UNITED STATES
                             SECURITIES AND EXCHANGE COMMISSION
                                   WASHINGTON, D.C. 20549



                                          FORM 10-K/A
                                        Amendment No. 1

The original 10-K has been amended by this 10-K/A to update the list of exhibits
that were included in the previous filing but unintentionally omitted in the
list.


  (Mark one)

  /X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934
      For the fiscal year ended December 31, 2006

      OR



  / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934


       Commission file number:  333-131374-29

       Bear Stearns Asset Backed Securities I Trust 2006-AC5
       (exact name of issuing entity as specified in its charter)

       Bear Stearns Asset Backed Securities I LLC.
       (exact name of the depositor as specified in its charter)

       EMC Mortgage Corporation
       (exact name of the sponsor as specified in its charter)


  New York                                          54-2198236
  (State or other jurisdiction of                   54-2198237
  incorporation or organization)                    54-2198238
                                                    54-2198239
                                                    (I.R.S. Employer
                                                    Identification No.)


   c/o Wells Fargo Bank, N.A.
   9062 Old Annapolis Road
   Columbia, MD                                21045
  (Address of principal executive offices)    (Zip Code)


  Registrant's telephone number, including area code: (410) 884-2000


  Securities registered pursuant to Section 12(b) of the Act:

        NONE.


  Securities registered pursuant to Section 12(g) of the Act:

        NONE.


  Indicate by check mark if the registrant is a well-known seasoned issuer,
  as defined in Rule 405 of the Securities Act.

        Yes  ___     No  X


  Indicate by check mark if the registrant is not required to file reports
  pursuant to Section 13 or Section 15(d) of the Act.

        Yes  ___     No  X


  Indicate by check mark whether the registrant (1) has filed all reports
  required to be filed by Section 13 or 15(d) of the Securities Exchange
  Act of 1934 during the preceding 12 months (or for such shorter period
  that the registrant was required to file such reports), and (2) has been
  subject to such filing requirements for the past 90 days.

        Yes  X       No  ___


  Indicate by check mark if disclosure of delinquent filers pursuant to
  Item 405 of Regulation S-K ( 229.405 of this chapter) is not contained
  herein, and will not be contained, to the best of registrant's knowledge,
  in definitive proxy or information statements incorporated by reference
  in Part III of this Form 10-K or any amendment to this Form 10-K.

        Not applicable.


  Indicate by check mark whether the registrant is a large accelerated filer,
  an accelerated filer, or a non-accelerated filer. See definition of
  "accelerated filer and large accelerated filer" in Rule 12b-2 of the
  Exchange Act. (Check one):


  Large accelerated filer ___  Accelerated filer ___  Non-accelerated filer X


  Indicate by check mark whether the registrant is a shell company (as
  defined in Rule 12b-2 of the Act).

        Yes  ___     No  X


  State the aggregate market value of the voting and non-voting common
  equity held by non-affiliates computed by reference to the price at which
  the common equity was last sold, or the average bid and asked price of
  such common equity, as of the last business day of the registrant's most
  recently completed second fiscal quarter.

        Not applicable.


     Documents Incorporated by Reference

  List hereunder the following documents if incorporated by reference and
  the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which the
  document is incorporated: (1)Any annual report to security holders; (2)
  Any proxy or information statement; and (3)Any prospectus filed pursuant
  to Rule 424(b) or (c) under the Securities Act of 1933. The listed
  documents should be clearly described for identification purposes (e.g.,
  annual report to security holders for fiscal year ended December 24, 1980).

        Not applicable.


                                   PART I
  Item 1.  Business.

            Omitted.


  Item 1A.  Risk Factors.

            Omitted.


  Item 1B.  Unresolved Staff Comments.

            None.


  Item 2.  Properties.

            Omitted.


  Item 3.  Legal Proceedings.

            Omitted.


  Item 4.  Submission of Matters to a Vote of Security Holders.

            Omitted.


                                PART II

  Item 5. Market for Registrants Common Equity, Related Stockholder
         Matters and Issuer Purchases of Equity Securities.

            Omitted.


  Item 6.  Selected Financial Data.

            Omitted.


  Item 7.  Management's Discussion and Analysis of Financial Condition and
           Results of Operations.

            Omitted.


  Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

            Omitted.


  Item 8.  Financial Statements and Supplementary Data.

            Omitted.


  Item 9.  Changes in and Disagreements With Accountants on Accounting and
           Financial Disclosure.

            Omitted.


  Item 9A. Controls and Procedures.

            Omitted.


  Item 9A(T). Controls and Procedures.

            Omitted.


  Item 9B. Other Information.

            None.


                                PART III

  Item 10. Directors, Executive Officers and Corporate Governance.

            Omitted.


  Item 11. Executive Compensation.

            Omitted.

  Item 12. Security Ownership of Certain Beneficial Owners and
           Management and Related Stockholder Matters.

            Omitted.


  Item 13. Certain Relationships and Related Transactions, and Director
           Independence.

            Omitted.


  Item 14. Principal Accounting Fees and Services.

            Omitted.



                ADDITIONAL DISCLOSURE ITEMS FOR REGULATION AB

  Item 1112(b) of Regulation AB, Significant Obligor Financial Information.

            No single obligor represents more than 10% of the pool assets held
            by this transaction.


  Item 1114(b)(2) and 1115(b) of Regulation AB, Significant Enhancement
             Provider Financial Information.



            None.



  Item 1117 of Regulation AB, Legal Proceedings.

            The registrant knows of no material pending legal proceedings
            involving the Trust and all parties related to such Trust, other
            than routine litigation incidental to the duties of those respective
            parties.



  Item 1119 of Regulation AB, Affiliations and Certain Relationships and
             Related Transactions.


            On February 9, 2007, Bear Stearns Residential Mortgage Corporation,
            a wholly owned subsidiary of The Bear Stearns Companies Inc. and an
            affiliate of the Registrant, acquired certain assets used in the
            subprime wholesale mortgage banking division of Performance Credit
            Corporation (formerly known as Encore Credit Corp.) ("PCC"), a
            California corporation that, until February 9, 2007, originated and
            purchased one-to four-family residential mortgage loans offered to
            borrowers with a particular emphasis on "nonconforming" borrowers
            who generally do not satisfy the credit, collateral, documentation
            or other standards required by conventional mortgage lenders and
            loan buyers.


  Item 1122 of Regulation AB, Compliance with Applicable Servicing Criteria.


            The servicing criteria have been completed within the manner stated
            in the governing documents and are attached hereto under Item 15.


            The 1122 statements for Wells Fargo Bank, National Association
            (Corporate Trust Services) has disclosed material noncompliance with
            criterion 1122(d)(3)(i), as applicable to the Company during the
            twelve months ended December 31. 2006.  Certain monthly investor or
            remittance reports included errors in the calculation and/or the
            reporting of delinquencies for the pool assets.


            The 1122 statements for GreenPoint Mortgage Funding, Inc. has
            disclosed the following material noncompliance with servicing
            criteria 1122(d)(1)(i), 1122(d)(2)(iv), and 1122(d)(3)(ii)
            applicable to the Company's platform covered by this report
            during the year ended December 31, 2006. 1122(d)(1)(i) - There
            were no policies and procedures instituted to monitor the
            performance or other triggers and events of defaults in
            accordance with the transaction agreements; 1122(d)(2)(iv) - The
            related accounts for each transaction were not separately
            maintained as set forth in the transaction agreements; and,
            1122(d)(3)(ii) - Amounts due to investors were not remitted in
            accordance with the timeframes set forth in the transaction
            agreements.

            Although each servicing criterion required by Item 1122(d) of
            Regulation AB is addressed in one or more of the Assessments of
            Compliance with Servicing Criteria and related Attestation Reports
            included with this report, the Servicer's, GreenPoint Mortgage
            Funding Inc., Assessment of Compliance and related Attestation
            Report did not address each of the servicing criteria that the
            Servicer was required to address under the terms of the related
            Servicing Agreement. The Servicer has not identified such failure to
            provide an Assessment and Attestation for these items as a material
            failure to fulfill its obligations under the related servicing
            agreement in the Servicer's Compliance Statement provided under Item
            1123 of Regulation AB, because the Servicer asserts that those items
            are not applicable to the Servicer.



  Item 1123 of Regulation AB, Servicer Compliance Statement.


            The servicer compliance statements have been completed within the
            manner stated in the governing documents and are attached hereto
            under Item 15.




                                PART IV


  Item 15. Exhibits, Financial Statement Schedules.

     (a) Exhibits


   (4.1) Pooling and Servicing Agreement, dated as of November 1, 2006, among
         Bear Stearns Asset Backed Securities I LLC, as depositor, EMC Mortgage
         Corporation, as seller and as company, Wells Fargo Bank, National
         Association, as master servicer and securities administrator and U.S.
         Bank National Association, as trustee (As previously filed on Form 8-K
         filed on December 15, 2006 and is hereby incorporated by reference
         into this report on Form 10-K)


  (10.1) The Underwriting Agreement, dated April 13, 2006, between Bear,
         Stearns & Co. Inc. as underwriter and Bear Stearns Asset Backed
         Securities I LLC as depositor and the related Terms Agreement, dated
         November 15, 2006, between Bear, Stearns & Co. Inc. as underwriter and
         Bear Stearns Assets Backed Securities I LLC as depositor (As previously
         filed on Form 8-K filed on December 15, 2006 and is hereby incorporated
         by reference into this report on Form 10-K).

  (10.2) Assignment, Assumption and Recognition  Agreement (this "AAR
         Agreement") made as of November 30, 2006, among EMC Mortgage
         Corporation (the "Assignor"),  U.S. Bank National Association,  not
         individually but solely as trustee for the holders of the Bear Stearns
         Asset  Backed Securities I Trust 2006-AC5,  Asset-Backed  Certificates,
         Series  2006-AC5 (the  "Assignee") and GreenPoint Mortgage Funding,
         Inc. (the "Company")

  (10.3) Purchase, Warranties and Servicing Agreement, dated as of September 1,
         2003 and is executed between EMC MORTGAGE CORPORATION, as Purchaser,
         with offices located at Mac Arthur Ridge II, 909 Hidden Ridge Drive,
         Suite 200, Irving, Texas 75038 (the "Purchaser"), and GREENPOINT
         MORTGAGE FUNDING, INC., with offices located at 100 Wood Hollow Drive,
         Novato, California 94945 (the "Company")

  (10.4) AMENDMENT NUMBER ONE (this "Amendment") is made and entered into this
         1st day of January, 2006, by and between EMC Mortgage Corporation, a
         Delaware corporation, as purchaser (the "Purchaser") and GreenPoint
         Mortgage Funding, Inc., as company (the "Company") in connection with
         the Purchase, Warranties and Servicing Agreement, dated as of September
         1, 2003, between the above mentioned parties (the "Agreement"). This
         Amendment is made pursuant to Section 11.02 of the Agreement

  (10.5) Assignment, Assumption and Recognition Agreement (this "AAR Agreement")
         made as of November 30, 2006, among EMC Mortgage Corporation (the
         "Assignor"), U.S. Bank National Association, not individually but
         solely as trustee for the holders of Bear Stearns Asset Backed
         Securities I Trust 2006-AC5, Asset-Backed Certificates, Series 2006-AC5
         (the "Assignee"), National City Mortgage Co. (the "Company") and Bear
         Stearns Asset Backed Securities I LLC ("BSABS I")

  (10.6) Purchase, Warranties and Servicing Agreement, dated as of October 1,
         2001 and is executed between EMC MORTGAGE CORPORATION, as Purchaser
         (the "Purchaser"), and NATIONAL CITY MORTGAGE COMPANY (the "Company").

  (10.7) Amendment Reg AB (the "Amendment Reg AB"), dated as of March 1, 2006
         (the "Amendment Date"), by and between EMC Mortgage Corporation
         (the "Purchaser"), and National City Mortgage, Co. (the "Company") to
         that certain Seller's Purchase, Warranties and Servicing Agreement
         dated as of October 1, 2001 between the Company and the Purchaser
         (the "Agreement")


    (31) Rule 13a-14(d)/15d-14(d) Certifications.

    (33) Reports on assessment of compliance with servicing criteria for
         asset-backed securities.



      <TABLE>

      
         <c>
      a) Assurant Inc. as Sub-Contractor for EMC Mortgage Corporation  <F1>
      b) Assurant Inc. as Sub-Contractor for GreenPoint Mortgage Funding, Inc.  <F1>
      c) EMC Mortgage Corporation, as Servicer <F1>
      d) GreenPoint Mortgage Funding, Inc., as Servicer <F1>
      e) LandAmerica Tax and Flood Services as Sub-Contractor for EMC Mortgage Corporation  <F1>
      f) LandAmerica Tax and Flood Services as Sub-Contractor for GreenPoint Mortgage Funding, Inc.  <F1>
      g) National City Mortgage Co., as Servicer <F2>
      h) Regulus Group LLC as Sub-Contractor for National City Mortgage Co., as Sub-Contractor <F2>
      i) Wells Fargo Bank, N.A., as Master Servicer <F1>
      j) Wells Fargo Bank, N.A., as Securities Administrator <F1>
      k) Wells Fargo Bank, N.A., as Custodian <F1>

      </TABLE>

     (34) Attestation reports on assessment of compliance with servicing
          criteria for asset-backed securities.

      <TABLE>

      
        <c>
      a) Assurant Inc. as Sub-Contractor for EMC Mortgage Corporation  <F1>
      b) Assurant Inc. as Sub-Contractor for GreenPoint Mortgage Funding, Inc.  <F1>
      c) EMC Mortgage Corporation, as Servicer <F1>
      d) GreenPoint Mortgage Funding, Inc., as Servicer <F1>
      e) LandAmerica Tax and Flood Services as Sub-Contractor for EMC Mortgage Corporation  <F1>
      f) LandAmerica Tax and Flood Services as Sub-Contractor for GreenPoint Mortgage Funding, Inc.  <F1>
      g) National City Mortgage Co., as Servicer <F2>
      h) Regulus Group LLC as Sub-Contractor for National City Mortgage Co.  <F2>
      i) Wells Fargo Bank, N.A., as Master Servicer <F1>
      j) Wells Fargo Bank, N.A., as Securities Administrator <F1>
      k) Wells Fargo Bank, N.A., as Custodian <F1>

      </TABLE>

     (35) Servicer compliance statement.

      <TABLE>

      
         <c>
      a) Assurant Inc. as Sub-Contractor for EMC Mortgage Corporation r <F4>
      b) Assurant Inc. as Sub-Contractor for GreenPoint Mortgage Funding, Inc.  <F4>
      c) EMC Mortgage Corporation, as Servicer <F1>
      d) GreenPoint Mortgage Funding, Inc., as Servicer <F1>
      e) LandAmerica Tax and Flood Services as Sub-Contractor for EMC Mortgage Corporation  <F4>
      f) LandAmerica Tax and Flood Services as Sub-Contractor for GreenPoint Mortgage Funding, Inc.  <F4>
      g) National City Mortgage Co., as Servicer <F3>
      h) Regulus Group LLC as Sub-Contractor for National City Mortgage Co.  <F4>
      i) Wells Fargo Bank, N.A., as Master Servicer <F1>
      j) Wells Fargo Bank, N.A., as Securities Administrator <F1>
      k) Wells Fargo Bank, N.A., as Custodian <F4>

      </TABLE>

   (b) Not applicable.

   (c) Omitted.


  <F1> Filed herewith.

  <F2> The Servicing Participant serviced less than 5% of the deal and is
       not required under Regulation AB to provide such documentation.

  <F3> The Servicing Participant serviced less than 10% of the deal and is
       not required under Regulation AB to provide such documentation.

  <F4> The Servicing Participant of the deal is not required under Regulation
       AB to provide such documentation.

                                SIGNATURES

  Pursuant to the requirements of Section 13 or 15(d) of the Securities
  Exchange Act of 1934, the registrant has duly caused this report to be
  signed on its behalf by the undersigned, thereunto duly authorized.



    Bear Stearns Asset Backed Securities I Trust 2006-AC5
    (Issuing Entity)

    Wells Fargo Bank, N.A.
    (Master Servicer)

    /s/ William Augustin IV
    William Augustin IV, Vice President

    Date: April 2, 2007


  Exhibit Index

  Exhibit No.

     (31) Rule 13a-14(d)/15d-14(d) Certifications.

     (33) Reports on assessment of compliance with servicing criteria for
          asset-backed securities.



      <TABLE>

      
         <c>
      a) Assurant Inc. as Sub-Contractor for EMC Mortgage Corporation
      b) Assurant Inc. as Sub-Contractor for GreenPoint Mortgage Funding, Inc.
      c) EMC Mortgage Corporation, as Servicer
      d) GreenPoint Mortgage Funding, Inc., as Servicer
      e) LandAmerica Tax and Flood Services as Sub-Contractor for EMC Mortgage Corporation
      f) LandAmerica Tax and Flood Services as Sub-Contractor for GreenPoint Mortgage Funding, Inc.
      i) Wells Fargo Bank, N.A., as Master Servicer
      j) Wells Fargo Bank, N.A., as Securities Administrator
      k) Wells Fargo Bank, N.A., as Custodian

      </TABLE>

     (34) Attestation reports on assessment of compliance with servicing
          criteria for asset-backed securities.

      <TABLE>

      
        <c>
      a) Assurant Inc. as Sub-Contractor for EMC Mortgage Corporation
      b) Assurant Inc. as Sub-Contractor for GreenPoint Mortgage Funding, Inc.
      c) EMC Mortgage Corporation, as Servicer
      d) GreenPoint Mortgage Funding, Inc., as Servicer
      e) LandAmerica Tax and Flood Services as Sub-Contractor for EMC Mortgage Corporation
      f) LandAmerica Tax and Flood Services as Sub-Contractor for GreenPoint Mortgage Funding, Inc.
      i) Wells Fargo Bank, N.A., as Master Servicer
      j) Wells Fargo Bank, N.A., as Securities Administrator
      k) Wells Fargo Bank, N.A., as Custodian

      </TABLE>

     (35) Servicer compliance statement.

      <TABLE>

      
         <c>
      c) EMC Mortgage Corporation, as Servicer
      d) GreenPoint Mortgage Funding, Inc., as Servicer
      i) Wells Fargo Bank, N.A., as Master Servicer
      j) Wells Fargo Bank, N.A., as Securities Administrator


      </TABLE>

  EX-31 Rule 13a-14(d)/15d-14(d) Certifications

  I, William Augustin IV, certify that:

  1. I have reviewed this report on Form 10-K and all reports on Form 10-D
     required to be filed in respect of the period covered by this report
     on Form 10-K of Bear Stearns Asset Backed Securities I Trust 2006-AC5
     (the "Exchange Act periodic reports");

  2. Based on my knowledge, the Exchange Act periodic reports, taken as a
     whole, do 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 with respect to the period covered by this report;

  3. Based on my knowledge, all of the distribution, servicing and other
     information required to be provided under Form 10-D for the period
     covered by this report is included in the Exchange Act periodic
     reports;

  4. I am responsible for reviewing the activities performed by the
     servicers and based on my knowledge and the compliance reviews
     conducted in preparing the servicer compliance statements required in
     this report under Item 1123 of Regulation AB, and except as disclosed
     in the Exchange Act periodic reports, the servicers have fulfilled
     their obligations under the servicing agreements; and

  5. All of the reports on assessment of compliance with servicing
     criteria for asset-backed securities and their related attestation
     reports on assessment of compliance with servicing criteria for
     asset-backed securities required to be included in this report in
     accordance with Item 1122 of Regulation AB and Exchange Act Rules
     13a-18 and 15d-18 have been included as an exhibit to this report,
     except as otherwise disclosed in this report. Any material instances
     of noncompliance described in such reports have been disclosed in
     this report on Form 10-K.

     In giving the certifications above, I have reasonably relied on
     information provided to me by the following unaffiliated parties:
     EMC Mortgage Corporation, as Servicer, GreenPoint Mortgage Funding, Inc.,
     as Servicer and National City Mortgage Co., as Servicer.

