties hereunder or any portion
thereof or sell or otherwise dispose of all or substantially all of its property
or assets, without the prior written consent of the Seller, the Master Servicer
and the Trustee and NIMs Insurer (except as provided by the first paragraph of
this Section 7.03 and Section 7.04), then such parties shall have the right to
terminate this Agreement upon notice given as set forth in Section 8.01, without
any payment of any penalty or damages and without any liability whatsoever to
the Servicer or any third party.

      Section 7.04  Sub-Servicing Agreements; Sub-Servicing Acknowledgment
Agreement; Successor Sub-Servicer.

      (a) The Servicer may enter into sub-servicing agreements, with the consent
of the NIMs Insurer, for any servicing and administration of the Securitized
Loans with any institution which (i) is an approved Fannie Mae or Freddie Mac
Seller/Servicer as indicated in writing, and (ii) represents and warrants that
it is in compliance with the laws of each state as necessary to enable it to
perform its obligations under such sub-servicing agreement. For this purpose,
sub-servicing shall not be deemed to include the use of a tax service, or
services for reconveyance, insurance or brokering REO Property. The Servicer
shall give prior written notice to the Master Servicer, the Trustee and NIMs
Insurer of the appointment of any sub-servicer and shall furnish to the Master
Servicer, the Trustee and NIMs Insurer a copy of such sub-servicing


                                     M-1-48

<PAGE>



agreement. For purposes of this Agreement, the Servicer shall be deemed to have
received payments on Securitized Loans immediately upon receipt by any
sub-servicer of such payments. Any such sub-servicing agreement shall be
acceptable to the Master Servicer and the related Trustee and NIMs Insurer and
shall be consistent with and not violate the provisions of this Agreement. Each
sub-servicing agreement shall provide that a successor servicer shall have the
option to terminate such agreement without payment of any fees if the
predecessor Servicer is terminated or resigns.

      (b) The Servicer, with the consent of the NIMs Insurer, may terminate any
sub-servicing agreement to which it is a party in accordance with the terms and
conditions of such sub-servicing agreement and either itself directly service
the related Securitized Loans or enter into a sub-servicing agreement with a
successor sub-servicer that qualifies under Section 7.04(a).

      (c) Notwithstanding any sub-servicing agreement or the provisions of this
Agreement relating to agreements or arrangements between the Servicer and a
sub-servicer or reference to actions taken through a sub-servicer or otherwise,
the Servicer shall remain obligated and primarily liable to the Trustee, the
Master Servicer, the Trust and the Certificateholders for the servicing and
administering of the Securitized Loans in accordance with the provisions hereof
without diminution of such obligation or liability by virtue of such
sub-servicing agreements or arrangements or by virtue of indemnification from
the sub-servicer and to the same extent and under the same terms and conditions
as if the Servicer alone were servicing and administering the Securitized Loans.
The Servicer shall be entitled to enter into any agreement with a sub-servicer
for indemnification of the Servicer by such sub-servicer and nothing contained
in this Agreement shall be deemed to limit or modify such indemnification.

      (d) In the event of a Subservicer Termination Trigger, the Servicer shall
terminate the related Subservicer at the direction of the NIMS Insurer.
Following such termination, the Servicer shall have the right to service such
Securitized Loans without the use of a Subservicer or to engage a new
Subservicer acceptable to the NIMS Insurer pursuant to a Subservicing Agreement,
which is not in conflict with the terms of this Agreement. Notwithstanding the
foregoing, the Servicer shall retain the ownership of all servicing rights with
respect to the related Securitized Loans and no such direction of termination of
a Subservicer shall be deemed to diminish such ownership.

      Section 7.05  Inspection.

      The Servicer shall offer each Trustee, NIMs Insurer and the Master
Servicer, upon reasonable advance notice, during normal business hours, access
to all records maintained by the Servicer in respect of its rights and
obligations hereunder and access to officers of the Servicer responsible for
such obligations. Upon request, the Servicer shall furnish to each Trustee, NIMs
Insurer and the Master Servicer its most recent publicly available financial
statements and such other information relating to its capacity to perform its
obligations under this Agreement.


                                     M-1-49

<PAGE>



                                  ARTICLE VIII.

                                   TERMINATION

      Section 8.01  Termination for Cause.

      This Agreement shall be terminable at the option of the Master Servicer or
the related Trustee if any of the following events of default exist on the part
of the Servicer:

            (i) any failure by the Servicer to remit to the Master Servicer any
payment required to be made under the terms of this Agreement which continues
unremedied for a period of one Business Day after the date upon which written
notice of such failure, requiring the same to be remedied, shall have been
received by the Servicer from the Master Servicer, the NIMs Insurer or a related
Trustee; or

            (ii) failure by the Servicer duly to observe or perform in any
material respect any other of the covenants or agreements on the part of the
Servicer set forth in this Agreement (except with respect to its obligations
under Section 5.02, 5.03 or 5.04) which continues unremedied for a period of 15
days following the Servicer's receipt of written notice of such failure from the
Master Servicer, the NIMs Insurer or a related Trustee; or

            (iii) failure by the Servicer to maintain its license or to cause
its designated sub-servicer to do business or service residential Securitized
Loans in any jurisdiction, if required by such jurisdiction, where a Mortgaged
Property is located; or

            (iv) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, including bankruptcy,
marshaling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against the
Servicer and such decree or order shall have remained in force undischarged or
unstayed for a period of 60 days; or

            (v) the Servicer shall consent to the appointment of a conservator
or receiver or liquidator in any insolvency, readjustment of debt, marshaling of
assets and liabilities or similar proceedings of or relating to the Servicer or
of or relating to all or substantially all of its property; or

            (vi) the Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of any
applicable insolvency, bankruptcy or reorganization statute, make an assignment
for the benefit of its creditors, voluntarily suspend payment of its obligations
or cease its normal business operations for three Business Days; or



                                     M-1-50

<PAGE>



            (vii) the Servicer ceases to meet or to cause its designated
sub-servicer to meet the qualifications of a Fannie Mae or Freddie Mac
seller/servicer; or

            (viii)the Servicer attempts to assign the servicing of the
Securitized Loans or its right to servicing compensation hereunder or the
Servicer attempts to sell or otherwise dispose of all or substantially all of
its property or assets or to assign this Agreement or the servicing
responsibilities hereunder or to delegate its duties hereunder or any portion
thereof, in each case without complying fully with the provisions of Section
7.03 or Section 7.04; or

            (ix) failure by the Servicer to duly perform, within the required
time period, its obligations under Sections 5.02, 5.03 or 5.04 which failure
continues unremedied for a period of fifteen (15) days after the date on which
written notice of such failure, requiring the same to be remedied, shall have
been given to the Servicer by any party to this Servicing Agreement, by the NIMs
Insurer or by any master servicer responsible for master servicing the
Securitized Loans pursuant to a securitization of such Securitized Loans.

      In each and every such case, so long as an event of default shall not have
been remedied within the applicable cure period, in addition to whatever rights
the Master Servicer or a related Trustee may have at law or equity to damages,
including injunctive relief and specific performance, the Trustee or the Master
Servicer, by notice in writing to the Servicer, and with the consent of the
other party, may (and, at the request of the NIMs Insurer, shall) terminate all
the rights and obligations of the Servicer under this Agreement and in and to
the servicing contract established hereby and the proceeds thereof.

      Upon receipt by the Servicer of such written notice, all authority and
power of the Servicer under this Agreement, whether with respect to the
Securitized Loans or otherwise, shall pass to and be vested in a successor
servicer appointed by the Trustee or the Master Servicer, as the case may be,
with the consent of the other party and the NIMs Insurer. Upon written request
from the Master Servicer, the Servicer shall prepare, execute and deliver to the
successor servicer or the Trustee any and all documents and other instruments,
place in such successor's possession all Servicing Files, and do or cause to be
done all other acts or things necessary or appropriate to effect the purposes of
such notice of termination, including but not limited to the transfer and
endorsement or assignment of the Securitized Loans and related documents, at the
Servicer's sole expense. The Servicer shall cooperate with the Master Servicer
and such successor in effecting the termination of the Servicer's
responsibilities and rights hereunder, including without limitation, the
transfer to such successor for administration by it of all cash amounts which
shall at the time be credited by the Servicer to the Custodial Account or Escrow
Account or thereafter received with respect to the Securitized Loans.

      By a written notice, the Trustee or the Master Servicer, with the consent
of the other parties and the NIMs Insurer, may waive any default by the Servicer
in the performance of its obligations hereunder and its consequences. Upon any
waiver of a past default, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been


                                     M-1-51

<PAGE>



remedied for every purpose of this Agreement. No such waiver shall extend to any
subsequent or other default or impair any right consequent thereon except to the
extent expressly so waived.

      Section 8.02  Termination Without Cause.

      (a) This Agreement shall terminate upon: (i) the later of (a) the
distribution of the final payment or liquidation proceeds on the last
Securitized Loan to the Master Servicer or the Trust, and (b) the disposition of
all REO Property acquired upon foreclosure of the last Securitized Loan and the
remittance of all funds due hereunder or (ii) mutual consent of the Servicer and
the Master Servicer in writing, provided such termination is also acceptable to
the applicable Rating Agency or Rating Agencies and the NIMs Insurer. In
addition, with the prior written consent of the Master Servicer and the NIMs
Insurer, the Seller or its designee may terminate this Agreement with respect to
all of the Securitized Loans, without cause, provided, that the Seller or its
designee gives the Servicer 30 days' notice. Any such notice of termination
shall be in writing and delivered to the Servicer, NIMs Insurer and the Master
Servicer by registered mail to the address set forth in Section 9.03. The Seller
or its designee and the Servicer shall comply with the termination procedures
set forth in Section 9.01 hereof. All unreimbursed Servicing Fees, Servicing
Advances and Monthly Advances still owing the Servicer shall be paid by the
Seller or its designee or the successor servicer from its own funds within 5
Business Days of the date of such termination without right of reimbursement
from the Trust. In connection with any termination pursuant to clause (ii) of
the first sentence of this Section 8.02(a), all unreimbursed Servicing Fees,
Servicing Advances and Monthly Advances still owing the Servicer shall be paid
at the time of such termination by the Trust.

      Upon a termination of the Servicer for cause pursuant to Section 8.01, all
unreimbursed Servicing Fees, Servicing Advances and Monthly Advances still owing
the Servicer shall be paid by the Trust as such amounts are received from the
related Securitized Loans. In connection with any termination pursuant to the
second sentence of this Section 8.02(a), the Seller or its designee or the
successor servicer will be responsible for reimbursing the Servicer for all
unreimbursed out-of-pocket Servicing Advances, Monthly Advances and Servicing
Fees and other reasonable and necessary out-of-pocket costs associated with any
transfer of servicing at the time of such transfer of servicing. Any invoices
received by the Servicer after termination will be forwarded to the Seller or
its designee, and the Seller or its designee or the successor servicer shall pay
such invoices within five (5) Business Days upon receipt from the Servicer.

      (b) In the event that the Servicer decides to terminate its obligations
under this Agreement as set forth in clause (ii) of Section 8.02(a), the
Servicer agrees that it will continue to service the Securitized Loans beyond
the prescribed termination date until such time as the Trustee, using reasonable
commercial efforts, is able to appoint, with the consent of the NIMs Insurer, a
successor servicer acceptable to the NIMs Insurer and the Master Servicer and
otherwise meeting the characteristics of Sections 7.01 and 9.01.

                                   ARTICLE IX.


                                     M-1-52

<PAGE>



                            MISCELLANEOUS PROVISIONS

      Section 9.01  Successor to the Servicer.

      Simultaneously with the termination of the Servicer's responsibilities and
duties under this Agreement (a) pursuant to Sections 6.02, 7.03, 8.01 or
8.02(a)(ii), the Master Servicer shall (i) within 90 days of the Servicer's
receipt of notice of such termination, succeed to and assume all of the
Servicer's responsibilities, rights, duties and obligations under this Agreement
(except that the Master Servicer shall immediately assume all of the obligations
of the Servicer to make Monthly Advances), or (ii) appoint a successor
acceptable to the NIMs Insurer having the characteristics set forth in clauses
(i) and (ii) of Section 7.01 and which shall succeed to all rights and assume
all of the responsibilities, duties and liabilities of the Servicer under this
Agreement simultaneously with the termination of the Servicer's
responsibilities, duties and liabilities under this Agreement; or (b) as a
result of termination of the Servicer without cause by the Seller pursuant to
Section 8.02 hereof, the Seller shall appoint a successor acceptable to the NIMs
Insurer having the characteristics set forth in clauses (i) and (ii) of Section
7.01 and which shall succeed to all rights and assume all of the
responsibilities, duties and liabilities of the Servicer under this Agreement
simultaneously with the termination of the Servicer's responsibilities, duties
and liabilities under this Agreement. If the NIMs Insurer requests, the Master
Servicer shall appoint a successor servicer as provided in the preceding
sentence. Any successor to the Servicer shall be subject to the approval of the
Master Servicer and the Trustee and, to the extent required by the Trust
Agreement, shall be a member in good standing of the MERS system (if any of the
Securitized Loans are MERS Eligible Securitized Loans, unless such Securitized
Loans are withdrawn from MERS and Assignments of Mortgage are recorded in favor
of the Trust at the expense of the successor servicer). The final approval of a
successor servicer shall be conditioned upon the receipt by the Trustee, the
Master Servicer, NIMs Insurer and the Seller of a letter from the applicable
Rating Agency or Rating Agencies to the effect that such transfer of servicing
will not result in a qualification, withdrawal or downgrade of the then-current
rating of any of the Certificates. In connection with such appointment and
assumption, the Master Servicer or the Seller, as applicable, may make such
arrangements for the compensation of such successor out of payments on
Securitized Loans as it and such successor shall agree, provided, however, that
no such compensation shall be in excess of the Servicing Fee permitted under
this Agreement. In the event that the Servicer's duties, responsibilities and
liabilities under this Agreement should be terminated pursuant to the
aforementioned sections, the Servicer shall discharge such duties and
responsibilities during the period from the date it acquires knowledge of such
termination until the effective date thereof with the same degree of diligence
and prudence which it is obligated to exercise under this Agreement, and shall
take no action whatsoever that might impair or prejudice the rights or financial
condition of its successor. The resignation or removal of the Servicer pursuant
to the aforementioned sections shall not become effective until a successor
servicer shall be appointed pursuant to this Section 9.01, or until the Master
Servicer succeeds to and assumes all of the Servicer's responsibilities, rights,
duties and obligations pursuant to this Section 9.01, and shall in no event
relieve the Servicer of the representations and warranties made pursuant to
Section 6.01 and the remedies available to the


                                     M-1-53

<PAGE>



Trustee, the Trust, the Master Servicer, NIMs Insurer and the Seller under
Section 6.02 and 6.03, it being understood and agreed that the provisions of
such Sections 6.01, 6.02 and 6.03 shall be applicable not only to such successor
servicer but also to the Servicer notwithstanding any such resignation or
termination of the Servicer, or the termination of this Agreement.
Notwithstanding the foregoing, the Master Servicer, in its capacity as successor
servicer, shall not be responsible for the lack of information and/or documents
that it cannot obtain through reasonable efforts.

      Within a reasonable period of time, but in no event longer than 30 days
after the appointment of a successor entity, the Servicer shall prepare, execute
and deliver to the successor entity any and all documents and other instruments,
place in such successor's possession all Servicing Files, and do or cause to be
done all other acts or things necessary or appropriate to effect the purposes of
such notice of termination, including but not limited to the transfer and
endorsement of the Mortgage Notes and related documents, and the preparation and
recordation of Assignments of Mortgage. The Servicer shall cooperate with the
Master Servicer or the Seller, as applicable, and such successor in effecting
the termination of the Servicer's responsibilities and rights hereunder and the
transfer of servicing responsibilities to the successor servicer, including
without limitation, the transfer to such successor for administration by it of
all cash amounts which shall at the time be credited by the Servicer to the
Custodial Account or Escrow Account or thereafter received with respect to the
Securitized Loans.

      Any successor servicer appointed as provided herein shall execute,
acknowledge and deliver to the Trustee, the Servicer, the Master Servicer, NIMs
Insurer and the Seller an instrument (i) accepting such appointment, wherein the
successor shall make the representations and warranties set forth in Section
6.01 (including a representation that the successor servicer is a member of
MERS, unless none of the Securitized Loans are MERS Securitized Loans or MERS
Eligible Securitized Loans or any such Securitized Loans have been withdrawn
from MERS and Assignments of Mortgage are recorded in favor of the Trust) and
provide for the same remedies set forth in Section 6.02 and Section 6.03 herein
(ii) an assumption of the due and punctual performance and observance of each
covenant and condition to be performed and observed by the Servicer under this
Agreement, whereupon such successor servicer shall become fully vested with all
the rights, powers, duties, responsibilities, obligations and liabilities of the
Servicer, with like effect as if originally named as a party to this Agreement.
Any termination or resignation of the Servicer or termination of this Agreement
pursuant to Sections 6.02, 7.03, 8.01 or 8.02 shall not affect any claims that
the Seller, the Depositor, the Master Servicer, NIMs Insurer or the Trustee may
have against the Servicer arising out of the Servicer's actions or failure to
act prior to any such termination or resignation. In addition, in the event any
successor servicer is appointed pursuant to Section 8.03 of this Agreement, such
successor servicer must satisfy the conditions relating to the transfer of
servicing set forth in the Trust Agreement.

      The Servicer shall deliver promptly to the successor servicer the funds in
the Custodial Account and Escrow Account and all Securitized Loan documents and
related documents and statements held by it hereunder and the Servicer shall
account for all funds and shall execute and



                                     M-1-54

<PAGE>



deliver such instruments and do such other things as may reasonably be required
to more fully and definitively vest in the successor all such rights, powers,
duties, responsibilities, obligations and liabilities of the Servicer.

      Upon a successor's acceptance of appointment as such, the Servicer shall
notify the Trustee, the Master Servicer, NIMs Insurer, the Seller and the
Depositor of such appointment in accordance with the procedures set forth in
Section 9.03.

      Section 9.02 Costs.

      The Seller shall pay any legal fees and expenses of its attorneys. Costs
and expenses incurred in connection with the transfer of the servicing
responsibilities pursuant to Section 9.01 or pursuant to any other provision of
this Agreement, including fees for delivering Servicing Files, shall be paid by
the Seller. Subject to Sections 2.03 and 3.01(a), the Seller shall pay the costs
associated with the preparation, delivery and recording of Assignments of
Mortgages.

      Section 9.03  Notices.

      All demands, notices, consents, reports, directions, instructions,
statements and other communications hereunder shall be in writing and shall be
deemed to have been duly given if sent by facsimile or mailed by overnight
courier, addressed as follows (or such other address as may hereafter be
furnished to the other parties by like notice):
            (i)   if to the Seller:
                  Home Star Mortgage Services, LLC
                  W. 115 Century Road
                  Paramus, New Jersey 07652
                  Attention: Frank Plenskofski
                  Facsimile: (201) 225-2878

            (ii)  if to the Servicer:
                  Home Star Mortgage Services, LLC
                  W. 115 Century Road
                  Paramus, New Jersey 07652
                  Attention: Frank Plenskofski
                  Facsimile: (201) 225-2878

            (iii) if to the Master Servicer:
                  Wells Fargo Bank,
                  National Association
                  9062 Old Annapolis Road
                  Columbia, Maryland 21045
                  Attention:  Corporate Trust Services -- Home Star Master
                  Servicing
                  Facsimile: (410) 884-2360


                                     M-1-55

<PAGE>



            (iv) if to the Trustee:
                 The address shown in the Transfer Notice

      Any such communication hereunder shall be deemed to have been received on
the date delivered to or received at the premises of the addressee.

      Section 9.04  Severability Clause.

      Any part, provision, representation or warranty of this Agreement which is
prohibited or which is held to be void or unenforceable shall be ineffective to
the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof. Any part, provision, representation or warranty of
this Agreement which is prohibited or unenforceable or is held to be void or
unenforceable in any jurisdiction shall be ineffective, as to such jurisdiction,
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Securitized Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity of any
part, provision, representation or warranty of this Agreement shall deprive any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate, in good-faith, to develop a structure the economic
effect of which is as close as possible to the economic effect of this Agreement
without regard to such invalidity.

      Section 9.05  No Personal Solicitation.

      From and after the related Closing Date, the Servicer hereby agrees that
it will not take any action or permit or cause any action to be taken by any of
its agents or affiliates, or by any independent contractors or independent
mortgage brokerage companies on the Servicer's behalf, to personally, by
telephone or mail, solicit the Mortgagor under any Securitized Loan for the
purpose of refinancing such Securitized Loan; provided, that the Servicer may
solicit any Mortgagor for whom the Servicer has received a request for
verification of mortgage status, a request for demand for payoff, a mortgagor
initiated written or verbal communication indicating a desire to prepay the
related Securitized Loan, or the mortgagor initiates a title search, provided
further, it is understood and agreed that promotions undertaken by the Servicer
or any of its affiliates which (i) concern optional insurance products or other
additional projects or (ii) are directed to mailing lists or customers of
affiliated companies or the general public at large, including without
limitation, mass mailings based on commercially acquired mailing lists,
newspaper, radio and television advertisements shall not constitute solicitation
under this Section 9.05 nor is the Servicer prohibited from responding to
unsolicited requests or inquiries made by a Mortgagor or an agent of a
Mortgagor.

      Section 9.06  Counterparts.



                                     M-1-56

<PAGE>



      This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.

      Section 9.07  Place of Delivery and Governing Law.

      THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK, NOTWITHSTANDING NEW YORK OR OTHER CHOICE OF LAW RULES TO THE
CONTRARY.

      Section 9.08  Further Agreements.

      The Seller and the Servicer each agree to execute and deliver to the other
such reasonable and appropriate additional documents, instruments or agreements
as may be necessary or appropriate to effectuate the purposes of this Agreement.

      Section 9.09  Intention of the Parties.

      It is the intention of the parties that the Seller is conveying, and the
Servicer is receiving, only a contract for servicing the Securitized Loans.
Accordingly, the parties hereby acknowledge that each Trust remains the sole and
absolute owner of the related Securitized Loans and all rights (other than the
servicing rights) related thereto.

      Section 9.10  Successors and Assigns; Assignment of Servicing Agreement.

      This Agreement shall bind and inure to the benefit of and be enforceable
by the Servicer, the Seller , each Trustee (with respect to related Securitized
Loans), the NIMs Insurer and the Master Servicer and their respective successors
and assigns. This Agreement shall not be assigned, pledged or hypothecated by
the Servicer to a third party except in accordance with Section 7.03 and shall
not be assigned, pledged or hypothecated by the Seller except as and to the
extent provided in Section 9.11.

      Section 9.11  Assignment by Seller.

      The Seller shall have the right, with the consent of the NIMs Insurer,
upon notice to but without the consent of the Servicer, to assign, in whole or
in part (but exclusive of such Seller's rights and obligations as owner of the
servicing rights relating to Securitized Loans), its interest under this
Agreement with respect to Securitized Loans which will be owned by the related
Trust to the related Depositor, which in turn shall assign such rights to such
Trust, and such Trust then shall succeed to all such rights of the Seller under
this Agreement. All references to the Seller in


                                     M-1-57

<PAGE>



this Agreement shall be deemed to include its assignee or designee and any
subsequent assignee or designee, specifically including, with respect to each
Securitized Loan, the related Trust and the related Trustee.

      Section 9.12  Amendment.

      This Agreement may be amended in writing from time to time by the parties,
with the prior written consent of the Trustee and the NIMs Insurer; provided
that the party requesting such amendment shall, at its own expense, provide the
other parties and such Trustee and the NIMs Insurer with an Opinion of Counsel
that (i)such amendment is permitted under the terms of this Agreement, (ii) the
Servicer has complied with all applicable requirements of this Agreement, and
(iii)) such amendment will not materially adversely affect the interest of any
Trust or the related Certificateholders in the Securitized Loans.

      Any such amendment shall be deemed not to adversely affect in any material
respect any of the interest of Certificateholders in the Securitized Loans if
each related Trustee and the NIMs Insurer receives written confirmation from the
applicable Rating Agency or Rating Agencies that such amendment will not cause
such Rating Agency or Rating Agencies to reduce, qualify or withdraw the then
current rating assigned to the related Certificates (and any Opinion of Counsel
requested by a party in connection with any such amendment may rely expressly on
such confirmation as the basis therefor).

      Section 9.13  Waivers.

      No term or provision of this Agreement may be waived or modified unless
such waiver or modification is in writing, signed by the party against whom such
waiver or modification is sought to be enforced.

      Section 9.14  Exhibits.

      The exhibits to this Agreement are hereby incorporated and made a part
hereof and are an integral part of this Agreement.

      Section 9.15   Intended Third Party Beneficiary.

      Notwithstanding any provision herein to the contrary, the parties to this
Agreement agree that it is appropriate, in furtherance of the intent of such
parties as set forth herein, that each Trustee, each Trust and each NIMs Insurer
receive the benefit of the provisions of this Agreement as an intended third
party beneficiary of this Agreement to the extent of such provisions with
respect to the related Securitized Loans. The Servicer shall have the same
obligations to the related Trustee, the related Trust and the related NIMs
Insurer as if it were a party to this Agreement, and each Trustee, Trust and
NIMs Insurer shall have the same rights and remedies to enforce the provisions
of this Agreement as if it were a party to this Agreement. The


                                     M-1-58

<PAGE>



Servicer shall only take direction from the Master Servicer or NIMs Insurer (if
direction by the Master Servicer or NIMs Insurer, as applicable, is required
under this Agreement) unless otherwise directed by this Agreement.
Notwithstanding the foregoing, all rights and obligations of a Trust, the
related Trustee, the related NIMs Insurer and the Master Servicer hereunder
(other than the right to indemnification) with respect to the related
Securitized Loans shall terminate upon the termination of such Trust pursuant to
the related Trust Agreement.

      Section 9.16  Confidentiality.

      The Trustee and the Master Servicer hereby agree to hold and treat all
Confidential Information (as defined below) in confidence and in accordance with
this Section 9.16. Such Confidential Information will not, without the prior
written consent of the Servicer, be disclosed or used by any Trustee or the
Master Servicer or by its subsidiaries, affiliates, directors, officers,
employees, agents or controlling persons (collectively, the "Information
Recipients") other than for the purposes of this Agreement or for the purposes
specified in the related Trust Agreement. Disclosure that is not in violation of
the Right to Financial Privacy Act of 1978, as amended, the Gramm-Leach-Bliley
Act of 1999 (the "G-L-B Act") or other applicable law by the Trustee or the
Master Servicer of any Confidential Information at the request of its outside
auditors or governmental regulatory authorities in connection with an
examination of any Trustee or the Master Servicer by any such authority or for
the purposes specified in any Trust Agreement or this Agreement shall not
constitute a breach of its obligations under this Section 9.19, and shall not
require the prior consent of the Servicer.

      As used herein, "Confidential Information" means non-public personal
information (as defined in the G-L-B Act and its enabling regulations issued by
the Federal Trade Commission) regarding borrowers. Confidential Information
shall not include information which (i) is or becomes generally available to the
public other than as a result of disclosure by a Trustee or the Master Servicer
or any of its Information Recipients; (ii) was available to the related Trustee
or the Master Servicer on a non-confidential basis from a person or entity other
than the Servicer prior to its disclosure by the Servicer to such Trustee; (iii)
is required to be disclosed by a governmental authority or related governmental
agencies or as otherwise required by law; (iv) becomes available to the related
Trustee or the Master Servicer on a non-confidential basis from a person or
entity other than the Servicer who, to the best knowledge of the related Trustee
or the Master Servicer, is not otherwise bound by a confidentiality agreement
with the Servicer, and is not otherwise prohibited from transmitting the
information to such Trustee or the Master Servicer, or (v) is released pursuant
to the Trust Agreement or this Agreement.

      Section 9.17  General Interpretive Principles.

      For purposes of this Agreement, except as otherwise expressly provided or
unless the context otherwise requires:



                                     M-1-59

<PAGE>



      (a) the terms defined in this Agreement have the meanings assigned to them
in this Agreement and include the plural as well as the singular, and the use of
any gender herein shall be deemed to include the other gender;

      (b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;

      (c) references herein to "Articles", "Sections", "Subsections",
"Paragraphs", and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;

      (d) a reference to a Subsection without further reference to a Section is
a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;

      (e) the words "herein", "hereof", "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular provision;

      (f) the term "include" or "including" shall mean by reason of enumeration;
and

      (g) this Agreement shall be construed as a separate agreement with respect
to the Securitized Loans held by each Trust, and references to the rights of the
Master Servicer, Trustee or any NIMs Insurer shall apply separately with respect
to each Trust.

      Section 9.18  Reproduction of Documents.

      This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications which may hereafter be
executed, (b) documents received by any party at the closing, and (c) financial
statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be as admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.




                                    M-1-60

<PAGE>



      IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of the
date first above written.

                                    HOME STAR MORTGAGE SERVICES, LLC,
                                    as Seller

                                    By:____________________________________
                                    Name:__________________________________
                                    Title:_________________________________


                                    HOME STAR MORTGAGE SERVICES, LLC,
                                    as Servicer

                                    By:____________________________________
                                    Name:__________________________________
                                    Title:_________________________________


                                    WELLS FARGO BANK, NATIONAL
                                    ASSOCIATION,
                                    as Master Servicer

                                    By:____________________________________
                                    Name:__________________________________
                                    Title:_________________________________





                                     M-1-61

<PAGE>



                                    EXHIBIT A

                             FORM OF TRANSFER NOTICE

                                     [Date]

Home Star Mortgage Services, LLC, as Servicer
W. 115 Century Road
Paramus, New Jersey  07652

Cenlar FSB, as Sub-Servicer
P.O. Box 77400
425 Phillips Boulevard
Trenton, New Jersey 08628

You are hereby notified that as of [date] (the "Effective Date"), the
undersigned has transferred the Securitized Loans listed on the attached
schedule (the "Securitized Loans") to Homestar Mortgage Securities Trust 200_ -
__ (the "Trust"). The attached schedule also contains a field which sets forth
the Servicing Fee Rate(s) and the Prepayment Charge Schedule. You agree to
service such Securitized Loans as Securitized Loans under that certain Servicing
Agreement dated as of March 5, 2004 (the "Servicing Agreement"), by and among
Home Star Mortgage Services, LLC ("Home Star"), as servicer (the "Servicer"),
Home Star, as seller (the "Seller") and Wells Fargo Bank, National Association,
as master servicer (the "Master Servicer"), and that certain Sub-Servicing
Acknowledgment Agreement dated of even date therewith (the "Sub-Servicing
Agreement"), by and between the Servicer and Cenlar FSB (the "Sub-Servicer"). In
addition, you shall recognize the Trust or the Master Servicer or
____________________ (the "Trustee"), acting as agents for the Trust, as having
the same rights as Home Star as Seller under the Servicng Agreement with respect
to such transferred Securitized Loans. The address for notice for the Trustee
for these Securitized Loans is __________________________________.