     Dated: April 2, 2007

     /s/ William Augustin IV
     Signature

     Vice President
     Title


EX-33 (a)
REPORT ON ASSESSMENT OF COMPLIANCE WITH
section 1122(d)(2)(vi) and section 1122(d)(4)(xi)
of REGULATION AB SERVICING CRITERIA


American Security Insurance Company, Standard Guaranty Insurance Company and
Safeco Financial Institution Solutions, Inc. (affiliates of Assurant Inc.,
collectively the "Asserting Party") is responsible for assessing compliance as
of December 31, 2006 and for the period from January 1, 2006 through December
31, 2006 (the "Reporting Period") with the servicing criteria set forth in
section 1122(d)(2)(vi), section 1122(d)(4)(xi) and section 1122(d)(4)(xii) of
Title 17, section 229.1122(d) of the Code of Federal Regulations, which the
Asserting Party has concluded are applicable to the insurance escrow servicing
activities it performs with respect to all mortgage loan-tracking transactions
covered by this report. The transactions covered by this report include all
mortgage loan-tracking transactions for which the Asserting Party served as a
Vendor on behalf of Servicers for such asset-backed securities transactions that
were registered after January 1, 2006 with the Securities and Exchange
Commission pursuant to the Securities Act of 1933 (the "Platform"). The scope of
the Asserting Party assertions excludes section 1122(d)(4)(xii) of Title 17,
section 229.1122(d) of the Code of Federal Regulations, which relates to
servicing activities that are performed by the Asserting Party with respect to
the Platform, but are not reported on herein.

The Asserting Party has assessed its compliance with section 1122(d)(2)(vi) and
section 1122(d)(4)(xi) ("the Applicable Servicing Criteria") for the Reporting
Period and has concluded that the Asserting Party has complied, in all material
respects, with the Applicable Servicing Criteria for the Reporting Period with
respect to the Platform taken as a whole. The Asserting Party used the criteria
set forth in paragraph (d) of Item 1122 of Regulation AB to assess the
compliance with the Applicable Servicing Criteria.

The Asserting Party has complied, in all material respects, with the Applicable
Servicing Criteria for the Reporting Period.

PricewaterhouseCoopers LLP, an independent registered public accounting firm,
has issued an attestation report on the assessment of compliance with the
Applicable Servicing Criteria as of and for the Reporting Period ending December
31, 2006 as set forth in this assertion.

American Security Insurance Company
Standard Guaranty Insurance Company
Safeco Financial Institution Solutions, Inc.




/s/ John Frobose
By: John Frobose
Senior Vice President


Date: February 23, 2007





EX-33 (b)
REPORT ON ASSESSMENT OF COMPLIANCE WITH
SECTION 1122(d)(2)(vi) and SECTION 1122(d)(4)(xi)
of REGULATION AB SERVICING CRITERIA

American Security Insurance Company, Standard Guaranty Insurance Company and
Safeco Financial Institution Solutions, Inc. (affiliates of Assurant Inc.,
collectively the "Asserting Party") is responsible for assessing compliance as
of December 31, 2006 and for the period from January 1, 2006 through December
31, 2006 (the "Reporting Period") with the servicing criteria set forth in
Section 1122(d)(2)(vi), Section 1122(d)(4)(xi) and Section 1122(d)(4)(xii) of
Title 17, Section 229.1122(d) of the Code of Federal Regulations, which the
Asserting Party has concluded are applicable to the insurance escrow servicing
activities it performs with respect to all mortgage loan-tracking transactions
covered by this report. The transactions covered by this report include all
mortgage loan-tracking transactions for which the Asserting Party served as a
Vendor on behalf of Servicers for such asset-backed securities transactions that
were registered after January 1, 2006 with the Securities and Exchange
Commission pursuant to the Securities Act of 1933 (the "Platform"). The scope of
the Asserting Party assertions excludes Section 1122(d)(4)(xii) of Title 17,
Section 229.1122(d) of the Code of Federal Regulations, which relates to
servicing activities that are performed by the Asserting Party with respect to
the Platform, but are not reported on herein.

The Asserting Party has assessed its compliance with Section 1122(d)(2)(vi) and
Section 1122(d)(4)(xi) ("the Applicable Servicing Criteria") for the Reporting
Period and has concluded that the Asserting Party has complied, in all material
respects, with the Applicable Servicing Criteria for the Reporting Period with
respect to the Platform taken as a whole. The Asserting Party used the criteria
set forth in paragraph (d) of Item 1122 of Regulation AB to assess the
compliance with the Applicable Servicing Criteria.

The Asserting Party has complied, in all material respects, with the Applicable
Servicing Criteria for the Reporting Period.

PricewaterhouseCoopers LLP, an independent registered public accounting firm,
has issued an attestation report on the assessment of compliance with the
Applicable Servicing Criteria as of and for the Reporting Period ending December
31, 2006 as set forth in this assertion.

American Security Insurance Company
Standard Guaranty Insurance Company
Safeco Financial Institution Solutions, Inc.

By: /s/ John Frobose
John Frobose
Senior Vice President

Date: February 23, 2007





EX-33 (c)
(logo)EMC
Mortgage Corporation
Proven Performance

Certification Regarding Compliance with Applicable Servicing Criteria


1. EMC Mortgage Corporation ("EMC") is responsible for assessing compliance with
the servicing criteria applicable to it under paragraph (d) of Item 1122 of
Regulation AB, as of and for the 12-month period ended December 31, 2006 (the
"Reporting Period"), as set forth in Appendix A hereto. The transactions covered
by this report include the asset-backed securities transactions for which EMC
acted as servicer involving residential mortgage loans that were completed on or
after January 1, 2006, and that were registered with the Securities and Exchange
Commission pursuant to the Securities Act of 1933 (the "Platform");


2. Except as set forth in paragraph 3 below, EMC used the criteria set forth in
paragraph (d) of Item 1122 of Regulation AB to assess the compliance with the
applicable servicing criteria;


3. The criteria listed in the column titled "Inapplicable Servicing Criteria"
on Appendix A hereto are inapplicable to EMC based on the activities it
performs, directly or through its Vendors, with respect to the Platform;


4. EMC has complied, in all material respects, with the applicable
servicing criteria as of December 31, 2006 and for the Reporting Period with
respect to the Platform taken as a whole;


5. Deloitte & Touche LLP, a registered public accounting firm, has issued an
attestation report on EMC's assessment of compliance with the applicable
servicing criteria for the Reporting Period.

/s/ John Vella
John Vella
President and Chief Executive Officer

March 12, 2007


2780 Lake Vista Drive, Lewisville, Texas 75067
Mailing Address: P.O. Box 1292190 Lewisville, Texas 75029-2190

(logo) Member
Mortgage Bankers Association of America


(page)

<table>

 <c>
Appendix A


SERVICING CRITERIA                                                          APPLICABLE                                 INAPPLICABLE
                                                                            SERVICING CRITERIA                         SERVICING
                                                                                                                       CRITERIA
                                                              Performed    Performed by     Performed by
                                                              Directly     Sub-Servicer(s)  Sub-Servicer(s) or
                                                              By           for              Vendor(s) for
                                                              EMC          which EMC is     which EMC is
Reference               Criteria                                           the Responsible  NOT the
                                                                           Party            Responsible Party

General Servicing Consideration

1122(d)(1)(i)   Polices and procedures are instituted          X
                to monitor any performance or other
                triggers and events of default in
                accordance with the transaction
                agreements.

1122(d)(1)(ii)  If any material servicing activities
                are outsourced to third parties,               X
                policies and procedures are
                instituted to monitor the third
                party's performance and compliance
                with such servicing activities.

1122(d)(1)(iii) Any requirements in the transaction
                agreements to maintain a back-up                                                                           X
                servicer for the mortgage loans
                are maintained.

1122(d)(1)(iv)  A fidelity bond and errors and
                omissions policy is in effect on                X
                the party participating in the
                servicing function throughout the
                reporting period in the amount of
                coverage required by and otherwise in
                accordance with the terms of the
                transaction agreements.

Cash Collection and Administration

1122(d)(2)(i)   Payments on mortgage loans are
                deposited into the appropriate                  X
                custodial bank accounts and related
                bank clearing accounts no more than
                two business days following receipt,
                or such other number of days
                specified in the transaction agreements.

1122(d)(2)(ii)  Disbursements made via wire transfer on         X
                behalf of an obligor or to an investor
                are made only by authorized personnel.

1122(d)(2)(iii) Advances of funds or guarantees regarding
                collections, cash flows or distributions,       X
                and any interest or other fees charged for
                such advances, are made, reviewed and
                approved as specified in the transaction
                agreements.

1122(d)(2)iv)   The related accounts for the transaction,
                such as cash reserve accounts or accounts        X
                established as a form of overcollateralization.
                are separately maintained (e.g. with
                respect to commingling of cash) as set
                forth in the transaction agreements.

1122(d)(2)(v)   Each custodial account is maintained at a
                federally insured depository institution as set  X
                forth in the transaction agreements. For
                purposes of this criterion, "federally insured
                depository institutions" with respect to a
                foreign financial institution means a foreign
                financial that meets the requirements of Rule
                13k-1(b)(1) of the Securities Exchange Act.


(page)

Appendix A (page 2)

Servicing Criteria
                                                                                APPLICABLE                           INAPPLICABLE
                                                                             SERVICING CRITERIA                         SERVICING
                                                                                                                        CRITERIA
                                                               Performed       Performed by        Performed by
                                                               Directly        Sub-Servicer(s)     Sub-Servicer(s) or
                                                               By              for                 Vendor(s) for
                                                               EMC             which EMC is        which EMC is
Reference               Criteria                                               the Responsible     NOT the
                                                                               Party               Responsible Party
Cash Collection and Administration (con't)

1122(d)(2)(vi)   Un-issued checks are safeguarded                X                                     X
                 so as to prevent unauthorized access.

1122(d)(2)vii)  Reconciliations are prepared on a monthly
                basis for all asset-backed securities related    X
                bank accounts, including custodial accounts
                and related bank clearing accounts. These
                reconciliations are (A) mathematically
                accurate; (B) prepared within 30 calendar
                days after the bank statement cutoff date, or
                such other number of days specified in the
                transaction agreements; (C) reviewed and
                approved by someone other than the person
                who prepared the reconciliation; items are
                resolved within 90 calendar days of their
                original identification, or such other number
                of days specified in the transaction
                agreements.

Investor Remittances and Reporting

1122(d)(3)(i)   Reports to investors, including those
                to be filed with the Commission, are              X
                maintained in accordance with the
                transaction agreements and applicable
                Commission requirements. Specifically,
                such reports (A) are prepared in
                accordance with timeframes and other
                terms set forth in the transaction
                agreements; C)1 are filed with the
                Commission as required by its rules
                and regulations; and (D) agree with
                investors' or the trustee's records as
                to the total unpaid principal balance and
                number of mortgage loans serviced by the
                Servicer.

1122(d)(3)(ii)  Amounts due to investors are allocated
                and remitted in accordance with                   X
                timeframes, distribution priority
                and other terms set forth in the
                transaction agreements.

1122(d)(3)(iii) Disbursements made to an investor
                are posted within two business                     X
                days to the Servicer's investor
                records, or such other number
                of days specified in the
                transaction agreements.

1122(d)(3)(iv)  Amounts remitted to investors
                per the investor reports agree                     X
                with cancelled checks, or other
                form of payment, or custodial bank
                statements.

Pool Asset Administration

1122(d)(4)(i)   Collateral or security on mortgage
                loans is maintained as required by                 X
                the transaction agreements or
                related mortgage loan documents.

1 EMC is not responsible for filing reports with the Commission as included in
this criterion. The responsibility lies with the Securities Administrator or the
Trustee depending on the specific transaction agreements.


Appendix A (page 3)


SERVICING CRITERIA                                                               APPLICABLE                            INAPPLICABLE
                                                                             SERVICING CRITERIA                        SERVICING
                                                                                                                       CRITERIA
                                                               Performed       Performed by        Performed by
                                                               Directly        Sub-Servicer(s)     Sub-Servicer(s) or
                                                               By              for                 Vendor(s) for
                                                               EMC             which EMC is        which EMC is
Reference               Criteria                                               the Responsible     NOT the
                                                                               Party               Responsible Party

Pool Asset Administration (con't)

1122(d)(4)(ii)   Mortgage loan and related documents
                 are safeguarded as required by the               X
                 transaction agreements.

1122(d)(4)(iii)  Any additions, removals or
                 substitutions to the asset                       X
                 pool are made, reviewed and
                 approved in accordance with
                 any conditions or requirements
                 in the transaction agreements.

1122(d)(4)(iv)   Payments on mortgage loans, including
                 any payoffs, made in accordance with             X
                 the related mortgage loan documents
                 are posted to the Servicer's obligor
                 records maintained no more than two
                 business days after receipt, or such
                 other number of days specified in the
                 transaction agreements, and allocated to
                 principal, interest or other items (e.g.,
                 escrow) in accordance with the related
                 mortgage loan documents.

1122(d)(4)(v)    The Servicer's records regarding the
                 mortgage loans agree with the Servicer's         X
                 records with respect to an obligor's
                 unpaid principal balance.

1122(d)(4)(vi)   Changes with respect to the terms or
                 status of an obligor's mortgage loans            X
                 (e.g., loan modifications or re-agings)
                 are made reviewed and approved by
                 authorized personnel in accordance
                 with the transaction agreements and
                 related pool asset documents.

1122(d)(4)(vii)  Loss mitigation or recovery actions
                 (e.g., forbearance plans, modifications          X
                 and deed in lieu of foreclosure,
                 foreclosures and repossessions, as
                 applicable) are initiated, conducted
                 and concluded in accordance with the
                 timeframes or other requirements
                 established by the transaction agreements.

1122(d)(4)(viii) Records documenting collection efforts are
                 maintained during the period a mortgage          X
                 loan is delinquent in accordance with the
                 transaction agreements. Such records are
                 maintained on a least a monthly basis, or
                 such other period specified in the transaction
                 agreements, and describe the entity's
                 activities in monitoring delinquent mortgage
                 loans including, for example, phone calls,
                 letters and payment rescheduling plans in
                 cases where delinquency is deemed
                 temporary (e.g., illness or unemployment).

1122(d)(4)(ix)   Adjustments to interest rates or rates
                 of return for mortgage loans with                X
                 variable rates are computed based on
                 the related mortgage loan documents.


Appendix A (page 4)


SERVICING CRITERIA                                                               APPLICABLE                            INAPPLICABLE
                                                                             SERVICING CRITERIA                        SERVICING
                                                                                                                       CRITERIA
                                                                 Performed     Performed by        Performed by
                                                                 Directly      Sub-Servicer(s)     Sub-Servicer(s) or
                                                                 By            for                 Vendor(s) for
                                                                 EMC           which EMC is        which EMC is
Reference               Criteria                                               the Responsible     NOT the
                                                                               Party               Responsible Party
Pool Asset Administration (con't)

1122(d)(4)(x)    Regarding any funds held in trust for an
                 obligor (such as escrow accounts): (A) such          X
                 funds are analyzed, in accordance with the
                 obligor's mortgage loan documents, on a
                 least an annual basis, or such other period
                 specified n the transaction agreements; (B)
                 interest on such funds is paid, or credited, to
                 obligors in accordance with applicable
                 mortgage loan documents and state laws;
                 and (C) such funds are returned to the
                 obligor within 30 calendar days of full
                 repayment of the related mortgage loans, or
                 such other number of days specified in the
                 transaction agreements.

1122(d)(4)(xi)   Payments made on behalf of an obligor
                 (such as tax or insurance payments) are              X
                 made on or before the related penalty or
                 expiration dates, as indicated on the
                 appropriate bills or notices for such
                 payments, provided that such support has
                 been received by the servicer at least 30
                 calendar days prior to these dates, or such
                 other number of days specified in the
                 transaction agreements.

1122(d)(4)(xii)  Any late payments penalties in connection
                 with any payment to be made on behalf of             X
                 an obligor are paid from the Servicer's
                 funds and not charged to the obligor,
                 unless the late payment was due to the
                 obligor's error or omission.


1122(d)(4)(xiii) Disbursements made on behalf of an obligor
                 are posted within two business days to the           X                                X
                 obligor's records maintained by the Servicer,
                 or such other numbers of days specified in
                 the transaction agreements.

1122(d)(4)(xiv)  Delinquencies, charge-offs and uncollectible
                 accounts are recognized and recorded in              X
                 accordance with the transaction agreements.

1122(d)(4)(xv)   Any External enhancement or other support,
                 identified in Item 1114(a)(1) through (3)            X
                 or - Item 1115 of Regulation AB, is maintained
                 as set forth in the transaction agreements.


(page)


Exhibit B


Describe material instances of noncompliance:
NONE

Describe any remediation efforts:
NOT APPLICABLE

Describe material instances of noncompliance by Vendor(s):
NONE

Describe any remediation efforts:
NOT APPLICABLE

Describe material deficiencies if EMC's polices and procedures to monitor Vendor(s):
NONE

Describe any remediation efforts:
NOT APPLICABLE

</TABLE>





EX-33 (d)
GreenPoint Mortgage Funding, Inc.
Certification Regarding Compliance with Applicable Servicing Criteria

1.   GreenPoint Mortgage Funding, Inc, ("GreenPoint") is responsible for
     assessing compliance with the servicing criteria applicable to it under
     paragraph (d) of Item 1122 of Regulation AB, as of and for the 12-month
     period ending December 31, 2006 (the "Reporting Period"), as set forth in
     Appendix A hereto. The transactions covered by this report include
     asset-backed securities transactions for which GreenPoint acted as servicer
     involving residential mortgage loans (the "Platform");

2.   GreenPoint has engaged certain vendors (the "Vendors") to perform specific,
     limited or scripted activities, and GreenPoint elects to take
     responsibility for assessing compliance with the servicing criteria or
     portion of the servicing criteria applicable to such Vendors' activities as
     set forth in Appendix A hereto;

3.   Except as set forth in paragraph 4 below, GreenPoint used the criteria set
     forth in paragraph (d) of Item 1122 of Regulation AB to assess the
     compliance with the applicable servicing criteria;

4.   The criteria listed in the column titled "Inapplicable Servicing Criteria"
     on Appendix A hereto are inapplicable to GreenPoint based on the activities
     it performs, directly or through its Vendors, with respect to the Platform;

5.   GreenPoint has complied, in all material respects, with the applicable
     servicing criteria as of December 31, 2006 and for the Reporting Period
     with respect to the Platform taken as a whole, except as described on
     Appendix B hereto;

6.   GreenPoint has not identified and is not aware of any material instance of
     noncompliance by the Vendors with the applicable servicing criteria as of
     December 31, 2006 and for the Reporting Period with respect to the Platform
     taken as a whole;

7.   GreenPoint has not identified any material deficiency in its policies and
     procedures to monitor the compliance by the Vendors with the applicable
     servicing criteria as of December 31, 2006 and for the Reporting Period
     with respect to the Platform taken as a whole; and

8.   Ernst & Young, a registered public accounting firm, has issued an
     attestation report on GreenPoint's assessment of compliance with the
     applicable servicing criteria for the Reporting Period.

February 28, 2007

GreenPoint Mortgage Funding, Inc.

By: /s/ Michael DeFrancesco
Name:  Michael DeFrancesco
Title: Senior Vice President,
Loan Administration


(page)


APPENDIX A

<TABLE>
<CAPTION>
<S>     <C>    <C>    <C>

                                                                                                                INAPPLICABLE
                                                                                    APPLICABLE                    SERVICING
                                SERVICING CRITERIA                              SERVICING CRITERIA                 CRITERIA*
                                                                                                Performed
                                                                                                   by
                                                                                                Vendor(s)
                                                                                                for which
                                                                                Performed       GreenPoint
                                                                                 Directly         is the
                                                                                   by           responsible
Reference                               Criteria                                GreenPoint        party

                                General Servicing Considerations

1122(d)(1)(i)    Policies and procedures are instituted to monitor any
                 performance or other triggers and events of default in             X
                 accordance with the transaction agreements.

1122(d)(1)(ii)   If any material servicing activities are outsourced to third
                 parties, policies and procedures are instituted to monitor         X
                 the third party's performance and compliance with such
                 servicing activities.

1122(d)(1)(iii)  Any requirements in the transaction agreements to maintain a                                          X
                 back-up servicer for the mortgage loans are maintained.