                                    HOME STAR MORTGAGE SERVICES, LLC, as
                                    Seller

                                    By:
Acknowledged by:

HOME STAR MORTGAGE SERVICES, LLC, as Servicer

By:
Name:
Title:

CENLAR FSB, as Sub-Servicer


                                     M-1-62

<PAGE>



By:
Name:
Title:



                                     M-1-63

<PAGE>



                                    EXHIBIT B

                       CUSTODIAL ACCOUNT LETTER AGREEMENT

                                                              _______ __, 20__
To:   ___________________________
      ___________________________
      ___________________________
      (the "Depository")

      As Servicer under the Servicing Agreement, dated as of March 5, 2004, by
and among Home Star Mortgage Services, LLC ("Home Star"), as servicer (the
"Servicer"), Home Star, as seller (the "Seller") and Wells Fargo Bank, National
Association, as master servicer (the "Master Servicer") (the "Agreement"), we
hereby authorize and request you to establish an account as the Custodial
Account pursuant to Section 3.03 of the Agreement, to be designated as "Home
Star Mortgage Services, LLC, as Servicer for Wells Fargo Bank, National
Association, as Master Servicer, and in trust for one or more Homestar Mortgage
Securities Trusts." All deposits in the account shall be subject to withdrawal
therefrom by order signed by the Servicer. This letter is submitted to you in
duplicate. Please execute and return one original to us.

                              HOME STAR MORTGAGE SERVICES, LLC, as Servicer

                              By:
                              Name:
                              Title:

      The undersigned, as Depository, hereby certifies that the above described
account has been established under Account Number __________, at the office of
the Depository indicated above, and agrees to honor withdrawals on such account
as provided above.

                              ______________________________
                              Depository

                              By:
                              Name:
                              Title:
                              Date:




                                     M-1-64

<PAGE>



                                    EXHIBIT C

                         ESCROW ACCOUNT LETTER AGREEMENT

                                                              _______ __, 20__
To:   ___________________________
      ___________________________
      ___________________________
      (the "Depository")

      As Servicer under the Servicing Agreement, dated as of March 5, 2004, by
and among Home Star Mortgage Services, LLC ("Home Star"), as servicer (the
"Servicer"), Home Star, as seller (the "Seller") and Wells Fargo Bank, National
Association, as master servicer (the "Master Servicer") (the "Agreement"), we
hereby authorize and request you to establish an account as the Escrow Account
pursuant to Section 3.05 of the Agreement, to be designated as "Home Star
Mortgage Services, LLC, as Servicer for Wells Fargo Bank, National Association,
as Master Servicer, and in trust for one or more Homestar Mortgage Securities
Trusts." All deposits in the account shall be subject to withdrawal therefrom by
order signed by the Servicer. This letter is submitted to you in duplicate.
Please execute and return one original to us.

                              HOME STAR MORTGAGE SERVICES, LLC, as Servicer

                              By:
                              Name:
                              Title:

      The undersigned, as Depository, hereby certifies that the above described
account has been established under Account Number __________, at the office of
the Depository indicated above, and agrees to honor withdrawals on such account
as provided above.

                              _____________________________________________
                              Depository

                              By:
                              Name:
                              Title:
                              Date:



                                     M-1-65

<PAGE>



                                    EXHIBIT D

                        MONTHLY SERVICER REPORTING FORMAT


The format should be:
1. Record length of 240
2. ASCII
3. All dates should have DD of "01".

                                                            COBOL
#     M/O    Field Name               Position    Length   "Picture"   Justify
1.    O      Master Servicer No.      001-002     2
2.    O      Unit Code                003-004     2
3.    M      Loan Number              005-014     10       X(10)
4.    O      Borrower Name            015-034     20       X(20)
5.    O      Old Payment Amount       035-045     11       S(9)V9(02)
6.    O      Old Loan Rate            046-051     6        9(2)V9(04)
7.    O      Servicer Fee Rate        052-057     6        9(2)V9(04)
8.    M      Servicer Ending Balance  058-068     11       S9(9)V9(02)
9.    M      Servicer Next Due Date   069-076     8        CCYYMMDD
10.   O      Curtail Amt 1 - Before   077-087     11       S9(9)V9(02)
11.   O      Curtail Date 1           088-095     8        CCYYMMDD
12.   O      Curtail Amt 1 - After    096-106     11       S9(9)V9(02)
13    O      Curtail Amt 2 - Before   107-117     11       S9(9)V9(02)
14.   O      Curtail Date             118-125     8        CCYYMMDD
15.   O      Curtail Amt 2 - After    126-136     11       9(9)V9(02)
16.   O      Curtail Amt 3 - Before   137-147     11       9(9)V9(02)
17.   O      Curtail Date             148-155     8        CCYYMMDD
18    O      Curtail Amt 3 - After    156-166     11       9(9)V9(02)
19    O      New Payment Amount       167-177     11       9(9)V9(02)
20.   O      New Loan Rate            178-183     6        (2)V9(04)
21.   O      Index Rate               184-189     6        (2)V9(04)
22.   O      Remaining Term           190-192     3        (3)
23.   O      Liquidation Amount       193-203     11       9(9)V9(02)
24.   O      Action Code              204-205     2        (02)
25.   O      Scheduled Principal      206-216     11       9(9)V9(02)
26.   O      Scheduled Interest       217-227     11       9(9)V9(02)
27.   O      Scheduled Ending Balance 228-238     11       9(9)V9(02)
28.   O      FILLER                   239-240     2        (02)
Trailer Record
1.    O      Number of Records        001-006     6        9(06)
2.    O      FILLER                   007-240     234      X(234)


                                     M-1-66

<PAGE>



Field Names and Descriptions:


Field Name                  Description

Master Servicer No.         Hard code as "01" used internally

Unit Code                   Hard code as "  " used internally

Loan Number                 Investor's loan number

Borrower Name               Last name of borrower

Old Payment Amount          P&I amount used for the applied payment

Old Loan Rate               Gross interest rate used for the applied payment

Servicer Fee Rate           Servicer's fee rate

Servicer Ending Balance     Ending actual balance after a payment has been
                            applied

Servicer Next Due Date      Borrower's next due date for a payment

Curtailment Amount 1-Before Amount of curtailment applied before the payment

Curtailment Date 1          Date of curtailment should coincide with the payment
                            date applicable to the curtailment

Curtailment Amount 1-After  Amount of curtailment applied after the payment

Curtailment Amount 2-Before Amount of curtailment applied before the payment

Curtailment Date 2          Date of curtailment should coincide with the payment
                            date applicable to the curtailment

Curtailment Amount 2-After  Amount of curtailment applied after the payment

Curtailment Amount 3-Before Amount of curtailment applied before the payment

Curtailment Date 3          Date of curtailment should coincide with the payment
                            date applicable to the curtailment

Curtailment Amount 3-After  Amount of curtailment applied after the payment


                                     M-1-67

<PAGE>



New                         Payment Amount For ARM, Equal, or Buydown loans,
                            when a payment change occurs, this is the scheduled
                            payment

New                         Loan Rate For ARM loans, when the gross interest
                            rate change occurs, this is the scheduled rate

Index Rate                  For ARM loans, the index rate used in calculating
                            the new gross interest rate

Remaining Term              For ARM loans, the number of months left on the loan
                            used  to determine the new P&I amount

Liquidation Amount          The payoff amount of the loan

Action Code                 For delinquent loans:
                            12 -- Relief Provisions
                            15 -- Bankruptcy/Litigation
                            20 -- Referred for Deed-in-lieu, short sale 30 --
                            Referred to attorney to begin foreclosure 60 -- Loan
                            Paid in full 70 -- Real Estate Owned

Scheduled Principal         Amount of principal from borrower payment due to
                            bondholder

Scheduled Interest          Amount of interest from borrower payment due to
                            bondholder

Scheduled Ending Balance    Ending scheduled balance of loan

FILLER                      Should be filled with spaces




                                     M-1-68

<PAGE>



                                    EXHIBIT E

               Wells Fargo Bank Master Servicing Default Reporting
                             DATA FIELD REQUIREMENTS

Data must be submitted to Wells Fargo Bank in an Excel spreadsheet format with
fixed field names and data type. The Excel spreadsheet should be used as a
template consistently every month when submitting data.

Table: Delinquency

Name                                    Type                      Character Size
Servicer Loan #                         Number (Double)              10
Investor Loan #                         Number (Double)              10
Servicer Investor #                     Text                         3
Borrower Name                           Text                         20
Address                                 Text                         30
State                                   Text                         2
Zip                                     Text                         10
Due Date                                Date/Time                    8
Wells Fargo Action Code                 Text                         2
FC Approval Date                        Date/Time                    8
File Referred to Attorney               Date/Time                    8
NOD                                     Date/Time                    8
Complaint Filed                         Date/Time                    8
Sale Published                          Date/Time                    8
Target Sale Date                        Date/Time                    8
Actual Sale Date                        Date/Time                    8
Loss Mit Approval Date                  Date/Time                    8
Loss Mit Type                           Text                         5
Loss Mit Code                           Number                       2
Loss Mit Estimated Completion Date      Date/Time                    8
Loss Mit Actual Completion Date         Date/Time                    8
Loss Mit Broken Plan Date               Date/Time                    8
BK Chapter                              Text                         6
BK Filed Date                           Date/Time                    8
Post Petition Due                       Date/Time                    8
Motion for Relief                       Date/Time                    8
Lift of Stay                            Date/Time                    8
Reason For Delinquency                  Text                         10
Occupant Code                           Text                         10
Eviction Start Date                     Date/Time                    8
Eviction Completed Date                 Date/Time                    8


                                     M-1-69

<PAGE>



List Price                              Currency                     8
List Date                               Date/Time                    8
Accepted Offer Price                    Currency                     8
Accepted Offer Date                     Date/Time                    8
Estimated REO Effective Date            Date/Time                    8
Actual REO Sale Date                    Date/Time                    8
Servicer Comments                       Text                         200
Modification Exp. Date                  Date/Time                    8
Fannie Mae Del. Status Code             Text                         2
Fannie Mae Del. Reason Code             Text                         2
BK Discharge/Dismissal Date             Date/Time                    8
Property Damage Date                    Date/Time                    8
Property Repair Amount                  Currency                     8
BK Hearing Date                         Date/Time                    8
POC Date                                Date/Time                    8
POC Amount                              Currency                     8
BK Case Number                          Text                         30 Maximum
F/C Sale Amount                         Currency                     8
Redemption Exp. Date                    Date/Time                    8
Property Value Date                     Date/Time                    8
Current Property Value                  Currency                     8
Repaired Property Value                 Currency                     8
BPO Y/N                                 Text                         1
Current LTV                             Currency                     8
Property Condition Code                 Text                         2
Property Inspection Date                Date/Time                    8
MI Cancellation Date                    Date/Time                    8
MI Claim Filed Date                     Date/Time                    8
MI Claim Amount                         Currency                     8
MI Claim Reject Date                    Date/Time                    8
MI Claim Resubmit Date                  Date/Time                    8
MI Claim Paid Date                      Date/Time                    8
MI Claim Amount Paid                    Currency                     8
Pool Claim Filed Date                   Date/Time                    8
Pool Claim Amount                       Currency                     8
Pool Claim Reject Date                  Date/Time                    8
Pool Claim Paid Date                    Date/Time                    8
Pool Claim Amount Paid                  Currency                     8
Pool Claim Resubmit Date                Date/Time                    8
FHA Part A Claim Filed Date             Date/Time                    8
FHA Part A Claim Amount                 Currency                     8
FHA Part A Claim Paid Date              Date/Time                    8
FHA Part A Claim Paid Amount            Currency                     8


                                     M-1-70

<PAGE>



FHA Part B Claim Filed Date             Date/Time                    8
FHA Part B Claim Amount                 Currency                     8
FHA Part B Paid Date                    Date/Time                    8
FHA Part B Claim Paid Amount            Currency                     8
V A Claim Filed Date                    Date/Time                    8
V A Claim Paid Date                     Date/Time                    8
V A Claim Paid Amount                   Currency                     8

The Action Code Field should show the applicable numeric code to indicate that a
special action is being taken. The Action Codes are the following:

12-Relief Provisions (i.e. Sailors & Soldiers Relief Act)
15-Bankruptcy/Litigation 20-Loss Mitigation-Workout 30-Referred for Foreclosure
60-Payoff 65-Repurchase 70-REO-Held for Sale 71- Third Party Sale/Condemnation
72-REO-Pending Conveyance-Pool Insurance claim filed

Wells Fargo Bank will accept alternative Action Codes to those above, provided
that the Codes are consistent with industry standards. If Action Codes other
than those above are used, the Servicer must supply Wells Fargo Bank with a
description of each of the Action Codes prior to sending the file.

Description of Action Codes:

Action Code 12- To report a Securitized Loan for which the Borrower has been
granted relief for curing a delinquency.

Action Code 15 - To report a borrower filing bankruptcy and for all active
bankruptcies.

Action Code 20 - To report that the Borrower has agreed to some form of loss
mitigation/workout. Examples of these include Short Sale, Deed-in-Lieu of
Foreclosure, Formal Forbearance Agreements, Modifications, etc.

Action Code 30 - To report a loan that has been referred to attorney for
foreclosure.

Action Code 60 - To report that a Securitized Loan has been paid in full either
at, or prior to, maturity.

Action Code 65- To report that the Servicer is repurchasing the Securitized
Loan.


                                     M-1-71

<PAGE>



Action Code 70 -To report that a Securitized Loan has been foreclosed or a
deed-in-lieu of foreclosure has been accepted, and the Servicer, on behalf of
the owner of the Securitized Loan, has acquired the property and may dispose of
it.

Action Code 71 -To report that a Securitized Loan has been foreclosed and a
third party acquired the property, or a total condemnation of the property has
occurred.

Action Code 72 -To report that a Securitized Loan has been foreclosed, or a
deed-in-lieu has been accepted, and the property may be conveyed to the mortgage
insurer and the pool insurance claim has been filed. Also to be used for
completed HUDNA foreclosures where the property is pending conveyance to HUDNA.

The Loss Mit Type field should show the approved Loss Mitigation arrangement.
The following are acceptable:
*******
o           ASU M - Approved Assumption
o           BAP - Borrower Assistance Program
o           CO - Charge Off
o           DIL - Deed-in-Lieu
o           FFA - Formal Forbearance Agreement
o           MOD - Loan Modification
o           PRE - Pre-Sale
o           SS - Short Sale
o           MISC- Anything else approved by the PMI or Pool Insurer

Wells Fargo Bank will accept alternative Loss Mitigation Types to those above,
provided that they are consistent with industry standards. If Loss Mitigation
Types other than those above are used, the Servicer must supply Wells Fargo Bank
with a description of each of the Loss Mitigation Types prior to sending the
file.

The Occupant Code field should show the current status of the property. The
acceptable codes are:

o            Mortgagor
o            Tenant
o            Unknown
o            Vacant




                                     M-1-72

<PAGE>



The RFD field should show the Reason for Default. The acceptable codes are
below, or we can accept Fannie Mae Delinquency Reason Codes.

Delinquency Code                    Delinquency Description
AB                                  Abandonment of property
AA                                  Arm Adjustment Problem
BK                                  Bankruptcy
06                                  Borrower Complaint
BOC                                 Borrower Out of Country
BU                                  Business Failure
CL                                  Casualty Loss
JC                                  Change in Job
CD                                  Chronic Delinquent
CSP                                 Chronic Slow Pay
CI                                  Commission Income
DIF                                 Death in Family
08                                  Deceased
00                                  Defective Loan
DT                                  Delinquent Property Tax
FIRE                                Disability
DS                                  Disregard
Dl                                  Divorce
DD                                  Domestic Difficulties
EA                                  Earthquake
ENV                                 Environmental
ECO                                 Excessive Credit Obligation
FA                                  Family Death
FE                                  Family Emergency
FI                                  Family Illness
FD                                  Financial Difficulty
05                                  Foreclosure or Borrower moved or skipped
FFP                                 Formal Forbearance Plan
FR                                  Fraud
G                                   Garnishment
HU                                  Hurricane
IT                                  Illegal Transfer
B1                                  Illness of Borrower
IP                                  Inability to Sell Property
IC                                  Incarcerated
IN                                  Income Reduction
LIT                                 Involved in Litigation
IRS                                 IRS Lien
JD                                  Judgment


                                     M-1-73

<PAGE>



LB                                  Language Barrier
LM                                  Legal Matter
LS                                  Legal Separation
MA                                  Marital Difficulties
ME                                  Medical
03                                  Medical/Illness in Family
MD                                  Mortgagor Death
ND                                  Natural Disaster
NC                                  No Contact with borrower
NSF                                 Non Sufficient Funds
09                                  Other
01                                  Over Obligated
OV                                  Overextended
PAD                                 Payment Dispute
PP                                  Payment Plan Established
POP                                 Payoff Pending
PE                                  Pending Sale
PS                                  Previous Servicer Problem
PB                                  Promise to Pay Broken
PR                                  Property Damage
PD                                  Property Devaluation
REFI                                Refinance Pending
RELO                                Relocation (Job Related)
JRP                                 Relocation (Personal)l
RE                                  Rental
10                                  REO
SI                                  Seasonal Income
SE                                  Self Employed
SP                                  Servicing Problems
SR                                  Slow Receivables
02                                  Unemployed/Reduced Income
UE                                  Unemployment
UK                                  Unknown
UTP                                 Unwilling to Pay




                                     M-1-74

<PAGE>



                                    EXHIBIT F

WELLS FARGO BANK, N.A.
Form 332

Calculation of Realized Loss

Purpose

To provide the Servicer with a form for the calculation of any Realized Loss (or
gain) as a result of a Securitized Loan having been foreclosed and Liquidated.

Distribution

The Servicer will prepare the form in duplicate and send the original together
with evidence of conveyance of title and appropriate supporting documentation to
the Master Servicer with the Monthly Accounting Reports which supports the
Securitized Loan's removal from the Securitized Loan Activity Report. The
Servicer will retain the duplicate for its own records.

Due Date

With respect to any liquidated Securitized Loan, the form will be submitted to
the Master Servicer no later than the date on which statements are due to the
Master Servicer under Section 4.02 of this Agreement (the "Statement Date") in
the month following receipt of final liquidation proceeds and supporting
documentation relating to such liquidated Securitized Loan; provided, that if
such Statement Date is not at least 30 days after receipt of final liquidation
proceeds and supporting documentation relating to such liquidated Securitized
Loan, then the form will be submitted on the first Statement Date occurring
after the 30th day following receipt of final liquidation proceeds and
supporting documentation.

Preparation Instructions

The numbers on the form correspond with the numbers listed below.

1.    The actual Unpaid Principal Balance of the Securitized Loan.
2.    The Total Interest Due less the aggregate amount of servicing fee that
      would have been earned if all delinquent payments had been made as agreed.
3-7.  Complete as necessary. All line entries must be supported by copies of
      appropriate statements, vouchers, receipts, canceled checks, etc., to
      document the expense. Entries not properly documented will not be
      reimbursed to the Servicer.
8.    Accrued Servicing Fees based upon the Scheduled Principal Balance of the
      Securitized Loan as calculated on a monthly basis.
10.   The total of lines 1 through 9.


                                     M-1-75

<PAGE>



Credits

11-17.Complete as necessary. All line entries must be supported by copies of the
      appropriate claims forms, statements, payment checks, etc. to document the
      credit. If the Securitized Loan is subject to a Bankruptcy Deficiency, the
      difference between the Unpaid Principal Balance of the Note prior to the
      Bankruptcy Deficiency and the Unpaid Principal Balance as reduced by the
      Bankruptcy Deficiency should be input on line 16.
18. The total of lines 11 through 17.

Total Realized Loss (or Amount of Any Gain)

19.   The total derived from subtracting line 18 from 10. If the amount
      represents a realized gain, show the amount in parenthesis ( )




                                     M-1-76

<PAGE>



WELLS FARGO BANK, N.A.
CALCULATION OF REALIZED LOSS

WELLS FARGO BANK, N.A. Trust:  ___________________________
Prepared by:  __________________                 Date:  _______________
Phone:  ______________________

Servicer Loan No.             Servicer Name      Servicer Address

WELLS FARGO BANK, N.A.
Loan No._____________________________
Borrower's Name:________________________________________________________
Property
Address:________________________________________________________________
Liquidation and Acquisition Expenses:
Actual Unpaid Principal Balance of Securitized Lo$ _______________(1)
Interest accrued at Net Rate                      ________________(2)
Attorney's Fees                                   ________________(3)
Taxes                                             ________________(4)
Property Maintenance                              ________________(5)
MI/Hazard Insurance Premiums                      ________________(6)
Hazard Loss Expenses                              ________________(7)
Accrued Servicing Fees                            ________________(8)
Other (itemize)                                   ________________(9)
_________________________________________        $ _________________
_________________________________________         __________________
_________________________________________         __________________
_________________________________________         __________________
Total Expenses                                   $ ______________(10)
Credits:
Escrow Balance                                   $ ______________(11)
HIP Refund                                       ________________(12)
Rental Receipts                                  ________________(13)
Hazard Loss Proceeds                             ________________(14)
Primary Mortgage Insurance Proceeds              ________________(15)
Proceeds from Sale of Acquired Property          ________________(16)
Other (itemize)                                  ________________(17)
_________________________________________        ___________________
_________________________________________        ___________________
Total Credits                                    $________________(18)
Total Realized Loss (or Amount of Gain)          $________________(19)




                                     M-1-77

<PAGE>



                                   EXHIBIT M-2

                     SERVICING AGREEMENT FOR SUBPRIME LOANS

THIS IS A SERVICING AGREEMENT, dated as of March 5, 2004 (the "Agreement"), and
is executed between Homestar Mortgage Acceptance Corp. (the "Owner") and Home
Star Mortgage Services LLC (the "Servicer").

                              W I T N E S S E T H:

      WHEREAS, the Owner and the Servicer desire that, from and after the
Effective Date, the Mortgage Loans which are subject to this Agreement will be
serviced by the Servicer on behalf of the Owner in accordance with the terms and
provisions of this Agreement.

      NOW, THEREFORE, in consideration of the mutual agreements hereinafter set
forth, and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the Owner and the Servicer agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

      Section 1.01. Defined Terms.

      Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:

      Accepted Servicing Practices: With respect to any Mortgage Loan, all
applicable federal, state and local laws and regulations and the standards
employed by the Servicer in servicing similar mortgage loans for its own
account, giving due consideration to those mortgage servicing practices and
procedures (including collection practices and procedures) of mortgage banking
institutions which service mortgage loans of the same type as such Mortgage Loan
in the jurisdiction where the related Mortgaged Property is located, giving due
consideration to customary and usual standards of practice of mortgage lenders
and loan servicers administering similar mortgage loans.

      Adjustment Date: As to each ARM Loan, the date on which the Mortgage
Interest Rate is adjusted in accordance with the terms of the related Mortgage
Note and Mortgage.

      Agreement: This Servicing Agreement including all exhibits hereto,
amendments hereof and supplements hereto.

      Ancillary Income: All income derived from the Mortgage Loans (other than
the (i) Servicing Fee or (ii) prepayment charges attributable to the Mortgage
Loans), including but not


                                      M-2-1

<PAGE>



limited to late charges, any interest paid on funds deposited in the Custodial
Account and Escrow Account (other than interest on escrowed funds required by
law to be paid to the Mortgagor), fees received with respect to checks or bank
drafts returned by the related bank for non-sufficient funds, assumption fees,
optional insurance administrative fees and all other incidental fees and
charges.

      ARM Loan: A first lien, conventional, 1-4 family residential Mortgage Loan
with an interest rate which adjusts from time to time in accordance with the
related Index and is subject to a Periodic Rate Cap and a Lifetime Rate Cap and
which may permit conversion to a fixed interest rate.

      Business Day: Any day other than (i) a Saturday or Sunday, or (ii) a legal
holiday in the State of New York or the jurisdiction in which the Servicer
conducts its servicing activities, or (iii) a day on which banking and savings
and loan institutions in the State of New York or the jurisdiction in which the
Servicer conducts its servicing activities are authorized or obligated by law or
executive order to be closed.

      Code: The Internal Revenue Code of 1986, as it may be amended from time to
time, or any successor statute thereto, and applicable U.S. Department of the
Treasury regulations issued pursuant thereto.

      Condemnation Proceeds: All awards or settlements in respect of a Mortgaged
Property, whether permanent or temporary, partial or entire, by exercise of the
power of eminent domain or condemnation, to the extent not required to be
released to a Mortgagor in accordance with the terms of the related Mortgage
Loan Documents.

      Custodial Account: The separate demand account or accounts created and
maintained pursuant to Section 4.04 which shall be entitled "HMAC 2004-1
Custodial Account in trust for [Owner], Owner of Whole Loan Mortgages" and shall
be established at a Qualified Depository.

      Custodial Agreement: The Custodial Agreement dated as of March 1, 2004
among HSBC Bank (USA), the Owner and Wells Fargo Bank, N.A., providing for the
custody of Mortgage Loan Documents.

      Custodian: Wells Fargo Bank, N.A, or such other Custodian as the Owner
shall designate.

      Determination Date: The 15th day of any month, or if such 15th day is not
a Business Day, the first Business Day immediately preceding such 15th day.

      Due Date: With respect to any Mortgage Loan, each day on which payments of
principal and interest are required to be paid in accordance with the terms of
the related Mortgage Note, exclusive of any days of grace.


                                      M-2-2

<PAGE>



      Due Period: With respect to each Remittance Date, the period commencing on
the second day of the month preceding the month of such Remittance Date and
ending on the first day of the month of such Remittance Date.

      Effective Date:  March 5, 2004.

      Escrow Account: The separate trust account or accounts created and
maintained pursuant to Section 4.06 which shall be entitled "HMAC 2004-1 Escrow
Account, in trust for [Owner], Owner of Whole Loan Mortgages and various
Mortgagors" and shall be established at a Qualified Depository.

      Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other related
Mortgage Loan Document.

      Escrow Mortgage Loan: The Mortgage Loans for which the Servicer has
established an Escrow Account for items constituting Escrow Payments.

      Event of Default: Any one of the conditions or circumstances enumerated in
Section 9.01.

      Fannie Mae:  Fannie Mae, or any successor thereto.

      Fannie Mae Guide: The Fannie Mae Selling Guide and the Fannie Mae
Servicing Guide and all amendments or additions thereto.

      Fidelity Bond: A fidelity bond to be maintained by the Servicer pursuant
to Section 4.12.

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

      Freddie Mac Guide: The Freddie Mac Selling Guide and the Freddie Mac
Servicing Guide and all amendments or additions thereto.

      Full Principal Prepayment: A Principal Prepayment made by a Mortgagor of
the entire principal balance of a Mortgage Loan.

      GAAP: Generally accepted accounting principles and procedures,
consistently applied.

      HUD: The United States Department of Housing and Urban Development or any
successor thereto.



                                      M-2-3

<PAGE>



      Index: With respect to each ARM Loan, the index, as specified in the
related Mortgage Note, used to determine the Mortgage Interest Rate on each
Adjustment Date on such ARM Loan.

      Index Rate: With respect to each ARM Loan, on each Adjustment Date, the
rate per annum equal to the Index, calculated as provided in the related
Mortgage Note.

      Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.

      Lifetime Rate Cap: With respect to each ARM Loan, the maximum Mortgage
Interest Rate over the term of such Mortgage Loan, as specified in the related
Mortgage Note.

      Liquidation Proceeds: Cash received in connection with the liquidation of
a defaulted Mortgage Loan, whether through the sale or assignment of such
Mortgage Loan, trustee's sale, foreclosure sale or otherwise, other than amounts
received following the acquisition of an REO Property pursuant to Section 4.13.

      Margin: With respect to each ARM Loan, the fixed percentage amount set
forth in the related Mortgage Note which is added to the Index in order to
determine the related Mortgage Interest Rate.

      MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, or any successor in interest thereto.

      MERS Mortgage Loan: Any Mortgage Loan as to which the related Mortgage, or
an Assignment of Mortgage, has been or will be recorded in the name of MERS, as
nominee for the holder from time to time of the related Mortgage Note.

      Monthly Advance: The portion of each Monthly Payment that is delinquent
with respect to each Mortgage Loan at the close of business on the Determination
Date required to be advanced by the Servicer pursuant to Section 5.03 on the
Business Day immediately preceding the Remittance Date of the related month.

      Monthly Payment: With respect to each Mortgage Loan, the scheduled monthly
payment of principal and interest thereon which is payable by the related
Mortgagor under the related Mortgage Note.

      Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a lien on real property securing the Mortgage Note.

      Mortgage Interest Rate: The annual rate at which interest accrues on any
Mortgage Loan in accordance with the provisions of the related Mortgage Note,
and in the case of an ARM Loan,


                                      M-2-4

<PAGE>



as adjusted from time to time on each Adjustment Date for such Mortgage Loan to
equal the Index Rate for such Mortgage Loan plus the Margin for such Mortgage
Loan, and subject to the limitations on such interest rate imposed by the
Periodic Rate Cap and the Lifetime Rate Cap.

      Mortgage Loan: An individual Mortgage Loan described herein and as further
identified on the Mortgage Loan Schedule, which Mortgage Loan includes without
limitation the Mortgage Loan Documents, the Monthly Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
REO Disposition Proceeds and all other rights, benefits, proceeds and
obligations arising from or in connection with such Mortgage Loan.

      Mortgage Loan Documents: With respect to each Mortgage Loan, the original
mortgage loan legal documents held by the Owner or by a Custodian on the Owner's
behalf.

      Mortgage Loan Remittance Rate: With respect to each Mortgage Loan, the
annual rate of interest remitted to the Owner, which shall be equal to the
related Mortgage Interest Rate minus the Servicing Fee Rate.

      Mortgage Loan Schedule: The schedule of Mortgage Loans attached hereto as
Exhibit A.

      Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.

      Mortgaged Property: The underlying real property securing repayment of the
debt evidenced by a Mortgage Note.

      Mortgagor:  The obligor on a Mortgage Note.

      Non-Escrow Mortgage Loan: Any Mortgage Loan which is not an Escrow
Mortgage Loan.

      Nonrecoverable Advance: Any Monthly Advance previously made by the
Servicer pursuant to Section 5.03 or any Servicing Advance which, in the good
faith judgment of the Servicer, will not be ultimately recoverable by the
Servicer from Liquidation Proceeds or other proceeds of the related Mortgage
Loan. The determination by the Servicer that is has made a Nonrecoverable
Advance, shall be evidenced by an Officer's Certificate of the Servicer
delivered to the Owner and the NIMs Insurer and detailing the reasons for such
determination.

      Officers' Certificate: A certificate signed by the Chairman of the Board,
the Vice Chairman of the Board, the President, a Vice President or an Assistant
Vice President or by the Treasurer or the Secretary or one of the Assistant
Treasurers or Assistant Secretaries of the Servicer, and delivered to the Owner
as required by this Agreement.



                                      M-2-5

<PAGE>



      Opinion of Counsel: A written opinion of counsel, who may be an employee
of the party on behalf of whom the opinion is being given, reasonably acceptable
to the other party.

      Owner: Homestar Mortgage Acceptance Corp., its successors in interest and
assigns.

      Partial Principal Prepayment: A Principal Prepayment by a Mortgagor in
part but not in full of the outstanding principal balance of a Mortgage Loan.

      Periodic Rate Cap: With respect to each ARM Loan, the maximum number of
percentage points by which the Mortgage Interest Rate may increase or decrease
on any Adjustment Date.

      Permitted Investments: Any one or more of the following obligations or
securities:

      (i) direct obligations of, and obligations the timely payment of which are
fully guaranteed by the United States of America or any agency or
instrumentality of the United States of America the obligations of which are
backed by the full faith and credit of the United States of America;

      (ii) (a) demand or time deposits, federal funds or bankers' acceptances
issued by any depository institution or trust company incorporated under the
laws of the United States of America or any state thereof and subject to
supervision and examination by federal and/or state banking authorities,
provided that the commercial paper and/or the short-term deposit rating and/or
the long-term unsecured debt obligations or deposits of such depository
institution or trust company at the time of such investment or contractual
commitment providing for such investment are rated in one of the two highest
rating categories by each Rating Agency and (b) any other demand or time deposit
or certificate of deposit that is fully insured by the FDIC;

      (iii) repurchase obligations with respect to (a) any security described in
clause (i) above or (b) any other security issued or guaranteed by an agency or
instrumentality of the United States of America, the obligations of which are
backed by the full faith and credit of the United States of America, in either
case entered into with a depository institution or trust company (acting as
principal) described in clause (ii)(a) above;

      (iv) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of America or any
state thereof that are rated in the highest rating categories by each Rating
Agency at the time of such investment or contractual commitment providing for
such investment; provided, however, that securities issued by any particular
corporation will not be Permitted Investments to the extent that investments
therein will cause the then outstanding principal amount of securities issued by
such corporation and held as Permitted Investments to exceed 10% of the
aggregate outstanding principal balances and amounts of all the Permitted
Investments;



                                      M-2-6

<PAGE>



      (v) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a specified
date not more than one year after the date of issuance thereof) which are rated
in the highest rating categories by each Rating Agency at the time of such
investment;

      (vi) any other demand, money market or time deposit, obligation, security
or investment as may be acceptable to each Rating Agency and the NIMs Insurer;
and

      (vii) any money market funds the collateral of which consists of
obligations fully guaranteed by the United States of America or any agency or
instrumentality of the United States of America the obligations of which are
backed by the full faith and credit of the United States of America (which may
include repurchase obligations secured by collateral described in clause (i))
and which money market funds are rated in one of the two highest rating
categories by each Rating Agency;

provided, however, that no instrument or security shall be a Permitted
Investment if such instrument or security evidences a right to receive only
interest payments with respect to the obligations underlying such instrument or
if such security provides for payment of both principal and interest with a
yield to maturity in excess of 120% of the yield to maturity at par; and
provided further that any such instrument or security must be payable on demand
or on a specified date not later than the Remittance Date on which amounts held
therein are required to be distributed.

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

      Prepayment Interest Shortfall: With respect to any Mortgage Loan that was
subject to a Full Principal Prepayment or Partial Principal Prepayment during
any Due Period, which Full Principal Prepayment or Partial Principal Prepayment
was applied to such Mortgage Loan prior to such Mortgage Loan's Due Date in such
Due Period, the amount of interest (adjusted to the applicable Mortgage Loan
Remittance Rate) that would have accrued on the amount of such Full Principal
Prepayment or Partial Principal Prepayment during the period commencing on the
date as of which such Full Principal Prepayment or Partial Principal Prepayment
was applied to such Mortgage Loan and ending on the day immediately preceding
such Due Date, inclusive.

      Primary Mortgage Insurance Policy: Each primary policy of mortgage
insurance, or any replacement policy therefor obtained by the Servicer pursuant
to Section 4.08.

      Prime Rate: The prime rate of U.S. money center banks as published from
time to time in The Wall Street Journal.



                                      M-2-7

<PAGE>



      Principal Prepayment: Any payment or other recovery of principal on a
Mortgage Loan, full or partial, which is received in advance of its scheduled
Due Date, including any prepayment charge or premium thereon, 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.

      Qualified Depository: A deposit account or accounts maintained with a
federal or state chartered depository institution the deposits in which are
insured by the FDIC to the applicable limits and the short-term unsecured debt
obligations of which (or, in the case of a depository institution that is a
subsidiary of a holding company, the short-term unsecured debt obligations of
such holding company) are rated A-2 by Standard & Poor's Ratings Services or
Prime-1 by Moody's Investors Service, Inc. (or a comparable rating if another
rating agency is specified by the Owner by written notice to the Servicer) at
the time any deposits are held on deposit therein.

      Qualified Insurer: An insurance company duly qualified as such under the
laws of the states in which the Mortgaged Properties are located, duly
authorized and licensed in such states to transact the applicable insurance
business and to write the insurance provided.

      Rating Agency: Standard & Poor's Ratings Service, a division of The McGraw
Hill Companies Inc., Moody's Investors Service, Inc. or Fitch, Inc.

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

      REMIC Provisions: The provisions of the federal income tax law relating to
a REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter 1,
Subtitle A of the Code, and related provisions, and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.

      Remittance Date: The 18th day of any month, or if such 18th day is not a
Business Day, the first Business Day immediately preceding such 18th day. The
first Remittance Date shall occur on April 16, 2004.

      REO Disposition: The final sale by the Servicer of any REO Property.

      REO Disposition Proceeds: Amounts received by the Servicer in connection
with a related REO Disposition.

      REO Property: A Mortgaged Property acquired by the Servicer on behalf of
the Owner as described in Section 4.13.

      Servicer: Home Star Mortgage Services LLC, or any of its successors in
interest or any successor under this Agreement appointed as herein provided.


                                      M-2-8

<PAGE>



      Servicing Advances: All customary, reasonable and necessary
"out-of-pocket" costs and expenses (including reasonable attorneys' fees and
disbursements) incurred in the performance by the Servicer of its servicing
obligations relating to each Mortgage Loan, including the cost of (a) the
inspection, preservation, restoration and protection of the Mortgaged Property,
(b) any enforcement, administrative or judicial proceedings, or any legal work
or advice specifically related to servicing the Mortgage Loans, including
foreclosures, bankruptcies, condemnations, drug seizures, elections,
foreclosures by subordinate or superior lienholders, and other legal actions
incidental to the servicing of the Mortgage Loans (provided that such expenses
are reasonable and that the Servicer specifies the Mortgage Loan(s) to which
such expenses relate), (c) the management and liquidation of the Mortgaged
Property if the Mortgaged Property is acquired in full or partial satisfaction
of the Mortgage, (d) taxes, assessments, water rates, sewer rates and other
charges which are or may become a lien upon the Mortgaged Property, and Primary
Mortgage Insurance Policy premiums and fire and hazard insurance coverage and
(e) compliance with the obligations under Section 4.08.

      Servicing Fee: With respect to each Mortgage Loan, the amount of the
annual fee the Owner shall pay to the Servicer, which shall, for a period of one
full month, be equal to one-twelfth of the product of (a) the applicable
Servicing Fee Rate and (b) the outstanding principal balance of such Mortgage
Loan. Such fee shall be payable monthly, computed on the basis of the same
principal amount and period respecting which any related interest payment on a
Mortgage Loan is computed. The obligation of the Owner to pay the Servicing Fee
is limited to, and the Servicing Fee is payable from the interest portion of
such Monthly Payments, Liquidation Proceeds, Insurance Proceeds, REO Disposition
Proceeds and Condemnation Proceeds collected by the Servicer or as otherwise
provided under Section 4.05.

      Servicing Fee Rate:  0.50%.

      Servicing File: The documents, records and other items pertaining to a
particular Mortgage Loan, and any additional documents relating to such Mortgage
Loan as are in, or as may from time to time come into, the Servicer's
possession.

      Servicing Officer: Any officer of the Servicer involved in, or responsible
for, the administration and servicing of the Mortgage Loans whose name appears
on a list of servicing officers furnished by the Servicer to the Owner upon
request, as such list may from time to time be amended.

      Trust Agreement: Any trust agreement, pooling and servicing agreement,
indenture or comparable documents by and among some or all of the Owner, the
Master Servicer and a Trustee (and which may include other parties) creating a
trust and/or otherwise effectuating a pass-through transfer.

      Any capitalized terms used and not defined herein shall have the meanings
ascribed to such terms in the related Trust Agreement.


                                      M-2-9

<PAGE>



                                   ARTICLE II
        SERVICING OF MORTGAGE LOANS; POSSESSION OF SERVICING FILES; BOOKS
                AND RECORDS; DELIVERY OF MORTGAGE LOAN DOCUMENTS

      Section 2.01  Servicing of Mortgage Loans.

      The Servicer does hereby agree to service the Mortgage Loans, from and
after the Effective Date, pursuant to the terms of this Agreement. The Mortgage
Loans subject to this Agreement are described in the Mortgage Loan Schedule
attached hereto.

      Section 2.02  Maintenance of Servicing Files.

      The Servicer shall maintain a Servicing File consisting of all documents
necessary to service the Mortgage Loans. The possession of each Servicing File
by the Servicer is for the sole purpose of servicing the related Mortgage Loan,
and such retention and possession by the Servicer is in a custodial capacity
only. The Servicer acknowledges that the ownership of each Mortgage Loan is
vested in the Owner. All rights arising out of the Mortgage Loans including all
funds received on or in connection with the Mortgage Loans and all records or
documents with respect to the Mortgage Loans prepared by or which come into the
possession of the Servicer shall be received and held by the Servicer for the
sole purpose of servicing the Mortgage Loans and such retention and possession
by the Servicer is in a custodial capacity only in trust for the exclusive
benefit of the Owner as the owner of the related Mortgage Loans. Any portion of
the related Servicing Files retained by the Servicer shall be appropriately
identified in the Servicer's computer system to reflect clearly the ownership of
the related Mortgage Loans by the Owner. The Servicer shall release its custody
of the contents of the related Servicing Files only in accordance with written
instructions of the Owner, except when such release is required as incidental to
the Servicer's servicing of the Mortgage Loans, such written instructions shall
not be required.

      Section 2.03  Books and Records.

      The Servicer shall be responsible for maintaining, and shall maintain, a
complete set of books and records for the Mortgage Loans which shall be
appropriately identified in the Servicer's computer system to clearly reflect
the ownership of the Mortgage Loan by the Owner. In particular, the Servicer
shall maintain in its possession, available for inspection by the Owner, or its
designee and shall deliver to the Owner upon demand, evidence of compliance with
all federal, state and local laws, rules and regulations, and requirements of
Fannie Mae and Freddie Mac, as applicable, including documentation as to the
method used in determining the applicability of the provisions of the Flood
Disaster Protection Act of 1973, as amended, to the Mortgaged Property,
documentation evidencing insurance coverage and eligibility of any condominium
project for approval by Fannie Mae and periodic inspection reports as required
by Section 4.13. To the extent that original documents are not required for
purposes of realization of Liquidation Proceeds or Insurance Proceeds, documents
maintained by the Servicer may be in the


                                     M-2-10

<PAGE>



form of microfilm or microfiche or such other reliable means of recreating
original documents, including optical imagery techniques . The Servicer shall
maintain with respect to each Mortgage Loan and shall make available for
inspection by the Owner or its designee, upon reasonable prior notice, the
related Servicing File (or copies thereof) during the time the Owner retains
ownership of a Mortgage Loan and thereafter in accordance with applicable laws
and regulations.

      Section 2.04  Transfer of Mortgage Loans.

      No transfer of a Mortgage Loan may be made unless such transfer is in
compliance with the terms hereof. For the purposes of this Agreement, the
Servicer shall be under no obligation to deal with any person with respect to
this Agreement or any Mortgage Loan unless a notice of the transfer of such
Mortgage Loan has been delivered to the Servicer in accordance with this Section
2.04. The Owner may, subject to the terms of this Agreement, sell and transfer
one or more of the Mortgage Loans in accordance with Section 11.10; provided,
however, that the transferee will not be deemed to be an Owner hereunder binding
upon the Servicer unless such transferee shall agree in writing to be bound by
the terms of this Agreement and an assignment and assumption of this Agreement
reasonably acceptable to the Servicer. The Owner also shall advise the Servicer
in writing of the transfer. Upon receipt of notice of the permitted transfer,
the Servicer shall mark its books and records to reflect such assignee's
ownership of the related Mortgage Loans, and the previous Owner shall be deemed
released from its obligations hereunder with respect to such Mortgage Loans from
and after the date of such sale or transfer without the necessity of any action
on the part of the Servicer. If the Servicer receives notification of a
transfer, including a final loan schedule, less than five (5) Business Days
before the last Business Day of the month, the Servicer's duties to remit and
report as required by Section 5 shall begin with the next Due Period.

      Section 2.05  Delivery of Mortgage Loan Documents.

      The Servicer shall forward to the Custodian on behalf of the Owner
original documents evidencing an assumption, modification, consolidation or
extension of any Mortgage Loan entered into in accordance with Section 4.01 or
6.01 promptly after their execution; provided, however, that the Servicer shall
provide the Custodian on behalf of the Owner with a certified true copy of any
such document submitted for recordation promptly after its execution, and shall
provide the original of any document submitted for recordation or a copy of such
document certified by the appropriate public recording office to be a true and
complete copy of the original promptly after receipt thereof, but in no event
later than 240 days after its execution, provided, however, that if delivery is
not completed within 240 days solely due to delays in making such delivery by
reason of the fact that such documents shall not have been returned by the
appropriate recording office, the Servicer shall continue to use its best
efforts to obtain such documents and effect delivery as soon as possible after
its receipt thereof.



                                     M-2-11

<PAGE>



      From time to time the Servicer may have a need for Mortgage Loan Documents
to be released by the Custodian. If the Servicer shall require any of the
Mortgage Loan Documents, the Servicer shall notify the Custodian in writing of
such request in the form of the request for release attached hereto as Exhibit
D. During the time that any such documentation is held by the Servicer, such
possession is in trust for the benefit of the Owner, and the Servicer shall
return such documentation to the Custodian upon the request of the Owner or when
the Servicer's need therefore no longer exists.

      Section 2.06  Tax Service Contracts.

      In the event that a Mortgage Loan is not subject to a fully assignable
life of loan tax servicer contract with Fidelity National Real Estate Tax
Service which is assignable to the Servicer or any subsequent Servicer without
the payment of any cost or fee, the Servicer shall acquire a tax service
contract for any such Mortgage Loan. The Servicer shall deliver an invoice to
the Owner with respect to the costs of acquiring such tax service contracts, and
Owner shall remit the cost of such tax service contracts to the Servicer within
ten business days of receipt of invoice.

                                   ARTICLE III
          REPRESENTATIONS AND WARRANTIES OF THE SERVICER AND THE OWNER

      Section 3.01 Representations of the Servicer.

      The Servicer hereby represents, warrants and covenants to the Owner that,
as of the Effective Date:

      (a) The Servicer is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization and has all licenses
necessary to carry on its business as now being conducted and is licensed,
qualified and in good standing in each state where a Mortgaged Property is
located if the laws of such state require licensing or qualification in order to
conduct business of the type conducted by the Servicer, and in any event the
Servicer is in compliance with the laws of any such state to the extent
necessary to ensure the enforceability of the related Mortgage Loan and the
servicing of such Mortgage Loan in accordance with the terms of this Agreement;
the Servicer has the full corporate power and authority to execute and deliver
this Agreement and to perform in accordance herewith; the execution, delivery
and performance of this Agreement (including all instruments of transfer to be
delivered pursuant to this Agreement) by the Servicer and the consummation of
the transactions contemplated hereby have been duly and validly authorized; this
Agreement evidences the valid, binding and enforceable obligation of the
Servicer; and all requisite corporate action has been taken by the Servicer to
make this Agreement valid and binding upon the Servicer in accordance with its
terms;

      (b) The consummation of the transactions contemplated by this Agreement
are in the ordinary course of business of the Servicer, who is in the business
of servicing loans;


                                     M-2-12

<PAGE>



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

      (d) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Servicer of or compliance by the Servicer with this
Agreement, or if required, such approval has been obtained prior to the
Effective Date;

      (e) The Servicer is an approved seller/servicer of conventional
residential mortgage loans for Fannie Mae or Freddie Mac, with the facilities,
procedures, and experienced personnel necessary for the sound servicing of
mortgage loans of the same type as the Mortgage Loans. The Servicer is a HUD
approved mortgagee and is in good standing to service mortgage loans for Fannie
Mae or Freddie Mac, and no event has occurred, including but not limited to a
change in insurance coverage, which would make the Servicer unable to comply
with Fannie Mae or Freddie Mac eligibility requirements or which would require
notification to either Fannie Mae or Freddie Mac;

      (f) Neither this Agreement nor any statement, report or other document
furnished or to be furnished pursuant to this Agreement or in connection with
the transactions contemplated hereby contains any untrue statement of fact or
omits to state a fact necessary to make the statements contained therein, in
light of the circumstances under which they were made, not misleading; and

           (No Waiver of prepayment charges. The Servicer will not waive any
prepayment charge unless it is waived in accordance with the standard set forth
in Section 4.16.

      Section 3.02  Representations of the Owner.

      The Owner represents, warrants and covenants to the Servicer as of the
Effective Date:

      (a) The Owner is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization;

      (b) The Owner has the full power and authority to execute and deliver this
Agreement and to perform in accordance herewith; the execution, delivery and
performance of this Agreement (including all instruments of transfer to be
delivered pursuant to this Agreement) by the Owner and the consummation of the
transactions contemplated hereby have been duly and


                                     M-2-13

<PAGE>



validly authorized; this Agreement evidences the valid, binding and enforceable
obligation of the Owner; and all requisite action has been taken by the Owner to
make this Agreement valid and binding upon the Owner in accordance with its
terms; and

      (c) The Owner holds the entire legal and beneficial title to each Mortgage
Loan. The information provided to Servicer by Owner, and each Mortgage File, is
complete, true and accurate in all material respects.

                                   ARTICLE IV
                 ADMINISTRATION AND SERVICING OF MORTGAGE LOANS

      Section 4.01  Servicer to Act as Servicer.

      The Servicer, as independent contract servicer, shall service and
administer the Mortgage Loans in accordance with this Agreement and with
Accepted Servicing Practices (giving due consideration to the Owner's reliance
on the Servicer), and shall have full power and authority, acting alone, to do
or cause to be done any and all things in connection with such servicing and
administration which the Servicer may deem necessary or desirable and consistent
with the terms of this Agreement and with Accepted Servicing Practices. If
reasonably required by the Servicer, the Owner shall furnish the Servicer with
any powers of attorney and other documents necessary or appropriate to enable
the Servicer to carry out its servicing and administrative duties under this
Agreement.

      Consistent with the terms of this Agreement, the Servicer may, with the
consent of the NIMs Insurer, waive, modify or vary any term of any Mortgage Loan
or consent to the postponement of any such term or in any manner grant
indulgence to any Mortgagor if in the Servicer's reasonable and prudent
determination such waiver, modification, postponement or indulgence is not
materially adverse to the Owner; provided, however, that unless the related
Mortgagor is in default with respect to the Mortgage Loan or such default is, in
the judgment of the Servicer, reasonably foreseeable, the Servicer shall not
permit any modification with respect to any Mortgage Loan that would change the
Mortgage Interest Rate, forgive the payment of principal or interest, reduce or
increase the outstanding principal balance (except for actual payments of
principal) or change the final maturity date on such Mortgage Loan, and,
provided further, that the NIMs Insurer's prior written consent shall be
required for any modification, waiver or amendment if the aggregate number of
outstanding Mortgage Loans which have been modified, waived or amended exceeds
5% of the number of Mortgage Loans subject to this Agreement as of the Effective
Date. In the event of any such modification which permits the deferral of
interest or principal payments on any Mortgage Loan, the Servicer shall, on the
Business Day immediately preceding the related Remittance Date in any month in
which any such principal or interest payment has been deferred, deposit in the
Custodial Account from its own funds, in accordance with Section 4.04 and
Section 5.03, the difference between (a) such month's principal and one month's
interest at the related Mortgage Loan Remittance Rate on the unpaid principal
balance of such Mortgage Loan and (b) the amount paid by the Mortgagor. The


                                     M-2-14

<PAGE>



Servicer shall be entitled to reimbursement for such advances to the same extent
as for all other advances pursuant to Section 4.05. Without limiting the
generality of the foregoing, the Servicer shall continue, and is hereby
authorized and empowered, to prepare, execute and deliver, all instruments of
satisfaction or cancellation, or of partial or full release, discharge and all
other comparable instruments, with respect to the Mortgage Loans and with
respect to the Mortgaged Properties.

      Notwithstanding anything in this Agreement to the contrary, if a REMIC
election is made, the Servicer shall not (unless the related Mortgagor is in
default with respect to the Mortgage Loan or such default is, in the judgment of
the Servicer, reasonably foreseeable) make or permit any modification, waiver or
amendment of any term of any Mortgage Loan that would both (i) effect an
exchange or reissuance of such Mortgage Loan under Section 1001 of the Code (or
Treasury regulations promulgated thereunder) and (ii) cause the related REMIC to
fail to qualify as a REMIC under the Code or the imposition of any tax on
"prohibited transactions" or "contributions" after the "startup date" of such
REMIC under the REMIC Provisions.

      The Servicer shall perform all of its servicing responsibilities hereunder
or may, with the consent of the NIMs Insurer, cause a subservicer to perform any
such servicing responsibilities on its behalf, but the use by the Servicer of a
subservicer shall not release the Servicer from any of its obligations hereunder
and the Servicer shall remain responsible hereunder for all acts and omissions
of each subservicer as fully as if such acts and omissions were those of the
Servicer. Any such subservicer must be a Fannie Mae approved seller/servicer or
a Freddie Mac approved seller/servicer in good standing and no event shall have
occurred, including but not limited to, a change in insurance coverage, which
would make it unable to comply with the eligibility requirements for
seller/servicers imposed by Fannie Mae or Freddie Mac, or which would require
notification to Fannie Mae or Freddie Mac. The Servicer shall pay all fees and
expenses of each subservicer from its own funds, and a subservicer's fee shall
not exceed the Servicing Fee.

      At the cost and expense of the Servicer, without any right of
reimbursement from the Custodial Account, with the consent of the NIMs Insurer,
the Servicer shall be entitled to terminate the rights and responsibilities of a
subservicer and arrange for any servicing responsibilities to be performed by a
successor subservicer meeting the requirements in the preceding paragraph;
provided, however, that nothing contained herein shall be deemed to prevent or
prohibit the Servicer, at the Servicer's option, with the consent of the NIMs
Insurer, from electing to service the related Mortgage Loans itself. In the
event that the Servicer's responsibilities and duties under this Agreement are
terminated pursuant to Section 8.04, 9.01 or 10.01, and if requested to do so by
the Owner or the NIMs Insurer, the Servicer shall at its own cost and expense
terminate the rights and responsibilities of each subservicer effective as of
the date of termination of the Servicer. The Servicer shall pay all fees,
expenses or penalties necessary in order to terminate the rights and
responsibilities of each subservicer from the Servicer's own funds without
reimbursement from the Owner. Each subservicing agreement shall provide that a
successor servicer shall have the option to terminate such agreement with
payment of any fees if the predecessor Servicer is terminated or resigns.


                                     M-2-15

<PAGE>



      Notwithstanding any of the provisions of this Agreement relating to
agreements or arrangements between the Servicer and a subservicer or any
reference herein to actions taken through a subservicer or otherwise, the
Servicer shall not be relieved of its obligations to the Owner and shall be
obligated to the same extent and under the same terms and conditions as if it
alone were servicing and administering the Mortgage Loans. The Servicer shall be
entitled to enter into an agreement with a subservicer for indemnification of
the Servicer by the subservicer and nothing contained in this Agreement shall be
deemed to limit or modify such indemnification.

      Any subservicing agreement and any other transactions or services relating
to the Mortgage Loans involving a subservicer shall be deemed to be between such
subservicer and Servicer alone, and the Owner shall have no obligations, duties
or liabilities with respect to such Subservicer including no obligation, duty or
liability of Owner to pay such subservicer's fees and expenses. For purposes of
distributions and advances by the Servicer pursuant to this Agreement, the
Servicer shall be deemed to have received a payment on a Mortgage Loan when a
subservicer has received such payment.

      Section 4.02  Collection of Mortgage Loan Payments.

      Continually from the date hereof until the date each Mortgage Loan ceases
to be subject to this Agreement, the Servicer shall proceed with reasonable
diligence and in accordance with Accepted Servicing Practices, to collect all
payments due under each Mortgage Loan when the same shall become due and
payable. Further, the Servicer shall take reasonable care in ascertaining and
estimating annual ground rents, taxes, assessments, water rates, fire and hazard
insurance premiums, mortgage insurance premiums, and all other charges that, as
provided in the Mortgage Loan Documents, will become due and payable to the end
that the installments payable by the Mortgagors will be sufficient to pay such
charges as and when they become due and payable.

      Section 4.03  Realization Upon Defaulted Mortgage Loans.

      The Servicer shall use its reasonable efforts, consistent with Accepted
Servicing Practices, to foreclose upon or otherwise comparably convert the
ownership of properties securing such of the Mortgage Loans as come into and
continue in default and as to which no satisfactory arrangements can be made for
collection of delinquent payments pursuant to Section 4.01. The Servicer shall
use its reasonable efforts to realize upon defaulted Mortgage Loans in such
manner as will maximize the receipt of principal and interest by the Owner,
taking into account, among other things, the timing of foreclosure proceedings.
The foregoing is subject to the provisions that, in any case in which any
Mortgaged Property shall have suffered damage, the Servicer shall not be
required to expend its own funds toward the restoration of such property unless
it shall determine in its discretion (i) that such restoration will increase the
proceeds of liquidation of the related Mortgage Loan to the Owner after
reimbursement to itself for such expenses, and (ii) that such expenses will be
recoverable by the Servicer through Insurance


                                     M-2-16

<PAGE>



Proceeds or Liquidation Proceeds from the related Mortgaged Property, as
contemplated in Section 4.05. The Servicer shall be responsible for all costs
and expenses incurred by it in any such proceedings or functions as Servicing
Advances; provided, however, that it shall be entitled to reimbursement therefor
as provided in Section 4.05. Notwithstanding anything to the contrary contained
herein, in connection with a foreclosure or acceptance of a deed in lieu of
foreclosure, in the event the Servicer has reasonable cause to believe that a
Mortgaged Property is contaminated by hazardous or toxic substances or wastes,
or if the Owner otherwise requests an environmental inspection or review of such
Mortgaged Property, such an inspection or review is to be conducted by a
qualified inspector. Upon completion of the inspection, the Servicer shall
promptly provide the Owner and the NIMs Insurer with a written report of the
environmental inspection. After reviewing the environmental inspection report,
the Owner (with the consent of the NIMs Insurer) shall direct the Servicer as to
how the Servicer shall proceed with respect to the Mortgaged Property, and the
Servicer shall follow the Owner's directions with respect thereto.

      Section 4.04 Establishment of Custodial Accounts; Deposits in Custodial
Accounts.

      The Servicer shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan separate and apart from any of its own funds and
general assets and shall establish and maintain one or more Custodial Accounts.
Any funds in a Custodial Account may be invested in Permitted Investments for
the benefit of the Owner (with any income earned thereon for the benefit of the
Servicer), provided that in the event that amounts on deposit in the Custodial
Account exceed the amount fully insured by the FDIC (the "Insured Amount"), the
Servicer shall be obligated to invest the excess amount over the Insured Amount
in Permitted Investments on the same Business Day as such excess amount becomes
present in the Custodial Account. Any such Permitted Investment shall mature no
later than the Business Day immediately preceding the related Remittance Date.
Funds deposited in the Custodial Account may be drawn on by the Servicer only in
accordance with Section 4.05. The creation of any Custodial Account shall be
evidenced by an account certification in the form shown in Exhibit B hereto. The
original of such account certification shall be furnished to the Owner, or a
copy to the NIMs Insurer, upon reasonable request. The NIMs Insurer, Master
Servicer and the Trustee shall be notified of any change in the location of the
Custodial Account. The Servicer acknowledges and agrees that the Servicer shall
bear any losses incurred with respect to Permitted Investments. The amount of
any such losses shall be immediately deposited by the Servicer in the Custodial
Account, out of the Servicer's own funds, with no right to reimbursement
therefor.

      The Servicer shall deposit in the Custodial Account within two (2)
Business Days of Servicer's receipt, and retain therein, the following
collections:

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



                                     M-2-17

<PAGE>



      (ii) all payments on account of interest on the Mortgage Loans adjusted to
the related Mortgage Loan Remittance Rate;

      (iii) all Liquidation Proceeds;

      (iv) any net amounts received by the Servicer in connection with any REO
Property pursuant to Section 4.13;

      (v) all Insurance Proceeds including amounts required to be deposited
pursuant to Sections 4.08, 4.10 and 4.11, other than proceeds to be held in a
restricted escrow account and applied to the restoration or repair of the
Mortgaged Property or released to the Mortgagor in accordance with Accepted
Servicing Practices, the Mortgage Loan Documents or applicable law;

      (vi) all Condemnation Proceeds affecting any Mortgaged Property other than
proceeds to be held in a restricted escrow account and applied to the
restoration or repair of the Mortgaged Property or released to the Mortgagor in
accordance with Accepted Servicing Practices, the Mortgage Loan Documents or
applicable law;

      (vii) any Monthly Advances as provided in Section 5.03;

      (viii)any amounts required to be deposited in the Custodial Account
pursuant to Sections 4.01, 4.14, 6.01 and 6.02; and

      (ix) with respect to each Full Principal Prepayment or Partial Principal
Prepayment, any Prepayment Interest Shortfall, to the extent of the Servicer's
aggregate Servicing Fee received with respect to the related Due Period (the
"Compensating Interest Amount").

      The foregoing requirements for deposit in the Custodial Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of Servicing Fees and Ancillary Income
need not be deposited by the Servicer in the Custodial Account and may be
retained by the Servicer as compensation.

      Section 4.05  Permitted Withdrawals From the Custodial Account.