1122(d)(1)(iv)   A fidelity bond and errors and omissions policy is in effect
                 on the party participating in the servicing function
                 throughout the reporting period in the amount of coverage          X
                 required by and otherwise in accordance with the terms of
                 the transaction agreements.

                                Cash Collection and Administration

1122(d)(2)(i)    Payments on mortgage loans are deposited into the appropriate
                 custodial bank accounts and related bank clearing accounts no      X                X(1)
                 more than two business days following receipt, or such other
                 number of days specified in the transaction agreements.

1122(d)(2)(ii)   Disbursements made via wire transfer on behalf of an obligor or    X
                 to an investor are made only by authorized personnel.

1122(d)(2)(iii)  Advances of funds or guarantees regarding collections, cash
                 flows or distributions, and any interest or other fees charged     X
                 for such advances, are made, reviewed and approved as specified
                 in the transaction agreements.

1122(d)(2)(iv)   The related accounts for the transaction, such as cash reserve
                 accounts or accounts established as a form of
                 overcollateralization, are separately maintained (e.g., with       X
                 respect to commingling of cash) as set forth in the transaction
                 agreements.

1122(d)(2)(v)    Each custodial account is maintained at a federally insured
                 depository institution as set forth in the transaction
                 agreements. For purposes of this criterion, "federally insured
                 depository institution" with respect to a foreign financial        X
                 institution means a foreign financial institution that meets
                 the requirements of Rule 13k-1(b)(1) of the Securities
                 Exchange Act.

1122(d)(2)(vi)   Unissued checks are safeguarded so as to prevent unauthorized      X
                 access.

</TABLE>


(page)


<TABLE>
<CAPTION>
<S>     <C>    <C>    <C>

                                                                                                               INAPPLICABLE
                                                                                    APPLICABLE                    SERVICING
                                SERVICING CRITERIA                              SERVICING CRITERIA                 CRITERIA*
                                                                                                Performed
                                                                                                   by
                                                                                                Vendor(s)
                                                                                                for which
                                                                                Performed       GreenPoint
                                                                                 Directly         is the
                                                                                   by           responsible
Reference                               Criteria                                GreenPoint        party

1122(d)(2)(vii)  Reconciliations are prepared on a monthly basis for all
                 asset-backed securities related bank accounts, including
                 custodial accounts and related bank clearing accounts.
                 These reconciliations are (A) mathematically accurate;
                 (B) prepared within 30 calendar days after the bank
                 statement cutoff date, or such other number of days                X
                 specified in the transaction agreements; (C) reviewed and
                 approved by someone other than the person who prepared the
                 reconciliation; and (D) contain explanations for reconciling
                 items. These reconciling items are resolved within 90
                 calendar days of their original identification, or such
                 other number of days specified in the transaction
                 agreements.

                                Investor Remittances and Reporting

1122(d)(3)(i)    Reports to investors, including those to be filed with the
                 Commission, are maintained in accordance with the transaction
                 agreements and applicable Commission requirements.
                 Specifically, such reports (A) are prepared in accordance
                 with timeframes and other terms set forth in the transaction
                 agreements; (B) provide information calculated in accordance       X
                 with the terms specified in the transaction agreements;
                 (C) are filed with the Commission as required by its rules
                 and regulations; and (D) agree with investors' or the
                 trustee's records as to the total unpaid principal balance
                 and number of mortgage loans serviced by the Servicer.

1122(d)(3)(ii)   Amounts due to investors are allocated and remitted in
                 accordance with timeframes, distribution priority and other        X
                 terms set forth in the transaction agreements.

1122(d)(3)(iii)  Disbursements made to an investor are posted within two
                 business days to the Servicer's investor records, or such          X
                 other number of days specified in the transaction
                 agreements.

1122(d)(3)(iv)   Amounts remitted to investors per the investor reports agree
                 with cancelled checks, or other form of payment, or custodial      X
                 bank statements.

                                Pool Asset Administration

1122(d)(4)(i)    Collateral or security on mortgage loans is maintained as
                 required by the transaction agreements or related mortgage                                            X
                 loan documents.

1122(d)(4)(ii)   Mortgage loan and related documents are safeguarded as             X
                 required by the transaction agreements

1122(d)(4)(iii)  Any additions, removals or substitutions to the asset pool
                 are made, reviewed and approved in accordance with any             X
                 conditions or requirements in the transaction agreements.

1122(d)(4)(iv)   Payments on mortgage loans, including any payoffs, made in
                 accordance with the related mortgage loan documents are
                 posted to the Servicer's obligor records maintained no more
                 than two business days after receipt, or such other number         X                X(1)
                 of days specified in the transaction agreements, and
                 allocated to principal, interest or other items (e.g.,
                 escrow) in accordance with the related mortgage loan
                 documents.

1122(d)(4)(v)    The Servicer's records regarding the mortgage loans agree
                 with the Servicer's records with respect to an obligor's           X
                 unpaid principal

</TABLE>


(page)


<TABLE>
<CAPTION>
<S>     <C>    <C>    <C>

                                                                                                               INAPPLICABLE
                                                                                    APPLICABLE                    SERVICING
                                SERVICING CRITERIA                              SERVICING CRITERIA                 CRITERIA*
                                                                                                Performed
                                                                                                   by
                                                                                                Vendor(s)
                                                                                                for which
                                                                                Performed       GreenPoint
                                                                                 Directly         is the
                                                                                   by           responsible
Reference                               Criteria                                GreenPoint        party

                 balance.

1122(d)(4)(vi)   Changes with respect to the terms or status of an obligor's
                 mortgage loans (e.g., loan modifications or re-agings) are
                 made, reviewed and approved by authorized personnel in             X
                 accordance with the transaction agreements and related pool
                 asset documents.

1122(d)(4)(vii)  Loss mitigation or recovery actions (e.g., forbearance plans,
                 modifications and deeds in lieu of foreclosure, foreclosures
                 and repossessions, as applicable) are initiated, conducted         X
                 and concluded in accordance with the timeframes or other
                 requirements established by the transaction agreements.

1122(d)(4)(viii) Records documenting collection efforts are maintained during
                 the period a mortgage loan is delinquent in accordance with
                 the transaction agreements. Such records are maintained on
                 at least a monthly basis, or such other period specified
                 in the transaction agreements, and describe the entity's           X
                 activities in monitoring delinquent mortgage loans including,
                 for example, phone calls, letters and payment rescheduling
                 plans in cases where delinquency is deemed temporary (e.g.,
                 illness or unemployment).

1122(d)(4)(ix)   Adjustments to interest rates or rates of return for mortgage
                 loans with variable rates are computed based on the related        X
                 mortgage loan documents.

1122(d)(4)(x)    Regarding any funds held in trust for an obligor (such as
                 escrow accounts): (A) such funds are analyzed, in accordance
                 with the obligor's mortgage loan documents, on at least an
                 annual basis, or such other period specified in the
                 transaction agreements; (B) interest on such funds is paid,        X
                 or credited, to obligors in accordance with applicable
                 mortgage loan documents and state laws; and (C) such funds
                 are returned to the obligor within 30 calendar days of full
                 repayment of the related mortgage loans, or such other number
                 of days specified in the transaction agreements.

1122(d)(4)(xi)   Payments made on behalf of an obligor (such as tax or insurance
                 payments) are made on or before the related penalty or
                 expiration dates, as indicated on the appropriate bills or
                 notices for such payments, provided that such support has been                      X(2)
                 received by the Servicer at least 30 calendar days prior to
                 these dates, or such other number of days specified in the
                 transaction agreements.

1122(d)(4)(xii)  Any late payment penalties in connection with any payment to
                 be made on behalf of an obligor are paid from the Servicer's                        X(2)
                 funds and not charged to the obligor, unless the late payment
                 was due to the obligor's error or omission.

1122(d)(4)(xiii) Disbursements made on behalf of an obligor are posted within
                 two business days to the obligor's records maintained by the       X
                 Servicer, or such other number of days specified in the
                 transaction agreements.

1122(d)(4)(xiv)  Delinquencies, charge-offs and uncollectible accounts are
                 recognized and recorded in accordance with the transaction         X
                 agreements.

1122(d)(4)(xv)   Any external enhancement or other support, identified in Item
                 1114(a)(1) through (3) or Item 1115 of Regulation AB, is                                              X
                 maintained as set forth in the transaction agreements.

</TABLE>


(1) The servicer has elected to take responsibility for assessing compliance
with such servicing criteria as permitted by the Interpretation 17.06 of the SEC
Division of Finance telephone interpretation with respect to the initial
processing of cash receipts at the lockbox

(2) The servicer will obtain an assertion of management and an accompanying 1122
attestation report from the vendor performing such activities.


(page)


APPENDIX B*

1. GreenPoint has identified the following noncompliance with servicing criteria
1122(d)(1)(i), 1122(d)(2)(iv), and 1122(d)(3)(ii) applicable to the Platform
during the year ended December 31, 2006 as follows:

1122(d)(1)(i) - GreenPoint did not institute policies and procedures to monitor
performance or other triggers and events of defaults in accordance with the
transaction agreements.

1122(d)(2)(iv) - GreenPoint did not establish separate P&I and T&I accounts for
certain securitizations which allowed funds to be commingled in various
custodial accounts.

1122(d)(3)(ii) - In certain situations where GreenPoint has received mortgage
insurance proceeds prior to the liquidation of the related properties, the
mortgage insurance proceeds were not remitted at the time of the next regularly
scheduled remittance date as required by the transaction agreements, but instead
remained in the related custodial account and were remitted at the time the REO
liquidation proceeds were remitted to the Master Servicer.


2. GreenPoint has implemented the following remediation procedures:

1122(d)(1)(i) - GreenPoint has active monitoring of the entire portfolio and at
investor levels but not at the securitization transaction level. GreenPoint will
establish policies and procedures to monitor performance or other triggers and
events of default in accordance with the transaction agreements.

1122(d)(2)(iv) - GreenPoint has separated the commingled funds and established
proper custodial and escrow accounts and improved the oversight of establishing
such accounts as required by the related agreements.

1122(d)(3)(ii) - GreenPoint is modifying applicable agreements to clarify that
such mortgage insurance proceeds may be remitted at the time of the remittance
of the REO liquidation proceeds or modifying its remittance practice to remit
the mortgage insurance proceeds during the next regularly schedule remittance
where required.


*Accountants' attestation report covers only paragraph 1 of this Appendix B





EX-33 (e)
Report on Assessment of Compliance

with Regulation AB Servicing Criteria

1. The undersigned authorized officer of LandAmerica Tax and Flood Services,
Inc. (the "Company") is responsible for assessing the Company's compliance with
the applicable servicing criteria as defined in 17 CFR Part 229 Section 1122(d)
(4)(xi) and 1122(d)(4)(xii) (the "Regulation AB Servicing Criteria") for
residential mortgage backed securities for which the Company served as
third-party property tax payment provider on the underlying collateral (the
"Platform"). Except as set forth in the preceding sentence, the servicing
criteria set forth in 17 CFR Part 229 Section 1122(d) are not applicable to the
activities the Company performed with respect to the Platform.

2. The Company used the criteria in 17 CFR Part 229 Section 1122(d) to assess
the compliance with the Regulation AB Servicing Criteria.

3. Under one of the services offered by the Company, some customers may elect to
remit tax payments directly to tax agencies without having the Company remit
those property tax payments through our tax payment service. We refer to these
customers as "non-outsourced servicer customers." With respect to these
non-outsourced customers and the services the Company delivered pursuant to the
servicing criteria set forth in 17 CFR Part 229 Section 1122(d)(4)(xi), the
Company's assertion is strictly limited to its processing of tax payments
submitted through the Company's tax payment service.

4. With respect to servicing criteria set forth in 17 CFR Part 229 Section
1122(d)(4)(xii), the Company's assertion is strictly limited to its processing
of property tax penalty payments. The Company has determined that its servicer
customers may also have access to systems that enable those servicers to process
penalties through obligor escrow accounts. Management's assessment of compliance
does not relate to the actual or potential activities of other parties with
access to obligor escrow accounts.

5. Based on such assessment, management believes that, as of and for the year
ended December 31, 2006, the Company has complied in all material respects with
the Regulation AB Servicing Criteria related to the servicing of the Platform.

6. The registered public accounting firm of Grant Thornton, LLP, has issued an
attestation report on the Company's assessment of compliance with the Regulation
AB Servicing Criteria as of and for the year ended December 31, 2006.

Date: February 20, 2007

LandAmerica Tax and Flood Services, Inc.



By: /s/ Bob Ige
Name: Bob Ige
Its: Executive Vice President





EX-33 (f)
Report on Assessment of Compliance

with Regulation AB Servicing Criteria

1.      The undersigned authorized officer of LandAmerica Tax and Flood
Services, Inc. (the "Company") is responsible for assessing the Company's
compliance with the applicable servicing criteria as defined in 17 CFR Part 229
Section 1122(d) (4) (xi) and 1122(d) (4) (xii) (the "Regulation AB Servicing
Criteria") for residential mortgage backed securities for which the Company
served as third-party property tax payment provider on the underlying collateral
(the "Platform"). Except as set forth in the preceding sentence, the servicing
criteria set forth in 17 CFR Part 229 Section 1122(d) are not applicable to the
activities the Company performed with respect to the Platform.

2.      The Company used the criteria in 17 CFR Part 229 Section 1122(d) to
assess the compliance with the Regulation AB Servicing Criteria.

3.      Under one of the services offered by the Company, some customers may
elect to remit tax payments directly to tax agencies without having the Company
remit those property tax payments through our tax payment service. We refer to
these customers as "non-outsourced servicer customers." With respect to these
non-outsourced customers and the services the Company delivered pursuant to the
servicing criteria set forth in 17 CFR Part 229 Section 1122(d)(4)(xi), the
Company's assertion is strictly limited to its processing of tax payments
submitted through the Company's tax payment service.

4.      With respect to servicing criteria set forth in 17 CFR Part 229 Section
1122(d)(4)(xii), the Company's assertion is strictly limited to its processing
of property tax penalty payments. The Company has determined that its servicer
customers may also have access to systems that enable those servicers to process
penalties through obligor escrow accounts. Management's assessment of compliance
does not relate to the actual or potential activities of other parties with
access to obligor escrow accounts.

5.      Based on such assessment, management believes that, as of and for the
year ended December 31, 2006, the Company has complied in all material respects
with the Regulation AB Servicing Criteria related to the servicing of the
Platform.

6.      The registered public accounting firm of Grant Thornton, LLP, has issued
an attestation report on the Company's assessment of compliance with the
Regulation AB Servicing Criteria as of and for the year ended December 31, 2006.

Date: February 20, 2007

LandAmerica Tax and Flood Services, Inc.


By:   /s/ Bob Ige
Name: Bob Ige
Its:  Executive Vice President





EX-33 (i)
(logo) WELLS FARGO

Corporate Trust Services
9062 Old Annapolis Road
Columbia, MD 21045-1951
410 884-2000
410 715-2380 Fax

Wells Fargo Bank, N.A.

ASSESSMENT OF COMPLIANCE WITH APPLICABLE SERVICING CRITERIA

Corporate Trust Services division of Wells Fargo Bank, National Association (the
"Company") provides this assessment of compliance with the following applicable
servicing criteria set forth in Item 1122(d) of Regulation AB promulgated by
the Securities and Exchange Commission. Management has determined that the
servicing criteria are applicable in regards to the servicing platform for the
period as follows:

Platform: Publicly-issued (i.e., transaction-level reporting initially required
under the Securities Exchange Act of 1934, as amended) residential
mortgage-backed securities, commercial mortgage-backed securities and other
asset-backed securities, for which the Company provides master servicing,
trustee, securities administration or paying agent services, excluding
transactions issued by any agency or instrumentality of the U.S. government or
any government sponsored entity (the "Platform").

Applicable Servicing Criteria: All servicing criteria set forth in Item 1122(d),
to the extent required in the related transaction agreements or required by the
Item 1122(d) servicing criteria in regards to the activities performed by the
Company, except for the following criteria: 1122(d)(1)(iii), 1122(d)(4)(ii),
1122(d)(4)(iv), 1122(d)(4)(v), 1122(d)(4)(viii), 1122(d)(4)(ix), 1122(d)(4)(x),
1122(d)(4)(xi), 1122(d)(4)(xii) and 1122(d)(4)(xiii), which management has
determined are not applicable to the activities the Company performs with
respect to the Platform (the "Applicable Servicing Criteria").

Period: Twelve months ended December 31, 2006 (the "Period").

Third parties classified as vendors: With respect to servicing criteria
1122(d)(4)(i), the Company has engaged various vendors to handle certain Uniform
Commercial Code filing functions required by the servicing criteria ("vendors").
The Company has determined that none of the vendors is a "servicer" as defined
in Item 1101(j) of Regulation AB, and the Company elects to take responsibility
for assessing compliance with the portion of the servicing criteria applicable
to each vendor as permitted by Interpretation 17.06 of the SEC Division of
Corporation Finance Manual of Publicly Available Telephone Interpretations
("Interpretation 17.06"). The Company has policies and procedures in place to
provide reasonable assurance that each vendor's activities comply in all
material respects with the servicing criteria applicable to each vendor. The
Company is solely responsible for determining that it meets the SEC requirements
to apply Interpretation 17.06 for the vendors and related criteria.

With respect to the Platform and the Period, the Company provides the following
assessment of compliance with respect to the Applicable Servicing Criteria:

1. The Company is responsible for assessing its compliance with the Applicable
Servicing Criteria.

2. The Company has assessed compliance with the Applicable Servicing Criteria,
including servicing criteria for which compliance is determined based on
Interpretation 17.06 as described above, as of and for the Period. In performing
this assessment, management used the criteria set forth by the Securities and
Exchange Commission in paragraph (d) of Item 1122 of Regulation AB.

3. Other than as identified on Schedule A hereto, as of and for the Period, the
Company was in material compliance with the Applicable Servicing Criteria. Any
material instances of noncompliance by a vendor of which the Company is aware
and any material deficiency in the Company's policies and procedures to monitor
vendors' compliance that the Company has identified is specified on Schedule A
hereto.

KPMG LLP, a registered public accounting firm, has issued an attestation
report with respect to the Company's foregoing assessment of compliance as of
and for the Period.

WELLS FARGO BANK, NATIONAL ASSOCIATION

By:/s/ Brian Bartlett
Brian Bartlett

Its:   Executive Vice President

Dated: March 1, 2007


(page)


(logo) WELLS FARGO

Corporate Trust Services
9062 Old Annapolis Road
Columbia, MD 21045-1951
410 884-2000
410 715-2380 Fax

Wells Fargo Bank, N.A.

Schedule A

Material Instances of Noncompliance by the Company

1122(d)(3)(i)- Delinquency Reporting - During the reporting period, certain
monthly investor or remittance reports included errors in the calculation and/or
the reporting of delinquencies for the pool assets, which errors may or may not
have been material. All such errors were the result of data processing errors
and/or the mistaken interpretation of data provided by other parties
participating in the servicing function. All necessary adjustments to data
processing systems and/or interpretive clarifications have been made to correct
those errors and to remedy related procedures.

Material instances of Noncompliance by any Vendor

NONE

Material Deficiencies In Company's Policies and Procedures to Monitor Vendors'
Compliance

NONE





EX-33 (j)
(logo) WELLS FARGO

Corporate Trust Services
9062 Old Annapolis Road
Columbia, MD 21045-1951
410 884-2000
410 715-2380 Fax

Wells Fargo Bank, N.A.

ASSESSMENT OF COMPLIANCE WITH APPLICABLE SERVICING CRITERIA

Corporate Trust Services division of Wells Fargo Bank, National Association (the
"Company") provides this assessment of compliance with the following applicable
servicing criteria set forth in Item 1122(d) of Regulation AB promulgated by
the Securities and Exchange Commission. Management has determined that the
servicing criteria are applicable in regards to the servicing platform for the
period as follows:

Platform: Publicly-issued (i.e., transaction-level reporting initially required
under the Securities Exchange Act of 1934, as amended) residential
mortgage-backed securities, commercial mortgage-backed securities and other
asset-backed securities, for which the Company provides master servicing,
trustee, securities administration or paying agent services, excluding
transactions issued by any agency or instrumentality of the U.S. government or
any government sponsored entity (the "Platform").