      The Servicer may, from time to time, make withdrawals from the Custodial
Account for the following purposes:

      (i) to make payments to the Owner in the amounts and in the manner
provided for in Section 5.01;

      (ii) to reimburse itself for Monthly Advances, the Servicer's right to
reimburse itself pursuant to this subclause (ii) being limited to amounts
received on the related Mortgage Loan


                                     M-2-18

<PAGE>



which represent late collections (net of the related Servicing Fees) of
principal and/or interest respecting which any such Monthly Advance was made;

      (iii) to reimburse itself for unreimbursed Servicing Advances and Monthly
Advances and unpaid Servicing Fees, the Servicer's right to reimburse itself
pursuant to this subclause (iii) with respect to any Mortgage Loan being limited
to Liquidation Proceeds, Condemnation Proceeds, and Insurance Proceeds and REO
Disposition Proceeds related to such Mortgage Loan;

      (iv) to pay to itself as servicing compensation (a) any interest earned on
funds in the Custodial Account (all such interest to be withdrawn monthly not
later than each Remittance Date) and (b) any Servicing Fee to which the Servicer
is entitled in accordance with the terms hereof to the extent such Servicing Fee
has not been paid to or retained by the Servicer;

      (v) to reimburse itself for any Nonrecoverable Advances;

      (vi) to transfer funds to another Qualified Depository in accordance with
Section 4.09 hereof;

      (vii) to remove funds deposited in the Custodial Account in error by the
Servicer; and

      (viii)to clear and terminate the Custodial Account upon the termination of
this Agreement.

      Section 4.06 Establishment of Escrow Accounts; Deposits in Escrow
Accounts.

      The Servicer shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan which constitute Escrow Payments separate and
apart from any of its own funds and general assets and shall establish and
maintain one or more Escrow Accounts. Any funds deposited in an Escrow Account
may be invested in Permitted Investments. Funds deposited in an Escrow Account
may be drawn on by the Servicer in accordance with Section 4.07. The creation of
any Escrow Account shall be evidenced by an account certification in the form
shown in Exhibit C. The original of such account certification shall be
furnished to the Owner upon request. The Servicer acknowledges and agrees that
the Servicer shall bear any losses incurred with respect to Permitted
Investments. The amount of any such losses shall be immediately deposited by the
Servicer in the Escrow Account out of the Servicer's own funds, with no right to
reimbursement therefor.

      The Servicer shall deposit in the Escrow Account or Accounts within two
(2) Business Days of Servicer's receipt, and retain therein:

      (i) all Escrow Payments collected on account of the Mortgage Loans, for
the purpose of effecting timely payment of any items as are required under the
terms of this Agreement; and



                                     M-2-19

<PAGE>



      (ii) all Servicing Advances for Mortgagors whose Escrow Payments are
insufficient to cover escrow disbursements.

      The Servicer shall make withdrawals from an Escrow Account only to effect
such payments as are required under this Agreement, and for such other purposes
as shall be as set forth in and in accordance with Section 4.07. Except as
provided in Section 4.07, the Servicer shall be entitled to retain any interest
paid on funds deposited in an Escrow Account by the Qualified Depository.

      Section 4.07  Permitted Withdrawals From Escrow Account.

      Withdrawals from the Escrow Account may be made by the Servicer only:

      (i) to effect timely payments of ground rents, taxes, assessments, water
rates, fire and hazard insurance premiums, Primary Mortgage Insurance Policy
premiums, if applicable, and comparable items;

      (ii) to reimburse the Servicer for any Servicing Advance made by the
Servicer with respect to a related Mortgage Loan but only from amounts received
on the related Mortgage Loan which represent late payments or collections of
Escrow Payments thereunder;

      (iii) to refund to the Mortgagor any funds as may be determined to be
overages;

      (iv) for transfer to the Custodial Account in connection with the
liquidation of a Mortgage Loan or an acquisition of REO Property;

      (v) to pay to the Servicer, or to the Mortgagor to the extent required by
law, any interest paid on the funds deposited in the Escrow Account;

      (vi) to remove funds placed in an Escrow Account in error by the Servicer;
and

      (vii) to clear and terminate the Escrow Account on the termination of this
Agreement.

      As part of its servicing duties, the Servicer shall pay to the Mortgagors
interest on funds in an Escrow Account, to the extent required by law, and to
the extent that interest earned on funds in the Escrow Account is insufficient,
shall pay such interest from its own funds, without any reimbursement therefor.

      Section 4.08 Payment of Taxes, Insurance and Other Charges, Maintenance of
Primary Mortgage Insurance Policies, Collections Thereunder.

      With respect to each Mortgage Loan, the Servicer shall maintain accurate
records reflecting the status of ground rents, taxes, assessments, water rates
and other charges which are


                                     M-2-20

<PAGE>



or may become a lien upon the Mortgaged Property and the status of Primary
Mortgage Insurance Policy premiums and fire and hazard insurance coverage and,
with regard to Escrow Mortgage Loans, shall obtain, from time to time, all bills
for the payment of such charges, including renewal premiums and shall effect
payment thereof prior to the applicable penalty or termination date and at a
time appropriate for securing maximum discounts allowable, employing for such
purpose deposits of the Mortgagor in the Escrow Account which shall have been
estimated and accumulated by the Servicer in amounts sufficient for such
purposes, as allowed under the terms of the Mortgage or applicable law. To the
extent that the Mortgage does not provide for Escrow Payments, the Servicer
shall use commercially reasonable efforts consistent with Accepted Servicing
Practices to determine that any such payments are made by the Mortgagor when
due. With regard to Escrow Mortgage Loans, the Servicer assumes full
responsibility for the timely payment of all such bills and shall effect timely
payments of all such bills irrespective of the Mortgagor's faithful performance
in the payment of same or the making of the Escrow Payments and shall make
advances from its own funds to effect such payments. With regard to Non-Escrow
Mortgage Loans, the Servicer shall make Servicing Advances to effect such
payments within such time period as to avoid the loss of the related Mortgaged
Property by foreclosure of a tax or other lien and to ensure that the Mortgaged
Property is not uninsured for any reason.

      The Servicer shall maintain in full force and effect each Primary Mortgage
Insurance Policy, that as of the Effective Date, was in full force and effect
with respect to any Mortgage Loan. Such coverage will be maintained and will not
be waived by the Servicer except in accordance with applicable law. The Servicer
shall not cancel, except in accordance with applicable law, or refuse to renew
any Primary Mortgage Insurance Policy that is in force as of the Effective Date
unless a replacement Primary Mortgage Insurance Policy for such canceled or
nonrenewed policy is obtained from and maintained with a Qualified Insurer. The
Servicer shall not take any action which would result in noncoverage under any
applicable Primary Mortgage Insurance Policy of any loss which, but for the
actions of the Servicer would have been covered thereunder. In connection with
any assumption or substitution agreement entered into or to be entered into
pursuant to Section 6.01, the Servicer shall promptly notify the insurer under
the related Primary Mortgage Insurance Policy, if any, of such assumption or
substitution of liability in accordance with the terms of such policy and shall
take all actions which may be required by such insurer as a condition to the
continuation of coverage under the Primary Mortgage Insurance Policy. If such
Primary Mortgage Insurance Policy is terminated as a result of such assumption
or substitution of liability, the Servicer shall obtain a replacement Primary
Mortgage Insurance Policy as provided above.

      In connection with its activities as servicer, the Servicer agrees to
prepare and present, on behalf of itself and the Owner, claims to the insurer
under any Private Mortgage Insurance Policy in a timely fashion in accordance
with the terms of such Primary Mortgage Insurance Policy and, in this regard, to
take such action as shall be necessary to permit recovery under any Primary
Mortgage Insurance Policy respecting a defaulted Mortgage Loan. Pursuant to
Section 4.04, any amounts collected by the Servicer under any Primary Mortgage
Insurance Policy shall be deposited in the Custodial Account, subject to
withdrawal pursuant to Section 4.05.


                                     M-2-21

<PAGE>



      Section 4.09  Transfer of Accounts.

      The Servicer may transfer the Custodial Account or the Escrow Account to a
different Qualified Depository from time to time. The Servicer shall notify the
Owner and the NIMs Insurer of any such transfer.

      Section 4.10  Maintenance of Hazard Insurance.

      The Servicer shall cause to be maintained for each Mortgage Loan fire and
hazard insurance with extended coverage as is customary in the area where the
Mortgaged Property is located in an amount which is equal to the lesser of (i)
the maximum insurable value of the improvements securing such Mortgage Loan and
(ii) the greater of (a) the outstanding principal balance of the Mortgage Loan,
and (b) the percentage such that the proceeds thereof shall be sufficient to
prevent the Mortgagor and/or the mortgagee from becoming a co-insurer. If the
Mortgaged Property is in an area identified in the Federal Register by the
Federal Emergency Management Agency as being a special flood hazard area that
has federally-mandated flood insurance requirements, the Servicer will cause to
be maintained a flood insurance policy meeting the requirements of the current
guidelines of the Federal Insurance Administration with a generally acceptable
insurance carrier, in an amount representing coverage not less than the least of
(i) the outstanding principal balance of the Mortgage Loan, (ii) the maximum
insurable value of the improvements securing such Mortgage Loan and (iii) the
maximum amount of insurance which is available under the Flood Disaster
Protection Act of 1973, as amended. The Servicer shall also maintain on each REO
Property, fire and hazard insurance with extended coverage in an amount which is
at least equal to the maximum insurable value of the improvements which are a
part of such property, liability insurance and, to the extent required and
available under the Flood Disaster Protection Act of 1973, as amended, flood
insurance in an amount as provided above. Any amounts collected by the Servicer
under any such policies other than amounts to be deposited in a restricted
escrow account and applied to the restoration or repair of the Mortgaged
Property or REO Property, or released to the Mortgagor in accordance with the
Servicer's normal servicing procedures, shall be deposited in the Custodial
Account, subject to withdrawal pursuant to Section 4.05. It is understood and
agreed that no other additional insurance need be required by the Servicer or
the Mortgagor or maintained on property acquired in respect of the Mortgage
Loans, other than as provided for under applicable state or federal laws and
regulations as shall at any time be in force and as shall require such
additional insurance. All such policies shall be endorsed with standard
mortgagee clauses with loss payable to the Servicer and its successors and/or
assigns and shall provide for at least thirty days prior written notice of any
cancellation, reduction in the amount or material change in coverage to the
Servicer. The Servicer shall not interfere with the Mortgagor's freedom of
choice in selecting either his insurance carrier or agent; provided, however,
that the Servicer shall not accept any such insurance policies from insurance
companies unless such companies currently reflect a General Policy Rating in
Best's Key Rating Guide of B:III or better and are licensed to do business in
the state wherein the property subject to the policy is located. All insurance
policies maintained pursuant to this Section 4.10 shall be maintained with a
Qualified Insurer.


                                     M-2-22

<PAGE>



      Section 4.11  Blanket Hazard Insurance.

      In the event that the Servicer shall obtain and maintain a blanket policy
with a Qualified Insurer insuring against fire and hazards of extended coverage
on all of the Mortgage Loans and provides coverage in an amount equal to the
amount required under Section 4.10, and otherwise complies with the requirements
of Section 4.10, the Servicer shall be deemed conclusively to have satisfied its
obligations under Section 4.10, it being understood and agreed that such blanket
policy may contain a deductible clause, in which case the Servicer shall, in the
event that there shall not have been maintained on the related Mortgaged
Property a policy complying with Section 4.10, and there shall have been a loss
which would have been covered by such policy, deposit in the Custodial Account
the difference, if any, between the amount that would have been payable under a
policy complying with Section 4.10 and the amount paid under such blanket
policy. Upon the request of the Owner, the Servicer shall cause to be delivered
to the Owner a certified true copy of such policy and a statement from the
insurer thereunder that such policy shall in no event be terminated or
materially modified without 30 days prior written notice to the Owner.

      Section 4.12  Fidelity Bond, Errors and Omissions Insurance.

      The Servicer shall maintain, at its own expense, with a Qualified Insurer,
a blanket Fidelity Bond and an errors and omissions insurance policy, with broad
coverage with responsible companies that meet the requirements of Fannie Mae on
all officers, employees and other persons acting in any capacity with regard to
the Mortgage Loans and who handle funds, money, documents and papers relating to
the Mortgage Loans. The Fidelity Bond and errors and omissions insurance shall
be in the form of the Mortgage Banker's Blanket Bond and shall protect and
insure the Servicer against losses, including forgery, theft, embezzlement,
fraud, errors and omissions and negligent acts of such persons. Such Fidelity
Bond and errors and omissions insurance shall also protect and insure the
Servicer against losses in connection with the failure to maintain any insurance
policies required pursuant to this Agreement and the release or satisfaction of
a Mortgage Loan without having obtained payment in full of the indebtedness
secured thereby. No provision of this Section 4.12 requiring the Fidelity Bond
and errors and omissions insurance shall diminish or relieve the Servicer from
its duties and obligations as set forth in this Agreement. The minimum coverage
under any such Fidelity Bond and insurance policy shall be at least equal to the
corresponding amounts acceptable to Fannie Mae in the Fannie Mae Guide or by
Freddie Mac in the Freddie Mac Guide. The Servicer shall, upon request of Owner
and the NIMs Insurer, deliver to the Owner and the NIMs Insurer a certificate
from the surety and the insurer as to the existence of the Fidelity Bond and
errors and omissions insurance policy and shall obtain a statement from the
surety and the insurer that such Fidelity Bond or insurance policy shall in no
event be terminated or materially modified without thirty days prior written
notice to the Owner and the NIMs Insurer. The Servicer shall notify the Owner
and the NIMs Insurer within five Business Days of receipt of notice that such
Fidelity Bond or insurance policy will be, or has been, materially modified or
terminated.



                                     M-2-23

<PAGE>



      Section 4.13  Title, Management and Disposition of REO Property.

      In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be taken in the name of the Owner or its designee. Any such Person or
Persons holding such title other than the Owner shall acknowledge in writing
that such title is being held as nominee for the benefit of the Owner.

      The Servicer shall assume the responsibility for marketing each REO
Property in accordance with Accepted Servicing Practices. Thereafter, the
Servicer shall continue to provide certain administrative services to the Owner
relating to such REO Property as set forth in this Section 4.13. The REO
Property must be sold within three years following the end of the calendar year
of the date of acquisition if a REMIC election has been made with respect to the
arrangement under which the Mortgage Loans and REO Property are held, unless (i)
the Servicer shall have delivered to the Owner an Opinion of Counsel acceptable
to the Owner and the NIMs Insurer, to the effect that the holding by the related
trust of such Mortgaged Property subsequent to such three-year period (and
specifying the period beyond such three-year period for which the Mortgaged
Property may be held) will not result in the imposition of taxes on "prohibited
transactions" of the related trust as defined in Section 860F of the Code, or
cause the related REMIC to fail to qualify as a REMIC, in which case the related
trust may continue to hold such Mortgaged Property (subject to any conditions
contained in such Opinion of Counsel), or (ii) the Servicer shall have applied
for, prior to the expiration of such three-year period, an extension of such
three-year period in the manner contemplated by Section 856(e)(3) of the Code,
in which case the three-year period shall be extended by the applicable period.
If a period longer than three years is permitted under the foregoing sentence
and is necessary to sell any REO Property, the Servicer shall report monthly to
the Owner as to progress being made in selling such REO Property.

      Notwithstanding any other provision of this Agreement, if a REMIC election
has been made, no Mortgaged Property held by a REMIC shall be rented (or allowed
to continue to be rented) or otherwise used for the production of income by or
on behalf of the related trust or sold in such a manner or pursuant to any terms
that would (i) cause such Mortgaged Property to fail to qualify at any time as
"foreclosure property" within a meaning of Section 860G(a)(8) of the Code, (ii)
subject the related trust to the imposition of any federal or state income taxes
on "net income from foreclosure property" with respect to such Mortgaged
Property within the meaning of Section 860G(c) of the Code, or (iii) cause the
sale of such Mortgaged Property to result in the receipt by the related trust or
any income from non-permitted assets as described in Section 860F(a) (2)(B) of
the Code, unless the Servicer has agreed to indemnify and hold harmless the
related trust with respect to the imposition of any such taxes.

      The Servicer shall, either itself or through an agent selected by the
Servicer and in accordance with Accepted Servicing Practices, manage, conserve,
protect and operate each REO Property. Each REO Disposition shall be carried out
by the Servicer at such price and upon such terms and conditions as the Servicer
deems to be in the best interest of the Owner and the related


                                     M-2-24

<PAGE>



terms and conditions are results of arm's-length negotiation. The REO
Disposition Proceeds from the sale of the REO Property shall be promptly
deposited in the Custodial Account. As soon as practical thereafter, the
expenses of such sale shall be paid and the Servicer shall reimburse itself for
any related Servicing Advances, Monthly Advances, made pursuant to Section 5.03,
and unpaid Servicing Fees.

      The Servicer shall cause each REO Property to be inspected promptly upon
the acquisition of title thereto and shall cause each REO Property to be
inspected at a frequency consistent with Accepted Servicing Practices. The
Servicer shall make or cause the inspector to make a written report of each such
inspection. Such reports shall be retained in the Servicing File and copies
thereof shall, upon reasonable request, be forwarded by the Servicer to the
Owner.

      Section 4.14  Notification of Adjustments.

      With respect to each Mortgage Loan, the Servicer shall adjust the Mortgage
Interest Rate on the related Interest Rate Adjustment Date in compliance with
requirements of applicable law and the related electronic data received on the
Mortgage and Mortgage Note. The Servicer shall execute and deliver any and all
necessary notices required under applicable law and the terms of the related
electronic data received on the Mortgage Note and Mortgage regarding the
Mortgage Interest Rate adjustments. The Servicer shall promptly, upon written
request by the Owner, deliver to the Owner such notifications and any additional
applicable data regarding such adjustments and the methods used to calculate and
implement such adjustments. Upon the discovery by the Servicer or the receipt of
notice from the Owner that the Servicer has failed to adjust a Mortgage Interest
Rate in accordance with the terms of the related Mortgage Note and Mortgage, the
Servicer shall immediately deposit in the Custodial Account from its own funds
the amount of any interest loss or deferral caused to the Owner thereby and
shall indemnify the Owner in respect of any liability as a result of such
shortfall; provided, however, that the Servicer shall not have an obligation to
pay any interest loss if the failure to appropriately adjust such Mortgage
Interest Rate is the direct result of inaccurate or incomplete information in
the electronic file provided in accordance with Section 2.01(iii) hereof.

      Section 4.15  Compliance with Applicable Laws.

      All requirements of any federal, state or local law applicable to the
servicing of the Mortgage Loans will be complied with by the Servicer in all
material respects.

      Section 4.16  Waiver of Prepayment Penalties.

      Except as provided below, the Servicer or any designee of the Servicer
shall not waive any prepayment charge with respect to any Mortgage Loan. If the
Servicer or its designee fails to collect a prepayment charge at the time of the
related prepayment of any Mortgage Loan subject to such prepayment charge, the
Servicer shall pay to the Owner at such time (by deposit to the


                                     M-2-25

<PAGE>



Custodial Account) an amount equal to the amount of the prepayment charge not
collected. The Owner warrants that the schedule of prepayment charges provided
to the Servicer shall be complete, true and accurate and may be relied on by the
Servicer in its calculation of prepayment charges. Notwithstanding the above,
the Servicer or its designee may waive a prepayment charge only if (i) the
related prepayment is not the result of a refinancing by the Servicer or its
designee, (ii) such waiver relates to a defaulted Mortgage Loan or a reasonably
foreseeable default, (iii) such waiver is standard and customary in servicing
similar mortgage loans to the Mortgage Loans, and (iv) such waiver, in the
reasonable judgment of the Servicer, would maximize recovery of total proceeds
from the Mortgage Loan, taking into account the amount of such prepayment charge
and the related Mortgage Loan. If a prepayment charge is waived as permitted by
meeting the standards described above, then the Servicer is required to pay the
amount of such waived prepayment charge, for the benefit of the holders of the
Class P Certificates (as defined in the related Trust Agreement), by depositing
such amount into the Custodial Account together with and at the time that the
amount prepaid on the related Mortgage Loan is required to be deposited into the
Custodial Account.

      Within 90 days of the earlier of discovery by the Servicer or receipt of
notice by the Servicer of the breach of the representation or covenant of the
Servicer set forth in this Section 4.16 which materially and adversely affects
the interests of the Holders of the Class P Certificates in any prepayment
charge, the Servicer shall remedy such breach as follows: if any of the
covenants made by the Servicer in this Section 4.16 is breached, the Servicer
must pay the amount of such waived prepayment charge, for the benefit of the
Holders of the Class P Certificates, by depositing such amount into the
Custodial Account.

                                    ARTICLE V
                              PAYMENTS TO THE OWNER

      Section 5.01  Remittances.

      On each Remittance Date the Servicer shall remit, by wire transfer of
immediately available funds, to the Owner (a) all amounts deposited in the
Custodial Account as of the close of business on the Determination Date (net of
charges against or withdrawals from the Custodial Account pursuant to Section
4.05), plus (b) all amounts, if any, which the Servicer is obligated to
distribute pursuant to Section 5.03, minus (c) any amounts attributable to
Principal Prepayments received after the end of the preceding month which
amounts shall be remitted on the following Remittance Date, together with the
Compensating Interest Amount required to be deposited in the Custodial Account
in connection with such Principal Prepayment in accordance with Section
4.04(ix); minus (d) any amounts attributable to Monthly Payments collected but
due on a Due Date or Dates subsequent to the first day of the month of the
Remittance Date, which amounts shall be remitted on the related Remittance Date
next succeeding the Due Period for such amounts.



                                     M-2-26

<PAGE>



      With respect to any remittance received by the Owner after the Business
Day on which such payment was due, the Servicer shall pay to the Owner interest
on any such late payment at an annual rate equal to the Prime Rate, adjusted as
of the date of each change, plus two percentage points, but in no event greater
than the maximum amount permitted by applicable law. Such interest shall be
deposited in the Custodial Account by the Servicer on the date such late payment
is made and shall cover the period commencing with the day following such
Business Day and ending with the Business Day on which such payment is made,
both inclusive. Such interest shall be remitted along with the distribution
payable on the next succeeding related Remittance Date. The payment by the
Servicer of any such interest shall not be deemed an extension of time for
payment or a waiver of any Event of Default by the Servicer.

      Section 5.02  Statements to the Owner.

      Not later than the tenth (10) calendar day, or if such day is not a
Business Day, the first Business Day immediately preceding the tenth calendar
day of the month of the related Remittance Date, the Servicer shall furnish to
the Owner and the NIMs Insurer, a monthly remittance advice in the format set
forth in Exhibit F attached hereto (or in such other electronic format mutually
agreed to by the Servicer and Owner), with regard to monthly loan remittance
data and Exhibit G (or in such other electronic format mutually agreed to by the
Servicer and Owner) with respect to defaulted mortgage loans, with a trial
balance report attached thereto, and such other loan level information
reasonably available to the Servicer and requested by the Owner. The Servicer
shall also furnish to the Owner and the NIMs Insurer (in such format mutually
agreed to by the Servicer and the Owner) a monthly report detailing loan level
prepayment charge collected and/or waived by the Servicer in accordance with
Section 4.16.

      Section 5.03  Monthly Advances by the Servicer.

      On the Business Day immediately preceding each Remittance Date, the
Servicer shall deposit in the Custodial Account from its own funds or from
amounts held for future distribution an amount equal to all Monthly Payments
(with interest adjusted to the Mortgage Loan Remittance Rate) which were due on
the Mortgage Loans during the applicable Due Period and which were delinquent at
the close of business on the immediately preceding Determination Date or which
were deferred pursuant to Section 4.01. Any amounts held for future distribution
and so used shall be replaced by the Servicer by deposit in the Custodial
Account on or before any future Remittance Date if funds in the Custodial
Account on such Remittance Date shall be less than payments to the Owner
required to be made on such Remittance Date. The Servicer's obligation to make
such Monthly Advances as to any Mortgage Loan will continue through the last
Monthly Payment due prior to the payment in full of the Mortgage Loan, or
through the last Remittance Date prior to the Remittance Date for the
distribution of all Liquidation Proceeds and other payments or recoveries
(including REO Disposition Proceeds, Insurance Proceeds and Condemnation
Proceeds) with respect to the Mortgage Loan; provided, however, that such
obligation shall cease if the Servicer determines, in its sole reasonable
opinion, that advances with respect to such Mortgage Loan are non-recoverable by
the Servicer from Liquidation


                                     M-2-27

<PAGE>



Proceeds, Insurance Proceeds, Condemnation Proceeds, or otherwise with respect
to a particular Mortgage Loan. In the event that the Servicer determines that
any such advances are non-recoverable, the Servicer shall provide the Owner with
a certificate signed by an officer of the Servicer evidencing such
determination.

      Section 5.04  Liquidation Reports.

      Upon the foreclosure sale of any Mortgaged Property or the acquisition
thereof by the Owner pursuant to a deed-in-lieu of foreclosure, the Servicer
shall submit to the Owner and the NIMs Insurer a liquidation report in the
format set forth in Exhibit H attached hereto (or in such other format mutually
agreed to by the Servicer and Owner) with respect to such Mortgaged Property.
The Servicer shall also provide reports on the status of REO Property containing
such information as Owner may reasonably require.

                                   ARTICLE VI
                          GENERAL SERVICING PROCEDURES

      Section 6.01  Assumption Agreements.

      The Servicer shall, to the extent it has knowledge of any conveyance or
prospective conveyance by any Mortgagor of a Mortgaged Property (whether by
absolute conveyance or by contract of, sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under any
"due-on-sale" clause to the extent permitted by law; provided, however, that the
Servicer shall not exercise any such rights if prohibited by law or the terms of
the Mortgage Note from doing so or if the exercise of such rights would impair
or threaten to impair any recovery under the related Primary Mortgage Insurance
Policy, if any. If the Servicer reasonably believes it is unable under
applicable law to enforce such "due-on-sale" clause, the Servicer shall enter
into an assumption agreement with the person to whom the Mortgaged Property has
been conveyed or is proposed to be conveyed, pursuant to which such person
becomes liable under the Mortgage Note and, to the extent permitted by
applicable state law, the Mortgagor remains liable thereon. If an assumption is
allowed pursuant to this Section 6.01, the Servicer, with the prior consent of
the primary mortgage insurer, if any, is authorized to enter into a substitution
of liability agreement with the person to whom the Mortgaged Property has been
conveyed or is proposed to be conveyed pursuant to which the original mortgagor
is released from liability and such Person is substituted as mortgagor and
becomes liable under the related Mortgage Note. Any such substitution of
liability agreement shall be in lieu of an assumption agreement.

      In connection with any such assumption or substitution of liability, the
Servicer shall follow its underwriting practices and procedures. With respect to
an assumption or substitution of liability, the Mortgage Interest Rate borne by
the related Mortgage Note and the amount of the Monthly Payment may not be
changed. The Servicer shall notify the Owner that any such


                                     M-2-28

<PAGE>



substitution of liability or assumption agreement has been completed by
forwarding to the Owner the original of any such substitution of liability or
assumption agreement, which document shall be added to the related Mortgage Loan
Documents and shall, for all purposes, be considered a part of such related
mortgage file to the same extent as all other documents and instruments
constituting a part thereof. All fees collected by the Servicer for entering
into an assumption or substitution of liability agreement shall belong to the
Servicer.

      Notwithstanding the foregoing paragraphs of this section or any other
provision of this Agreement, the Servicer shall not be deemed to be in default,
breach or any other violation of its obligations hereunder by reason of any
assumption of a Mortgage Loan by operation of law or any assumption which the
Servicer may be restricted by law from preventing, for any reason whatsoever.
For purposes of this Section 6.01, the term "assumption" is deemed to also
include a sale of the Mortgaged Property subject to the Mortgage that is not
accompanied by an assumption or substitution of liability agreement.

      Section 6.02 Satisfaction of Mortgages and Release of Mortgage Loan
Documents.

      Upon the payment in full of any Mortgage Loan, the Servicer will
immediately notify the Custodian with a certification and request for release by
a Servicing Officer, which certification shall include a statement to the effect
that all amounts received in connection with such payment which are required to
be deposited in the Custodial Account pursuant to Section 4.04 have been so
deposited, and a request for delivery to the Servicer of the portion of the
Mortgage Loan Documents held by the Custodian. Upon receipt of such
certification and request, the Owner shall, or shall cause, the Custodian to
release, in accordance with the terms of the Custodial Agreement, the related
Mortgage Loan Documents to the Servicer and the Servicer shall prepare and
execute under the authority of a power of attorney delivered to the Servicer by
the Owner any satisfaction or release. No expense incurred in connection with
any instrument of satisfaction or deed of reconveyance shall be chargeable to
the Custodial Account.

      In the event the Servicer satisfies or releases a Mortgage without having
obtained payment in full of the indebtedness secured by the Mortgage or should
it otherwise prejudice any right the Owner may have under the mortgage
instruments, the Servicer, upon written demand, shall remit to the Owner within
two Business Days the then outstanding principal balance of the related Mortgage
Loan by deposit thereof in the Custodial Account. The Servicer shall maintain
the Fidelity Bond and errors and omissions insurance insuring the Servicer
against any loss it may sustain with respect to any Mortgage Loan not satisfied
in accordance with the procedures set forth herein.

      From time to time and as appropriate for the servicing or foreclosure of
the Mortgage Loans, including for the purpose of collection under any Primary
Mortgage Insurance Policy, upon request of the Servicer and delivery to the
Custodian of a servicing receipt signed by a Servicing Officer, all as provided
in the Custodial Agreement, the Servicer may request the Custodian to release to
the Servicer the portion of the Mortgage Loan Documents held by the


                                     M-2-29

<PAGE>



Custodian to the Servicer. Such servicing receipt shall obligate the Servicer to
promptly return the related Mortgage Loan Documents to the Custodian, when the
need therefor by the Servicer no longer exists, unless the Mortgage Loan has
been liquidated and the Liquidation Proceeds relating to the Mortgage Loan have
been deposited in the Custodial Account or such documents have been delivered to
an attorney, or to a public trustee or other public official as required by law,
for purposes of initiating or pursuing legal action or other proceedings for the
foreclosure of the Mortgaged Property either judicially or non-judicially, and
the Servicer has promptly delivered to the Owner or the Custodian a certificate
of a Servicing Officer certifying as to the name and address of the Person to
which such documents were delivered and the purpose or purposes of such
delivery.

      Section 6.03  Servicing Compensation.

      As compensation for its services hereunder, the Servicer shall be entitled
to withdraw from the Custodial Account or to retain from interest payments on
the Mortgage Loans the amounts provided for as the Servicer's Servicing Fee.
Additional servicing compensation in the form of Ancillary Income shall be
retained by the Servicer. The Servicer shall be required to pay all expenses
incurred by it in connection with its servicing activities hereunder and shall
not be entitled to reimbursement therefor except as specifically provided for.

      Section 6.04  Annual Statement as to Compliance.

      The Servicer shall deliver to the Owner and the Master Servicer, on or
before May 15, each year beginning May 15, 2005, an Officer's Certificate,
stating that (i) a review of the activities of the Servicer during the preceding
calendar year and of performance under this Agreement or similar agreements has
been made under such officer's supervision, and (ii) to the best of such
officer's knowledge, based on such review, the Servicer has fulfilled all its
responsibilities and obligations under this Agreement throughout such year, or,
if there has been a default in the fulfillment of any such responsibilities and
obligation, specifying each such default known to such officer and the nature
and status thereof and the action being taken by the Servicer to cure such
default.

      Section 6.05 Annual Independent Certified Public Accountants' Servicing
Report.

      On or before May 15th of each year beginning May 15, 2005, the Servicer
shall, or shall cause each related subservicer to, at its expense, cause a firm
of independent public accountants which is a member of the American Institute of
Certified Public Accountants to furnish a statement to the Owner to the effect
that such firm has examined certain documents and records relating to the
servicing of the mortgage loans similar in nature and that such firm is of the
opinion that the provisions of this or similar Agreements have been complied
with, and that, on the basis of such examination conducted in compliance with
the Uniform Single Attestation Program for Mortgage Bankers, nothing has come to
their attention which would indicate that such servicing has not been conducted
in compliance therewith, except for (i) such exceptions as


                                     M-2-30

<PAGE>



such firm shall believe to be immaterial, and (ii) such other exceptions as
shall be set forth in such statement. By providing Owner and the Master Servicer
a copy of a Uniform Single Attestation Program Report from their independent
public accountant's on an annual basis, Servicer shall be considered to have
fulfilled its obligations under this Section 6.05.

      Section 6.06  Owner's Right to Examine Servicer Records.

      The Owner or the NIMs Insurer shall have the right to examine and audit,
at its expense, upon reasonable notice to the Servicer, during business hours or
at such other times as might be reasonable under applicable circumstances, any
and all of the books, records, documentation or other information of the
Servicer, or held by another for the Servicer or on its behalf or otherwise,
which relate to the performance or observance by the Servicer of the terms,
covenants or conditions of this Agreement.

      The Servicer shall provide to the Owner, the NIMs Insurer and any
supervisory agents or examiners representing a state or federal governmental
agency having jurisdiction over the Owner access to any documentation regarding
the Mortgage Loans in the possession of the Servicer which may be required by
any applicable regulations. Such access shall be afforded without charge, upon
reasonable request, during normal business hours and at the offices of the
Servicer, and in accordance with the applicable federal or state government
regulations.

      Section 6.07 Compliance with REMIC Provisions.

      If a REMIC election has been made with respect to the arrangement under
which the Mortgage Loans and REO Property are held, the Servicer shall not take
any action, cause the REMIC to take any action or fail to take (or fail to cause
to be taken) any action that, under the REMIC Provisions, if taken or not taken,
as the case may be, could (i) endanger the status of the REMIC as a REMIC or
(ii) result in the imposition of a tax upon the REMIC (including but not limited
to the tax on "prohibited transactions" as defined in Section 860F(a)(2) of the
Code and the tax on "contribution" to a REMIC set forth in Section 860G(d) of
the Code unless the Servicer has received an Opinion of Counsel (at the expense
of the party seeking to take such actions) to the effect that the contemplated
action will not endanger such REMIC status or result in the imposition of any
such tax.

      Section 6.08  Non-solicitation.

      The Servicer shall not conduct any solicitation targeted to the Mortgagors
for the purpose of inducing or encouraging the early prepayment or refinancing
of the related Mortgage Loans. It is understood and agreed that promotions
undertaken by the Servicer or any agent or affiliate of the Servicer which are
directed to the general public at large, including mass mailings based on
commercially acquired mailing lists, newspaper, radio and television
advertisements, shall not constitute solicitation under this Section 6.08 nor is
the Servicer prohibited from responding to unsolicited requests or inquiries
made by a Mortgagor or an agent of a Mortgagor.


                                     M-2-31

<PAGE>



      Section 6.09  Annual Certification and Indemnification.

      (a) With respect to any Mortgage Loans that are subject to a pass-through
transfer or other securitization (a "Securitization") in which the filing of a
Sarbanes-Oxley Certification directly with the Securities and Exchange
Commission is required, by May 15th of each year or in connection with any
additional Sarbanes-Oxley Certification required to be filed upon thirty (30)
days written request, an officer of the Servicer shall execute and deliver an
Officer's Certification substantially in the form attached hereto as Exhibit E,
to the entity filing the Sarbanes-Oxley Certification directly with the
Securities and Exchange Commission (the "Sarbanes Certifying Party") for the
benefit of such entity and such entity's affiliates and the officers, directors
and agents of such entity.

      (b) The Servicer shall indemnify and hold harmless the Sarbanes Certifying
Party and its officers, directors, agents and affiliates from and against any
losses, damages, penalties, fines, forfeitures, reasonable legal fees and
related costs, judgments and other costs and expenses arising out of or based
upon a breach by the Servicer or any of its officers, directors, agents or
affiliates of its obligations under Sections 6.04, 6.05 and 6.09 or the
negligence, bad faith or willful misconduct of the Servicer in connection
therewith. If the indemnification provided for herein is unavailable or
insufficient to hold harmless the Sarbanes Certifying Party, then the Servicer
agrees that it shall contribute to the amount paid or payable by the Sarbanes
Certifying Party as a result of the losses, claims, damages or liabilities of
the Sarbanes Certifying Party in such proportion as is appropriate to reflect
the relative fault of the Sarbanes Certifying Party on the one hand and the
Servicer on the other in connection with a breach of the Servicer's obligations
under Sections 6.04, 6.05 and 6.09 or the Servicer's negligence, bad faith or
willful misconduct in connection therewith.

                                   ARTICLE VII
                       REPORTS TO BE PREPARED BY SERVICER

      Section 7.01  Servicer Shall Provide Information as Reasonably Required.

      The Servicer shall furnish to the Owner or the NIMs Insurer upon
reasonable request, during the term of this Agreement, such periodic, special or
other reports or information, whether or not provided for herein, as shall be
necessary, reasonable or appropriate with respect to the purposes of this
Agreement. The Servicer may negotiate with the Owner or the NIMs Insurer for a
reasonable fee for providing such report or information, unless (i) the Servicer
is required to supply such report or information pursuant to any other section
of this Agreement, or (ii) the report or information has been requested in
connection with Internal Revenue Service or other regulatory agency
requirements. All such reports or information shall be provided by and in
accordance with all reasonable instructions and directions given by the Owner or
the NIMs Insurer. The Servicer agrees to execute and deliver all such
instruments and take all such action as the Owner, or the NIMs Insurer, from
time to time, may reasonably request in order to effectuate the purpose and to
carry out the terms of this Agreement.


                                     M-2-32

<PAGE>



                                  ARTICLE VIII
                                  THE SERVICER

      Section 8.01  Indemnification; Third Party Claims.

      The Servicer agrees to indemnify the Owner, its successors and assigns,
and any agent of the Owner, and the NIMs Insurer (each an "Indemnified Person")
and hold each such Indemnified Person harmless from and against any and all
claims, losses, damages, penalties, fines, forfeitures, legal fees and related
costs, judgments, and any other costs, fees and expenses that such Indemnified
Person may sustain in any way related to the failure of the Servicer to perform
its duties and service the Mortgage Loans in strict compliance with the terms of
this Agreement and for breach of any representation, warranty or covenant of the
Servicer contained herein. The Servicer shall notify the Owner and the NIMs
Insurer in accordance with Section 11.04 herein of any claim made by a third
party against the Servicer, the Owner or both, with respect to this Agreement,
the Mortgage Loans and/or any alleged act by Owner. The Owner shall assume the
defense of any such claim and pay all costs and expenses (including reasonable
legal fees and expenses) of defending the Servicer and itself against any such
claim other than (i) any loss, liability or expense related to the Servicer's
failure to perform Servicer's duties in strict compliance with this Agreement;
and (ii) any loss, liability or expense incurred by reason of the Servicer's
willful misfeasance, bad faith or negligence in the performance of its duties
hereunder or by reason of reckless disregard of its obligations and duties
hereunder. The Owner shall promptly pay, discharge and satisfy any judgment or
decree that may be entered against it in respect of such claim. If in any event,
the Servicer incurred any expenses or fees related to the above, the Owner shall
reimburse the Servicer within thirty (30) Business Days upon receipt of an
invoice from the Servicer of all amounts advanced by the Servicer pursuant to
the preceding sentence.

      Section 8.02 Merger or Consolidation of the Servicer.

      The Servicer shall keep in full effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation
except as permitted herein, and will obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement or any of the Mortgage Loans and to perform its
duties under this Agreement.

      Any Person into which the Servicer may be merged or consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Servicer shall be a party, or any Person succeeding to the business of the
Servicer whether or not related to loan servicing, shall be the successor of the
Servicer hereunder, without the execution or filing of any paper or any further
act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor or surviving Person shall
be an institution (i) having a GAAP net worth of not less than $25,000,000, (ii)
the deposits of which are insured by the FDIC, or which is a HUD-approved
mortgagee whose primary business is in origination


                                     M-2-33

<PAGE>



and servicing of first lien 1-4 family mortgage loans, and (iii) which is a
Fannie Mae or Freddie Mac approved seller/servicer in good standing.
Furthermore, in the event the Servicer transfers or otherwise disposes of all or
substantially all of its assets to an affiliate of the Servicer, such affiliate
shall satisfy the condition above, and shall also be fully liable to the Owner
for all of the Servicer's obligations and liabilities hereunder.

      Section 8.03 Limitation on Liability of the Servicer and Others.

      Neither the Servicer nor any of the directors, officers, employees or
agents of the Servicer shall be under any liability to the Owner for any action
taken or for refraining from the taking of any action in good faith pursuant to
this Agreement, or for errors in judgment made in good faith; provided, however,
that this provision shall not protect the Servicer or any such person against
any breach of warranties or representations made herein, or failure to perform
its obligations in compliance with any standard of care set forth in this
Agreement, or any liability which would otherwise be imposed under this
Agreement. The Servicer and any director, officer, employee or agent of the
Servicer may rely in good faith on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters arising hereunder.
The Servicer shall not be under any obligation to appear in, prosecute or defend
any legal action which is not incidental to its duties to service the Mortgage
Loans in accordance with this Agreement and which in its opinion may involve it
in any expenses or liability; provided, however, that the Servicer may, with the
consent of the Owner and the NIMs Insurer, undertake any such action which it
may deem necessary or desirable with respect to this Agreement and the rights
and duties of the parties hereto. In such event, the reasonable legal expenses
and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities for which the Owner will be liable, the Owner
shall reimburse the Servicer within thirty days of receipt by the Owner of a
billing statement from the Servicer providing reasonable detail with respect
thereto, unless the Owner is disputing such charges, in which event the Owner
shall reimburse the Company as promptly as feasible upon resolution of such
dispute.

      Section 8.04  Servicer Not to Resign.

      The Servicer shall not assign this Agreement or resign from the
obligations and duties hereby imposed on it except by mutual consent of the
Servicer and the Owner, with the consent of the NIMs Insurer or upon the
determination that its duties hereunder are no longer permissible under
applicable law and such incapacity cannot be cured by the Servicer. Any such
determination permitting the resignation of the Servicer shall be evidenced by
an Opinion of Counsel to such effect delivered to the Owner and the NIMs Insurer
which Opinion of Counsel shall be in form and substance acceptable to the Owner
and the NIMs Insurer. No such resignation shall become effective until a
successor shall have assumed the Servicer's responsibilities and obligations
hereunder in the manner provided in Section 11.01. Notwithstanding the
foregoing, the Servicer, without the consent of the Owner, may retain
third-party contractors to perform certain servicing and loan administration
functions, including without limitation hazard insurance administration, tax
payment and administration, flood


                                     M-2-34

<PAGE>



certification and administration, collection services and similar functions,
provided, however, that the retention of such contractors by Servicer shall not
limit the obligation of the Servicer to service the Mortgage Loans pursuant to
the terms and conditions of this Agreement.

      Section 8.05  No Transfer of Servicing.

      With respect to the retention of the Servicer to service the Mortgage
Loans hereunder, the Servicer acknowledges that the Owner and the NIMs Insurer
have in reliance upon the Servicer's independent status, the adequacy of its
servicing facilities, plan, personnel, records and procedures, its integrity,
reputation and financial standing and the continuance thereof. Without in any
way limiting the generality of this section, the Servicer shall not either
assign this Agreement or the servicing hereunder or delegate its rights or
duties hereunder or any portion thereof, or sell or otherwise dispose of all or
substantially all of its property or assets, without the prior written approval
of the Owner and the NIMs Insurer.

                                   ARTICLE IX
                                     DEFAULT

      Section 9.01  Events of Default.

      Each of the following shall constitute an Event of Default on the part of
the Servicer:

      (i) any failure by the Servicer to remit to the Owner any payment required
to be made under the terms of this Agreement which continues unremedied for a
period of two (2) Business Days after written notice thereof from the Owner or
the NIMs Insurer (it being understood that this subparagraph shall not affect
Servicer's obligation pursuant to Section 5.01 to pay default interest on any
remittance received by the Owner after the Business Day on which such payment
was due); or

      (ii) any failure by the Servicer duly to observe or perform in any
material respect any other of the covenants or agreements on the part of the
Servicer set forth in this Agreement (other than with respect to Sections, 6.04,
6.05 and 6.09), the breach of which has a material adverse effect and which
continue unremedied for a period of sixty days (except that such number of days
shall be fifteen in the case of a failure to pay any premium for any insurance
policy required to be maintained under this Agreement and such failure shall be
deemed to have a material adverse effect) after the date on which written notice
of such failure, requiring the same to be remedied, shall have been given to the
Servicer by the Owner or the NIMs Insurer; or

      (iii) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, bankruptcy, readjustment of debt, marshaling of
assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Servicer and
such


                                     M-2-35

<PAGE>



decree or order shall have remained in force undischarged or unstayed for a
period of sixty days; or

      (iv) the Servicer shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, bankruptcy, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or relating to
the Servicer or of or relating to all or substantially all of its property; or

      (v) the Servicer shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency, bankruptcy or reorganization statute, make an assignment
for the benefit of its creditors, voluntarily suspend payment of its obligations
or cease its normal business operations for two Business Days; or

      (vi) the Servicer ceases to meet the qualifications of a Fannie Mae or
Freddie Mac servicer; or

      (vii) the Servicer attempts to assign its right to servicing compensation
hereunder or the Servicer attempts, without the consent of the Owner and the
NIMs Insurer, to sell or otherwise dispose of all or substantially all of its
property or assets or to assign this Agreement or the servicing responsibilities
hereunder or to delegate its duties hereunder or any portion thereof except as
otherwise permitted herein;

      (viii)the Servicer ceases to be qualified to transact business in any
jurisdiction where it is currently so qualified, but only to the extent such
non-qualification materially and adversely affects the Servicer's ability to
perform its obligations hereunder; or

      (ix) failure by the Servicer to duly perform, within the required time
period, its obligations under Section 6.04, Section 6.05 or Section 6.09 of this
Agreement which failure continues unremedied for a period of fifteen (15) days
after the date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Servicer by any party to this Agreement,
the NIMs Insurer or by any master servicer responsible for master servicing the
Mortgage Loans pursuant to a securitization of such Mortgage Loans.

      In each and every such case, so long as an Event of Default shall not have
been remedied, the Owner with the consent of the NIMs Insurer, by notice in
writing to the Servicer may (and at the request of the NIMs Insurer, shall), in
addition to whatever rights the Owner may have under Section 8.01 and at law or
equity to damages, including injunctive relief and specific performance,
terminate all the rights and obligations of the Servicer under this Agreement
and in and to the Mortgage Loans and the proceeds thereof without compensating
the Servicer for the same.

      From and after the receipt by the Servicer of such written notice, all
authority and power of the Servicer under this Agreement, whether with respect
to the Mortgage Loans or otherwise,


                                     M-2-36

<PAGE>



shall pass to and be vested in the successor appointed pursuant to Section
11.01. Upon written request from the Owner, the Servicer shall prepare, execute
and deliver, any and all documents and other instruments, place in such
successor's possession all Servicing Files, and do or accomplish all other acts
or things reasonably necessary or appropriate to effect the purposes of such
notice of termination, including, but not limited to, notification to MERS at
the Servicer's sole expense. The Servicer agrees to cooperate with the Owner and
such successor in effecting the termination of the Servicer's responsibilities
and rights hereunder, including, without limitation, the transfer to such
successor for administration by it of all cash amounts, net of unreimbursed
Servicing Advances and Monthly Advances, which shall at the time be credited by
the Servicer to the Custodial Account or Escrow Account or thereafter received
with respect to the Mortgage Loans.

      Section 9.02  Waiver of Defaults.

      The Owner with the consent of the NIMs Insurer may waive, only by written
notice, any default by the Servicer in the performance of its obligations
hereunder and its consequences. Upon any such waiver of a past default, such
default shall cease to exist, and any Event of Default arising therefrom shall
be deemed to have been remedied for every purpose of this Agreement. No such
waiver shall extend to any subsequent or other default or impair any right
consequent thereon except to the extent expressly so waived in writing.

                                    ARTICLE X
                                   TERMINATION

      Section 10.01  Termination.

      The respective obligations and responsibilities of the Servicer shall
terminate upon the earliest to occur of the following: (i) the later of the
final payment or other liquidation (or any advance with respect thereto) of the
last Mortgage Loan or the disposition of any REO Property and the remittance of
all funds due hereunder; (ii) by 30 days' written mutual consent of the Servicer
and the Owner with the consent of the NIMs Insurer; (iii) termination by the
Owner pursuant to Section 9.01; and (iv) upon resignation of the Servicer in
accordance with Section 8.04;. Simultaneously with any such termination and, in
the case of (ii), (iii) or (iv) of the preceding sentence, the transfer of
servicing hereunder, the Servicer shall be entitled to be reimbursed for any
outstanding Servicing Advances and Monthly Advances as such amounts are received
from the related Mortgage Loans or as otherwise provided herein for a servicer
that has not been terminated. In no event shall the Servicer be entitled to any
termination fee or other compensation with respect to any termination of this
Agreement or the Servicer's rights hereunder, in whole or in part.

      Section 10.02  Subservicing Termination Trigger.



                                     M-2-37

<PAGE>



      In the event of a Subservicer Termination Trigger (as defined in the
related Trust Agreement), the Servicer shall terminate the related Subservicer
at the direction of the NIMS Insurer. Following such termination, the Servicer
shall have the right to service such Mortgage Loans without the use of a
Subservicer or to engage a new Subservicer acceptable to the NIMS Insurer
pursuant to a Subservicing Agreement, which is not in conflict with the terms of
this Agreement. Notwithstanding the foregoing, the Servicer shall retain the
ownership of all servicing rights with respect to the related Mortgage Loans and
no such direction of termination of a Subservicer shall be deemed to diminish
such ownership.

                                   ARTICLE XI
                            MISCELLANEOUS PROVISIONS

      Section 11.01  Successor to the Servicer.

      Upon termination of the Servicer's responsibilities and duties under this
Agreement pursuant to Sections 8.04, 8.05 or 9.01, the Owner shall (i) succeed
to and assume all of the Servicer's responsibilities, rights, duties and
obligations under this Agreement, or (ii) appoint a successor acceptable to the
NIMs Insurer having the characteristics set forth in Section 8.02 and which
shall succeed to all rights and assume all of the responsibilities, duties and
liabilities of the Servicer under this Agreement prior to the termination of the
Servicer's responsibilities, duties and liabilities under this Agreement. If the
NIMs Insurer requests, the Master Servicer shall appoint a successor servicer as
provided in the preceding sentence. In connection with such appointment and
assumption, the Owner may make such arrangements for the compensation of such
successor out of payments on Mortgage Loans as the Owner with the consent of the
NIMs Insurer and such successor shall agree. In the event that the Servicer's
duties, responsibilities and liabilities under this Agreement should be
terminated pursuant to the aforementioned sections, the Servicer shall discharge
such duties and responsibilities during the period from the date it acquires
knowledge of such termination until the effective date thereof with the same
degree of diligence and prudence which it is obligated to exercise under this
Agreement, and shall take no action whatsoever that might impair or prejudice
the rights or financial condition of its successor. The resignation or removal
of the Servicer pursuant to the aforementioned sections shall not become
effective until a successor shall be appointed pursuant to this section and
shall in no event relieve the Servicer of the representations and warranties
made pursuant to Article III and the remedies available to the Owner under
Section 8.01, it being understood and agreed that the provisions of such Article
III and Section 8.01 shall be applicable to the Servicer notwithstanding any
such resignation or termination of the Servicer, or the termination of this
Agreement.

      Any successor appointed as provided herein shall execute, acknowledge and
deliver to the Servicer and to the Owner an instrument accepting such
appointment, whereupon such successor shall become fully vested with all the
rights, powers, duties, responsibilities, obligations and liabilities of the
Servicer, with like effect as if originally named as a party to this Agreement.
Any termination or resignation of the Servicer or termination of this Agreement
pursuant to


                                     M-2-38

<PAGE>



Section 8.04, 8.05 or 9.01 shall not affect any claims that the Owner may have
against the Servicer arising prior to any such termination or resignation.

      The Servicer shall promptly deliver to the successor the funds in the
Custodial Account and the Escrow Account and the Servicing Files and related
documents and statements held by it hereunder and the Servicer shall account for
all funds. All unreimbursed Monthly Advances and Servicing Advances shall be
paid by the Owner to the replaced servicer as such amounts are received from the
related Mortgage Loans or are otherwise reimbursable hereunder. The Servicer
shall execute and deliver such instruments and do such other things as may
reasonably be required to more fully and definitely vest and confirm in the
successor all such rights, powers, duties, responsibilities, obligations and
liabilities of the Servicer. In addition, the Servicer shall promptly take all
other actions reasonably requested by Owner or the NIMs Insurer with respect to
MERS Mortgage Loans and MERS to effectuate and evidence the transfer of
servicing and/or ownership thereof in accordance with the terms of this
Agreement.

      Upon a successor's acceptance of appointment as such, the Owner shall
notify the Servicer of such appointment.

      Section 11.02  Amendment.

      This Agreement may be amended from time to time by the Servicer and the
Owner, with the consent of the NIMs Insurer, by written agreement signed by the
Servicer and the Owner.

      Section 11.03  Governing Law.

      THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS
OF LAWS. THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.

      Section 11.04  Notices.

      Any demands, notices or other communications permitted or required
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at or mailed by registered mail, postage prepaid, and
return receipt requested or transmitted by telecopier and confirmed by a similar
mailed writing, as follows:

      (i) if to the Servicer with respect to servicing issues:

            Home Star Mortgage Services LLC
            W. 115 Century Road
            Paramus, New Jersey 07652


                                     M-2-39

<PAGE>



            Attention:

      (ii) if to the Owner:

            Homestar Mortgage Acceptance Corp.
            W. 115 Century Road
            Paramus, New Jersey 07652
            Attention:

or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice, or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
address (as evidenced, in the case of registered or certified mail, by the date
noted on the return receipt).

      Section 11.05  Severability of Provisions.

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

      Section 11.06  Exhibits and Schedules.

      The exhibits, schedules and other addenda and supplements to this
Agreement are hereby incorporated and made a part hereof and are an integral
part of this Agreement.

      Section 11.07  General Interpretive Principles.

      For purposes of this Agreement, except as otherwise expressly provided or
unless the context otherwise requires:

      (i) the terms defined in this Agreement have the meanings assigned to them
in this Agreement and include the plural as well as the singular, and the use of
any gender herein shall be deemed to include the other gender;

      (ii) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;

      (iii) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;



                                     M-2-40

<PAGE>



      (iv) a reference to a Subsection without further reference to a Section is
a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;

      (v) the words "herein," "hereof," "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular provision;

      (vi) the term "include" or "including" shall mean without limitation by
reason of enumeration; and

      (vii) to the extent that some, but not all, of the Mortgage Loans are
transferred pursuant to Section 11.10 hereof, this Agreement shall be construed
as a separate agreement with respect to such Mortgage Loans and references to
the rights of the Owner shall apply separately with respect to each Owner.

      Section 11.08  Reproduction of Documents.

      This Agreement and all documents relating hereto, including, without
limitation, (i) consents, waivers and modifications which may hereafter be
executed, (ii) documents received by any party at the closing, and (iii)
financial statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.

      Section 11.09  Confidentiality of Information.

      Each party recognizes that, in connection with this Agreement, it may
become privy to non-public information regarding the financial condition,
operations and prospects of the other party. Except as required to be disclosed
by law, each party agrees to keep all non-public information regarding the other
party strictly confidential, and to use all such information solely in order to
effectuate the purpose of this Agreement. Additionally, with respect to each
Mortgage Loan and the related Mortgagor, the Servicer and the Owner shall comply
with Title V of the Gramm Leach Bliley Act of 1999 and all applicable
regulations promulgated thereunder.

      Section 11.10  Assignment by the Owner.

      The Owner shall have the right, with the consent of the NIMs Insurer,
without the consent of the Servicer but subject to the limits set forth in this
Agreement hereof, to assign its interest under this Agreement with respect to
some or all of the Mortgage Loans, and designate any person to exercise any
rights of the Owner hereunder and the assignee or designee shall accede to


                                     M-2-41

<PAGE>



the rights and obligations hereunder of the Owner with respect to such Mortgage
Loans. The Servicer shall not be obligated to recognize any such assignee or
designee unless such person executes an assignment and assumption agreement
reasonably acceptable to the Servicer. All references to the Owner in this
Agreement shall be deemed to include its assignees or designees.

      Section 11.11  No Partnership.

      Nothing herein contained shall be deemed or construed to create a
co-partnership or joint venture between the parties hereto and the services of
the Servicer shall be rendered as an independent contractor and not as agent for
Owner.

      Section 11.12  Counterparts; Successors and Assigns.

      This Agreement may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same agreement. Subject to Section 8.05, this Agreement
shall inure to the benefit of and be binding upon the Servicer, the NIMs Insurer
and the Owner and their respective successors and assigns.

      Section 11.13  Entire Agreement.

      Each of the Servicer and the Owner acknowledges that no representations,
agreements or promises were made to it by the other party or any of its
employees other than those representations, agreements or promises specifically
contained herein. This Agreement sets forth the entire understanding between the
parties hereto with respect to the matters set forth herein, and shall be
binding upon all successors of both parties.

      Section 11.14  Further Agreements.

      The Servicer and the Owner each agrees to execute and deliver to the other
such reasonable and appropriate additional documents, instruments or agreements
as may be necessary or appropriate to effectuate the purpose of this Agreement.

      Section 11.1Third Party Beneficiary.

      For purposes of this Agreement, any Master Servicer and the NIMs Insurer
shall be considered a third party beneficiary to this Agreement entitled to all
the rights and benefits accruing to any Master Servicer and the NIMs Insurer
herein as if it were a direct party to this Agreement.




                                     M-2-42

<PAGE>



      IN WITNESS WHEREOF, the Servicer and the Owner have caused their names to
be signed hereto by their respective officers thereunto duly authorized as of
the date and year first above written.

                                    HOMESTAR MORTGAGE ACCEPTANCE
CORP.


                                    By:
                                    Name:
                                    Title:


                                    HOMESTAR MORTGAGE SERVICES, LLC


                                    By:
                                    Name:
                                    Title:




                                     M-2-43


<PAGE>



                                    EXHIBIT A

                             MORTGAGE LOAN SCHEDULE

                             Available Upon Request







                                     M-2-44

<PAGE>



                                    EXHIBIT B

                    FORMS OF CUSTODIAL ACCOUNT CERTIFICATIONS


                         CUSTODIAL ACCOUNT CERTIFICATION



                                                            , 20

      Home Star Mortgage Services LLC hereby certifies that it has established
the account described below as a Custodial Account pursuant to Section 4.04 of
the Servicing Agreement, dated as of March 5, 2004.

Title of Account: HMAC 2004-_ in trust for the Purchaser and/or subsequent
                  purchasers of Mortgage Loans, and various Mortgagors - P & I

Address of office or branch of the Servicer at which Account is maintained:


                                    HOME STAR MORTGAGE SERVICES LLC
                                    Servicer


                                    By:
                                    Name:
                                    Title:




                                     M-2-45

<PAGE>



                                    EXHIBIT C

                     FORMS OF ESCROW ACCOUNT CERTIFICATIONS


                          ESCROW ACCOUNT CERTIFICATION



                                                            , 20



      Home Star Mortgage Services LLC hereby certifies that it has established
the account described below as an Escrow Account pursuant to Section 4.06 of the
Servicing Agreement, dated as of March 5, 2004.

Title of Account: HMAC 2004-_ in trust for the Purchaser and/or subsequent
purchasers of Mortgage Loans, and various Mortgagors - T & I

Address of office or branch
of the Servicer at which
Account is maintained:









                                    HOME STAR MORTGAGE SERVICES LLC
                                    Servicer


                                    By:
                                    Name:
                                    Title:




                                     M-2-46

<PAGE>



                                    EXHIBIT D

                        REQUEST FOR RELEASE OF DOCUMENTS

To:   Wells Fargo Bank, N.A.
      1015 10th Avenue S.E.
      Mpls., MN  55414
      Attn:  ________________

      Re:   Custodial Agreement dated as of March 1, 2004, among HSBC Bank
            (USA), Homestar Mortgage Acceptance Corp. and Wells Fargo Bank,
            N.A., as Custodian

      In connection with the administration of the Mortgage Loans held by you as
Custodian for the Owner pursuant to the above-captioned Custody Agreement, we
request the release, and hereby acknowledge receipt, of the Custodian's Mortgage
File for the Mortgage Loan described below, for the reason indicated.

Mortgage Loan Number:

Mortgagor Name, Address & Zip Code:

Reason for Requesting Documents (check one):
_______           1.    Mortgage Paid in Full
_______           2.    Foreclosure
_______           3.    Substitution
_______           4.    Other Liquidation (Repurchases, etc.)
_______           5.    Nonliquidation  [Reason:_______________________________]

Address to which Custodian should
Deliver the Custodian's Mortgage File ________________________________________
                                      ________________________________________
                                      ________________________________________

                                    By:_____________________________________
                                          (authorized signer)
Issuer:_____________________________________
                              Address:___________________________________
      ___________________________________
Date:______________________________________

Custodian
Wells Fargo Bank, N.A.



                                     M-2-47

<PAGE>



Please acknowledge the execution of the above request by your signature and date
below:
____________________________________      _________________
Signature                                 Date

Documents returned to Custodian:
____________________________________      _________________
Custodian




                                     M-2-48

<PAGE>



                                  EXHIBIT E

                     FORM OF SARBANES-OXLEY CERTIFICATION

      I, __________________________, certify to Wells Fargo Bank, N.A., and its
officers, directors, agents and affiliates (the "Sarbanes Certifying Party"),
and with the knowledge and intent that they will rely upon this certification,
that:

      (i) Based on my knowledge, the information relating to the Mortgage Loans
and the servicing thereof submitted by the Servicer to the Sarbanes Certifying
Party which is used in connection with preparation of the reports on Form 8-K
and the annual report on Form 10-K filed with the Securities and Exchange
Commission with respect to the Securitization, taken as a whole, does not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading as of the date of this certification;

      (ii) The servicing information required to be provided to the Sarbanes
Certifying Party by the Servicer under the Agreement has been provided to the
Sarbanes Certifying Party;

      (iii) I am responsible for reviewing the activities performed by the
Servicer and by each related subservicer under the Agreement and based upon the
review required by the Agreement, and except as disclosed in the Annual
Statement of Compliance, the Annual Independent Public Accountant's Servicing
Report and all servicing reports, officer's certificates and other information
relating to the servicing of the Mortgage Loans submitted to the Sarbanes
Certifying Party, the Servicer and each related subservicer has, as of the date
of this certification, fulfilled its obligations under the Agreement; and

      (iv) I have disclosed to the Sarbanes Certifying Party all significant
deficiencies relating to the Servicer's and/or each related subservicer's
compliance with the minimum servicing standards in accordance with a review
conducted in compliance with the Uniform Single Attestation Program for Mortgage
Bankers or similar standard as set forth in the Agreement.