Applicable Servicing Criteria: All servicing criteria set forth in Item 1122(d),
to the extent required in the related transaction agreements or required by the
Item 1122(d) servicing criteria in regards to the activities performed by the
Company, except for the following criteria: 1122(d)(1)(iii), 1122(d)(4)(ii),
1122(d)(4)(iv), 1122(d)(4)(v), 1122(d)(4)(viii), 1122(d)(4)(ix), 1122(d)(4)(x),
1122(d)(4)(xi), 1122(d)(4)(xii) and 1122(d)(4)(xiii), which management has
determined are not applicable to the activities the Company performs with
respect to the Platform (the "Applicable Servicing Criteria").

Period: Twelve months ended December 31, 2006 (the "Period").

Third parties classified as vendors: With respect to servicing criteria
1122(d)(4)(i), the Company has engaged various vendors to handle certain Uniform
Commercial Code filing functions required by the servicing criteria ("vendors").
The Company has determined that none of the vendors is a "servicer" as defined
in Item 1101(j) of Regulation AB, and the Company elects to take responsibility
for assessing compliance with the portion of the servicing criteria applicable
to each vendor as permitted by Interpretation 17.06 of the SEC Division of
Corporation Finance Manual of Publicly Available Telephone Interpretations
("Interpretation 17.06"). The Company has policies and procedures in place to
provide reasonable assurance that each vendor's activities comply in all
material respects with the servicing criteria applicable to each vendor. The
Company is solely responsible for determining that it meets the SEC requirements
to apply Interpretation 17.06 for the vendors and related criteria.

With respect to the Platform and the Period, the Company provides the following
assessment of compliance with respect to the Applicable Servicing Criteria:

1. The Company is responsible for assessing its compliance with the Applicable
Servicing Criteria.

2. The Company has assessed compliance with the Applicable Servicing Criteria,
including servicing criteria for which compliance is determined based on
Interpretation 17.06 as described above, as of and for the Period. In performing
this assessment, management used the criteria set forth by the Securities and
Exchange Commission in paragraph (d) of Item 1122 of Regulation AB.

3. Other than as identified on Schedule A hereto, as of and for the Period, the
Company was in material compliance with the Applicable Servicing Criteria. Any
material instances of noncompliance by a vendor of which the Company is aware
and any material deficiency in the Company's policies and procedures to monitor
vendors' compliance that the Company has identified is specified on Schedule A
hereto.

KPMG LLP, a registered public accounting firm, has issued an attestation
report with respect to the Company's foregoing assessment of compliance as of
and for the Period.

WELLS FARGO BANK, NATIONAL ASSOCIATION

By:/s/ Brian Bartlett
Brian Bartlett

Its:   Executive Vice President

Dated: March 1, 2007


(page)


(logo) WELLS FARGO

Corporate Trust Services
9062 Old Annapolis Road
Columbia, MD 21045-1951
410 884-2000
410 715-2380 Fax

Wells Fargo Bank, N.A.

Schedule A

Material Instances of Noncompliance by the Company

1122(d)(3)(i)- Delinquency Reporting - During the reporting period, certain
monthly investor or remittance reports included errors in the calculation and/or
the reporting of delinquencies for the pool assets, which errors may or may not
have been material. All such errors were the result of data processing errors
and/or the mistaken interpretation of data provided by other parties
participating in the servicing function. All necessary adjustments to data
processing systems and/or interpretive clarifications have been made to correct
those errors and to remedy related procedures.

Material instances of Noncompliance by any Vendor

NONE

Material Deficiencies In Company's Policies and Procedures to Monitor Vendors'
Compliance

NONE





EX-33 (k)
(logo) WELLS FARGO

Wells Fargo Bank, N.A.
Document Custody
1015 10th Avenue SE
Minneapolis, MN 55414


Appendix I


ASSESSMENT OF COMPLIANCE WITH APPLICABLE SERVICING CRITERIA

Corporate Trust Services division of Wells Fargo Bank, National Association
(the "Company") is responsible for assessing compliance with the servicing
criteria set forth in Item 1122(d) of Regulation AB promulgated by the
Securities and Exchange Commission. The Company has determined that the
servicing criteria are applicable in regard to the servicing platform for the
period as follows:

Platform: Publicly-issued (i.e., transaction-level reporting required under
the Securities Exchange Act of 1934, as amended) residential mortgage-backed
securities and commercial mortgage-backed securities issued on or after January
1, 2006, for which the Company provides document custody services, excluding any
publicly issued transactions issued by any government sponsored entity (the
"Platform").

Applicable Servicing Criteria: The servicing criteria set forth in Item
1122(d)(4)(i) and 1122(d)(4)(ii), in regard to the activities performed by the
Company with respect to the Platform (the "Applicable Servicing Criteria"). The
Company has determined that all other servicing criteria set forth in Item
1122(d) are not applicable to the Platform.

Period: Twelve months ended December 31, 2006 (the "Period").

With respect to the Platform, the Company provides the following
assessment of compliance with respect to the Applicable Servicing Criteria:

1. The Company is responsible for assessing the Company's compliance with
the Applicable Servicing Criteria as of and for the Period.

2. The Company has assessed compliance with the Applicable Servicing
Criteria. In performing this assessment, the Company used the criteria set forth
by the Securities and Exchange Commission in paragraph (d) of Item 1122 of
Regulation AB.

3. Based on such assessment, as of and for the Period, the Company has
complied, in all material respects with the Applicable Servicing Criteria.

KPMG LLP, a registered public accounting firm, has issued an attestation
report with respect to the Company's assessment of compliance as of and for the
Period.


WELLS FARGO BANK, NATIONAL ASSOCIATION

By: /s/ Shari L. Gillund
Shari L. Gillund

Its: Senior Vice President

Dated: March 1, 2007





EX-34 (a)
(logo) PRICEWATERHOUSECOOPERS

PricewaterhouseCoopers LLP
10 Tenth Street, Northwest
Suite 1400
Atlanta, GA 30309-3851
Telephone (678) 419 1000
Facsimile (678) 419 1239
www.pwc.com



Report of Independent Registered Public Accounting Firm


To the Shareholders and the Board of Directors of
Assurant, Inc.:

We have examined management's assertion, included in the accompanying
management's Report on Assessment of Compliance with 1122(d)(2)(vi) and
1122(d)(4)(xi) of Regulation AB Servicing Criteria, that American Security
Insurance Company, Standard Guaranty Insurance Company and Safeco Financial
Institution Solutions, Inc. (affiliates of Assurant Inc., collectively the
"Asserting Party") complied with the servicing criteria set forth in Item
1122(d) of the Securities and Exchange Commission's Regulation AB for all
mortgage loan-tracking transactions for which the Asserting Party served as a
Vendor on behalf of Servicers for such asset-backed securities transactions that
were registered after January 1, 2006 with the Securities and Exchange
Commission pursuant to the Securities Act of 1933 (the "Platform"), as of
December 31, 2006 and for the year then ended, excluding (i) criteria
1122(d)(1)(i) through 1122 (d)(1)(iv), 1122 (d)(2)(i) through 1122(d)(2)(v),
1122(d)(2)(vii), 1122(d)(3)(i) through 1122(d)(3)(iv), 1122(d)(4)(i) through
1122(d)(4)(x) and 1122(d)(4)(xiii) through 1122(d)(4)(xv), which the Asserting
Party has determined are not applicable to the activities performed by it with
respect to the Platform and (ii), criterion 1122(d)(4)(xii), which relates to
servicing activities that are applicable to the Platform, but are excluded from
the scope of management's assertion and are not reported on herein. Management
is responsible for the Company's compliance with the servicing criteria. Our
responsibility is to express an opinion on management's assertion based on our
examination.

Our examination was conducted in accordance with standards of the Public Company
Accounting Oversight Board (United States) and, accordingly, included examining,
on a test basis, evidence about the Company's compliance with the applicable
servicing criteria and performing such other procedures as we considered
necessary in the circumstances. Our examination included testing of selected
asset-backed transactions and securities that comprise the Platform, testing of
selected servicing activities related to the Platform, and determining whether
the Company processed those selected transactions and performed those selected
activities in compliance with the applicable servicing criteria. Our procedures
were limited to the selected transactions and servicing activities performed by
the Company during the period covered by this report. Our procedures were not
designed to detect noncompliance arising from errors that may have occurred
prior to or subsequent to our tests that may


1


(page)


have affected the balances or amounts calculated or reported by the Company
during the period covered by this report. We believe that our examination
provides a reasonable basis for our opinion. Our examination does not provide a
legal determination on the Company's compliance with the servicing criteria.

In our opinion, management's assertion that the Asserting Party complied with
the aforementioned applicable servicing criteria as of and for the year ended
December 31, 2006 for the Platform is fairly stated, in all material respects.

/s/ PricewaterhouseCoopers LLP

Atlanta, Georgia
February 23, 2007


2





EX-34 (b)
(logo) PRICEWATERHOUSECOOPERS

PricewaterhouseCoopers LLP
10 Tenth Street, Northwest
Suite 1400
Atlanta, GA 30309-3851
Telephone (678) 419 1000
Facsimile (678) 419 1239
www.pwc.com

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of
Assurant, Inc.:

We have examined management's assertion, included in the accompanying
management's Report on Assessment of Compliance with 1122(d)(2)(vi) and
1122(d)(4)(xi) of Regulation AB Servicing Criteria, that American Security
insurance Company, Standard Guaranty Insurance Company and Safeco Financial
Institution Solutions, Inc. (affiliates of Assurant Inc., collectively the
"Asserting Party") complied with the servicing criteria set forth in Item
1122(d) of the Securities and Exchange Commission's Regulation AB for all
mortgage loan-tracking transactions for which the Asserting Party served as a
Vendor on behalf of Servicers for such asset-backed securities transactions that
were registered after January 1, 2006 with the Securities and Exchange
Commission pursuant to the Securities Act of 1933 (the "Platform"), as of
December 31, 2006 and for the year then ended, excluding (i) criteria
1122(d)(1)(i) through 1122 (d)(1)(iv), 1122 (d)(2)(i) through 1122(d)(2)(v),
1122(d)(2)(vii), 1122(d)(3)(i) through 1122(d)(3)(iv), 1122(d)(4)(i) through
1122(d)(4)(x) and 1122(d)(4)(xiii) through 1122(d)(4)(xv), which the Asserting
Party has determined are not applicable to the activities performed by it with
respect to the Platform and (ii), criterion 1122(d)(4)(xii), which relates to
servicing activities that are applicable to the Platform, but are excluded from
the scope of management's assertion and are not reported on herein. Management
is responsible for the Company's compliance with the servicing criteria. Our
responsibility is to express an opinion on management's assertion based on our
examination.

Our examination was conducted in accordance with standards of the Public Company
Accounting Oversight Board (United States) and, accordingly, included examining,
on a test basis, evidence about the Company's compliance with the applicable
servicing criteria and performing such other procedures as we considered
necessary in the circumstances. Our examination included testing of selected
asset-backed transactions and securities that comprise the Platform, testing of
selected servicing activities related to the Platform, and determining whether
the Company processed those selected transactions and performed those selected
activities in compliance with the applicable servicing criteria. Our procedures
were limited to the selected transactions and servicing activities performed by
the Company during the period covered by this report. Our procedures were not
designed to detect noncompliance arising from errors that may have occurred
prior to or subsequent to our tests that may

1


(page)


have affected the balances or amounts calculated or reported by the Company
during the period covered by this report. We believe that our examination
provides a reasonable basis for our opinion. Our examination does not provide a
legal determination on the Company's compliance with the servicing criteria.

In our opinion, management's assertion that the Asserting Party complied with
the aforementioned applicable servicing criteria as of and for the year ended
December 31, 2006 for the Platform is fairly stated, in all material respects.

/s/ PricewaterhouseCoopers LLP

Atlanta, Georgia
February 23, 2007



2





EX-34 (c)
(logo) Deloitte

Deloitte & Touche LLP
JPMorgan Chase Tower
2200 Ross Avenue, Suite 1600
Dallas, TX 75201-6778
USA
Tel: +1 214 840 7000
www.deloitte.com

Report of Independent Registered Public Accounting Firm

Board of Directors and Shareholders
EMC Mortgage Corporation

We have examined management's assertion, included in the accompanying
Certification Regarding Compliance with Applicable Servicing Criteria, that EMC
Mortgage Corporation (the Company) complied with the servicing criteria set
forth in Item 1122 (d) of the Securities and Exchange Commission's Regulation AB
for the asset-backed securities transactions for which EMC acted as servicer
involving residential mortgage loans, that were completed on or after January 1,
2006, and that were registered with the Securities and Exchange Commission
pursuant in the Securities Act of 1933 (the Platform) as of and for the year
ended December 31, 2006, excluding criteria 1122 (d)(1)(iii), (d)(3)(i)C,
(d)(4)(xi) and (d)(4)(xii) which management has determined are not applicable to
the activities performed by the Company with respect to the Platform. Management
is responsible for the Company's compliance with the servicing criteria. Our
responsibility is to express an opinion on management's assertion about the
Company's compliance with the servicing criteria based on our examination.

Our examination was conducted in accordance with attestation standards
established by the American Institute of Certified Public Accountants, as
adopted by the Public Company Accounting Oversight Board (United States) and,
accordingly, included examining, on a test basis, evidence about the Company's
compliance with the applicable servicing criteria, including tests on a sample
basis of the servicing activities related to the Platform, determining whether
the Company performed those selected activities in compliance with the servicing
criteria during the specified period and performing such other procedures as we
considered necessary in the circumstances. Our procedures were limited to
selected servicing activities performed by the Company during the period covered
by this report and, accordingly, such samples may not have included servicing
activities related to each asset-backed transaction included in the Platform.
Further, an examination is not designed to detect noncompliance arising from
errors that may have occurred prior to the period specified above that may have
affected the balances or amounts calculated or reported by the Company during
the period covered by this report. We believe that our examination provides a
reasonable basis for our opinion. Our examination does not provide a legal
determination on the Company's compliance with the servicing criteria.

In our opinion, management's assertion that the Company complied with the
aforementioned applicable servicing criteria as of and for the year ended
December 31, 2006 for the asset-backed securities transactions for which EMC
acted as servicer involving residential mortgage loans, that were completed on
or after January 1, 2006, and that were registered with the Securities and
Exchange Commission pursuant to the Securities Act of 1933 is fairly stated, in
all material respects.

/s/ Deloitte & Touch LLP

March 12, 2007


Member of
Deloitte Touche Tohmatsu





EX-34 (d)
(logo) ERNST & YOUNG

Ernst & Young LLP
8484 Westpark Drive
McLean, VA 22102

Phone: (703) 747-1000
www.ey.com


Report of Independent Registered Public Accounting Firm

Board of Directors
GreenPoint Mortgage Funding, Inc.

We have examined management's assertion included in the accompanying report of
Certification Regarding Compliance with Applicable Servicing Criteria, that
GreenPoint Mortgage Funding, Inc. (the "Company") complied with the servicing
criteria set forth in Item 1122 (d) of the Securities and Exchange Commission's
Regulation AB for the residential mortgage loan servicing platform, except for
the instances of material noncompliance described therein, as of and for the
year ended December 31, 2006, and except for criteria 1122(d)(1)(iii),
1122(d)(4)(i), 1122(d)(4)(xi), 1122(d)(4)(xii), and 1122(d)(4)(xv), which the
Company has determined are not applicable to the activities performed by them
with respect to the servicing platform covered by this report. Management is
responsible for the Company's compliance with the applicable servicing
criteria. Our responsibility is to express an opinion on management's assertion
about the Company's compliance with the applicable servicing criteria based on
our examination.

Our examination was conducted in accordance with attestation standards
established by the American Institute of Certified Public Accountants, as
adopted by the Public Company Accounting Oversight Board (United States) and,
accordingly, included examining, on a test basis, evidence about the Company's
compliance with the applicable servicing criteria and performing such other
procedures as we considered necessary in the circumstances. Our examination
included testing of less than all of the individual asset backed transactions
and securities that comprise the platform, testing of less than all of the
servicing activities related to the Platform, and determining whether the
Company processed those selected transactions and performed those selected
activities in compliance with the servicing criteria and as permitted by the
Interpretation 17.06 of the SEC Division of Corporation Finance Manual of
Publicly Available Telephone Interpretations ("Interpretation 17.06").
Furthermore, our procedures were limited to the selected transactions and
servicing activities performed by the Company during the period covered by this
report. Our procedures were not designed to determine whether errors may have
occurred either prior to or subsequent to our tests that may have affected the
balances or amounts calculated or reported by the Company during the period
covered by this report for the selected transactions or any other transactions.
We believe that our examination provides a reasonable basis for our opinion. Our
examination does not provide a legal determination on the Company's compliance
with the servicing criteria.

As described in management's assertion, for servicing criteria 1122(d)(2)(i) and
1122(d)(4)(iv), the Company has engaged various vendors to perform the
activities required by these servicing criteria. The Company has determined that
these vendors are not considered a "servicer" as defined in Item 1101(j) of
Regulation AB, and the Company has elected to take responsibility for assessing
compliance with the applicable servicing criteria applicable to each vendor as
permitted by Interpretation 17.06. As permitted by Interpretation 17.06, the
Company has asserted that it has policies and procedures in place designed to
provide reasonable assurance that the vendors' activities comply in all material
respects with servicing criteria applicable to each vendor. The Company is
solely responsible for determining that it meets the SEC requirements to apply
Interpretation 17.06 for the vendors and related criteria as described in its
assertion, and we performed no procedures with respect to the Company's
eligibility to apply Interpretation 17.06.

Our examination disclosed the following material noncompliance with servicing
criteria 1122(d)(1)(i), 1122(d)(2)(iv), and 1122(d)(3)(ii) applicable to the
Company's platform covered by this report during the year ended December 31,
2006. 1122(d)(1)(i) - There were no policies and procedures instituted to
monitor the performance or other triggers and events of defaults in accordance
with the transaction agreements; 1122(d)(2)(iv) - The related accounts for each
transaction were not separately maintained as set forth in the transaction
agreements; and, 1122(d)(3)(ii) - Amounts due to investors were not remitted in
accordance with the timeframes set forth in the transaction agreements.

The information in the Certification Regarding Compliance with Applicable
Servicing Criteria in Item 2 of Appendix B (i.e., remediation procedures) is
presented by the Company for information purposes. Such information has not been
subjected to the procedures applied in our examination of management's assertion
as described above, and accordingly, we express no opinion on it.

In our opinion, except for the material noncompliance described in the fourth
paragraph, the Company complied, in all material respects, with the
aforementioned servicing criteria, including servicing criteria 1122(d)(2)(i)
and 1122(d)(4)(iv) for which compliance is determined based on Interpretation
17.06 as described above, as of and for the year ended December 31, 2006 for the
residential mortgage loan servicing platform.

/s/ Ernst & Young LLP

March 1, 2007





EX-34 (e)
(logo) Grant Thornton
Accountants and Business Advisors



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


Board of Directors and Shareholders
LandAmerica Tax and Flood Services, Inc.

We have examined management's assertion, included in the accompanying Report on
Assessment of Compliance with Regulation AB Servicing Criteria ("Management's
Report"), that LandAmerica Tax and Flood Services, Inc. (the "Company") complied
with the servicing criteria set forth in Item 1122(d) of the U.S. Securities and
Exchange Commission's Regulation AB for the residential mortgage backed
securities for which the Company served as third-party property tax payment
provider on the underlying collateral (the "Platform") as of and for the year
ended December 31, 2006, excluding criteria 1122(d)(1)(i)-(iv),
1122(d)(2)(i)-(vii), 1122(d)(3)(i)-(iv), 1122(d)(4)(i)-(x) and
1122(d)(4)(xiii)-(xv), which management has determined are not applicable to the
activities performed by the Company with respect to the Platform. Management is
responsible for the Company's compliance with the applicable servicing criteria.
Our responsibility is to express an opinion on management's assertion about the
Company's compliance with the applicable servicing criteria for the Platform
based on our examination.