      Capitalized words not otherwise defined herein have the meaning assigned
to them in the Servicing Agreement dated March 5, 2004 by and between Homestar
Mortgage Acceptance Corp. as Owner and Home Star Mortgage Services LLC as
Servicer.

      IN WITNESS WHEREOF, I have hereunto signed my name and affixed the seal of
the Servicer.

Dated:                              By:
Name:
Title:


                                     M-2-49

<PAGE>



                                    EXHIBIT F

                        MONTHLY SERVICER REPORTING FORMAT

                   (RYLAND) FORMAT, SERVICER PERIOD REPORTING

The format should be:
1. Record length of 240
2. ASCII
3. All dates should have DD of "01".

                                                           COBOL
#    M/O   Field Name                  Position   Length   "Picture"    Justify
1.   O     Master Servicer No.         001-002    2
2.   O     Unit Code                   003-004    2
3.   M     Loan Number                 005-014    10       X(10)
4.   O     Borrower Name               015-034    20       X(20)
5.   O     Old Payment Amount          035-045    11       S(9)V9(02)
6.   O     Old Loan Rate               046-051    6        9(2)V9(04)
7.   O     Servicer Fee Rate           052-057    6        9(2)V9(04)
8.   M     Servicer Ending Balance     058-068    11       S9(9)V9(02)
9.   M     Servicer Next Due Date      069-076    8        CCYYMMDD
10.  O     Curtail Amt 1 - Before      077-087    11       S9(9)V9(02)
11.  O     Curtail Date 1              088-095    8        CCYYMMDD
12.  O     Curtail Amt 1 - After       096-106    11       S9(9)V9(02)
13   O     Curtail Amt 2 - Before      107-117    11       S9(9)V9(02)
14.  O     Curtail Date                118-125    8        CCYYMMDD
15.  O     Curtail Amt 2 - After       126-136    11       9(9)V9(02)
16.  O     Curtail Amt 3 - Before      137-147    11       9(9)V9(02)
17.  O     Curtail Date                148-155    8        CCYYMMDD
18   O     Curtail Amt 3 - After       156-166    11       9(9)V9(02)
19   O     New Payment Amount          167-177    11       9(9)V9(02)
20.  O     New Loan Rate               178-183    6        (2)V9(04)
21.  O     Index Rate                  184-189    6        (2)V9(04)
22.  O     Remaining Term              190-192    3        (3)
23.  O     Liquidation Amount          193-203    11       9(9)V9(02)
24.  O     Action Code                 204-205    2        (02)
25.  O     Scheduled Principal         206-216    11       9(9)V9(02)
26.  O     Scheduled Interest          217-227    11       9(9)V9(02)
27.  O     Scheduled Ending Balance    228-238    11       9(9)V9(02)
28.  O     FILLER                      239-240    2        (02)
Trailer Record
1.   O     Number of Records           001-006    6        9(06)


                                     M-2-50

<PAGE>

<TABLE>
<CAPTION>
<S>                               <C>

2.   O     FILLER                      007-240    234      X(234)


Field Names and Descriptions:


Field Name                        Description

Master Servicer No.               Hard code as "01" used internally

Unit Code                         Hard code as "  " used internally

Loan Number                       Investor's loan number

Borrower Name                     Last name of borrower

Old Payment Amount                P&I amount used for the applied payment

Old Loan Rate                     Gross interest rate used for the applied payment

Servicer Fee Rate                 Servicer's fee rate

Servicer Ending Balance           Ending actual balance after a payment has been applied

Servicer Next Due Date            Borrower's next due date for a payment

Curtailment Amount 1 - Before     Amount of curtailment applied before the payment

Curtailment Date 1                Date of curtailment should coincide with the payment
                                  date applicable to the curtailment

Curtailment Amount 1 - After      Amount of curtailment applied after the payment

Curtailment Amount 2 - Before     Amount of curtailment applied before the payment

Curtailment Date 2                Date of curtailment should coincide with the payment
                                  date applicable to the curtailment

Curtailment Amount 2 - After      Amount of curtailment applied after the payment

Curtailment Amount 3 - Before     Amount of curtailment applied before the payment


</TABLE>

                                     M-2-51

<PAGE>


<TABLE>
<CAPTION>
<S>                               <C>
Curtailment Date 3                Date of curtailment should coincide with the payment
                                  date applicable to the curtailment

Curtailment Amount 3 - After      Amount of curtailment applied after the payment

New                               Payment Amount For ARM, Equal, or Buydown
                                  loans, when a payment change occurs, this is
                                  the scheduled payment

New                               Loan Rate For ARM loans, when the gross
                                  interest rate change occurs, this is the
                                  scheduled rate

Index Rate                        For ARM loans, the index rate used in calculating the
                                  new gross interest rate

Remaining Term                    For ARM loans, the number of months left on the loan
                                  used to determine the new P&I amount

Liquidation Amount                The payoff amount of the loan

Action Code                       For delinquent loans:
                                  12 -- Relief Provisions
                                  15 -- Bankruptcy/Litigation
                                  20 -- Referred for Deed-in-lieu, short sale
                                  30 -- Referred to attorney to begin
                                  foreclosure
                                  60 -- Loan Paid in full
                                  70 -- Real Estate Owned

Scheduled Principal               Amount of principal from borrower payment due to
                                  bondholder

Scheduled Interest                Amount of interest from borrower payment due to
                                  bondholder

Scheduled Ending Balance          Ending scheduled balance of loan

FILLER                            Should be filled with spaces
</TABLE>




                                     M-2-52

<PAGE>



                                    EXHIBIT G

  Data must be submitted to Wells Fargo Bank in an Excel spreadsheet format with
fixed field names and data type. The Excel spreadsheet should be used as a
template consistently every month when submitting data for all loans that are 60
days + delinquent and/or in bankruptcy, foreclosure or REO.

Table: Delinquency

  Name                                    Type              Max Character Size
  Servicer Loan #                         Number            10
  Investor Loan #                         Number            10
  Servicer Investor #                     Text              3
  Borrower Name                           Text              20
  Address                                 Text              30
  State                                   Text              2
  Zip                                     Text              5
  Due Date                                Date/Time         8
  Loan Type                               Text              8
  BK Filed Date                           Date/Time         8
  BK Chapter                              Text              6
  BK Case Number                          Text              30 Maximum
  Post Petition Due                       Date/Time         8
  Motion for Relief                       Date/Time         8
  Lift of Stay                            Date/Time         8
  BK Discharge/Dismissal Date             Date/Time         8
  Loss Mit Approval Date                  Date/Time         8
  Loss Mit Type                           Text              5
  Loss Mit Code                           Number            2
  Loss Mit Estimated Completion Date      Date/Time         8
  Loss Mit Actual Completion Date         Date/Time         8
  FC Approval Date                        Date/Time         8
  File Referred to Attorney               Date/Time         8
  NOD                                     Date/Time         8
  Complaint Filed                         Date/Time         8
  Scheduled Sale Date                     Date/Time         8
  Actual Sale Date                        Date/Time         8
  F/C Sale Amount                         Currency          8
  Eviction Start Date                     Date/Time         8
  Eviction Completed Date                 Date/Time         8
  List Price                              Currency          8
  List Date                               Date/Time         8
  Accepted Offer Price                    Currency          8


                                     M-2-53

<PAGE>



  Accepted Offer Date                     Date/Time         8
  Estimated REO Closing Date              Date/Time         8
  Actual REO Sale Date                    Date/Time         8
  Occupant Code                           Text              10
  Property Condition Code                 Text              2
  Property Inspection Date                Date/Time         8
  Property Value Date                     Date/Time         8
  Current Property Value                  Currency          8
  Repaired Property Value                 Currency          8
  Current LTV                             Currency          8
  FNMA Delinquent Status Code             Text              2
  FNMA Delinquent Reason Code             Text              3

  If applicable:
  MI Cancellation Date                    Date/Time         8
  MI Claim Filed Date                     Date/Time         8
  MI Claim Amount                         Currency          8
  MI Claim Reject Date                    Date/Time         8
  MI Claim Resubmit Date                  Date/Time         8
  MI Claim Paid Date                      Date/Time         8
  MI Claim Amount Paid                    Currency          8
  Pool Claim Filed Date                   Date/Time         8
  Pool Claim Amount                       Currency          8
  Pool Claim Reject Date                  Date/Time         8
  Pool Claim Paid Date                    Date/Time         8
  Pool Claim Amount Paid                  Currency          8
  Pool Claim Resubmit Date                Date/Time         8
  FHA Part A Claim Filed Date             Date/Time         8
  FHA Part A Claim Amount                 Currency          8
  FHA Part A Claim Paid Date              Date/Time         8
  FHA Part A Claim Paid Amount            Currency          8
  FHA Part B Claim Filed Date             Date/Time         8
  FHA Part B Claim Amount                 Currency          8
  FHA Part B Claim Paid Date              Date/Time         8
  FHA Part B Claim Paid Amount            Currency          8
  VA Claim Filed Date                     Date/Time         8
  VA Claim Paid Date                      Date/Time         8
  VA Claim Paid Amount                    Currency          8



                                     M-2-54

<PAGE>



The Loss Mit Type field should show the approved Loss Mitigation arrangement.
The following are acceptable:

o    ASUM-      Approved Assumption
o    BAP-       Borrower Assistance Program
o    CO-        Charge Off
o    DIL-       Deed-in-Lieu
o    FFA-       Formal Forbearance Agreement
o    MOD-       Loan Modification
o    PRE-       Pre-Sale
o    SS-        Short Sale
o    MISC-      Anything else approved by the PMI or Pool Insurer

Wells Fargo Bank will accept alternative Loss Mitigation Types to those above,
provided that they are consistent with industry standards. If Loss Mitigation
Types other than those above are used, the Servicer must supply Wells Fargo Bank
with a description of each of the Loss Mitigation Types prior to sending the
file.

The Occupant Code field should show the current status of the property. The
acceptable codes are:

o     Mortgagor
o     Tenant
o     Unknown
o     Vacant

The Property Condition field should show the last reported condition of the
property. The acceptable codes are:

o Damaged
o Excellent
o Fair
o Gone
o Good
o Poor
o Special Hazard
o Unknown




                                     M-2-55

<PAGE>



The FNMA Delinquent Reason Code field should show the Reason for Default. The
following FNMA Delinquency Reason Codes to be used are below.

Delinquency Code                 Delinquency Description
001                              FNMA-Death of principal mortgagor
002                              FNMA-Illness of principal mortgagor
003                              FNMA-Illness of mortgagor's family member
004                              FNMA-Death of mortgagor's family member
005                              FNMA-Marital difficulties
006                              FNMA-Curtailment of income
007                              FNMA-Excessive Obligation
008                              FNMA-Abandonment of property
009                              FNMA-Distant employee transfer
011                              FNMA-Property problem
012                              FNMA-Inability to sell property
013                              FNMA-Inability to rent property
014                              FNMA-Military Service
015                              FNMA-Other
016                              FNMA-Unemployment
017                              FNMA-Business failure
019                              FNMA-Casualty loss
022                              FNMA-Energy environment costs
023                              FNMA-Servicing problems
026                              FNMA-Payment adjustment
027                              FNMA-Payment dispute
029                              FNMA-Transfer of ownership pending
030                              FNMA-Fraud
031                              FNMA-Unable to contact borrower
INC                              FNMA-Incarceration




                                     M-2-56

<PAGE>



The FNMA Delinquent Status Code field should show the Status of Default. The
following FNMA Delinquency Status Codes to be used are below.

Status Code                      Status Description
09                               Forbearance
17                               Pre-foreclosure Sale Closing Plan Accepted
24                               Government Seizure
26                               Refinance
27                               Assumption
28                               Modification
29                               Charge-Off
30                               Third Party Sale
31                               Probate
32                               Military Indulgence
43                               Foreclosure Started
44                               Deed-in-Lieu Started
49                               Assignment Completed
61                               Second Lien Considerations
62                               Veteran's Affairs-No Bid
63                               Veteran's Affairs-Refund
64                               Veteran's Affairs-Buydown
65                               Chapter 7 Bankruptcy
66                               Chapter 11 Bankruptcy
67                               Chapter 13 Bankruptcy




                                     M-2-57

<PAGE>



EXHIBIT H

WELLS FARGO BANK,  N.A.
Form 332

Calculation of Realized Loss

Purpose

To provide the Servicer with a form for the calculation of any Realized Loss (or
gain) as a result of a Mortgage Loan having been foreclosed and Liquidated.

Distribution

The Servicer will prepare the form in duplicate and send the original together
with evidence of conveyance of title and appropriate supporting documentation to
the Master Servicer with the Monthly Accounting Reports which supports the
Mortgage Loan's removal from the Mortgage Loan Activity Report. The Servicer
will retain the duplicate for its own records.

Due Date

With respect to any liquidated Mortgage Loan, the form will be submitted to the
Master Servicer no later than the date on which statements are due to the Master
Servicer under Section 4.02 of this Agreement (the "Statement Date") in the
month following receipt of final liquidation proceeds and supporting
documentation relating to such liquidated Mortgage Loan; provided, that if such
Statement Date is not at least 30 days after receipt of final liquidation
proceeds and supporting documentation relating to such liquidated Mortgage Loan,
then the form will be submitted on the first Statement Date occurring after the
30th day following receipt of final liquidation proceeds and supporting
documentation.

Preparation Instructions

The numbers on the form correspond with the numbers listed below.
1.    The actual Unpaid Principal Balance of the Mortgage Loan.
2.    The Total Interest Due less the aggregate amount of servicing fee that
      would have been earned if all delinquent payments had been made as agreed.
3-7.  Complete as necessary. All line entries must be supported by copies of
      appropriate statements, vouchers, receipts, canceled checks, etc., to
      document the expense. Entries not properly documented will not be
      reimbursed to the Servicer.
8.    Accrued Servicing Fees based upon the Scheduled Principal Balance of the
      Mortgage Loan as calculated on a monthly basis.
10.   The total of lines 1 through 9.



                                     M-2-58

<PAGE>



Credits

11-17.Complete as necessary. All line entries must be supported by copies of the
      appropriate claims forms, statements, payment checks, etc. to document the
      credit. If the Mortgage Loan is subject to a Bankruptcy Deficiency, the
      difference between the Unpaid Principal Balance of the Note prior to the
      Bankruptcy Deficiency and the Unpaid Principal Balance as reduced by the
      Bankruptcy Deficiency should be input on line 16.
18.   The total of lines 11 through 17.

Total Realized Loss (or Amount of Any Gain)

19.   The total derived from subtracting line 18 from 10. If the amount
      represents a realized gain, show the amount in parenthesis ( ).




                                     M-2-59

<PAGE>



                             WELLS FARGO BANK, N.A.
                          CALCULATION OF REALIZED LOSS

WELLS FARGO BANK,  N.A. Trust:  ___________________________
Prepared by:  __________________    Date:  _______________
Phone:  ______________________

Servicer Loan No.                   Servicer Name           Servicer Address



WELLS FARGO BANK, N.A.
Loan No._____________________________
Borrower's Name:________________________________________________________
Property
Address:________________________________________________________________
Liquidation and Acquisition Expenses:
Actual Unpaid Principal Balance of Mortgage Loan            $ _______________(1)
Interest accrued at Net Rate                                 ________________(2)
Attorney's Fees                                              ________________(3)
Taxes                                                        ________________(4)
Property Maintenance                                         ________________(5)
MI/Hazard Insurance Premiums                                 ________________(6)
Hazard Loss Expenses                                         ________________(7)
Accrued Servicing Fees                                       ________________(8)
Other (itemize)                                              ________________(9)
_________________________________________                   $ _________________
_________________________________________                    __________________
_________________________________________                    __________________
_________________________________________                    __________________
Total Expenses                                              $ ______________(10)
Credits:
Escrow Balance                                              $ ______________(11)
HIP Refund
________________(12)
Rental Receipts
________________(13)
Hazard Loss Proceeds
________________(14)
Primary Mortgage Insurance Proceeds
________________(15)
Proceeds from Sale of Acquired Property
________________(16)


                                     M-2-60

<PAGE>



Other (itemize)
________________(17)
_________________________________________
___________________
_________________________________________
___________________
Total Credits
$________________(18)
Total Realized Loss (or Amount of Gain)
$________________(19)



                                     M-2-61

<PAGE>



                                    EXHIBIT N

                               CUSTODIAL AGREEMENT

            THIS CUSTODIAL AGREEMENT (as amended and supplemented from time to
time, the "Agreement"), dated as of July 1, 2004, by and among HSBC BANK USA,
N.A., not individually but solely as trustee under the Pooling and Servicing
Agreement defined below (including its successors under the Pooling and
Servicing Agreement defined below, the "Trustee"), HOMESTAR MORTGAGE ACCEPTANCE
CORP., as depositor (together with any successor in interest, the "Company"),
WELLS FARGO BANK, NATIONAL ASSOCIATION, as master servicer and securities
administrator (together with any successor in interest or successor under the
Pooling and Servicing Agreement referred to below, the "Master Servicer") and
WELLS FARGO BANK, NATIONAL ASSOCIATION, as custodian (together with any
successor in interest or any successor appointed hereunder, the "Custodian").


                                WITNESSETH THAT:

            WHEREAS, the Company, the Master Servicer, the Securities
Administrator and the Trustee have entered into a Pooling and Servicing
Agreement, dated as of June 1, 2004, relating to the issuance of HMAC Mortgage
Trust 2004-3, Asset-Backed Pass-Through Certificates, Series 2004-3 (as in
effect on the date of this agreement, the "Original Pooling and Servicing
Agreement," and as amended and supplemented from time to time, the "Pooling and
Servicing Agreement'); and

            WHEREAS, the Custodian has agreed to act as agent for the Trustee
for the purposes of receiving and holding certain documents and other
instruments delivered by the Company or the Master Servicer under the Pooling
and Servicing Agreement, all upon the terms and conditions and subject to the
limitations hereinafter set forth;

            NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, the Trustee, the Company, the
Master Servicer, the Securities Administrator and the Custodian hereby agree as
follows:

                                   SECTION 1.

                                   DEFINITIONS

            1.1 Capitalized terms used in this Agreement and not defined herein
shall have the meanings assigned in the Original Pooling and Servicing
Agreement, unless otherwise required by the context herein.



                                       N-1

<PAGE>



                                   SECTION 2.

                          CUSTODY OF MORTGAGE DOCUMENTS

            2.1 CUSTODIAN TO ACT AS AGENT: Acceptance of Mortgage Files. The
Custodian, as the duly appointed custodial agent of the Trustee for these
purposes, acknowledges (subject to any exceptions noted in the Initial
Certification referred to in Section 2.3(a)), receipt of the Mortgage Files
relating to the Mortgage Loans identified on the schedule attached hereto (the
"Mortgage Files") and declares that it holds and will hold such Mortgage Files
as agent for the Trustee, in trust, for the use and benefit of all present and
future Certificateholders.

            2.2 RECORDATION OF ASSIGNMENTS. Within 30 days after the Closing
Date, the Company shall complete or cause to be completed the Assignments in the
name of "HSBC Bank USA, N.A., as trustee under the Pooling and Servicing
Agreement relating to Homestar Mortgage Acceptance Corp., Asset-Backed
Pass-Through Certificates, Series 2004-3" (or shall prepare or cause to be
prepared new forms of Assignment in the name of the Trustee) for each Mortgaged
Property in a state, if any, which is specifically excluded from the Opinion of
Counsel delivered by the Company to the Trustee and the Custodian, each such
Assignment shall be recorded in the appropriate public office for real property
records, and returned to the Custodian, at no expense to the Custodian.

            2.3   REVIEW OF MORTGAGE FILES.

            (a) On or prior to the Closing Date, in accordance with Section 2.02
      of the Pooling and Servicing Agreement, the Custodian shall deliver to the
      Trustee an Initial Certification in the form annexed hereto as Exhibit One
      evidencing receipt (subject to any exceptions noted therein) of a Mortgage
      File for each of the Mortgage Loans listed on the Schedule attached hereto
      (the "Mortgage Loan Schedule").

            (b) Not later than 180 days after the Closing Date, the Custodian
      shall review the Mortgage Files as provided in Section 2.02 of the Pooling
      and Servicing Agreement and deliver to the Company and the Trustee a Final
      Certification in the form annexed hereto as Exhibit Two evidencing the
      completeness of the Mortgage Files.

            (c) In reviewing the Mortgage Files as provided herein and in the
      Pooling and Servicing Agreement, the Custodian shall make no
      representation as to and shall not be responsible to verify (i) the
      validity, legality, enforceability, due authorization, recordability,
      sufficiency or genuineness of any of the documents included in any
      Mortgage File or (ii) the collectibility, insurability, effectiveness or
      suitability of any of the documents in any Mortgage File.



                                     N-2

<PAGE>



      Upon receipt of written request from the Trustee, the Custodian shall as
soon as practicable supply the Trustee with a list of all of the documents
relating to the Mortgage Loans missing from the Mortgage Files.

            2.4 CUSTODIAN TO COOPERATE: Release of Mortgage Files. Upon receipt
of notice from the Trustee or the Master Servicer of a repurchase of a Mortgage
Loan pursuant to the Mortgage Loan Purchase Agreement or the Pooling and
Servicing Agreement, and that the purchase price therefore has been deposited in
the Custodial Account or the Certificate Account, then the Custodian agrees to
promptly release the related Mortgage File to the Seller or other party at the
direction of the Trustee.

            Upon the Custodian's receipt of a request for release (a "Request
for Release") substantially in the form of Exhibit F to the Pooling and
Servicing Agreement signed by a servicing officer of the Servicer or a Servicing
Officer of the Master Servicer stating that it has received payment in full of a
Mortgage Loan or that payment in full will be escrowed in a manner customary for
such purposes, the Custodian agrees promptly to release to the Servicer or the
Master Servicer the related Mortgage File. The Company shall deliver to the
Custodian and the Custodian agrees to accept the Mortgage Note and other
documents constituting the Mortgage File with respect to any Substitute Mortgage
Loan.

            From time to time as is appropriate for the servicing or foreclosure
of any Mortgage Loan, including, for this purpose, collection under any Primary
Insurance Policy, the Servicer (or if the Servicer does not, the Master
Servicer) shall deliver to the Custodian a Request for Release signed by a
Servicing Officer requesting that possession of the Mortgage File be released to
the Servicer and certifying as to the reason for such release and that such
release will not invalidate any insurance coverage provided in respect of the
Mortgage Loan under any of the Insurance Policies. Upon receipt of the
foregoing, the Custodian shall deliver the Mortgage File to the Servicer. The
Servicer shall cause the Mortgage File or any document therein so released to be
returned to the Custodian when the need therefore by the Servicer no longer
exists, unless (i) the Mortgage Loan has been liquidated and the Liquidation
Proceeds relating to the Mortgage Loan have been deposited in the Custodial
Account or the Certificate Account or (ii) the Mortgage File or such document
has been delivered to an attorney, or to a public trustee or other public
official as required by law, for purposes of initiating or pursuing legal action
or other proceedings for the foreclosure of the Mortgaged Property either
judicially or non-judicially, and the Servicer has delivered to the Custodian a
certificate of a servicing officer certifying as to the name and address of the
Person to which such Mortgage File or such document was delivered and the
purpose or purposes of such delivery.

            At any time that the Servicer is required to deliver to the
Custodian a Request for Release, the Servicer shall deliver two copies of the
Request for Release if delivered in hard copy or the Servicer may furnish such
Request for Release electronically in a form acceptable to the Custodian, in
which event the servicing officer transmitting the same shall be deemed to have
signed the Request for Release. In connection with any Request for Release of a
Mortgage File because of


                                       N-3

<PAGE>



a repurchase of a Mortgage Loan, such Request for Release shall be followed by
an assignment of mortgage, without recourse, representation or warranty from the
Trustee to the Seller and the related Mortgage Note shall be endorsed without
recourse by the Trustee and be returned to the Seller. In connection with any
Request for Release of a Mortgage File because of the payment in full of a
Mortgage Loan, such Request for Release shall be accompanied by a certificate of
satisfaction or other similar instrument to be executed by or on behalf of the
Trustee and returned to the Servicer.

            2.5 ASSUMPTION AGREEMENTS. In the event that any assumption
agreement, substitution of liability agreement or sale of servicing agreement is
entered into with respect to any Mortgage Loan subject to this Agreement in
accordance with the terms and provisions of the Pooling and Servicing Agreement,
the Master Servicer, to the extent provided in the Servicing Agreement, shall
enforce the obligation of the Servicer to notify the Custodian that such
assumption or substitution agreement has been completed by forwarding to the
Custodian the original of such assumption or substitution agreement, which shall
be added to the related Mortgage File and, for all purposes, shall be considered
a part of such Mortgage File to the same extent as all other documents and
instruments constituting parts thereof.

                                   SECTION 3.

                            CONCERNING THE CUSTODIAN

            3.1 CUSTODIAN AS BAILEE AND AGENT OF THE TRUSTEE. With respect to
each Mortgage Note, Mortgage and other documents constituting each Mortgage File
which are delivered to the Custodian, the Custodian is exclusively the bailee
and custodial agent of the Trustee and has no instructions to hold any Mortgage
Note or Mortgage for the benefit of any person other than the Trustee and the
Certificateholders and undertakes to perform such duties and only such duties as
are specifically set forth in this Agreement and in the Pooling and Servicing
Agreement. Except upon compliance with the provisions of Section 2.4 of this
Agreement, no Mortgage Note, Mortgage or Mortgage File shall be delivered by the
Custodian to the Company, the Servicer or the Master Servicer or otherwise
released from the possession of the Custodian.

            3.2 CUSTODIAN MAY OWN CERTIFICATES. The Custodian in its individual
or any other capacity may become the owner or pledgee of Certificates with the
same rights it would have if it were not Custodian.

            3.3 MASTER SERVICER TO PAY CUSTODIAN'S FEES AND EXPENSES. The Master
Servicer covenants and agrees to pay to the Custodian from time to time, and the
Custodian shall be entitled to, reasonable compensation for all services
rendered by it in the exercise and performance of any of the powers and duties
hereunder of the Custodian, and the Master Servicer will pay or reimburse the
Custodian upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Custodian in accordance with any of the
provisions of this Agreement (including the reasonable compensation and the
expenses and disbursements of its counsel and of all persons not regularly in
its employ), except any such expense, disbursement or advance as may arise from
its


                                       N-4

<PAGE>



negligence or bad faith or to the extent that such cost or expense is
indemnified by the Trust Fund pursuant to the Pooling and Servicing Agreement.

            3.4 CUSTODIAN MAY RESIGN; TRUSTEE MAY REMOVE CUSTODIAN. The
Custodian may resign from the obligations and duties hereby imposed upon it as
such obligations and duties relate to its acting as Custodian of the Mortgage
Loans. Upon receiving such written notice of resignation, the Trustee shall
either take custody of the Mortgage Files itself and give prompt written notice
thereof to the Company, the Master Servicer, the Securities Administrator and
the Custodian, or promptly appoint a successor Custodian by written instrument,
in duplicate, one copy of which instrument shall be delivered to the resigning
Custodian and one copy to the successor Custodian. If the Trustee shall not have
taken custody of the Mortgage Files and no successor Custodian shall have been
so appointed and have accepted appointment within 30 days after the giving of
such written notice of resignation, the resigning Custodian may petition any
court of competent jurisdiction for the appointment of a successor Custodian.

            The Trustee may, with or without cause, upon at least 60 days notice
remove and discharge the Custodian from the performance of its duties with the
consent of the Master Servicer. In such event, the Trustee shall appoint, or
petition a court of competent jurisdiction to appoint, a successor Custodian
hereunder. Any successor Custodian shall be a depository institution subject to
supervision or examination by federal or state authority, shall be able to
satisfy the other requirements contained in Section 3.6 hereof and shall be
unaffiliated with the Servicer or the Company.

            Any resignation or removal of the Custodian and appointment of a
successor Custodian pursuant to any of the provisions of this Section 3.4 shall
become effective upon acceptance of appointment by the successor Custodian. The
Trustee shall give prompt notice to the Company and the Master Servicer of the
appointment of any successor Custodian. No successor Custodian shall be
appointed by the Trustee without the prior approval of the Company and the
Master Servicer.

            3.5 MERGER OR CONSOLIDATION OF CUSTODIAN. Any Person into which the
Custodian may be merged or converted or with which it may be consolidated, or
any Person resulting from any merger, conversion or consolidation to which the
Custodian shall be a party, or any Person succeeding to the business of the
Custodian, shall be the successor of the Custodian hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding.

            3.6 REPRESENTATIONS OF THE CUSTODIAN. The Custodian hereby
represents that it is a depository institution subject to supervision or
examination by a federal or state authority, has a combined capital and surplus
of at least $15,000,000 and is qualified to do business in the jurisdictions in
which it will hold any Mortgage File.



                                      N-5

<PAGE>



            3.7 STANDARD OF CARE; INDEMNIFICATION. Neither the Custodian nor any
parent, affiliate, subsidiaries, directors, officers, agents or employees shall
have any liability arising from or related to this Custodial Agreement or any
related document or agreement, except for any such liability resulting from the
Custodian's negligence or willful misconduct. The Custodian shall be indemnified
and held harmless from the Trust Fund to the extent provided in Section 6.03 of
the Pooling and Servicing Agreement.

            3.8 RELIANCE; LIMITATION OF CUSTODIANT'S DUTIES. The Custodian shall
have no duties or obligations other than those specifically set forth herein or
as may subsequently be agreed to in writing by the parties hereto. The
Custodian: (a) may consult with counsel and any Opinion of Counsel shall be full
and complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in accordance with such
Opinion of Counsel; and shall not be liable for any error of judgment, or for
any act done or step taken or omitted by it, in good faith, except for any such
liability resulting from the Custodian's negligence or willful misconduct; (b)
shall use the same degree of care and skill as is reasonably expected of
financial institutions acting in comparable capacities, provided that this
subsection shall not be interpreted to impose upon the Custodian a higher
standard of care than that set forth above; (c) will be regarded as making no
representations and having no responsibilities (except as expressly set forth
herein) as to the validity, sufficiency, value, genuineness, ownership or
transferability of the Mortgage Loans, and will not be required to and will not
make any representations as to the validity, value, genuineness, ownership or
transferability of the Mortgage Loans; (d) may rely on and shall be protected in
acting upon any certificate, instrument, opinion, notice, letter, telegram,
facsimile or other document delivered to it and in good faith believed by it to
be genuine and to have been signed by the proper party or parties; and (e) may
rely on and shall be protected in acting upon the written instructions of the
Company or the Trustee and such employees and representatives of the Company or
the Trustee as the Company or the Trustee may hereinafter designate in writing.

                                   SECTION 4.

                            MISCELLANEOUS PROVISIONS

            4.1. NOTICES. All notices, requests, consents and demands and other
communications required under this Agreement or pursuant to any other instrument
or document delivered hereunder shall be in writing and, unless otherwise
specifically provided, may be delivered personally, by telegram or telex, or by
registered or certified mail, postage prepaid, return receipt requested, at the
addresses specified on the signature page hereof (unless changed by the
particular party whose address is stated herein by similar notice in writing),
in which case the notice will be deemed delivered when received.

            4.2. AMENDMENTS. No modification or amendment of or supplement to
this Agreement shall be valid or effective unless the same is in writing and
signed by all parties hereto, and neither the Company, the Master Servicer, the
Securities Administrator, nor the Trustee shall enter into any amendment hereof
except as permitted by the Pooling and Servicing Agreement. The


                                       N-6

<PAGE>



Trustee shall give prompt notice to the Custodian of any amendment or supplement
to the Pooling and Servicing Agreement and furnish the Custodian with written
copies thereof.

            4.3. GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED A CONTRACT MADE
UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

            4.4. RECORDATION OF AGREEMENT. To the extent permitted by applicable
law, this Agreement is subject to recordation in all appropriate public offices
for real property records in all the counties or other comparable jurisdictions
in which any or all of the properties subject to the Mortgages are situated, and
in any other appropriate public recording office or elsewhere, such recordation
to be effected by the Company and at the Trust's expense, but only upon
direction accompanied by an Opinion of Counsel reasonably satisfactory to the
Company to the effect that the failure to effect such recordation is likely to
materially and adversely affect the interests of the Certificateholders.

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

            4.5 SEVERABILITY OF PROVISIONS. If any one or more of the covenants,
agreements, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such covenants, agreements, provisions or terms
shall be deemed severable from the remaining covenants, agreements, provisions
or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the holders thereof.



                                       N-7

<PAGE>



            IN WITNESS WHEREOF, this Agreement is executed as of the date first
above written.



Address:                                HSBC BANK USA, N.A., not individually
                                        but solely as Trustee
452 Fifth Avenue
New York, New York 10018
                                        By:____________________________________
Attention:                              Name:
Telecopy:                               Title:
Confirmation:
Address:                                HOMESTAR MORTGAGE ACCEPTANCE
                                        CORP.
W. 115 Century Road
Paramus, New Jersey 07652
                                        By:____________________________________
                                        Name:
                                        Title:

Address:                                WELLS FARGO BANK, NATIONAL
                                        ASSOCIATION, as Master Servicer
9062 Old Annapolis Road
Columbia, Maryland 21045
                                        By:____________________________________
                                        Name:
                                        Title:

Address:                                WELLS FARGO BANK, NATIONAL
                                        ASSOCIATION, as Custodian
2030 Main Street
Suite 100                               By:____________________________________
Irvine, California 92614                Name:
                                        Title:




                                       N-8

<PAGE>



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

            On the___ day of July 2004 before me, a notary public in and for
said State, personally appeared ____________________, known to me to be a
_______________ of HSBC Bank USA, N.A., a national banking association that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation and acknowledged to me that such
corporation executed the within instrument.

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

                                                            ___________________
                                                            Notary Public


[SEAL]




                                       N-9

<PAGE>



STATE OF MARYLAND       )
                        ) ss.:
COUNTY OF HOWARD        )

            On the ___ day of July 2004 before me, a notary public in and for
said State, personally appeared ______________, known to me to be an
___________________ of Wells Fargo Bank, National Association, a national
banking association that executed the within instrument, and also known to me to
be the person who executed it on behalf of said national banking association,
and acknowledged to me that such national banking association executed the
within instrument.

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

                                                            ___________________
                                                            Notary Public
[SEAL]



                                      N-10

<PAGE>



STATE OF NEW JERSEY     )
                        )ss.:
COUNTY OF _________     )

            On the ___ day of July 2004 before me, a notary public in and for
said State, personally appeared _______________, known to me to be a
_____________ of Homestar Mortgage Acceptance Corp., one of the corporations
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

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


                                                            ___________________
                                                            Notary Public
[Notarial Seal]





                                      N-11

<PAGE>



STATE OF MARYLAND       )
                        )ss.:
 COUNTY OF HOWARD       )

            On the ___ day of July 2004 before me, a notary public in and for
said State, personally appeared ______________, known to me to be an
___________________ of Wells Fargo Bank, National Association, a national
banking association that executed the within instrument, and also known to me to
be the person who executed it on behalf of said national banking association,
and acknowledged to me that such national banking association executed the
within instrument.

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


                                                             ___________________
                                                             Notary Public
[Notarial Seal]





                                     N-12

<PAGE>



                                   EXHIBIT ONE

                     FORM OF CUSTODIAN INITIAL CERTIFICATION


                                                      July 1, 2004



HSBC Bank USA, N.A.                    Homestar Mortgage Acceptance Corp.
452 Fifth Avenue                       W. 115 Century Road
New York, New York 10018               Paramus, New Jersey 07652


          Attention: Homestar Mortgage Acceptance Corp., HMAC Mortgage Trust
          2004-3, Asset-Backed Pass-Through Certificates, Series 2004-3

          Re:  Custodial Agreement, dated as of July 1, 2004, by and among HSBC
               Bank USA, N.A., Homestar Mortgage Acceptance Corp. and Wells
               Fargo Bank, National Association relating to HMAC Mortgage Trust
               2004-3, Asset- Backed Pass-Through Certificates, Series 2004-3

Ladies and Gentlemen:

            In accordance with Section 2.3 of the above-captioned Custodial
Agreement and subject to Section 2.02 of the Pooling and Servicing Agreement,
dated as of July 1, 2004 among Homestar Mortgage Acceptance Corp., HSBC Bank
USA, N.A., and Wells Fargo Bank, National Association, the undersigned, as
custodian (the "Custodian"), hereby certifies that as to each Mortgage Loan
listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full
or listed on the attachment hereto) it has reviewed the Mortgage File, and has
determined that: (1) all documents required to be included in the Mortgage File
are in its possession and (2) such documents have been reviewed by it and appear
regular on their face and relate to such Mortgage Loan.

      The Custodian has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Custodial and Pooling and Servicing Agreements. The Custodian
makes no representations as to and shall not be responsible to verify: (i) the
validity, legality, sufficiency, enforceability, due authorization,
recordability or genuineness of any of the documents contained in each Mortgage
File of any of the Mortgage Loans identified on the Mortgage Loan Schedule, (ii)
the collectability, insurability, effectiveness or suitability of any such
Mortgage Loan, or (iii) the existence of any assumption, modification, written
assurance or substitution agreement with respect to any Mortgage File if no such
documents appear in the Mortgage File delivered to the Custodian.




                                      N-13

<PAGE>



            Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Custodial Agreement.

                                          WELLS FARGO BANK, NATIONAL
                                          ASSOCIATION, as Custodian


                                          By:___________________________________
                                          Name:
                                          Title:



                                      N-14

<PAGE>



                                   EXHIBIT TWO

                      FORM OF CUSTODIAN FINAL CERTIFICATION



                                                      _______, 20__



HSBC Bank USA, N.A.                    Homestar Mortgage Acceptance Corp.
452 Fifth Avenue                       W. 115 Century Road
New York, New York 10018               Paramus, New Jersey 07652


     Attention: Homestar Mortgage Acceptance Corp., HMAC Mortgage Trust 2004-3,
     Mortgage Pass-Through Certificates, Series 2004-3

          Re:  Custodial Agreement, dated as of July 1, 2004, by and among HSBC
               Bank USA, N.A., Homestar Mortgage Acceptance Corp. and Wells
               Fargo Bank, National Association relating to HMAC Mortgage Trust
               2004-3, Asset- Backed Pass-Through Certificates, Series 2004-3

Ladies and Gentlemen:

            In accordance with Section 2.3 of the above-captioned Custodial
Agreement and subject to Section 2.02 of the Pooling and Servicing Agreement,
the undersigned, as Custodian, hereby certifies that it has received a Mortgage
File with respect to each Mortgage Loan listed in the Mortgage Loan Schedule
containing with respect to each Mortgage Loan:

            (i) the original Mortgage Note (including all riders thereto)
      bearing all intervening endorsements necessary to show a complete chain of
      endorsements from the original payee, endorsed "Pay to the order of
      _____without recourse", via original signature, and, if previously
      endorsed, signed in the name of the last endorsee by a duly qualified
      officer of the last endorsee. If the Mortgage Loan was acquired by the
      last endorsee in a merger, the endorsement must be by "[name of last
      endorsee], successor by merger to [name of the predecessor]." If the
      Mortgage Loan was acquired or originated by the last endorsee while doing
      business under another name, the endorsement must be by "[name of last
      endorsee], formerly known as [previous name].";

            (ii) The original recorded Mortgage, noting the presence of the MIN
      of the Mortgage Loan and either language indicating that the Mortgage Loan
      is a MOM loan or if the Mortgage Loan was not a MOM loan at origination,
      the original Mortgage and the assignment thereof to MERS, with evidence of
      recording indicated thereon; provided that


                                      N-15

<PAGE>



      if such document is not included because of a delay by the public
      recording office where such document has been delivered for recordation or
      such office as a matter of policy does not return the original of such
      document or if such original Mortgage has been lost, the Seller shall
      include or cause to be included a copy thereof certified by the
      appropriate recording office, if available;

            (iii) the original Assignment of Mortgage in blank, in form and
      substance acceptable for recordation in the jurisdiction in which the
      related mortgage property is located and signed in the name of the Last
      Endorsee by an authorized officer; unless the Mortgage Loan is registered
      on the MERS system;

            (iv) The original intervening Assignments, if any and if available,
      with evidence of recording thereon, showing an unbroken chain of title to
      the Mortgage from the originator thereof to Person assigning it to the
      Trustee (or to MERS, if the Mortgage Loan is registered on the MERS(R)
      System); provided that if such document is not included because of a delay
      by the public recording office where such document has been delivered for
      recordation or such office as a matter of policy does not return the
      original of such document, the Seller shall include or cause to be
      included a copy thereof certified by the appropriate recording office, if
      available;

            (v) The originals of each assumption, modification or substitution
      agreement, if any and if available, relating to the Mortgage Loan; and

            (vi) the original title insurance policy, or, if such policy has not
      been issued, any one of an original or a copy of the preliminary title
      report, title binder or title commitment on the Mortgaged Property with
      the original policy of the insurance to be delivered promptly following
      the receipt thereof;

            Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Custodial Agreement or in the
Pooling and Servicing Agreement, as applicable.

                                                WELLS FARGO BANK, NATIONAL
                                                ASSOCIATION, as Custodian



                                                By:___________________________
                                                Name:_________________________
                                                Title:________________________




                                      N-16

<PAGE>



                                    EXHIBIT O

                                   [RESERVED]







                                       O-1

<PAGE>



                                    EXHIBIT P

                        MORTGAGE LOAN PURCHASE AGREEMENT

            This MORTGAGE LOAN PURCHASE AGREEMENT (this "Agreement"), dated as
of June 1, 2004 "(the Cut-off Date"), is made between Home Star Mortgage
Services LLC (the "Seller") and Homestar Mortgage Acceptance Corp. (the
"Purchaser").

                              W I T N E S S E T H:

            WHEREAS, the Seller owns the Mortgage Loans indicated on the
Mortgage Loan Schedule attached as Exhibit 1 hereto (the "Mortgage Loans"),
including rights to (a) any property acquired by foreclosure or deed in lieu of
foreclosure or otherwise, and (b) the proceeds of any insurance policies
covering the Mortgage Loans;

            WHEREAS, the parties hereto desire that the Seller sell the Mortgage
Loans to the Purchaser (other than the servicing rights with respect thereto),
and that the Seller make certain representations and warranties and undertake
certain obligations with respect to the Mortgage Loans;

            WHEREAS, pursuant to the terms of a Pooling and Servicing Agreement,
to be dated as of the Cut-off Date (the "Pooling and Servicing Agreement"),
among the Purchaser, as seller, HSBC Bank USA, as trustee (the "Trustee") and
Wells Fargo Bank, N.A., as master servicer and securities administrator (the
"Master Servicer"), the Purchaser will issue Asset-Backed Pass-Through
Certificates, Series 2004-3 (the "Certificates");

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

                                    ARTICLE I

                                   DEFINITIONS

            Section 1.1.DEFINITIONS. For all purposes of this Mortgage Loan
Purchase Agreement, except as otherwise expressly provided herein or unless the
context otherwise requires, capitalized terms not otherwise defined herein shall
have the meanings assigned to such terms in the Pooling and Servicing Agreement.
All other capitalized terms used herein shall have the meanings specified
herein.



                                       P-1

<PAGE>



                                   ARTICLE II

                  SALE OF MORTGAGE LOANS AND RELATED PROVISIONS

            Section 2.1.  SALE OF MORTGAGE LOANS.

            (a) The Seller, by the execution and delivery of this Agreement,
      does hereby sell, assign, set over, and otherwise convey to the Purchaser,
      without recourse but subject to the terms of this Agreement, (i) all of
      its right, title and interest in the Mortgage Loans identified on Exhibit
      1 as of the Closing Date, including the related Cut-off Date Principal
      Balance, all interest accruing thereon on and after the Cut-off Date, and
      all collections of interest and principal due after the Cut-off Date,
      other than the servicing rights with respect thereto (ii) the Seller's
      interest in any insurance policies and (iii) all proceeds of the
      foregoing.

            (b) In connection with any transfer pursuant to this Section 2.1,
      the Seller agrees (i) to cause the books and records of the Seller to
      indicate that the Mortgage Loans have been sold to the Purchaser pursuant
      to this Agreement and (ii) to deliver to the Purchaser the Mortgage Loan
      Schedule which is attached as Exhibit 1 to this Agreement, and to the
      Pooling and Servicing Agreement, as which is incorporated by reference
      herein.

            (c) In connection with such conveyances by the Seller, the Seller
      shall on behalf of the Purchaser deliver to, and deposit with the Trustee,
      on or before the Closing Date, the following documents or instruments with
      respect to each Mortgage Loan:

                  (i) the original Mortgage Note (including all riders thereto)
            bearing all intervening endorsements necessary to show a complete
            chain of endorsements from the original payee, endorsed "Pay to the
            order of _____without recourse", via original signature, and, if
            previously endorsed, signed in the name of the last endorsee by a
            duly qualified officer of the last endorsee or, with respect to any
            Mortgage Loan as to which the original Mortgage Note has been
            permanently lost or destroyed and has not been replaced, a lost note
            affidavit with indemnity. If the Mortgage Loan was acquired by the
            last endorsee in a merger, the endorsement must be by "[name of last
            endorsee], successor by merger to [name of the predecessor]." If the
            Mortgage Loan was acquired or originated by the last endorsee while
            doing business under another name, the endorsement must be by "[name
            of last endorsee], formerly known as [previous name]." Within 45
            days after the Closing Date, the Seller shall endorse or cause to be
            endorsed the Mortgage Note in the name of "HSBC Bank USA, as trustee
            under the Pooling and Servicing Agreement relating to Homestar
            Mortgage Acceptance Corp., Asset-Backed Pass-Through Certificates,
            Series 2004-3" for each Mortgage Note;

                  (ii) The original recorded Mortgage, noting the presence of
            the MIN of the Mortgage Loan and language indicating that the
            Mortgage Loan is a MOM Loan


                                       P-2

<PAGE>



            if the Mortgage Loan is a MOM Loan, with evidence of recording
            indicated thereon; provided that if such document is not included
            because of a delay by the public recording office where such
            document has been delivered for recordation or such office as a
            matter of policy does not return the original of such document or if
            such original Mortgage has been lost, the Seller shall include or
            cause to be included a copy thereof certified by the appropriate
            recording office, if available;

                  (iii) unless the Mortgage Loan is registered on the MERS(R)
            System, an original duly executed Assignment of the Mortgage in
            recordable form from the Seller or the originator, as applicable, to
            "HSBC Bank USA, as trustee under the Pooling and Servicing Agreement
            relating to Homestar Mortgage Acceptance Corp., Asset-Backed
            Pass-Through Certificates, Series 2004-3" for each Mortgage Note;

                  (iv) The original intervening Assignments, if any and if
            available, with evidence of recording thereon, showing an unbroken
            chain of title to the Mortgage from the originator thereof to Person
            assigning it to the Trustee (or to MERS, if the Mortgage Loan is
            registered on the MERS(R) System and noting the presence of a MIN);
            provided that if such document is not included because of a delay by
            the public recording office where such document has been delivered
            for recordation or such office as a matter of policy does not return
            the original of such document, the Seller shall include or cause to
            be included a copy thereof certified by the appropriate recording
            office, if available;

                  (v) The originals of each assumption, modification or
            substitution agreement, if any and if available, relating to the
            Mortgage Loan; and

                  (vi) the original title insurance policy, or, if such policy
            has not been issued, any one of an original or a copy of the
            preliminary title report, title binder or title commitment on the
            Mortgaged Property with the original policy of the insurance to be
            delivered promptly following the receipt thereof;

      The Seller need not cause to be recorded any Assignment in any
jurisdiction under the laws of which, as evidenced by an Opinion of Counsel
delivered by the Seller to the Trustee and the Rating Agencies, the recordation
of such Assignment is not necessary to protect the Trustee's interest in the
related Mortgage Loan; provided, however, notwithstanding the delivery of any
Opinion of Counsel, each Assignment shall be submitted for recording by the
Seller, at no expense to the Trust or the Trustee, upon the earliest to occur
of: (i) reasonable direction by the Holders of Certificates evidencing at least
25% of the Voting Rights, (ii) the occurrence of a Event of Default under the
Pooling and Servicing Agreement, (iii) the occurrence of a bankruptcy,
insolvency or foreclosure relating to the Seller, (iv) the occurrence of a
servicing transfer as described in Section 7.02 of the Pooling and Servicing
Agreement and (v) if the Seller is not the Master Servicer, the occurrence of a
bankruptcy, insolvency or foreclosure relating to the Mortgagor under the
related Mortgage. Upon receipt of written notice from the Trustee that recording
of the Assignments is required pursuant to


                                       P-3

<PAGE>



one or more of the conditions set forth in the preceding sentence, the Seller
shall be required to deliver such Assignments for recording as provided above,
promptly and in any event within 30 days following receipt of such notice. The
Seller shall furnish the Trustee, or its designated agent, with a copy of each
Assignment submitted for recording. In the event that any such Assignment is
lost or returned unrecorded because of a defect therein, the Seller shall
promptly have a substitute Assignment prepared or have such defect cured, as the
case may be, and thereafter cause each such Assignment to be duly recorded.

            To the extent an Assignment referred to in clause (c)(iii) above is
required to be recorded (including, without limitation, Assignments for states
which are not covered by the Opinion of Counsel in the prior paragraph), the
Seller at its own expense shall complete and submit it for recording in the
appropriate public office for real property records, with such Assignment
completed in favor of the Trustee. While such Assignment to be recorded is being
recorded, the Trustee shall retain a photocopy of such Assignment. If any
Assignment is lost or returned unrecorded to the Trustee because of any defect
therein, the Seller is required to prepare a substitute Assignment or cure such
defect, as the case may be, and the Seller shall cause such substitute
Assignment to be recorded in accordance with this paragraph.

            Notwithstanding anything to the contrary contained in this Section
2.1, in those instances where the public recording office retains the original
Mortgage after it has been recorded, the Seller shall be deemed to have
satisfied its obligations hereunder upon delivery to the Trustee of a copy of
such Mortgage certified by the public recording office to be a true and complete
copy of the recorded original thereof.

            If any Assignment is lost or returned unrecorded to the Trustee
because of any defect therein, the Seller shall prepare a substitute Assignment
or cure such defect, as the case may be, and the Seller shall cause such
Assignment to be recorded in accordance with this Section 2.1.

            If a defect in any Mortgage File is discovered which materially and
adversely affects the value of the related Mortgage Loan, or the interests of
the Certificateholders in such Mortgage Loan, including if any document required
to be delivered to the Trustee has not been delivered (provided that a Mortgage
File will not be deemed to contain a defect for an unrecorded Assignment under
clause (c) (iii) above if the Seller has submitted such Assignment for recording
pursuant to the terms of the following paragraph), the Seller shall either (i)
purchase such Mortgage Loan from the Trust Fund at the Purchase Price within 90
days after the date on which the Seller was notified of such defect; provided,
that if such defect would cause the Mortgage Loan to be other than a "qualified
mortgage" as defined in Section 860G(a)(3) of the Code, any such cure or
repurchase must occur within 90 days from the date such breach was discovered,
or cure such defect, or (ii) substitute a Qualified Substitute Mortgage Loan for
the related Mortgage Loan upon the same terms and conditions set forth in
Section 3.1 hereof for substitutions.

            The Seller shall exercise its best reasonable efforts to deliver or
cause to be delivered to the Custodian on behalf of the Trustee within 120 days
of the Closing Date, with respect to the


                                       P-4

<PAGE>



Mortgage Loans, the original or a photocopy of the title insurance policy with
respect to each such Mortgage Loan assigned to the Purchaser pursuant to this
Section 2.1.

            In connection with the assignment of any Mortgage Loan registered on
the MERS(R) System, the Seller further agrees that it will cause, at the
Seller's own expense, as of the Closing Date, the MERS(R) System to indicate
that such Mortgage Loans have been assigned by the Seller to the Trustee in
accordance with this Agreement for the benefit of the Certificateholders by
including (or deleting, in the case of Mortgage Loans which are repurchased in
accordance with this Agreement) in such computer files (a) the code in the field
which identifies the specific Trustee and (b) the code in the field "Pool Field"
which identifies the series of the Certificates issued in connection with such
Mortgage Loans. The Seller and the Purchaser further agree that they will not,
and will not permit the Master Servicer to, alter the codes referenced in this
paragraph with respect to any Mortgage Loan during the term of this Agreement
unless and until such Mortgage Loan is repurchased in accordance with the terms
of this Agreement.

            The Purchaser hereby acknowledges its acceptance of all right, title
and interest to the Mortgage Loans and other property, now existing and
hereafter created, conveyed to it pursuant to this Section 2.1, other than with
respect to servicing rights with respect to the Mortgage Loans. In addition to
the foregoing, on the Closing Date the Seller assigns to the Purchaser all of
its right, title and interest in the Servicing Agreements.

            (d) The parties hereto intend that the transaction set forth herein
      constitutes a sale by the Seller to the Purchaser of all the Seller's
      right, title and interest in and to the Mortgage Loans (other than with
      respect to the related servicing rights) and other property as and to the
      extent described above. In the event the transaction set forth herein is
      deemed not to be a sale, the Seller hereby grants to the Purchaser a
      security interest in (i) all of the Seller's right, title and interest in,
      to and under the Mortgage Loans (other than with respect to the related
      servicing rights), (ii) all of Seller's interest in any insurance policies
      and (iii) all proceeds of the foregoing and such other property, to secure
      all of the Seller's obligations hereunder, and this Agreement shall
      constitute a security agreement under applicable law. The Seller agrees to
      take or cause to be taken such actions and to execute such documents,
      including without limitation the filing of all necessary UCC-1 financing
      statements filed in the State of Delaware (which shall have been submitted
      for filing as of the Closing Date with respect to the aggregate Stated
      Principal Balance of the Mortgage Loans), any continuation statements with
      respect thereto and any amendments thereto required to reflect a change in
      the name or corporate structure of the Seller or the filing of any
      additional UCC-1 financing statements due to the change in the principal
      office of the Seller, as are necessary to perfect and protect the
      Purchaser's interests in each Mortgage Loan and the proceeds thereof.



                                       P-5

<PAGE>



            Section 2.2. PAYMENT OF PURCHASE PRICE FOR THE MORTGAGE LOANS.

            (a) The purchase price for the Mortgage Loans (other than with
      respect to the servicing rights thereto) shall be the sum of (1)
      $[____________] and (2) a 100% Percentage Interest in the Class P, Class
      C, Class R and Class R-X Certificates.

            (b) In consideration of the sale of the Mortgage Loans from the
      Seller to the Purchaser on the Closing Date, the Purchaser shall (1) pay
      to the Seller on the Closing Date by wire transfer of immediately
      available funds to a bank account designated by the Seller, the amount
      specified above in clause (a)(1) and (2) cause the transfer to the Seller
      of the Certificates in clause (a)(2).



                                       P-6

<PAGE>



                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES;
                               REMEDIES FOR BREACH

            Section 3.1. SELLER REPRESENTATIONS AND WARRANTIES. The Seller
hereby represents and warrants to the Purchaser as of the Closing Date (or if
otherwise specified below, as of the date so specified) that:

            (a) with respect to the Seller:

                  (i) the Seller is a limited liability company duly organized,
            validly existing and in good standing under the laws of the State of
            Delaware;

                  (ii) the Seller has full corporate power to own its property,
            to carry on its business as presently conducted and to enter into
            and perform its obligations under this Agreement;

                  (iii) the execution and delivery by the Seller of this
            Agreement have been duly authorized by all necessary corporate
            action on the part of the Seller; and neither the execution and
            delivery of this Agreement, nor the consummation of the transactions
            herein contemplated hereby, nor compliance with the provisions
            hereof, will conflict with or result in a breach of, or constitute a
            default under, any of the provisions of any law, governmental rule,
            regulation, judgment, decree or order binding on the Seller or its
            properties or the certificate of incorporation or by-laws of the
            Seller, except those conflicts, breaches or defaults which would not
            reasonably be expected to have a material adverse effect on the
            Seller's ability to enter into this Agreement and to consummate the
            transactions contemplated hereby;

                  (iv) the execution, delivery and performance by the Seller of
            this Agreement and the consummation of the transactions contemplated
            hereby do not require the consent or approval of, the giving of
            notice to, the registration with, or the taking of any other action
            in respect of, any state, federal or other governmental authority or
            agency, except those consents, approvals, notices, registrations or
            other actions as have already been obtained, given or made and, in
            connection with the recordation of the Mortgages, powers of attorney
            or assignments of Mortgages not yet completed;

                  (v) this Agreement has been duly executed and delivered by the
            Seller and, assuming due authorization, execution and delivery by
            the Purchaser, constitutes a valid and binding obligation of the
            Seller enforceable against it in accordance with its terms (subject
            to applicable bankruptcy and insolvency laws and other similar laws
            affecting the enforcement of the rights of creditors generally);


                                       P-7

<PAGE>



                  (vi) to the best of the Seller's knowledge, there are no
            actions, litigation, suits or proceedings pending or threatened
            against the Seller before or by any court, administrative agency,
            arbitrator or governmental body (i) with respect to any of the
            transactions contemplated by this Agreement or (ii) with respect to
            any other matter which in the judgment of the Seller if determined
            adversely to the Seller would reasonably be expected to materially
            and adversely affect the Seller's ability to perform its obligations
            under this Agreement; and the Seller is not in default with respect
            to any order of any court, administrative agency, arbitrator or
            governmental body so as to materially and adversely affect the
            transactions contemplated by this Agreement; and

                  (vii) the Seller's chief executive office and principal place
            of business are located in the County of Bergen in the State of New
            Jersey.