Our examination was conducted in accordance with the standards of the Public
Company Accounting Oversight Board (United States) and, accordingly, included
examining, on a test basis, evidence about the Company's compliance with the
applicable servicing criteria for the Platform and performing such other
procedures as we considered necessary in the circumstances. Our examination
included testing selected asset-backed transactions and securities constituting
the Platform and evaluating whether the Company performed servicing activities
related to those transactions and securities in compliance with the applicable
servicing criteria for the period covered by this report. Accordingly, our
testing may not have included servicing activities related to each asset-backed
transaction or security constituting the Platform. Further, our examination was
not designed to detect material noncompliance that may have occurred prior to
the period covered by this report and that may have affected the Company's
servicing activities during the period covered by this report. We believe that
our examination provides a reasonable basis for our opinion. Our examination
does not provide a legal determination on the Company's compliance with the
applicable servicing criteria.

In our opinion, management's assertion that LandAmerica Tax and Flood Services,
Inc. complied with the aforementioned applicable servicing criteria as of and
for the year ended December 31, 2006 is fairly stated, in all material respects.

/s/ Grant Thorton LLP

Irvine, CA
February 20, 2007



18400 Von Karman Avenue
Suite 900
Irvine, CA 92612-0525
T 949.553.1600
F 949.553.0168
W www.grantthornton.com

Grant Thornton LLP
US member of Grant Thornton International





EX-34 (f)
(logo) Grant Thornton

Accountants and Business Advisors


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


Board of Directors and Shareholders
LandAmerica Tax and Flood Services, Inc.

We have examined management's assertion, included in the accompanying Report on
Assessment of Compliance with Regulation AB Servicing Criteria ("Management's
Report"), that LandAmerica Tax and Flood Services, Inc. (the "Company") complied
with the servicing criteria set forth in Item 1122(d) of the U.S. Securities and
Exchange Commission's Regulation AB for the residential mortgage backed
securities for which the Company served as third-party property tax payment
provider on the underlying collateral (the "Platform") as of and for the year
ended December 31, 2006, excluding criteria 1122(d)(1)(i)-(iv),
1122(d)(2)(i)-(vii), 1122(d)(3)(i)-(iv), 1122(d)(4)(i)-(x) and
1122(d)(4)(xiii)-(xv), which management has determined are not applicable to the
activities performed by the Company with respect to the Platform. Management is
responsible for the Company's compliance with the applicable servicing
criteria. Our responsibility is to express an opinion on management's assertion
about the Company's compliance with the applicable servicing criteria for the
Platform based on our examination.

Our examination was conducted in accordance with the standards of the Public
Company Accounting Oversight Board (United States) and, accordingly, included
examining, on a test basis, evidence about the Company's compliance with the
applicable servicing criteria for the Platform and performing such other
procedures as we considered necessary in the circumstances. Our examination
included testing selected asset-backed transactions and securities constituting
the Platform and evaluating whether the Company performed servicing activities
related to those transactions and securities in compliance with the applicable
servicing criteria for the period covered by this report. Accordingly, our
testing may not have included servicing activities related to each asset-backed
transaction or security constituting the Platform. Further, our examination was
not designed to detect material noncompliance that may have occurred prior to
the period covered by this report and that may have affected the Company's
servicing activities during the period covered by this report. We believe that
our examination provides a reasonable basis for our opinion. Our examination
does not provide a legal determination on the Company's compliance with the
applicable servicing criteria.

In our opinion, management's assertion that LandAmerica Tax and Flood Services,
Inc. complied with the aforementioned applicable servicing criteria as of and
for the year ended December 31, 2006 is fairly stated, in all material respects.


/s/ Grant Thornton LLP

Irvine, CA
February 20, 2007


18400 Von Karman Avenue
Suite 900
Irvine, CA 92612-0525
T 949.553.1600
F 949.553.0168
W www.grantthornton.com

Grant Thornton LLP
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EX-34 (i)
(logo) KPMG

KPMG LLP
303 East Wacker Drive
Chicago, IL 60801-5212

Report of Independent Registered Public Accounting Firm

The Board of Directors
The Corporate Trust Services division of Wells Fargo Bank, National Association:

We have examined the compliance of the Corporate Trust Services division of
Wells Fargo Bank, National Association (the Company) with the servicing criteria
set forth in Item 1122(d) of the Securities and Exchange Commission's Regulation
AB for publicly-issued (i.e., transaction-level reporting initially required
under the Securities Exchange Act of 1934, as amended) residential
mortgage-backed securities, commercial mortgage-backed securities and other
asset-backed securities, for which the Company provides master servicing,
trustee, securities administration or paying agent services, excluding
transactions issued by any agency or instrumentality of the U.S. government or
any government sponsored entity (the Platform), except for servicing criteria
1122(d)(1)(iii), 1122(d)(4)(ii), 1122(d)(4)(iv), 1122(d)(4)(v),
1122(d)(4)(viii), 1122(d)(4)(ix), 1122(d)(4)(x), 1122(d)(4)(xi),
1122(d)(4)(xii) and 1122(d)(4)(xiii), which the Company has determined are not
applicable to the activities it performs with respect to the Platform, as of and
for the twelve months ended December 31, 2006. Management is responsible for the
Company's compliance with those servicing criteria. Our responsibility is to
express an opinion on management's assertion about the Company's compliance
based on our examination.

Our examination was conducted in accordance with the standards of the Public
Company Accounting Oversight Board (United States) and, accordingly, included
examining, on a test basis, evidence about the Company's compliance with the
servicing criteria specified above and performing such other procedures as we
considered necessary in the circumstances. Our examination included testing of
less than all of the individual asset-backed transactions and securities that
comprise the Platform, testing of less than all of the servicing activities
related to the Platform, and determining whether the Company processed those
selected transactions and performed those selected activities in compliance with
the servicing criteria. Furthermore, our procedures were limited to the selected
transactions and servicing activities performed by the Company during the period
covered by this report. Our procedures were not designed to determine whether
errors may have occurred either prior to or subsequent to our tests that may
have affected the balances or amounts calculated or reported by the Company
during the period covered by this report for the selected transactions or any
other transactions. We believe that our examination provides a reasonable basis
for our opinion. Our examination does not provide a legal determination on the
Company's compliance with the servicing criteria.

As described in the accompanying management's Assessment of Compliance With
Applicable Servicing Criteria, for servicing criteria 1122(d)(4)(i), the Company
has engaged various vendors to perform the activities required by these
servicing criteria. The Company has determined that these vendors are not
considered a "servicer" as defined in Item 1101(j) of Regulation AB, and the
Company has elected to take responsibility for assessing compliance with the
servicing criteria applicable to each vendor as permitted by Interpretation
17.06 of the SEC Division of Corporation Finance Manual of Publicly Available
Telephone Interpretations ("Interpretation 17.06"). As permitted by
Interpretation 17.06, the Company has asserted that it has policies and

KPMG LLP, a U.S. limited liability partnership, in the U.S. member firm
of KPMG International, a Swiss cooperative.

(page)

(logo) KPMG

procedures in place designed to provide assurance that the vendors' activities
comply in all material respects with the servicing criteria applicable to each
vendor. The Company is solely responsible for determining that it meets the SEC
requirements to apply Interpretation 17.06 for the vendors and related criteria
as described in its assertion, and we performed no procedures with respect to
the Company's eligibility to apply Interpretation 17.06.

Our examination disclosed material noncompliance with criterion 1122(d)(3)(i),
as applicable to the Company during the twelve months ended December 31, 2006.
Certain monthly investor or remittance reports included errors in the
calculation and/or the reporting of delinquencies for the pool assets.

In our opinion, except for the material non-compliance described above, the
Company complied, in all material respects, with the aforementioned servicing
criteria, including servicing criteria for which compliance is determined based
on Interpretation 17.06 as discussed above, as of and for the twelve months
ended December 31, 2006.

/s/ KPMG LLP

Chicago, IL 60601
March 1, 2007





EX-34 (j)
(logo) KPMG

KPMG LLP
303 East Wacker Drive
Chicago, IL 60801-5212

Report of Independent Registered Public Accounting Firm

The Board of Directors
The Corporate Trust Services division of Wells Fargo Bank, National Association:

We have examined the compliance of the Corporate Trust Services division of
Wells Fargo Bank, National Association (the Company) with the servicing criteria
set forth in Item 1122(d) of the Securities and Exchange Commission's Regulation
AB for publicly-issued (i.e., transaction-level reporting initially required
under the Securities Exchange Act of 1934, as amended) residential
mortgage-backed securities, commercial mortgage-backed securities and other
asset-backed securities, for which the Company provides master servicing,
trustee, securities administration or paying agent services, excluding
transactions issued by any agency or instrumentality of the U.S. government or
any government sponsored entity (the Platform), except for servicing criteria
1122(d)(1)(iii), 1122(d)(4)(ii), 1122(d)(4)(iv), 1122(d)(4)(v),
1122(d)(4)(viii), 1122(d)(4)(ix), 1122(d)(4)(x), 1122(d)(4)(xi),
1122(d)(4)(xii) and 1122(d)(4)(xiii), which the Company has determined are not
applicable to the activities it performs with respect to the Platform, as of and
for the twelve months ended December 31, 2006. Management is responsible for the
Company's compliance with those servicing criteria. Our responsibility is to
express an opinion on management's assertion about the Company's compliance
based on our examination.

Our examination was conducted in accordance with the standards of the Public
Company Accounting Oversight Board (United States) and, accordingly, included
examining, on a test basis, evidence about the Company's compliance with the
servicing criteria specified above and performing such other procedures as we
considered necessary in the circumstances. Our examination included testing of
less than all of the individual asset-backed transactions and securities that
comprise the Platform, testing of less than all of the servicing activities
related to the Platform, and determining whether the Company processed those
selected transactions and performed those selected activities in compliance with
the servicing criteria. Furthermore, our procedures were limited to the selected
transactions and servicing activities performed by the Company during the period
covered by this report. Our procedures were not designed to determine whether
errors may have occurred either prior to or subsequent to our tests that may
have affected the balances or amounts calculated or reported by the Company
during the period covered by this report for the selected transactions or any
other transactions. We believe that our examination provides a reasonable basis
for our opinion. Our examination does not provide a legal determination on the
Company's compliance with the servicing criteria.

As described in the accompanying management's Assessment of Compliance With
Applicable Servicing Criteria, for servicing criteria 1122(d)(4)(i), the Company
has engaged various vendors to perform the activities required by these
servicing criteria. The Company has determined that these vendors are not
considered a "servicer" as defined in Item 1101(j) of Regulation AB, and the
Company has elected to take responsibility for assessing compliance with the
servicing criteria applicable to each vendor as permitted by Interpretation
17.06 of the SEC Division of Corporation Finance Manual of Publicly Available
Telephone Interpretations ("Interpretation 17.06"). As permitted by
Interpretation 17.06, the Company has asserted that it has policies and

KPMG LLP, a U.S. limited liability partnership, in the U.S. member firm
of KPMG International, a Swiss cooperative.

(page)

(logo) KPMG

procedures in place designed to provide assurance that the vendors' activities
comply in all material respects with the servicing criteria applicable to each
vendor. The Company is solely responsible for determining that it meets the SEC
requirements to apply Interpretation 17.06 for the vendors and related criteria
as described in its assertion, and we performed no procedures with respect to
the Company's eligibility to apply Interpretation 17.06.

Our examination disclosed material noncompliance with criterion 1122(d)(3)(i),
as applicable to the Company during the twelve months ended December 31, 2006.
Certain monthly investor or remittance reports included errors in the
calculation and/or the reporting of delinquencies for the pool assets.

In our opinion, except for the material non-compliance described above, the
Company complied, in all material respects, with the aforementioned servicing
criteria, including servicing criteria for which compliance is determined based
on Interpretation 17.06 as discussed above, as of and for the twelve months
ended December 31, 2006.

/s/ KPMG LLP

Chicago, IL 60601
March 1, 2007





EX-34 (k)
(logo) KPMG

KPMG LLP
303 East Wacker Drive
Chicago, IL 60601-5212

Report of Independent Registered Public Accounting Firm

The Board of Directors
The Corporate Trust Services division of Wells Fargo Bank National Association:

We have examined management's assertion, included in the accompanying Appendix
I, that the Document Custody section of the Corporate Trust Services division of
Wells Fargo Bank National Association complied with the servicing criteria set
forth in Item 1122(d) of the Securities and Exchange Commission's Regulation AB
for publicly-issued (i.e., transaction-level reporting required under the
Securities Exchange Act of 1934, as amended) residential mortgage-backed
securities and commercial mortgage-backed securities issued on or after January
1, 2006 for which the Company provides document custody services, excluding any
publicly issued transactions issued by any government sponsored entity (the
Platform) as of and for the twelve months ended December 31, 2006. Management
has determined that servicing criteria 1122(d)(4)(i) and 1122(d)(4)(ii) are
applicable to the activities it performs with respect to the Platform, and that
all other servicing criteria set forth in Item 1122(d) are not applicable to the
document custody services provided by the Company with respect to the Platform.
Management is responsible for the Company's compliance with those servicing
criteria. Our responsibility is to express an opinion on management's assertion
about the Company's compliance based on our examination.

Our examination was conducted in accordance with the standards of the Public
Company Accounting Oversight Board (United States) and, accordingly, included
examining, on a test basis, evidence about the Company's compliance with the
servicing criteria specified above and performing such other procedures as we
considered necessary in the circumstances. Our examination included testing of
less than all of the individual asset-backed transactions and securities that
comprise the Platform, testing of less than all of the servicing activities
related to the Platform, and determining whether the Company processed those
selected transactions and performed those selected activities in compliance with
the servicing criteria. Furthermore, our procedures were limited to the selected
transactions and servicing activities performed by the Company during the period
covered by this report. Our procedures were not designed to determine whether
errors may have occurred either prior to or subsequent to our tests that may
have affected the balances or amounts calculated or reported by the Company
during the period covered by this report for the selected transactions or any
other transactions. We believe that our examination provides a reasonable basis
for our opinion. Our examination does not provide a legal determination on the
Company's compliance with the servicing criteria.

In our opinion, management's assertion that the Company complied with the
aforementioned servicing criteria as of and for the period ended December 31,
2006 is fairly stated, in all material respects.

/s/ KPMG LLP

Chicago, Illinois
March 1, 2007

KPMG LLP, a U.S. limited liability partnership, is the U.S. member firm of KPMG
International, a Swiss cooperative.





EX-35 (c)
(logo) EMC
Mortgage Corporation
Proven Performance

ITEM 1123 ANNUAL STATEMENT OF COMPLIANCE

EMC MORTGAGE CORPORATION

I, John Vella, President and Chief Executive Officer of EMC Mortgage Corporation
("EMC") as servicer pursuant to the Bear Stearns Asset Backed Securities I Trust
2006-AC5 Agreement (the "Agreement") hereby certify that:

1.   A review of EMC's activities during the period from and including January
     1, 2006 through and including December 31, 2006 (the ""Reporting Period")
     and EMC's performance under the Agreement has been made under my
     supervision.

2.   To the best of my knowledge, based on such review, EMC has fulfilled all of
     its obligations under the Agreement in all material respects throughout the
     Reporting Period.

IN WITNESS WHEREOF, the undersigned has duly executed this Certificate this 12th
day of March 2007.

BY: /s/ John Vella
John Vella
President and Chief Executive Officer



2780 Lake Vista Drive, Lewisville, Texas 75067
Mailing Address: P.O. Box 1292190 Lewisville, Texas 75029-2190

(logo) MBA
Member
Mortgage Bankers
Association of America





EX-35 (d)
GREENPOINT MORTGAGE FUNDING, INC.

SERVICER COMPLIANCE STATEMENT

BSABS 2006-AC5


I, Michael De Francesco, an authorized officer of GreenPoint Mortgage Funding,
Inc. (the "Servicer"), certify that:

1. A review of the Servicer's activities during the period from and including
January 1, 2006 through and including December 31, 2006 (or applicable portion
thereof) and of the Servicer's performance under the applicable servicing
agreement has been made under my supervision.

2. To the best of my knowledge, based on such review, the Servicer has fulfilled
all of its obligations under the applicable servicing agreement in all material
respects throughout such period.


Capitalized terms used but not defined herein have the meanings ascribed to them
in the Agreement.

Date: February 28, 2007

/s/ Michael De Francesco
Michael De Francesco
Senior Vice President, Loan Administration





EX-35 (i)
(logo) WELLS FARGO

Corporate Trust Services
MAC N2702-011
9062 Old Annapolis Road
Columbia, MD 21045
410 884-2000
410 715-2380 Fax

Wells Fargo Bank, N.A.


March 12, 2007

Bear Stearns Asset Backed Securities I LLC
245 Park Avenue
4th Floor
New York, NY 10167

RE: Annual Statement As To Compliance for Bear Stearns Asset Backed
Securities I Trust 2006-AC5

Per Section 4.16 of the Pooling and Servicing Agreement, dated as of 11/1/2006,
the undersigned Officer of Wells Fargo Bank, N.A., (Master Servicer), hereby
certifies the following for the 2006 calendar year or portion thereof:

(i) a review of the activities of each such party during the preceding calendar
year and of its performance under this Agreement or other applicable servicing
agreement has been made under such officer's supervision and

(ii) to the best of such officer's knowledge, based on such review, such party
has fulfilled all of its obligations under this Agreement or other applicable
servicing agreement in all material respects throughout such year, or, if there
has been a failure to fulfill any such obligation in any material respect,
specifying each such failure known to such officer and the nature and status of
the cure provisions thereof.



Certified By:
/s/ Kristen Ann Cronin
Kristen Ann Cronin, Vice President


Certified By:
/s/ Gordon Johnson
Gordon Johnson, Assistant Secretary





EX-35 (j)
(logo) WELLS FARGO

Corporate Trust Services
MAC N2702-011
9062 Old Annapolis Road
Columbia, MD 21045
410 884-2000
410 715-2380 Fax

Wells Fargo Bank, N.A.

March 12, 2007

Bear Stearns Asset Backed Securities I LLC
245 Park Avenue
4th Floor
New York, NY 10167

RE: Annual Statement As To Compliance for Bear Stearns Asset Backed Securities I
Trust 2006-AC5

Per Section 4.16 of the Pooling and Servicing Agreement, dated as of 11/1/2006,
the undersigned Officer of Wells Fargo Bank, N.A., (Securities Administrator),
hereby certifies the following for the 2006 calendar year or portion thereof:

(i)  a review of the activities of each such party during the preceding calendar
     year and of its performance under this Agreement or other applicable
     servicing agreement has been made under such officer's supervision and

(ii) to the best of such officer's knowledge, based on such review, such party
     has fulfilled all of its obligations under this Agreement or other
     applicable servicing agreement in all material respects throughout such
     year, or, if there has been a failure to fulfill any such obligation in
     any material respect, specifying each such failure known to such officer
     and the nature and status of the cure provisions thereof.




Certified By:
/s/ Kristen Ann Cronin
Kristen Ann Cronin, Vice President


Certified By:
/s/ Gordon Johnson
Gordon Johnson, Assistant Secretary




Ex.99


                ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT

      This is an Assignment,  Assumption and Recognition  Agreement (this "AAR
Agreement") made as of November 30, 2006, among EMC Mortgage  Corporation (the
"Assignor"),  U.S. Bank National  Association,  not individually but solely as
trustee for the holders of the Bear Stearns  Asset  Backed  Securities I Trust
2006-AC5,  Asset-Backed  Certificates,  Series  2006-AC5 (the  "Assignee") and
GreenPoint Mortgage Funding, Inc. (the "Company").

      In  consideration  of the mutual promises  contained  herein the parties
hereto agree that the residential mortgage loans (the "Assigned Loans") listed
on Attachment 1 annexed hereto (the "Assigned Loan Schedule") purchased by the
Assignor  from the Company and now  serviced by Company for  Assignor  and its
successors and assigns pursuant to (a) the Purchase,  Warranties and Servicing
Agreement,  dated as of September 1, 2003,  between  Assignor and Company,  as
amended by Amendment  Number One,  dated as of January 1, 2006 (the  "Purchase
Agreement") and (b) the term sheet dated March 14, 2006,  between Assignor and
Company,  the term sheet dated July 25, 2006, between Assignor and Company and
the  term  sheet  dated   October  11,  2006  between   Assignor  and  Company
(collectively, the "Term Sheets" and together with the Purchase Agreement, the
"Agreements") shall be subject to the terms of this AAR Agreement. Capitalized
terms used herein but not defined shall have the meanings  ascribed to them in
the Purchase Agreement.