      (b) with respect to the Mortgage Loans:

            (i) as of the Cut-off Date, the information set forth in the
      Mortgage Loan Schedule hereto is true and correct in all material
      respects;

            (ii) immediately prior to the transfer to the Purchaser, the Seller
      was the sole owner of beneficial title and holder, and had good title to,
      of each Mortgage and Mortgage Note relating to the Mortgage Loans and is
      conveying the same free and clear of any and all liens, claims,
      encumbrances, participation interests, equities, pledges, charges or
      security interests of any nature and the Seller has full right and
      authority to sell or assign the same pursuant to this Agreement;

            (iii) no selection procedure reasonably believed by the Seller to be
      adverse to the interests of the Certificateholders or the Trust was
      utilized in selecting the Mortgage Loans;

            (iv) each Mortgage Loan constitutes a "qualified mortgage" under
      Section 860G(a)(3)(A) of the Code and Treasury Regulation Section
      1.860G-2(a)(1);

            (v) the information set forth under the caption "The Mortgage
      Pool--General" and "--Mortgage Loan Characteristics" in the Prospectus
      Supplement is true and correct in all material respects;

            (vi) as of the Cut-off Date, no Mortgage Loan is 30 or more days
      past due. The Seller has not advanced funds, or induced, solicited or
      knowingly received any advance of funds from a party other than the owner
      of the related Mortgaged Property, directly or indirectly, for the payment
      of any amount required by the Mortgage Note or Mortgage;

            (vii) there are no delinquent taxes or assessment liens against the
      related Mortgaged Property;


                                       P-8

<PAGE>



            (viii)no default, breach, violation or waiver exists under the
      mortgage documents, and no modifications to the mortgage documents have
      been made that have not been reflected in the Mortgage Loan Schedule;


            (ix) all buildings upon, or comprising part of, the Mortgaged
      Property are insured by an insurer acceptable to Fannie Mae and Freddie
      Mac against loss by fire, hazards of extended coverage and such other
      hazards as are customary in the area where the Mortgaged Property is
      located, and such insurer is licensed to do business in the state where
      the Mortgaged Property is located. All such insurance policies contain a
      standard mortgagee clause naming the originator, its successors and
      assigns as mortgagee and Seller has received no notice that all premiums
      thereon have not been paid. The amount of the Mortgage Loan covered by
      these insurance policies is in accordance with the standards of Fannie Mae
      or Freddie Mac. If upon origination of the Mortgage Loan, the Mortgaged
      Property was, or was subsequently deemed to be, in an area identified in
      the Federal Register by the Federal Emergency Management Agency as having
      special flood hazards (and such flood insurance has been made available),
      which require under applicable law that a flood insurance policy meeting
      the requirements of the current guidelines of the Federal Insurance
      Administration (or any successor thereto) be obtained, such flood
      insurance policy is in effect which policy is with a generally acceptable
      carrier in an amount representing coverage not less than the least of (A)
      the principal balance of the related Mortgage Loan, (B) the minimum amount
      required to compensate for damage or loss on a replacement cost basis, or
      (C) the maximum amount of insurance that is available under the Flood
      Disaster Protection Act of 1973. The Mortgage obligates the Mortgagor
      thereunder to maintain all such insurance at Mortgagor's cost and expense
      and, on the Mortgagor's failure to do so, authorizes the holder of the
      Mortgage to maintain such insurance at Mortgagor's cost and expense and to
      obtain reimbursement therefor from the Mortgagor;

            (x) all parties which have had any interest in the Mortgage Loan,
      whether as mortgagee, assignee, pledgee or otherwise, are (or during the
      period in which they held and disposed of such interest, were) in
      compliance with any and all applicable "doing business" and licensing
      requirements of the state wherein the Mortgaged Property is located;

            (xi) as of the date of transfer of the Mortgage Loans, there is no
      mechanics' lien or claim for work, labor or material affecting the
      Mortgaged Property except those which are insured against by the title
      insurance policy;

            (xii) as of the date of the transfer of the Mortgage Loans to the
      Purchaser, there is no valid offset, defense or counterclaim to any
      Mortgage Note or Mortgage, and, to the best of the Seller's knowledge or
      the knowledge of the related servicer, no such offset, defense or
      counterclaim has been asserted with respect thereto;



                                       P-9

<PAGE>



            (xiii)as of the Closing Date, the physical property subject to any
      Mortgage is free of material damage and is in good repair and, to the best
      of the Seller's knowledge or the knowledge of the related servicer, there
      is no proceeding for the total or partial condemnation thereof;

            (xiv) all improvements which were considered in determining the
      appraised value of the related Mortgaged Property lay wholly within the
      boundaries and building restriction lines of the Mortgaged Property, and
      no improvements on adjoining properties encroach upon the Mortgaged
      Property;

            (xv) at the time of origination, no improvement located on or being
      part of the Mortgaged Property was in violation of any applicable zoning
      and subdivision laws or ordinances;

            (xvi) to the best of the Seller's knowledge, all inspections,
      licenses and certificates required to be made or issued with respect to
      all occupied portions of the Mortgaged Property and, with respect to the
      use and occupancy of the same, including but not limited to certificates
      of occupancy, have been made or obtained from the appropriate authorities;

            (xvii)as of the origination date of each Mortgage Loan, the related
      Mortgaged Property is lawfully permitted to be occupied under applicable
      law;

            (xviiieach Mortgage Loan is and will be a mortgage loan arising out
      of the originator's practice in accordance with the underwriting
      guidelines of the related originator. The Seller has no knowledge of any
      fact that should have led it to expect at the time of the initial creation
      of an interest in the Mortgage Loan that such Mortgage Loan would not be
      paid in full when due;

            (xix) each original Mortgage has been recorded or is in the process
      of being recorded in the appropriate jurisdictions wherein such
      recordation is required to perfect the lien thereof for the benefit of the
      Trust Fund;

            (xx) if an Assignment is included in the Mortgage File, such
      Assignment is in recordable form and is acceptable for recording under the
      laws of the jurisdiction in which the Mortgaged Property is located;

            (xxi) the related Mortgage File contains each of the documents and
      instruments specified;

            (xxii)the Mortgage Loans are being serviced according to the
      guidelines of the applicable servicer;



                                      P-10

<PAGE>



            (xxiii) the Mortgage Note and the Mortgage have not been altered or
      modified in any material respect, except by a written instrument which has
      been recorded, and the substance of any such alteration or modification
      has been approved by the title insurer, to the extent required by the
      related policy. No instrument of alteration or modification has been
      executed by the Seller or any other person in the chain of title from the
      Seller, and no Mortgagor has been released, in whole or in part, except in
      connection with an assumption agreement approved by the title insurer;

            (xxiv)the Mortgage has not been satisfied, subordinated, rescinded
      or canceled, in whole or in part, and the Mortgaged Property has not been
      released from the lien of the Mortgage, in whole or in part, nor has any
      instrument been executed that would effect any such satisfaction,
      subordination, rescission, cancellation or release;

            (xxv) a lender's title policy or binder, or other assurance of title
      insurance customary in a form acceptable to Fannie Mae or Freddie Mac was
      issued at origination and each policy or binder is valid and remains in
      full force and effect;

            (xxvi)the Mortgaged Property consists of a contiguous parcel of real
      property with single-family residence erected thereon, or a two- to four-
      family dwelling, or an individual condominium unit, or an individual unit
      in a planned unit development or a DE MINIMIS planned unit development. To
      the best of the Seller's knowledge, the Mortgaged Property does not
      consist of any of the following property types: (a) co-operative units,
      (b) mobile homes and (c) manufactured homes (as defined in the Fannie Mae
      Originator-Servicer's Guide), except when the appraisal indicates that the
      home is of comparable construction to a stick or beam construction home,
      is readily marketable, has been permanently affixed to the site and is not
      in a mobile home "park." The Mortgaged Property is either a fee simple
      estate or a residential lease. If any of the Mortgage Loans are secured by
      a leasehold interest, with respect to each leasehold interest: the use of
      leasehold estates for residential properties is an accepted practice in
      the area where the related Mortgaged Property is located; residential
      property in such area consisting of leasehold estates is readily
      marketable; the lease is recorded and no party is in any way in breach of
      any provision of such lease; the leasehold is in full force and effect and
      is not subject to any prior lien or encumbrance by which the leasehold
      could be terminated or subject to any charge or penalty; and the remaining
      term of the lease does not terminate less than ten years after the
      maturity date of such Mortgage Loan;

            (xxvii) either (a) the Mortgage File contains an appraisal of the
      related Mortgaged Property which satisfied the standards of Fannie Mae and
      Freddie Mac and was made and signed, prior to the approval of the Mortgage
      Loan application, by a qualified appraiser, duly appointed by the Seller,
      who had no interest, direct or indirect in the Mortgaged Property or in
      any loan made on the security thereof, whose compensation is not affected
      by the approval or disapproval of the Mortgage Loan and who met the
      minimum qualifications of Fannie Mae and Freddie Mac or (b) with respect
      to no more than [___]% of the Mortgage Loans, by


                                      P-11

<PAGE>



      aggregate principal balance as of the Cut-off Date, the Mortgage File
      contains an "automated valuation" in accordance with the underwriting
      standards of the related originator. Each appraisal of the Mortgage Loan
      was made in accordance with the relevant provisions of the Financial
      Institutions Reform, Recovery, and Enforcement Act of 1989;

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

            (xxix)none of the Mortgage Loans are "buydown" mortgage loans or
      graduated payment mortgage loans;

            (xxx) the Mortgage is a legal, valid, existing and enforceable first
      lien on the Mortgaged Property, including all improvements on the
      Mortgaged Property, if any, subject only to (1) the lien of current real
      property taxes and assessments not yet due and payable, (2) covenants,
      conditions and restrictions, rights of way, easements and other matters of
      the public record as of the date of recording being acceptable to mortgage
      lending institutions generally and specifically referred to in the
      lender's title insurance policy delivered to the originator of the
      Mortgage Loan and which do not materially and adversely affect the
      Appraised Value of the Mortgaged Property and (3) other matters to which
      like properties are commonly subject which do not materially and adversely
      affect the benefits of the security intended to be provided by the
      Mortgage. The Seller has full right to sell and assign the Mortgage to the
      Purchaser;

            (xxxi)each Mortgagor who is a party to the Mortgage Note is a
      natural person;

            (xxxiieach Mortgage Loan was originated or purchased by (a) a
      savings and loan association, savings bank, commercial bank, credit union,
      insurance company or similar institution which is supervised and examined
      by a federal or state authority (or originated by (i) a subsidiary of any
      of the foregoing institutions which subsidiary is actually supervised and
      examined by applicable regulatory authorities or (ii) a mortgage loan
      correspondent of any of the foregoing and that was originated pursuant to
      the criteria established by any of the foregoing) or (b) a mortgagee
      approved by the Secretary of Housing and Urban Development pursuant to
      sections 203 and 211 of the National Housing Act, as amended, in each case
      within the meaning of Section 3(a)(41)(A)(ii) of the Exchange Act;

            (xxxiii) all requirements of any federal, state or local law
      (including usury, truth in lending, real estate settlement procedures,
      consumer credit protection, equal credit opportunity, disclosure or
      recording, predatory and abusive lending laws) applicable to the
      origination and servicing of such Mortgage Loan have been complied with in
      all material respects;


                                      P-12

<PAGE>



            (xxxiv) none of the Mortgage Loans are (a) loans subject to 12 CFR
      Part 226.31, 12 CFR Part 226.32 or 12 CFR Part 226.34 of Regulation Z, the
      regulation implementing TILA, which implements the Home Ownership and
      Equity Protection Act of 1994, as amended ("HOEPA"), (b) loan subject to,
      or in violation of, any applicable state or local law, ordinance or
      regulation similar to HOEPA or (c) classified and/or defined as a "high
      cost home loan" under any federal, state or local law;

            (xxxv) none of the Mortgage Loans secured by Mortgaged Property in
      the States of Georgia, New York, Arkansas, Kentucky and Florida is a "high
      cost home loan" as defined in the Georgia Fair Lending Act, as amended
      (the "Georgia Act"), the Arkansas Home Loan Protection Act, as amended
      (the "Arkansas Act"), Kentucky Revised Statutesss.360.100, as amended (the
      "Kentucky Act"), the Florida Home Loan Protection Actss.494.007 (the
      "Florida Act"), and the New York Predatory Lending Law, codified as N.Y.
      Banking Law ss.6-I, N.Y. Gen. Bus. Lawss.771-a, and N.Y. Real Prop. Acts
      Lawss.1302 (together, the "New York Act"), respectively;

            (xxxvi) none of the Mortgage Loans are subject to the New York Act;
      none of the Mortgage Loans secured by Mortgaged Property in the District
      of Columbia is a "covered loan" as defined in the District of Columbia
      Home Loan Protection Act ss.26- 1151.01 (the "D.C. Act"); none of the
      Mortgage Loans secured by Mortgaged Property in Maine is a "high-rate,
      high-fee mortgage" as defined in Maine Consumer Credit Code -- Truth In
      Lending ss.8-103 (the "Maine Act"); none of the Mortgage Loans secured by
      Mortgaged Property in Nevada is a "home loan" as defined in Nevada Revised
      Statutes title 52, as amended by Assembly Bill No. 284, 72nd Session
      (Nevada 2003) (the "Nevada Act"); and all the Mortgage Loans that are
      subject to the Georgia Act, the New York Act, the Arkansas Act, the
      Kentucky Act, the Florida Act, the D.C. Act, the Maine Act and the Nevada
      Act comply with the requirements of each such legislation;

            (xxxvii) each Prepayment Charge is enforceable and was originated in
      compliance with all applicable federal, state, and local laws;

            (xxxviii) no Mortgage Loan is a High Cost Loan or Covered Loan, as
      applicable (as such terms are defined in Standard & Poor's LEVELS(R)
      Glossary, Version 5.6 Revised, Appendix E, attached hereto as Exhibit 2)
      and no Mortgage Loan originated on or after October 1, 2002 through March
      6, 2003 is governed by the "Georgia Fair Lending Act";

            (xxxix) to the best of the Seller's knowledge, there is no breach,
      default, violation or event of acceleration existing under the Mortgage or
      the Mortgage Note and no event which, with the passage of time or with
      notice and the expiration of any grace or cure period, would constitute a
      default, breach, violation or event of acceleration;

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


                                      P-13

<PAGE>



      except as such enforcement may be limited by bankruptcy, insolvency,
      reorganization or other similar laws affecting the enforcement of
      creditors' rights generally and by general equity principles (regardless
      of whether such enforcement is considered in a proceeding in equity or at
      law). To the best of Seller's knowledge, all parties to the Mortgage Note
      and Mortgage had legal capacity to execute the Mortgage Note and Mortgage
      and each Mortgage Note and Mortgage have been duly and properly executed
      by such parties;

            (lxi) the proceeds of each Mortgage Loan have been fully disbursed,
      there is no requirement for future advances thereunder and any and all
      requirements as to completion of any on-site or off-site improvements and
      as to disbursement from any escrow funds therefore have been complied
      with;

            (lxii)the related Mortgage contains customary and enforceable
      provisions which render the rights and remedies of the holder thereof
      adequate for the realization against the Mortgaged Property of the
      benefits of the security, including (1) in the case of Mortgage designated
      as a deed of trust, by trustee's sale, and (2) otherwise by judicial
      foreclosure;

            (lxiii) the Mortgage contains an enforceable provision for the
      acceleration of the payment of the unpaid principal balance of the
      Mortgage Loan in the event that the Mortgaged Property is sold or
      transferred without the prior written consent of the mortgagee thereunder,
      except as may be limited by applicable law;

            (lxiv) with respect to each adjustable-rate Mortgage Loan, all
      adjustment to the Mortgage Rate and monthly payment have been done in
      accordance with the terms of the related Mortgage Note;

            (lxv) To the best of Seller's knowledge, no fraud was committed in
      connection with the origination of the Mortgage Loans; and

            (lxvi)the information set forth in the Mortgage Loan Schedule with
      respect to the Prepayment Charges is true and correct in all material
      respects.

            It is understood and agreed that the representations and warranties
set forth in this Section 3.1 shall survive the sale of the Mortgage Loans from
the Seller to the Purchaser and shall inure to the benefit of the Purchaser, its
successors and assigns, notwithstanding any restrictive or qualified endorsement
on any Mortgage Note or assignment of Mortgage or the examination of any
Mortgage File. It is understood by the parties hereto that a breach of the
representations and warranties made Section 3.1(b) (xxxvii) or (lxvi) will be
deemed to materially and adversely affect the value of the related Mortgage Loan
or the interest of the Purchaser.

            Upon discovery or receipt of notice by the Seller, the Purchaser or
the Trustee of a breach of any representation or warranty of the Seller set
forth in clause (b) above which breach materially and adversely affects the
value of the Mortgage Loans or the interests of the Purchaser,


                                      P-14

<PAGE>



the Certificateholders or the Trustee in any of the Mortgage Loans delivered to
the Purchaser pursuant to this Agreement, the party discovering or receiving
notice of such breach shall give prompt written notice to the others. In the
case of any such breach of a representation or warranty set forth in clause (b)
above, the Seller shall, within 90 days from the date that the Seller was
notified or otherwise obtained knowledge of such breach, either (i) cure such
breach in all material respects or (ii) purchase such Mortgage Loan from the
Trust Fund at the Purchase Price; provided that if such breach would cause the
Mortgage Loan to be other than a "qualified mortgage" as defined in Section
860G(a)(3) of the Code, any such cure or repurchase must occur within 90 days
from the date such breach was discovered; and provided, further, that (A) in the
case of a breach of the representation and warranty concerning the Mortgage Loan
Schedule contained in clause (b)(i), if such breach relates to any field on the
Mortgage Loan Schedule which identifies any Prepayment Charge or (B) in the case
of a breach of representation (xxxvii) or the unenforceability of any Prepayment
Charge due to subsequent changes in law, then, in each case, in lieu of
purchasing such Mortgage Loan from the Trust Fund at the Purchase Price, the
Seller shall pay the amount of the Prepayment Charge (net of any amount
previously collected by or paid to the Trust Fund in respect of such Prepayment
Charge), and the Seller shall have no right to repurchase (or, as detailed
below, substitute for) such Mortgage Loan. However, subject to the approval of
the Purchaser and except as specified above, the Seller shall have the option to
substitute a Qualified Substitute Mortgage Loan or Loans for such Mortgage Loan
if such substitution occurs within two years following the Closing Date, except
that if the breach would cause the Mortgage Loan to be other than a "qualified
mortgage" as defined in Section 860G(a)(3) of the Code, any such substitution
must occur within 90 days from the date the breach was discovered if such 90 day
period expires before two years following the Closing Date. If the breach of
representation and warranty that gave rise to the obligation to repurchase or
substitute a Mortgage Loan pursuant to this Section 3.1 was the representation
set forth in clause (xxxvii) or (lxvi) of this Section 3.1(b), then the Seller
shall pay to the Trust Fund, concurrently with and in addition to the remedies
provided in the third preceding sentence, an amount equal to any liability,
penalty or the expense that was actually incurred and paid out of or on behalf
of the Trust Fund, and that directly resulted from such breach, or if incurred
and paid by the Trust Fund thereafter, concurrently with such payment. The
obligations of the Seller to cure, purchase or substitute a Qualified Substitute
Mortgage Loan shall constitute the Purchaser's, the Trustee's and the
Certificateholders' sole and exclusive remedy under this Agreement or otherwise
respecting a breach of representations or warranties hereunder with respect to
the Mortgage Loans.

            In the event that the Seller elects to substitute a Qualified
Substitute Mortgage Loan or Loans for a Deleted Mortgage Loan pursuant to this
Section 3.1(b), the Seller shall deliver to the Trustee and the Master Servicer,
as appropriate, with respect to such Qualified Substitute Mortgage Loan or
Loans, the original Mortgage Note, the Mortgage, an Assignment of the Mortgage
in recordable form, and such other documents and agreements as are required by
Section 2.1, with the Mortgage Note endorsed as required by Section 2.1. No
substitution will be made in any calendar month after the Determination Date for
such month. Monthly Payments due with respect to Qualified Substitute Mortgage
Loans in the month of substitution, to the extent received by the Master
Servicer, will be retained by the Master Servicer and remitted by the Master
Servicer to the Seller on the next succeeding Distribution Date. After the month
of substitution, the Seller shall be entitled


                                      P-15

<PAGE>



to retain all amounts received in respect of such Deleted Mortgage Loan. Upon
such substitution, the Mortgage Loan Schedule shall be amended to reflect the
addition of the Qualified Substituted Mortgage Loan or Loans, the Qualified
Substitute Mortgage Loan or Loans shall be subject to the terms of this
Agreement in all respects, and the Seller shall be deemed to have made the non-
statistical representations and warranties with respect to the Qualified
Substitute Mortgage Loan contained in Section 3.1(b) as of the date of
substitution.

            In connection with the substitution of one or more Qualified
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Master
Servicer will determine the amount (if any) by which the aggregate principal
balance of all such Qualified Substitute Mortgage Loans as of the date of
substitution is less than the aggregate Stated Principal Balance of all such
Deleted Mortgage Loans (in each case after application of the principal portion
of the Monthly Payments due in the month of substitution that are to be
distributed to Certificateholders in the month of substitution). The Seller
shall provide the Master Servicer on the day of substitution for immediate
deposit into the Custodial Account the amount of such shortfall, without any
reimbursement therefor. The Seller shall give notice in writing to the Trustee
of such event, which notice shall be accompanied by an Officer's Certificate as
to the calculation of such shortfall and by an Opinion of Counsel to the effect
that such substitution will not cause (a) any federal tax to be imposed on any
REMIC created pursuant to the Pooling and Servicing Agreement, including without
limitation, any federal tax imposed on "prohibited transactions" under Section
860F(a)(1) of the Code or on "contributions after the startup date" under
Section 860G(d)(1) of the Code or (b) any portion of any REMIC created pursuant
to the Pooling and Servicing Agreement to fail to qualify as a REMIC at any time
that any Certificate is outstanding. The costs of any substitution as described
above, including any related assignments, opinions or other documentation in
connection therewith shall be borne by the Seller.

            Any cause of action against the Seller or relating to or arising out
of a breach by the Seller of any representations and warranties made in clause
(b) above shall accrue as to any Mortgage Loan upon (i) discovery of such breach
by the Seller or notice thereof by the party discovering such breach and (ii)
failure by the Seller to cure such breach, purchase such Mortgage Loan or
substitute a Qualified Substitute Mortgage Loan pursuant to the terms hereof.

            Section 3.2. The Purchaser's Representations and Warranties. The
Purchaser hereby represents and warrants to the Seller as of the Closing Date
(or if otherwise specified below, as of the date so specified) that:

            (a) the Purchaser is a corporation duly organized, validly existing
      and in good standing under the laws of the State of Delaware;

            (b) the Purchaser has full corporate power to own its property, to
      carry on its business as presently conducted and to enter into and perform
      its obligations under this Agreement;



                                      P-16

<PAGE>



            (c) the execution and delivery by the Purchaser of this Agreement
      have been duly authorized by all necessary corporate action on the part of
      the Purchaser; and neither the execution and delivery of this Agreement,
      nor the consummation of the transactions herein contemplated hereby, nor
      compliance with the provisions hereof, will conflict with or result in a
      breach of, or constitute a default under, any of the provisions of any
      law, governmental rule, regulation, judgment, decree or order binding on
      the Purchaser or its properties or the certificate of incorporation or
      by-laws of the Purchaser, except those conflicts, breaches or defaults
      which would not reasonably be expected to have a material adverse effect
      on the Purchaser's ability to enter into this Agreement and to consummate
      the transactions contemplated hereby;

            (d) the execution, delivery and performance by the Purchaser of this
      Agreement and the consummation of the transactions contemplated hereby do
      not require the consent or approval of, the giving of notice to, the
      registration with, or the taking of any other action in respect of, any
      state, federal or other governmental authority or agency, except those
      consents, approvals, notices, registrations or other actions as have
      already been obtained, given or made and, in connection with the
      recordation of the Mortgages, powers of attorney or assignments of
      Mortgages not yet completed;

            (e) this Agreement has been duly executed and delivered by the
      Purchaser and, assuming due authorization, execution and delivery by the
      Purchaser, constitutes a valid and binding obligation of the Purchaser
      enforceable against it in accordance with its terms (subject to applicable
      bankruptcy and insolvency laws and other similar laws affecting the
      enforcement of the rights of creditors generally); and

            (f) except as previously disclosed to the Purchaser in the
      Prospectus Supplement, there are no actions, suits or proceedings pending
      or, to the best of the Purchaser's knowledge, threatened against the
      Purchaser, before or by any court, administrative agency, arbitrator or
      governmental body (i) with respect to any of the transactions contemplated
      by this Agreement or (ii) with respect to any other matter which in the
      judgment of the Purchaser if determined adversely to the Purchaser or
      would reasonably be expected to materially and adversely affect the
      Purchaser's ability to perform its obligations under this Agreement; and
      the Purchaser is not in default with respect to any order of any court,
      administrative agency, arbitrator or governmental body so as to materially
      and adversely affect the transactions contemplated by this Agreement.

                                   ARTICLE IV

                               SELLER'S COVENANTS

            Section 4.1. COVENANTS OF THE SELLER. The Seller hereby covenants
that, except for the transfer hereunder with respect to the Mortgage Loans, the
Seller will not sell, pledge, assign or transfer to any other Person, or grant,
create, incur or assume any Lien on, any Mortgage Loan,


                                      P-17

<PAGE>



whether now existing or hereafter created, or any interest therein (other than
the servicing rights with respect thereto); the Seller will notify the Trustee,
as assignee of the Purchaser, of the existence of any Lien (other than as
provided above) on any Mortgage Loan immediately upon discovery thereof; and the
Seller will defend the right, title and interest of the Trustee, on behalf of
the Trust Fund, in, to and under the Mortgage Loans, whether now existing or
hereafter created, against all claims of third parties claiming through or under
the Seller.

                                    ARTICLE V

                      LIMITATION ON LIABILITY OF THE SELLER

            Section 5.1. LIMITATION ON LIABILITY OF THE SELLER. None of the
directors, officers, employees or agents of the Seller shall be under any
liability to the Purchaser hereunder, it being expressly understood that all
such liability is expressly waived and released as a condition of, and as
consideration for, the execution of this Agreement. Except as and to the extent
expressly provided in the Pooling and Servicing Agreement, the Custodial
Agreement and this Agreement, the Seller shall not be under any liability to the
Trust Fund, the Trustee or the Certificateholders thereunder. The Seller and any
director, officer, employee or agent of the Seller may rely in good faith on any
document of any kind PRIMA FACIE properly executed and submitted by any Person
respecting any matters arising hereunder.

                                  ARTICLE VI

                                 TERMINATION

            Section 6.1. TERMINATION. The respective obligations and
responsibilities of the Seller and the Purchaser created hereby shall terminate
upon the termination of the Trust Fund pursuant to the terms of the Pooling and
Servicing Agreement.

                                   ARTICLE VII

                            MISCELLANEOUS PROVISIONS

            Section 7.1.  AMENDMENT.  This Agreement may be amended from time to
time by the Seller and the Purchaser by written agreement signed by the Seller
and the Purchaser.

            Section 7.2. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.

            Section 7.3. NOTICES. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at or mailed by registered mail, postage prepaid, addressed
as follows:


                                      P-18

<PAGE>



                  (i) if to the Seller:

                        Home Star Mortgage Services LLC
                        W. 115 Century Road
                        Paramus, New Jersey 07652
                        Attention: General Counsel

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

                  (ii) if to the Purchaser:

                        Homestar Mortgage Acceptance Corp.
                        W. 115 Century Road
                        Paramus, New Jersey 07652
                        Attention: General Counsel

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

            Section 7.4. SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be held
invalid for any reason whatsoever then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement.

            Section 7.5. RELATIONSHIP OF PARTIES. Nothing herein contained shall
be deemed or construed to create a partnership or joint venture between the
parties hereto, and the services of the Seller shall be rendered as an
independent contractor and not as agent for the Purchaser.

            Section 7.6. COUNTERPARTS. This Agreement may be executed in two or
more counterparts and by the different parties hereto on separate counterparts,
each of which, when so executed, shall be deemed to be an original and such
counterparts together shall constitute one and the same Agreement.

            Section 7.7. SURVIVAL. The representations and warranties made
herein by the Seller and the provisions of Article V hereof shall survive the
purchase of the Mortgage Loans hereunder.

            Section 7.8. FURTHER AGREEMENTS. The Purchaser and the Seller each
agree to execute and deliver to the other such additional documents, instruments
or agreements as may be necessary or appropriate to effectuate the purposes of
this Agreement. Each of the Purchaser and the Seller agrees to use its best
reasonable efforts to take all actions necessary to be taken by it to cause the
Certificates to be issued and rated in the highest rating category by each of
the Rating Agencies, with the Certificates to be offered pursuant to the
Purchaser's shelf registration statement, and each party will cooperate with the
other in connection therewith.


                                      P-19

<PAGE>



            Section 7.9. INTENTION OF THE PARTIES. It is the intention of the
parties that the Purchaser is purchasing, and the Seller is selling, the
Mortgage Loans (other than the servicing rights with respect thereto), rather
than a loan by the Purchaser to the Seller secured by the Mortgage Loans.
Accordingly, the parties hereto each intend to treat this transaction with
respect to the Mortgage Loans for federal income tax purposes as a sale by the
Seller, and a purchase by the Purchaser, of the Mortgage Loans (other than the
servicing rights with respect thereto). The Purchaser will have the right to
review the Mortgage Loans and the Related Documents to determine the
characteristics of the Mortgage Loans which will affect the federal income tax
consequences of owning the Mortgage Loans and the Seller will cooperate with all
reasonable requests made by the Purchaser in the course of such review.

            Section 7.10. SUCCESSORS AND ASSIGNS; ASSIGNMENT OF PURCHASE
AGREEMENT. This Agreement shall bind and inure to the benefit of and be
enforceable by the Seller, the Purchaser and their respective successors and
assigns. The obligations of the Seller under this Agreement cannot be assigned
or delegated to a third party without the consent of the Purchaser, which
consent shall be at the Purchaser's sole discretion. The parties hereto
acknowledge that the Purchaser is acquiring the Mortgage Loans for the purpose
of assigning the Mortgage Loans to the Trustee, on behalf of the Trust Fund, for
the benefit of the Certificateholders. As an inducement to the Purchaser to
purchase the Mortgage Loans, the Seller acknowledges and consents to the
assignment by the Purchaser to the Trustee, on behalf of the Trust Fund of all
of the Purchaser's rights against the Seller pursuant to this Agreement and to
the enforcement or exercise of any right or remedy against the Seller pursuant
to this Agreement by the Purchaser. Such enforcement of a right or remedy by the
Trustee, on behalf of the Trust Fund, shall have the same force and effect as if
the right or remedy had been enforced or exercised by the Purchaser directly.




                                      P-20

<PAGE>



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


                       HOMESTAR MORTGAGE ACCEPTANCE CORP.
                                    as Purchaser


                              By:_______________________________________________
                              Name:
                              Title:



                         HOME STAR MORTGAGE SERVICES LLC
                                    as Seller


                              By:_______________________________________________
                              Name:
                              Title:



                                      P-21

<PAGE>



                                    Exhibit 1

                             MORTGAGE LOAN SCHEDULE






                                      P-22

<PAGE>



                                    EXHIBIT 2

         APPENDIX E: Standard & Poor's Predatory Lending Categorization

      Standard & Poor's has categorized loans governed by anti-predatory lending
laws in the Jurisdictions listed below into three categories based upon a
combination of factors that include (a) the risk exposure associated with the
assignee liability and (b) the tests and thresholds set forth in those laws.
Note that certain loans classified by the relevant statute as Covered are
included in Standard & Poor's High Cost Loan Category because they included
thresholds and tests that are typical of what is generally considered High Cost
by the industry.



                 STANDARD & POOR'S HIGH-COST LOAN CATEGORIZATION

STATE/JURISDICTION                    CATEGORY UNDER APPLICABLE ANTI-PREDATORY
                                      LENDING LAW
Arkansas                              High Cost Home Loan
Cleveland Heights, Ohio               Covered Loan
Colorado                              Covered Loan
Connecticut                           High Cost Home Loan
District of Columbia                  Covered Loan
Florida                               High Cost Home Loan
Georgia (Oct. 1, 2002 - March 6, 2003 High Cost Home Loan
Georgia as amended (March 7, 2003 -   High Cost Home Loan
current)
HOEPA Section 32                      High Cost Loan
Illinois                              High Risk Home Loan
Kansas                                High Loan-to-Value Consumer Loans and High
                                      APR Consumer Loans
Kentucky                             High Cost Home Loan
Los Angeles, Calif.                  High Cost Refinance Home Loan
Maine                                High Rate High Fee Mortgage
Massachusetts                        High Cost Home Loan
Nevada                               Home Loan
New Jersey                           High Cost Home Loan
New York                             High Cost Home Loan
New Mexico                           High Cost Home Loan
North Carolina                       High Cost Home Loan
Oakland, Calif.                      High Cost Home Loan
Ohio                                 Covered Loan
Oklahoma                             Subsection 10 Mortgage
South Carolina                       High Cost Home Loan
West Virginia                        West Virginia Mortgage Loan Act Loan



                                      P-23

<PAGE>


<TABLE>
<CAPTION>
<S>                                     <C>
                  STANDARD & POOR'S COVERED LOAN CATEGORIZATION

STATE/JURISDICTION                   CATEGORY UNDER APPLICABLE ANTI-PREDATORY LENDING LAW
Georgia (Oct. 1, 2002-March 6, 2003) Covered Loan
New Jersey                           Covered Home Loan

                    STANDARD & POOR'S HOME LOAN CATEGORIZATION

STATE/JURISDICTION                   CATEGORY UNDER APPLICABLE ANTI-PREDATORY LENDING LAW

Georgia (Oct. 1, 2002-March 6, 2003) Home Loan

New Jersey                           Home Loan

New Mexico                           Home Loan

North Carolina                       Consumer Home Loan

Oakland, Calif.                      Home Loan

South Carolina                       Consumer Home Loan
</TABLE>






                                      P-24