                            Assignment and Assumption

      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 (a) the Assigned  Loans and (b) the Purchase  Agreement  with
respect to the Assigned  Loans;  provided,  however,  that the Assignor is not
assigning  to the Assignee  any of its right,  title or  interest,  in, to and
under the Purchase  Agreement with respect to any mortgage loan other than the
Assigned Loans listed on Exhibit A.  Notwithstanding  anything to the contrary
contained herein,  the Assignor  specifically  reserves and does not assign to
the Assignee any right, title and interest in, to or under the representations
and  warranties  contained  in Section  3.01 and Section  3.02 of the Purchase
Agreement and in the Term Sheets,  and any  obligation of the Company to cure,
repurchase  or  substitute  for a mortgage  loan and to indemnify the Assignor
with respect to a breach of such  representations  and warranties  pursuant to
Section 3.03 and Section 8.01 of the  Purchase  Agreement  and the Assignor is
retaining  the right to enforce the  representations  and  warranties  and the
obligations of the Company set forth in those sections against the Company. In
addition,  the  Assignor  specifically  reserves  and does not  assign  to the
Assignee any right,  title and  interest  in, to or under  Section 2.09 of the
Purchase  Agreement.  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  Purchase  Agreement  or  otherwise  relating  to the
transaction contemplated herein (including, but not limited to, any obligation
to indemnify the Assignee).

                    Representations, Warranties and Covenants

      1.  Assignor  warrants and  represents to Assignee and Company as of the
date hereof:

      (a) Attached  hereto as Attachment 2 are true and accurate copies of the
Purchase  Agreement and the Term Sheets 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) Assignor is 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 Purchase Agreement as 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 Purchase Agreement 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
Company with respect to the Assigned Loans or the Purchase Agreement;

      (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 the part of
Assignor.  This AAR Agreement has been duly executed and delivered by Assignor
and,  upon the due  authorization,  execution  and  delivery by  Assignee  and
Company,  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;

      (h)  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;

      (i) The Assignor has received  from  Company,  and has  delivered to the
Assignee,  all  documents  required to be delivered to Assignor by the Company
prior to the date hereof  pursuant to the Purchase  Agreement  with respect to
the  Assigned  Loans  and has not  received,  and has not  requested  from the
Company, any additional documents; and

      (j) 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.

      2. Assignee warrants and represents to, and covenants with, Assignor and
Company as of the date hereof:

      (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 the  Bear  Stearns  Asset  Backed  Securities  I  Trust  2006-AC5,
Asset-Backed Certificates, Series 2006-AC5;

      (b) Assignee 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  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 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
Company,  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 the  Assignor  and the
Company all of the rights of the Purchaser  under the Purchase  Agreement with
respect to the Assigned Loans.

      3. Company  warrants and represents to, and covenant with,  Assignor and
Assignee as of the date hereof:

      (a) Attached  hereto as Attachment 2 are true and accurate copies of the
Purchase  Agreement and the Term Sheets 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 incorporation, and has all requisite
power and authority to service the Assigned Loans and otherwise to perform its
obligations under the Purchase Agreement;

      (c) Company 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 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 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 the 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) The  Company  shall  establish  a  Custodial  Account  and an Escrow
Account under the Purchase  Agreement in favor of the Assignee with respect to
the Assigned  Loans  separate  from the Custodial  Account and Escrow  Account
previously established under the Purchase Agreement in favor of Assignor;

      (f) No event has occurred from the Closing Date to the date hereof which
would render the  representations  and  warranties as to the related  Assigned
Loans made by the Company in Sections 3.01 and 3.02 of the Purchase  Agreement
or in the Term Sheets to be untrue in any material respect; 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  material  fact
necessary to make the statements contained therein not misleading.

      4.  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

      5. 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 service the Assigned  Loans in accordance  with the
Purchase  Agreement (as modified by this AAR  Agreement)  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,  waive,  or otherwise alter any of the
terms or provisions of the Purchase  Agreement which amendment,  modification,
waiver or other  alteration would in any way affect the Assigned Loans without
the prior written consent of Assignee.

      6.  Notwithstanding  any term hereof to the contrary,  the execution and
delivery of the AAR  Agreement  by the  Assignee is solely in its  capacity as
trustee for Bear  Stearns  Asset Backed  Securities  I Trust  2006-AC5 and not
individually,  and  any  recourse  against  the  Assignee  in  respect  of any
obligations  it may have under or pursuant to the terms of this AAR  Agreement
shall be limited  solely to the assets it may hold as trustee of Bear  Stearns
Asset Backed Securities I Trust 2006-AC5.

      Company shall  indemnify and hold harmless the Assignor,  each affiliate
of the Assignor,  Bear Stearns Asset Backed  Securities I LLC ("BSABS I"), the
Assignee,  Bear, Stearns & Co. Inc. (the  "Underwriter") and each affiliate of
the  Underwriter,  each  Person  (including  , but not  limited to, the Master
Servicer)  responsible for the preparation,  execution or filing of any report
required to be filed with the Commission,  or for execution of a certification
pursuant to Rule  13a-14(d) or Rule  15d-14(d)  under the Exchange  Act,  each
Person who controls  the  Assignor,  BSABS I, the Assignee or the  Underwriter
(within the meaning of Section 15 of the  Securities Act and Section 20 of the
Exchange  Act);  and the respective  present and former  directors,  officers,
employees,   agents  and  affiliates  of  each  of  the  foregoing  (each,  an
"Indemnified  Party"),  and shall hold each of them  harmless from and against
any losses, claims, damages,  penalties,  fines,  forfeitures,  legal fees and
expenses and related costs, judgments,  and any other costs, fees and expenses
that any of them may sustain arising out of or based upon:

      (i)   (A) any untrue  statement of a material fact  contained or alleged
            to be  contained  in  any  written  information,  written  report,
            certification,   data,   accountants'  letter  or  other  material
            provided  under Section  11.18 of the Purchase  Agreement by or on
            behalf of the  Assignor,  or provided  under  Section 11.18 of the
            Purchase   Agreement   by  or  on  behalf   of  any   Subservicer,
            Subcontractor  or  Third-Party   Originator   (collectively,   the
            "Company Information"), or (B) the omission or alleged omission to
            state in the Company  Information  a material  fact required to be
            stated in the Company  Information  or  necessary in order to make
            the statements  therein,  in the light of the circumstances  under
            which  they  were  made,  not  misleading;  provided,  by  way  of
            clarification,   that  clause  (B)  of  this  paragraph  shall  be
            construed  solely by reference to the Company  Information and not
            to any other information communicated in connection with a sale or
            purchase  of  securities,  without  regard to whether  the Company
            Information or any portion  thereof is presented  together with or
            separately from such other information;

      (ii)  any breach by the Company of its  obligations  under this section,
            including   particularly   any   failure  by  the   Company,   any
            Subservicer,  any  Subcontractor or any Third-Party  Originator to
            deliver  any  information,  report,  certification,   accountants'
            letter or other material when and as required under Section 11.18,
            including any failure by the Company to identify any Subcontractor
            "participating  in the servicing  function"  within the meaning of
            Item 1122 of Regulation AB;

      (iii) any breach by the  Company of a  representation  or  warranty  set
            forth in Section  3.01 of the  Purchase  Agreement or in a writing
            furnished  pursuant to Section  3.01(q) of the Purchase  Agreement
            and made as of a date prior to the date hereof, to the extent that
            such breach is not cured by the date hereof,  or any breach by the
            Company of a  representation  or warranty  in a writing  furnished
            pursuant  to Section  3.01(q) of the  Purchaser  Agreement  to the
            extent made as of a date subsequent to the date hereof; or

      (iv)  the negligence  bad faith or willful  misconduct of the Company in
            connection with its performance under this Section.

      If  the   indemnification   provided  for  herein  is   unavailable   or
insufficient  to hold harmless an Indemnified  Party,  then the Company agrees
that it shall  contribute  to the amount  paid or payable by such  Indemnified
Party as a result of any claims,  losses,  damages or liabilities  incurred by
such  Indemnified  Party in such  proportion as is  appropriate to reflect the
relative  fault of such  Indemnified  Party on the one hand and the Company on
the other.

      In the case of any failure of performance  described in Section 11.18 of
the Purchase  Agreement,  the Company shall  promptly  reimburse the Assignor,
BSABS I and each Person  responsible for the preparation,  execution or filing
of any report required to be filed with the Commission,  or for execution of a
certification  pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange
Act, for all costs  reasonably  incurred by each such party in order to obtain
the information, report, certification,  accountants' letter or other material
not delivered as required by the Company,  any Subservicer,  any Subcontractor
or any Third-Party Originator. \

      This indemnification  shall survive the termination of this Agreement or
the termination of any party to this Agreement.

                       Modification of Purchase Agreement

      7. The Company and  Assignor  hereby  amend the  Purchase  Agreement  as
follows:

      (a) The  following  definitions  are added to Article I of the  Purchase
Agreement:

      Assignee: U.S. Bank National Association,  as trustee for the holders of
      the Bear Stearns Asset Backed Securities I Trust 2006-AC5,  Asset-Backed
      Certificates, Series 2006-AC5.

      BSABS: Bear Stearns Asset Backed Securities I LLC.

      Pooling and  Servicing  Agreement:  That certain  pooling and  servicing
      agreement, dated as of November 1, 2006, among Bear Stearns Asset Backed
      Securities I LLC, the Trustee,  Wells Fargo Bank, National  Association,
      as the master servicer, the Securities Administrator and the Purchaser.

      Securities Administrator: Wells Fargo Bank, National Association.

      Trustee: U.S. Bank National  Association,  or its successor in interest,
      or any  successor  trustee  appointed  as  provided  in the  Pooling and
      Servicing Agreement.

      (b) The  definition  of  Business  Day is  deleted in its  entirety  and
replaced with the following:

      Business  Day: Any day other than:  (i) a Saturday or Sunday,  or (ii) a
      legal  holiday  in the  States  of  California,  New York,  Maryland  or
      Minnesota,  or (iii) a day on which  banks in the States of  California,
      New York,  Maryland or Minnesota  are  authorized or obligated by law or
      executive order to be closed.

      (c) The following is added to the first sentence of the fourth paragraph
of Section 4.13 of the Purchase Agreement:

      "; provided,  however, that any REO property shall be disposed of by the
      Company before the close of the third taxable year following the taxable
      year in which the  Mortgage  Loan  became an REO  property,  unless  the
      Company is otherwise  directed by the  Assignee."  (d) The  following is
      added as Section 4.13A of the Purchase Agreement:

      Section 4.13A REMIC Administration of REO Property.

      The Company shall prepare for and deliver to the Assignee and the Master
      Servicer (and the  securities  administrator,  if any) a statement  with
      respect to each  mortgaged  property  acquired  through  foreclosure  or
      deed-in-lieu of foreclosure in connection with a defaulted Assigned Loan
      ("REO  Property")  that has been  rented  showing the  aggregate  rental
      income  received  and all  expenses  incurred  in  connection  with  the
      management  and  maintenance  of such REO  Property  at such times as is
      necessary to enable the Assignee (or the  securities  administrator,  if
      any) to comply with the reporting  requirements of the REMIC  provisions
      of the  Code.  The net  monthly  rental  income,  if any,  from such REO
      Property shall be deposited in the related  collection  account no later
      than the close of business on each determination date. The Company shall
      perform,  or caused to be performed,  the tax reporting and  withholding
      related to  foreclosures,  abandonments and cancellation of indebtedness
      income as  specified  by Sections  1445,  6050J and 6050P of the Code by
      preparing  and  filing  such  tax  and  information  returns,  as may be
      required.  In the event that the Bear Stearns Asset Backed  Securities I
      Trust 2006-AC5, Asset-Backed Certificates,  Series 2006-AC5 acquires any
      REO Property as aforesaid or otherwise in  connection  with a default or
      default becoming reasonably foreseeable on an Assigned Loan, the Company
      shall cause such REO Property to be disposed  prior to three years after
      its  acquisition  by the Bear Stearns  Asset  Backed  Securities I Trust
      2006-AC5, Asset-Backed Certificates,  Series 2006-AC5 or, at the expense
      of  the  Bear  Stearns  Asset  Backed   Securities  I  Trust   2006-AC5,
      Asset-Backed  Certificates,  Series 2006-AC5,  request more than 60 days
      prior to the day on which such three-year period would otherwise expire,
      an extension of the three-year  grace period unless the Assignee (or the
      securities  administrator,  if any)  shall  have been  supplied  with an
      opinion  of  counsel  addressed  to the  Assignee  (and  the  securities
      administrator,  if any)  rendered by nationally  recognized  tax counsel
      specializing  in such matters  (such opinion not to be an expense of the
      Trustee or the Securities  Administrator) to the effect that the holding
      by  the  Bear  Stearns  Asset  Backed   Securities  I  Trust   2006-AC5,
      Asset-Backed   Certificates,   Series  2006-AC5  of  such  REO  Property
      subsequent to such  three-year  period will not result in the imposition
      of taxes on "prohibited transactions" of any REMIC as defined in Section
      860F of the Code or cause any REMIC to fail to  qualify  as a REMIC,  in
      which case the Bear Stearns  Asset Backed  Securities I Trust  2006-AC5,
      Asset-Backed Certificates, Series 2006-AC5 may continue to hold such REO
      Property  (subject  to any  conditions  contained  in  such  opinion  of
      counsel).   Notwithstanding   any  other   provision  of  the  Servicing
      Agreement,  no REO Property  acquired by the Bear  Stearns  Asset Backed
      Securities I Trust 2006-AC5, Asset-Backed Certificates,  Series 2006-AC5
      shall be rented (or allowed to continue to be rented) or otherwise  used
      for the  production  of income by or on behalf of the Bear Stearns Asset
      Backed Securities I Trust 2006-AC5,  Asset-Backed  Certificates,  Series
      2006-AC5  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
      to the  imposition  of any  federal,  state or local income taxes on the
      income earned from such REO Property  under Section  860G(c) of the Code
      or  otherwise,  unless  the  Company  has agreed to  indemnify  and hold
      harmless the Bear  Stearns  Asset  Backed  Securities I Trust  2006-AC5,
      Asset-Backed   Certificates,   Series   2006-AC5  with  respect  to  the
      imposition of any such taxes.

      (e) Section 6.04 of the Purchase  Agreement is hereby  amended by adding
the following paragraph to the end of the section:

      In the event the Servicer or any subservicer or subcontractor engaged by
      it is terminated,  assigns its rights and obligations  under, or resigns
      pursuant  to the  terms  of  this  Agreement,  or any  other  applicable
      agreement in the case of a subservicer or subcontractor, as the case may
      be, such party shall provide an Annual Statement of Compliance  pursuant
      to this Section 6.04 or to the related section of such other  applicable
      agreement,  as the case may be, as to the performance of its obligations
      with  respect to the period of time it was subject to this  Agreement or
      any other applicable agreement,  as the case may be, notwithstanding any
      such termination, assignment or resignation.

      (f) Section 6.05 of the Purchase  Agreement is hereby  amended by adding
the following paragraph to the end of the section:

      In the event the Servicer or any subservicer or subcontractor engaged by
      it is terminated,  assigns its rights and obligations  under, or resigns
      pursuant  to,  the  terms of this  Agreement,  or any  other  applicable
      agreement in the case of a subservicer or subcontractor, as the case may
      be, such party shall provide an Assessment of Compliance and cause to be
      provided an Attestation  Report  pursuant to this Section 6.05 or to the
      related section of such other applicable agreement,  as the case may be,
      notwithstanding any such termination, assignment or resignation.

      (g) Section  11.04 of the Purchase  Agreement is deleted in its entirety
and replaced with the following:

      Section 11.04 Governing Law.

            This  Agreement  and the related  Term Sheets 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 (other than
      Section  5-1401 of the New York General  Obligations  Law) and except to
      the extent  preempted  by Federal  law and the  obligations,  rights and
      remedies of the parties hereunder shall be determined in accordance with
      such laws.

                                  Miscellaneous

      8. All  demands,  notices  and  communications  related to the  Assigned
Loans,  the Purchase  Agreement 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: GreenPoint Mortgage Funding, Inc. 100
               Wood Hollow Drive Novato, California 94945 Attention: Susan
               Davia

               With a copy to:
      (b)      In the case of Assignor:

               EMC Mortgage Corporation
               2780 Lake Vista
               Drive Lewisville, Texas 75067-3884
               Attention: Conduit Seller Approval Dept.
               Facsimile: (214) 626-3751 Email:
               sellerapproval@bear.com

               with a copy to:
               Bear Stearns Mortgage Capital Corporation
               383 Madison Avenue
               New York, New York 10179
               Attention: Robert Durden
               Telecopier No.: (212) 272-5591

      (c)      In the case of Assignee: U.S. Bank National Association, as
               Trustee One Federal Street, 3rd Floor
               Boston, MA 02110
               Attention: Corporate Trust Services BSABS I 2006-AC5
               Telecopier No.: (617) 603-6638

      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 November 1,
2006, among the Assignor, the Assignee, Bear Stearns Asset Backed Securities I
LLC,  the Master  Servicer  and Wells  Fargo  Bank,  National  Association  as
securities   administrator,   and  therefor  has  the  right  to  enforce  all
obligations of the Company,  as they relate to the Assigned  Loans,  under the
Purchase Agreement. Such right will include, without limitation,  the right to
terminate the Company under the Purchase  Agreement  upon the occurrence of an
event of default thereunder,  the right to receive all remittances required to
be made by the Company under the Purchase Agreement,  the right to receive all
monthly  reports and other data  required to be delivered by the Company under
the  Purchase  Agreement,  the right to examine  the 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 Purchase  Agreement,  as they relate to
the Assigned  Loans,  to the Master  Servicer by wire transfer of  immediately
available funds to:

            BSABS I 2006-AC5 Master Servicer
            Collection Account
            Wells Fargo Bank, National Association
            ABA# 121000248 Account Name: SAS Clearing
            Account # 3970771416
            For Further Credit to: BSABS I 2006-AC5, Account # 50969700

      and the Company shall deliver all reports required to be delivered under
the Purchase Agreement,  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: Client Manager BSABS I 2006-AC5

      10. A copy of all  assessments,  attestations,  reports and certificates
required to be  delivered  by the Servicer  under this AAR  Agreement  and the
Purchase  Agreement  shall be delivered to the Master  Servicer by the date(s)
specified  herein or  therein,  and where such  documents  are  required to be
addressed to any party,  such addresses  shall include the Master Servicer and
the Master Servicer shall be entitled to rely on such documents.

      11. Each party will pay any  commissions it has incurred and the fees of
its attorneys in connection  with the  negotiations  for,  documenting  of and
closing of the transactions contemplated by this AAR Agreement.

      12. 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.  13. 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.

      14. 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.

      15. This AAR  Agreement  shall  survive the  conveyance  of the Assigned
Loans, the assignment of the Agreements to the extent of the Assigned Loans by
Assignor to Assignee and the termination of the Agreements.

      16. 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.

      17. In the event that any provision of this AAR Agreement conflicts with
any provision of the Agreements with respect to the Assigned Loans,  the terms
of this AAR Agreement shall control.



<PAGE>



      IN WITNESS WHEREOF,  the parties hereto have executed this AAR Agreement
as of the day and year first above written.

                                    EMC MORTGAGE CORPORATION
                                    Assignor


                                    By:      /s/ Mark Novachek
                                             --------------------------------
                                    Name:    Mark Novachek
                                    Title:   Senior Vice President


                                    U.S. BANK NATIONAL ASSOCIATION, not
                                    individually but solely as Trustee for the
                                    Bear Stearns Asset Backed Securities I Trust
                                    2006-AC5, Asset-Backed Certificates, Series
                                    2006-AC5
                                    Assignee


                                    By:      /s/ Maryellen Hunter
                                             --------------------------------
                                    Name:    Maryellen Hunter
                                    Title:   Assistant Vice President


                                    GREENPOINT MORTGAGE FUNDING, INC.
                                     Company

                                    By:      /s/ Susan Davia
                                             --------------------------------
                                    Name:    Susan Davia
                                    Title:   Vice President


                                    Acknowledged and Agreed:

                                    WELLS FARGO BANK, NATIONAL ASSOCIATION


                                    By:      /s/ Stacey M. Taylor
                                             --------------------------------
                                    Name:    Stacey M. Taylor
                                    Title:   Vice President










<PAGE>




                                  ATTACHMENT 1

                             ASSIGNED LOAN SCHEDULE


                            (Available upon request)






<PAGE>




                                  ATTACHMENT 2

                               PURCHASE AGREEMENT



                                   TERM SHEETS


<PAGE>




                            EMC MORTGAGE CORPORATION
                                   Purchaser,

                        GREENPOINT MORTGAGE FUNDING, INC.
                                    Company,

                 PURCHASE, WARRANTIES AND SERVICING AGREEMENT
                          Dated as of September 1, 2003





                  (Fixed and Adjustable Rate Mortgage Loans)


<PAGE>


                                TABLE OF CONTENTS

                                    ARTICLE I


Section 1.01   Defined Terms

                                   ARTICLE II

Section 2.01   Agreement to Purchase
Section 2.02   Purchase Price
Section 2.03   Servicing of Mortgage Loans
Section 2.04   Record Title and Possession of Mortgage Files; Maintenance of
               Servicing Files
Section 2.05   Books and Records
Section 2.06   Transfer of Mortgage Loans
Section 2.07   Delivery of Mortgage Loan Documents
Section 2.08   Quality Control Procedures
Section 2.09   Near-term Principal Prepayments; Near Term Payment Defaults
Section 2.10   Modification of Obligations

                                   ARTICLE III

Section 3.01   Representations and Warranties of the Company
Section 3.02   Representations and Warranties as to Individual Mortgage Loans
Section 3.03   Repurchase; Substitution
Section 3.04   Representations and Warranties of the Purchaser

                                   ARTICLE IV

Section 4.02   Collection of Mortgage Loan Payments
Section 4.03   Realization Upon Defaulted Mortgage Loans
Section 4.04   Establishment of Custodial Accounts; Deposits in Custodial
               Accounts
Section 4.05   Permitted Withdrawals from the Custodial Account
Section 4.06   Establishment of Escrow Accounts; Deposits in Escrow Accounts
Section 4.07   Permitted Withdrawals From Escrow Account
Section 4.08   Payment of Taxes, Insurance and Other  Charges; Maintenance of
               Primary Mortgage Insurance Policies; Collections Thereunder
Section 4.09   Transfer of Accounts
Section 4.10   Maintenance of Hazard Insurance
Section 4.11   Maintenance of Mortgage Impairment Insurance Policy
Section 4.12   Fidelity Bond, Errors and Omissions Insurance
Section 4.13   Title, Management and Disposition of REO  Property
Section 4.14   Notification of Maturity Date


                                    ARTICLE V

Section 5.01   Distributions
Section 5.02   Statements to the Purchaser
Section 5.03   Monthly Advances by the Company
Section 5.04   Liquidation Reports

                                   ARTICLE VI

Section 6.01   Assumption Agreements
Section 6.02   Satisfaction of Mortgages and Release of Mortgage Files
Section 6.03   Servicing Compensation
Section 6.04   Annual Statement as to Compliance
Section 6.05   Annual Independent Certified Public Accountants' Servicing
               Report
Section 6.06   Purchaser's Right to Examine Company Records

                                              ARTICLE VII

Section 7.01   Company Shall Provide Information as Reasonably Required

                                             ARTICLE VIII

Section 8.01   Indemnification; Third Party Claims
Section 8.02   Merger or Consolidation of the Company
Section 8.03   Limitation on Liability of the Company and Others
Section 8.04   Company Not to Assign or Resign
Section 8.05   No Transfer of Servicing

                                              ARTICLE IX

Section 9.01   Events of Default
Section 9.02   Waiver of Defaults

                                               ARTICLE X

Section 10.01  Termination
Section 10.02  Termination without cause

                                              ARTICLE XI

Section 11.01  Successor to the Company
Section 11.02  Amendment
Section 11.03  Recordation of Agreement
Section 11.04  Governing Law
Section 11.05  Notices
Section 11.06  Severability of Provisions
Section 11.07  Exhibits
Section 11.08  General Interpretive Principles
Section 11.09  Reproduction of Documents
Section 11.10  Confidentiality of Information
Section 11.11  Recordation of Assignment of Mortgage
Section 11.12  Assignment by Purchaser
Section 11.13  No Partnership
Section 11.14  Execution: Successors and Assigns
Section 11.15  Entire Agreement
Section 11.16  No Solicitation
Section 11.17  Closing
Section 11.18  Cooperation of Company with Reconstitution

EXHIBITS
A              Contents of Mortgage File
B              Custodial Account Letter Agreement
C              Escrow Account Letter Agreement
D              Form of Assignment, Assumption and Recognition Agreement
E              Form of Trial Balance
F              [reserved]
G              Request for Release of Documents and Receipt
H              Company's Underwriting Guidelines
I              Form of Term Sheet



<PAGE>


      This is a Purchase,  Warranties  and  Servicing  Agreement,  dated as of
September  1,  2003 and is  executed  between  EMC  MORTGAGE  CORPORATION,  as
Purchaser,  with  offices  located  at Mac Arthur  Ridge II, 909 Hidden  Ridge
Drive,  Suite 200,  Irving,  Texas  75038 (the  "Purchaser"),  and  GREENPOINT
MORTGAGE FUNDING, INC., with offices located at 100 Wood Hollow Drive, Novato,
California 94945 (the "Company").

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

      WHEREAS,  the  Purchaser  has  heretofore  agreed to  purchase  from the
Company and the Company has heretofore  agreed to sell to the Purchaser,  from
time to time, certain Mortgage Loans on a servicing retained basis;

      WHEREAS,  each of the Mortgage  Loans is secured by a mortgage,  deed of
trust or other  security  instrument  creating a first  lien on a  residential
dwelling located in the jurisdiction  indicated on the Mortgage Loan Schedule,
which is annexed to the related Term Sheet; and

      WHEREAS,   the   Purchaser   and  the  Company  wish  to  prescribe  the
representations  and  warranties of the Company with respect to itself and the
Mortgage  Loans and the  management,  servicing  and  control of the  Mortgage
Loans;

      NOW,  THEREFORE,  in consideration of the mutual agreements  hereinafter
set forth,  and for other good and  valuable  consideration,  the  receipt and
adequacy of which is hereby acknowledged,  the Purchaser and the Company agree
as follows:


<PAGE>




                                    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 meaning specified in
this Article:

      ACCEPTED SERVICING  PRACTICES:  With respect to any Mortgage Loan, those
mortgage  servicing  practices  (including  collection  procedures) of prudent
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,  and which are in accordance with Fannie Mae servicing  practices and
procedures,  for MBS pool  mortgages,  as  defined  in the  Fannie  Mae Guides
including future updates.

      ADJUSTMENT  DATE: As to each  adjustable rate Mortgage Loan, the date on
which the Mortgage  Interest Rate is adjusted in accordance  with the terms of
the related Mortgage Note.

      AGREEMENT:  This Purchase,  Warranties and Servicing Agreement including
all exhibits hereto, amendments hereof and supplements hereto.

      APPRAISED  VALUE:  With  respect to any  Mortgaged  Property,  the value
thereof as determined by an appraisal  made for the originator of the Mortgage
Loan at the time of  origination  of the Mortgage Loan by an appraiser who met
the requirements of the Company and Fannie Mae.

      ASSIGNMENT: An individual assignment of the 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 of
record the sale or transfer of the Mortgage Loan.

      BIF:  The Bank Insurance Fund, or any successor thereto.

      BUSINESS  DAY: Any day other than:  (i) a Saturday or Sunday,  or (ii) a
legal  holiday in the State of New York,  or (iii) a day on which banks in the
State of New York are authorized or obligated by law or executive  order to be
closed.

      CLOSING DATE:  With respect to any Mortgage Loan, the date stated on the
related Term Sheet.

      CODE: The Internal Revenue Code of 1986, or any successor  statute
thereto.

      COMPANY:  GreenPoint Mortgage Funding,  Inc., its successors in interest
and assigns, as permitted by this Agreement.

      COMPANY'S OFFICER'S CERTIFICATE: A certificate signed by the Chairman of
the Board,  President,  any Vice President or Treasurer of Company stating the
date by which  Company  expects  to receive  any  missing  documents  sent for
recording from the applicable recording office.

      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.

      CONFIRMATION:  The trade  confirmation  letter between the Purchaser and
the Company which relates to the Mortgage Loans.

      CO-OP LEASE:  With respect to a Co-op Loan,  the lease with respect to a
dwelling unit occupied by the Mortgagor and relating to the stock allocated to
the related dwelling unit.

      CO-OP LOAN: A Mortgage Loan secured by the pledge of stock  allocated to
a  dwelling  unit  in a  residential  cooperative  housing  corporation  and a
collateral assignment of the related Co-op Lease.

      CURRENT  APPRAISED VALUE:  With respect to any Mortgaged  Property,  the
value  thereof as  determined  by an  appraisal  made for the  Company  (by an
appraiser  who met the  requirements  of the  Company  and Fannie  Mae) at the
request  of a  Mortgagor  for the  purpose  of  canceling  a Primary  Mortgage
Insurance  Policy  in  accordance  with  federal,  state  and  local  laws and
regulations or otherwise made at the request of the Company or Mortgagor.

      CURRENT  LTV:  The ratio of the Stated  Principal  Balance of a Mortgage
Loan to the Current Appraised Value of the Mortgaged Property.

      CUSTODIAL ACCOUNT:  Each separate demand account or accounts created and
maintained  pursuant  to Section  4.04  which  shall be  entitled  "GreenPoint
Mortgage Funding, Inc., in trust for the [Purchaser], Owner of Adjustable Rate
Mortgage Loans" and shall be established in an Eligible  Account,  in the name
of the Person that is the  "Purchaser"  with  respect to the related  Mortgage
Loans.

      CUSTODIAN:  With respect to any Mortgage  Loan, the entity stated on the
related  Term Sheet,  and its  successors  and assigns,  as custodian  for the
Purchaser.

      CUT-OFF DATE:  With respect to any Mortgage Loan, the date stated on the
related Term Sheet.

      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 Remittance Date.

      DUE DATE: The day of the month on which the Monthly  Payment is due on a
Mortgage Loan,  exclusive of any days of grace,  which is the first day of the
month.

      DUE PERIOD:  With respect to any 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 the Remittance Date.

      ELIGIBLE ACCOUNT: An account established and maintained: (i) within FDIC
insured accounts created,  maintained and monitored by the Company so that all
funds deposited therein are fully insured, or (ii) as a trust account with the
corporate  trust  department  of a  depository  institution  or trust  company
organized  under the laws of the  United  States of  America or any one of the
states thereof or the District of Columbia  which is not  affiliated  with the
Company (or any  sub-servicer) or (iii) with an entity which is an institution
whose  deposits are insured by the FDIC,  the unsecured  and  uncollateralized
long-term debt  obligations of which shall be rated "A2" or higher by Standard
& Poor's and "A" or higher by Fitch, Inc. or one of the two highest short-term
ratings by any  applicable  Rating  Agency,  and which is either (a) a federal
savings  association  duly  organized,  validly  existing and in good standing
under the federal  banking laws, (b) an institution  duly  organized,  validly
existing and in good standing under the applicable  banking laws of any state,
(c) a national  banking  association  under the federal banking laws, or (d) a
principal  subsidiary of a bank holding  company,  or (iv) if ownership of the
Mortgage  Loans is evidenced by  mortgaged-backed  securities,  the equivalent
required  ratings of each Rating Agency,  and held such that the rights of the
Purchaser and the owner of the Mortgage Loans shall be fully protected against
the claims of any  creditors of the Company (or any  sub-servicer)  and of any
creditors or depositors of the institution in which such account is maintained
or (v) in a separate  non-trust  account without FDIC or other insurance in an
Eligible  Institution.  In the event that a Custodial  Account is  established
pursuant to clause (iii), (iv) or (v) of the preceding  sentence,  the Company
shall provide the Purchaser  with written notice on the Business Day following
the date on which  the  applicable  institution  fails to meet the  applicable
ratings requirements.

      ELIGIBLE   INSTITUTION:   GreenPoint  Mortgage  Funding,   Inc.,  or  an
institution  having (i) the highest short-term debt rating, and one of the two
highest  long-term debt ratings of each Rating Agency; or (ii) with respect to
any Custodial Account,  an unsecured  long-term debt rating of at least one of
the two highest unsecured long-term debt ratings of each Rating Agency.

      EQUITY TAKE-OUT REFINANCED MORTGAGE LOAN: A Refinanced Mortgage Loan the
proceeds of which were in excess of the outstanding  principal  balance of the
existing mortgage loan as defined in the Fannie Mae Guide(s).

      ESCROW  ACCOUNT:  Each separate  trust  account or accounts  created and
maintained  pursuant  to Section  4.06  which  shall be  entitled  "GreenPoint
Mortgage Funding, Inc., in trust for the [Purchaser], Owner of Adjustable Rate
Mortgage  Loans,  and  various  Mortgagors"  and  shall be  established  in an
Eligible  Account,  in the name of the  Person  that is the  "Purchaser"  with
respect to the related Mortgage Loans.

      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
document.

      EVENT OF DEFAULT: Any one of the conditions or circumstances  enumerated
in Section 9.01.

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

      FANNIE MAE  GUIDE(S):  The Fannie Mae  Selling  Guide and the Fannie Mae
Servicing Guide and all amendments or additions thereto.

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

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

      FHLMC  GUIDE:  The FHLMC  Single  Family  Seller/Servicer  Guide and all
amendments or additions thereto.

      FIDELITY BOND: A fidelity bond to be maintained by the Company  pursuant
to Section 4.12.

      FIRREA: The Financial  Institutions  Reform,  Recovery,  and Enforcement
Act of 1989.

      FIRST REMITTANCE DATE: With respect to any Mortgage Loan, the Remittance
Date occurring in the month  following the month in which the related  Closing
Date occurs.

      GAAP:  Generally accepted accounting principles, consistently applied.


      HUD: The United States  Department of Housing and Urban  Development  or
any successor thereto.

      INDEX:  With respect to any  adjustable  rate Mortgage  Loan,  the index
identified on the Mortgage Loan Schedule and set forth in the related Mortgage
Note for the purpose of calculating the interest rate thereon.

      INITIAL  RATE CAP:  As to each  adjustable  rate  Mortgage  Loan,  where
applicable,  the maximum increase or decrease in the Mortgage Interest Rate on
the first Adjustment Date.

      INSURANCE  PROCEEDS:  With respect to each  Mortgage  Loan,  proceeds of
insurance  policies  insuring  the  Mortgage  Loan  or the  related  Mortgaged
Property.

      LIFETIME RATE CAP: As to each adjustable rate Mortgage Loan, the maximum
Mortgage Interest Rate over the term of such Mortgage Loan.

      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.

      LOAN  PROGRAM  CODE:   With  respect  to  each  Mortgage  Loan,  a  code
designating   the  loan  program   pursuant  to  which  a  Mortgage  Loan  was
underwritten in accordance with the Company's underwriting guidelines.

      LOAN-TO-VALUE RATIO OR LTV: With respect to any Mortgage Loan, the ratio
of the original outstanding  principal amount of the Mortgage Loan, to (i) the
Appraised  Value of the  Mortgaged  Property as of the  Origination  Date with
respect to a Refinanced  Mortgage  Loan,  and (ii) the lesser of the Appraised
Value of the  Mortgaged  Property as of the  Origination  Date or the purchase
price of the Mortgaged Property with respect to all other Mortgage Loans.

      MARGIN:  With respect to each  adjustable  rate Mortgage Loan, the fixed
percentage  amount set forth in each related  Mortgage  Note which is added to
the Index in order to determine  the related  Mortgage  Interest  Rate, as set
forth in the Mortgage Loan Schedule.

      MONTHLY  ADVANCE:  The  aggregate of the advances made by the Company on
any Remittance Date pursuant to Section 5.03.

      MONTHLY PAYMENT: The scheduled monthly payment of principal and interest
on a Mortgage Loan which is payable by a Mortgagor under the related  Mortgage
Note.

      MORTGAGE:  The mortgage,  deed of trust or other  instrument  securing a
Mortgage  Note which creates a first lien on an  unsubordinated  estate in fee
simple in real property securing the Mortgage Note.

      MORTGAGE  FILE:  The  mortgage  documents  pertaining  to  a  particular
Mortgage  Loan which are  specified  in  Exhibit A hereto  and any  additional
documents  required  to be  added  to  the  Mortgage  File  pursuant  to  this
Agreement.

      MORTGAGE  IMPAIRMENT  INSURANCE POLICY: A mortgage impairment or blanket
hazard insurance policy as described in Section 4.11.

      MORTGAGE INTEREST RATE: The annual rate at which interest accrues on any
Mortgage Loan,  which may be adjusted from time to time for an adjustable rate
Mortgage Loan, in accordance with the provisions of the related Mortgage Note.

      MORTGAGE LOAN: An individual  mortgage loan which is the subject of this
Agreement,  each Mortgage Loan  originally  sold and subject to this Agreement
being  identified on the Mortgage  Loan Schedule  attached to the related Term
Sheet,  which Mortgage Loan includes without limitation the Mortgage File, 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, excluding replaced or repurchased mortgage loans.

      MORTGAGE LOAN DOCUMENTS:  The documents listed in EXHIBIT A.

      MORTGAGE LOAN  REMITTANCE  RATE: With respect to each Mortgage Loan, the
annual rate of interest remitted to the Purchaser, which shall be equal to the
Mortgage Interest Rate minus the Servicing Fee Rate.

      MORTGAGE LOAN  SCHEDULE:  The schedule of Mortgage  Loans annexed to the
related Term Sheet, such schedule setting forth the following information with
respect to each Mortgage Loan in the related Mortgage Loan Package:

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

      (2) the Mortgagor's first and last name;

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

      (4) a code indicating  whether the Mortgaged Property is owner-occupied,
a second home or an investor property;

      (5)  the  type  of  residential  property   constituting  the  Mortgaged
Property;

      (6) the original months to maturity of the Mortgage Loan;

      (7) the  remaining  months to maturity  from the related  Cut-off  Date,
based on the original  amortization  schedule and, if different,  the maturity
expressed in the same manner but based on the actual amortization schedule;

      (8) the Sales Price, if applicable,  Appraised  Value and  Loan-to-Value
Ratio, at origination;

      (9) the Mortgage  Interest Rate as of origination  and as of the related
Cut-off Date;  with respect to each adjustable rate Mortgage Loan, the initial
Adjustment  Date, the next Adjustment Date  immediately  following the related
Cut-off Date, the Index,  the Margin,  the Initial Rate Cap, if any,  Periodic
Rate  Cap,  if any,  minimum  Mortgage  Interest  Rate  under the terms of the
Mortgage Note and the Lifetime Rate Cap;

      (10) the Origination Date of the Mortgage Loan;

      (11) the stated maturity date;

      (12) the amount of the Monthly Payment at origination;

      (13) the amount of the Monthly Payment as of the related Cut-off Date;

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

      (15) the scheduled Stated  Principal  Balance of the Mortgage Loan as of
the close of business on the related Cut-off Date, after deduction of payments
of  principal  due on or  before  the  related  Cut-off  Date  whether  or not
collected;

      (16) a code indicating the purpose of the Mortgage Loan (i.e., purchase,
rate and term refinance, equity take-out refinance);

      (17) a code indicating the documentation style (i.e. full,  alternative,
etc.);

      (18) the number of times during the twelve (12) month  period  preceding
the related  Closing Date that any Monthly Payment has been received after the
month of its scheduled due date (if requested in writing by the Purchaser);

      (19) the date on which the first payment is or was due;

      (20) a code  indicating  whether or not the Mortgage Loan is the subject
of a Primary Mortgage  Insurance Policy and the name of the related  insurance
carrier;

      (21) a code  indicating  whether or not the  Mortgage  Loan is currently
convertible and the conversion spread;

      (22) the last Due Date on which a Monthly  Payment was actually  applied
to the unpaid principal balance of the Mortgage Loan.

      (23) product type (i.e. fixed, adjustable, 3/1, 5/1, etc.);

      (24) credit score and/or mortgage score, if applicable;

      (25) a code  indicating  whether or not the Mortgage Loan is the subject
of a Lender  Primary  Mortgage  Insurance  Policy and the name of the  related
insurance carrier and the Lender Paid Mortgage Insurance Rate;

      (26) a code indicating whether or not the Mortgage Loan has a prepayment
penalty and if so, the amount and term thereof;

      (27) the Loan Program Code; and

      (28) the Current  Appraised  Value of the Mortgage Loan and Current LTV,
if applicable.

      With respect to the Mortgage Loans in the  aggregate,  the Mortgage Loan
Schedule  attached  to the related  Term Sheet  shall set forth the  following
information, as of the related Cut-off Date:

      (1) the number of Mortgage Loans;

      (2) the current aggregate  outstanding principal balance of the Mortgage
Loans;

      (3) the weighted average Mortgage Interest Rate of the Mortgage Loans;

      (4) the weighted average maturity of the Mortgage Loans; and

      (5) the weighted average months to next Adjustment Date;

      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 a
Mortgage Note,  consisting of a single parcel of real estate  considered to be
real estate under the laws of the state in which such real property is located
which may include condominium units and planned unit developments, improved by
a residential  dwelling;  except that with respect to real property located in
jurisdictions in which the use of leasehold estates for residential properties
is a widely-accepted practice, a leasehold estate of the Mortgage, the term of
which is equal to or longer than the term of the Mortgage.

      MORTGAGOR:  The obligor on a Mortgage Note.

      NONRECOVERABLE  ADVANCE:  Any portion of a Monthly  Advance or Servicing
Advance previously made or proposed to be made by the Company pursuant to this
Agreement,  that, in the good faith  judgment of the Company,  will not or, in
the case of a proposed  advance,  would not, be ultimately  recoverable  by it
from the related  Mortgagor  or the related  Liquidation  Proceeds,  Insurance
Proceeds,  Condemnation  Proceeds  or  otherwise  with  respect to the related
Mortgage Loan.

      OCC:  Office  of the  Comptroller  of  the  Currency,  or any  successor
thereto.

      OFFICERS'  CERTIFICATE:  A  certificate  signed by the  Chairman  of the
Board, the Vice Chairman of the Board, the President,  a Senior Vice President
or a  Vice  President  or by the  Treasurer  or  the  Secretary  or one of the
Assistant Treasurers or Assistant Secretaries of the Company, and delivered to
the Purchaser as required by this Agreement.

      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 Purchaser.

      ORIGINATION  DATE: The date on which a Mortgage Loan funded,  which date
shall not, in connection  with a Refinanced  Mortgage Loan, be the date of the
funding of the debt  being  refinanced,  but  rather  the  closing of the debt
currently outstanding under the terms of the Mortgage Loan Documents.

      OTS:  Office of Thrift Supervision, or any successor thereto.

      PERIODIC RATE CAP: As to each adjustable rate Mortgage Loan, the maximum
increase or decrease in the Mortgage  Interest Rate on any Adjustment Date, as
set forth in the related Mortgage Note and the related Mortgage Loan Schedule.

      PERMITTED  INVESTMENTS:  Any one or more of the following obligations or
securities:

            (i) direct obligations of, and 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;

            (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 a term not to exceed thirty (30)
            days and with respect to (a) any security  described in clause (i)
            above and  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 one of the two
            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 of all of the Mortgage  Loans and
            Permitted Investments;

            (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 one of the two 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
            as evidenced in writing by each Rating Agency; 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
            other  securities 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 or if such
investment or security is purchased at a price greater than par.

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

      PREPAYMENT INTEREST SHORTFALL:  With respect to any Remittance Date, for
each Mortgage Loan that was the subject of a Principal  Prepayment  during the
related  Prepayment  Period,  an amount  equal to the  excess  of one  month's
interest at the applicable Mortgage Loan Remittance Rate on the amount of such
Principal  Prepayment  over the amount of interest  (adjusted  to the Mortgage
Loan Remittance  Rate) actually paid by the related  Mortgagor with respect to
such Prepayment Period.

      PREPAYMENT  PERIOD:  With respect to any  Remittance  Date, the calendar
month preceding the month in which such Remittance Date occurs.

      PRIMARY  MORTGAGE  INSURANCE  POLICY:  Each  primary  policy of mortgage
insurance  represented to be in effect  pursuant to Section  3.02(hh),  or any
replacement policy therefor obtained by the Company pursuant to Section 4.08.

      PRIME RATE:  The prime rate  announced to be in effect from time to time
as  published  as the  average  rate in the  Wall  Street  Journal  (Northeast
Edition).

      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 penalty 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.

      PURCHASE PRICE:  As defined in Section 2.02.

      PURCHASER:  EMC Mortgage  Corporation,  its  successors  in interest and
assigns.

      QUALIFIED  APPRAISER:  An appraiser,  duly appointed by the Company, who
had no interest,  direct or indirect in the related  Mortgaged  Property or in
any loan made on the security thereof,  and whose compensation is not affected
by the approval or  disapproval  of the Mortgage  Loan, and such appraiser and
the appraisal made by such appraiser both satisfy the requirements of Title XI
of FIRREA and the regulations  promulgated  thereunder and the requirements of
Fannie Mae, all as in effect on the date the Mortgage Loan was originated.

      QUALIFIED INSURER: An insurance company duly qualified as such under the
laws of the states in which the related  Mortgaged  Property is located,  duly
authorized  and licensed in such states to transact the  applicable  insurance
business and to write the insurance provided, approved as an insurer by Fannie
Mae or FHLMC.

      RATING AGENCY: Standard & Poor's, Fitch, Inc. or, in the event that some
or all of the ownership of the Mortgage Loans is evidenced by  mortgage-backed
securities,  the nationally  recognized  rating agencies  issuing ratings with
respect to such securities, if any.

      REFINANCED  MORTGAGE LOAN: A Mortgage Loan which was made to a Mortgagor
who owned the Mortgaged  Property  prior to the  origination  of such Mortgage
Loan and the  proceeds  of which  were  used in  whole or part to  satisfy  an
existing mortgage.

      REMIC:  A "real  estate  mortgage  investment  conduit," as such term is
defined in Section 860D of the Code.

      REMIC PROVISIONS:  The provisions of the federal income tax law relating
to REMICs,  which appear at Sections  860A  through 860G of the Code,  and the
related provisions and regulations  promulgated  thereunder,  as the foregoing
may be in effect from time to time.

      REMITTANCE  DATE:  The 18th day of any month,  beginning  with the First
Remittance Date, or if such 18th day is not a Business Day, the first Business
Day immediately preceding such 18th day.

      REO DISPOSITION: The final sale by the Company of any REO Property.

      REO DISPOSITION PROCEEDS:  Amounts received by the Company in connection
with a related REO Disposition.

      REO PROPERTY:  A Mortgaged Property acquired by the Company on behalf of
the Purchaser as described in Section 4.13.

      REPURCHASE  PRICE:  With respect to any Mortgage  Loan, a price equal to
(i) the product of the greater of 100% or the  percentage  of par as stated in
the Confirmation  multiplied by the Stated Principal  Balance of such Mortgage
Loan on the repurchase date, plus (ii) interest on such outstanding  principal
balance at the Mortgage Loan  Remittance Rate from the last date through which
interest  has been paid and  distributed  to the  Purchaser  to the end of the
month of repurchase,  plus, (iii) third party expenses  incurred in connection
with the  transfer  of the  Mortgage  Loan  being  repurchased;  less  amounts
received or advanced in respect of such  repurchased  Mortgage  Loan which are
being  held  in  the  Custodial  Account  for  distribution  in the  month  of
repurchase.

      SAIF:  The Savings Association Insurance Fund, or any successor thereto.

      SALES PRICE:  With  respect to any  Mortgage  Loan the proceeds of which
were used by the  Mortgagor  to acquire the related  Mortgaged  Property,  the
amount paid by the related Mortgagor for such Mortgaged Property.

      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 Company of its  servicing
obligations,  including, but not limited to, the cost of (a) the 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  but not
limited  to,  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 Company  specifies  the Mortgage
Loan(s) to which such expenses relate and, upon Purchaser's request,  provides
documentation supporting such expense (which documentation would be acceptable
to Fannie Mae), and provided further that any such enforcement, administrative
or judicial  proceeding does not arise out of a breach of any  representation,
warranty  or  covenant  of the  Company  hereunder),  (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,  (e) any expenses  reasonably  sustained by the
Company  with  respect  to  the  liquidation  of  the  Mortgaged  Property  in
accordance  with  the  terms of this  Agreement  and (f)  compliance  with the
obligations under Section 4.08.

      SERVICING  FEE:  With respect to each Mortgage  Loan,  the amount of the
annual fee the Purchaser shall pay to the Company,  which shall,  for a period
of one full month, be equal to one-twelfth of the product of (a) the 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 Purchaser to pay the Servicing Fee is
limited to, and the Servicing Fee is payable solely from, the interest portion
of such Monthly  Payment  collected by the Company,  or as otherwise  provided
under  Section 4.05 and in accordance  with the Fannie Mae  Guide(s).  Any fee
payable to the Company for administrative services related to any REO Property
as described in Section 4.13 shall be payable from Liquidation Proceeds of the
related REO Property.

      SERVICING FEE RATE:  As set forth in the Term Sheet.

      SERVICING FILE: With respect to each Mortgage Loan, the file retained by
the Company  consisting  of  originals of all  documents in the Mortgage  File
which are not  delivered  to the  Purchaser  and copies of the  Mortgage  Loan
Documents  listed in Exhibit A, the  originals  of which are  delivered to the
Purchaser or its designee pursuant to Section 2.04.

      SERVICING   OFFICER:   Any  officer  of  the  Company  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 Company to the
Purchaser upon request, as such list may from time to time be amended.

      STATED  PRINCIPAL  BALANCE:  As to each  Mortgage Loan as of any date of
determination,  (i) the principal balance of such Mortgage Loan at the Cut-off
Date after giving  effect to payments of principal due on or before such date,
whether or not received,  minus (ii) all amounts previously distributed to the
Purchaser  with  respect  to  the  Mortgage  Loan  representing   payments  or
recoveries of principal or advances in lieu thereof.

      SUBSERVICER:  Any subservicer  which is subservicing  the Mortgage Loans
pursuant  to  a  Subservicing  Agreement.   Any  subservicer  shall  meet  the
qualifications set forth in Section 4.01.

      SUBSERVICING   AGREEMENT:   An  agreement  between  the  Company  and  a
Subservicer, if any, for the servicing of the Mortgage Loans.

      TERM SHEET:  A  supplemental  agreement in the form  attached  hereto as
Exhibit  I which  shall be  executed  and  delivered  by the  Company  and the
Purchaser to provide for the sale and servicing  pursuant to the terms of this
Agreement of the Mortgage Loans listed on Schedule I attached  thereto,  which
supplemental  agreement shall contain certain specific information relating to
such sale of such Mortgage Loans and may contain additional covenants relating
to such sale of such Mortgage Loans.


                                   ARTICLE II

           PURCHASE OF MORTGAGE LOANS; SERVICING OF MORTGAGE LOANS;
                RECORD TITLE AND POSSESSION OF MORTGAGE FILES;
                   BOOKS AND RECORDS; CUSTODIAL AGREEMENT;
                       DELIVERY OF MORTGAGE LOAN DOCUMENTS

      Section 2.01      AGREEMENT TO PURCHASE.

      The Company  agrees to sell and the  Purchaser  agrees to  purchase  the
Mortgage  Loans having an aggregate  Stated  Principal  Balance on the related
Cut-off  Date set forth in the related Term Sheet in an amount as set forth in
the  Confirmation,  or in such other amount as agreed by the Purchaser and the
Company as evidenced by the actual aggregate  Stated Principal  Balance of the
Mortgage  Loans  accepted by the Purchaser on the related  Closing Date,  with
servicing  retained  by the  Company.  The Company  shall  deliver the related
Mortgage  Loan  Schedule  attached to the related  Term Sheet for the Mortgage
Loans to be  purchased on the related  Closing Date to the  Purchaser at least
two (2) Business Days prior to the related  Closing Date.  The Mortgage  Loans
shall be sold pursuant to this Agreement,  and the related Term Sheet shall be
executed and delivered on the related Closing Date.

      Section 2.02      PURCHASE PRICE.

      The Purchase Price for each Mortgage Loan shall be the percentage of par
as stated in the  Confirmation  (subject to adjustment  as provided  therein),
multiplied by the Stated Principal Balance, as of the related Cut-off Date, of
the Mortgage Loan listed on the related Mortgage Loan Schedule attached to the
related Term Sheet,  after application of scheduled  payments of principal due
on or before the related Cut-off Date whether or not collected.

      In addition to the Purchase  Price as  described  above,  the  Purchaser
shall pay to the Company, at closing, accrued interest on the Stated Principal
Balance of each Mortgage  Loan as of the related  Cut-off Date at the Mortgage
Loan  Remittance  Rate of each  Mortgage  Loan from the related  Cut-off  Date
through the day prior to the related Closing Date, inclusive.

      The Purchase  Price plus accrued  interest as set forth in the preceding
paragraph  shall  be paid on the  related  Closing  Date by wire  transfer  of
immediately available funds.

      Purchaser shall be entitled to (1) all scheduled principal due after the
related  Cut-off Date, (2) all other  recoveries of principal  collected on or
after the related Cut-off Date (provided, however, that all scheduled payments
of principal  due on or before the related  Cut-off Date and  collected by the
Company or any successor  servicer after the related Cut-off Date shall belong
to the Company), and (3) all payments of interest on the Mortgage Loans net of
applicable  Servicing  Fees (minus that portion of any such  payment  which is
allocable to the period prior to the related  Cut-off Date).  The  outstanding
principal  balance of each  Mortgage  Loan as of the related  Cut-off  Date is
determined  after  application  of payments of principal  due on or before the
related  Cut-off Date whether or not collected,  together with any unscheduled
principal  prepayments  collected prior to the related Cut-off Date; provided,
however,  that payments of scheduled  principal and interest prepaid for a Due
Date beyond the  related  Cut-off  Date shall not be applied to the  principal
balance as of the related  Cut-off  Date.  Such prepaid  amounts  shall be the
property of the Purchaser.  The Company shall deposit any such prepaid amounts
into the Custodial  Account,  which account is established  for the benefit of
the Purchaser for subsequent remittance by the Company to the Purchaser.

      Section 2.03      SERVICING OF MORTGAGE LOANS.

      Simultaneously  with the execution and delivery of each Term Sheet,  the
Company does hereby agree to directly service the Mortgage Loans listed on the
related  Mortgage Loan Schedule  attached to the related Term Sheet subject to
the terms of this  Agreement  and the related  Term  Sheet.  The rights of the
Purchaser to receive payments with respect to the related Mortgage Loans shall
be as set forth in this Agreement.

      Section 2.04      RECORD  TITLE  AND  POSSESSION  OF  MORTGAGE  FILES;
                        MAINTENANCE OF SERVICING FILES.

      As of the related Closing Date, the Company sold, transferred, assigned,
set over and  conveyed  to the  Purchaser,  without  recourse,  on a servicing
retained basis,  and the Company hereby  acknowledges  that the Purchaser has,
but subject to the terms of this Agreement and the related Term Sheet, all the
right, title and interest of the Company in and to the Mortgage Loans. Company
will deliver the Mortgage Files to the Custodian  designated by Purchaser,  on
or before the related Closing Date, at the expense of the Company. The Company
shall maintain a Servicing  File  consisting of a copy of the contents of each
Mortgage  File and the  originals of the  documents in each  Mortgage File not
delivered to the  Purchaser.  The  Servicing  File shall contain all documents
necessary to service the Mortgage Loans. The possession of each Servicing File
by the  Company  is at the  will of the  Purchaser,  for the sole  purpose  of
servicing the related  Mortgage Loan, and such retention and possession by the
Company is in a custodial  capacity only.  From the related  Closing Date, the
ownership of each Mortgage  Loan,  including the Mortgage  Note, the Mortgage,
the contents of the related Mortgage File and all rights,  benefits,  proceeds
and obligations arising therefrom or in connection therewith,  has been vested
in the Purchaser.  All rights arising out of the Mortgage Loans including, but
not limited to, 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 Company  shall be received and held by
the  Company  in trust for the  benefit of the  Purchaser  as the owner of the
Mortgage  Loans.  Any portion of the  Mortgage  Files  retained by the Company
shall be appropriately  identified in the Company's computer system to clearly
reflect the  ownership of the  Mortgage  Loans by the  Purchaser.  The Company
shall  release  its  custody of the  contents  of the  Mortgage  Files only in
accordance  with  written  instructions  of the  Purchaser,  except  when such
release is required as incidental  to the Company's  servicing of the Mortgage
Loans or is in connection with a repurchase of any Mortgage Loan or Loans with
respect  thereto  pursuant to this Agreement and the related Term Sheet,  such
written instructions shall not be required.

      Section 2.05       BOOKS AND RECORDS.

      The sale of each  Mortgage  Loan  shall be  reflected  on the  Company's
balance  sheet  and  other  financial  statements  as a sale of  assets by the
Company. The Company shall be responsible for maintaining, and shall maintain,
a  complete  set of books and  records  for the  Mortgage  Loans that shall be
appropriately  identified in the Company's  computer system to clearly reflect
the  ownership of the  Mortgage  Loan by the  Purchaser.  In  particular,  the
Company shall  maintain in its  possession,  available  for  inspection by the
Purchaser,  or its designee and shall  deliver to the  Purchaser  upon demand,
evidence of  compliance  with all  federal,  state and local  laws,  rules and
regulations, and requirements of Fannie Mae or FHLMC, as applicable, including
but not  limited to  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 of any  condominium  project as required by Fannie Mae or FHLMC,  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 Company may be in
the form of microfilm or microfiche.

      The Company shall  maintain with respect to each Mortgage Loan and shall
make  available  for  inspection  by any Purchaser or its designee the related
Servicing File during the time the Purchaser  retains  ownership of a Mortgage
Loan and thereafter in accordance with applicable laws and regulations.

      In addition to the foregoing,  Company shall provide to any  supervisory
agents or examiners that regulate Purchaser, including but not limited to, the
OTS, the FDIC and other  similar  entities,  access,  during  normal  business
hours,  upon reasonable  advance notice to Company and without cost to Company
or such supervisory  agents or examiners,  to any documentation  regarding the
Mortgage Loans that may be required by any applicable regulator.

      Section 2.06.     TRANSFER OF MORTGAGE LOANS.

      The  Company  shall keep at its  servicing  office  books and records in
which, subject to such reasonable regulations as it may prescribe, the Company
shall note transfers 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 Company 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 Company
in accordance  with this Section 2.06 and the books and records of the Company
show such person as the owner of the Mortgage Loan. The Purchaser may, subject
to the terms of this Agreement,  sell and transfer one or more of the Mortgage
Loans,  provided,  however,  that the  transferee  will not be  deemed to be a
Purchaser  hereunder  binding upon the Company  unless such  transferee  shall
agree in writing to be bound by the terms of this  Agreement  and an  original
counterpart  of the  instrument of transfer in an Assignment and Assumption of
this Agreement  substantially  in the form of Exhibit D hereto executed by the
transferee shall have been delivered to the Company.  The Purchaser also shall
advise the Company of the  transfer.  Upon receipt of notice of the  transfer,
the Company  shall mark its books and records to reflect the  ownership of the
Mortgage Loans of such assignee,  and the previous Purchaser shall be released
from its  obligations  hereunder  with respect to the  Mortgage  Loans sold or
transferred.

      Section 2.07      DELIVERY OF MORTGAGE LOAN DOCUMENTS.

      The Company  shall  deliver and release to the Purchaser or its designee
the Mortgage Loan Documents in accordance with the terms of this Agreement and
the related Term Sheet. The documents  enumerated as items (1), (2), (3), (4),
(5), (6), (7), (8), (9) and (16) in Exhibit A hereto shall be delivered by the
Company to the Purchaser or its designee no later than three (3) Business Days
prior to the related Closing Date pursuant to a bailee letter  agreement.  All
other  documents  in  Exhibit A  hereto,  together  with all  other  documents
executed in  connection  with the  Mortgage  Loan that Company may have in its
possession,  shall be retained by the Company in trust for the  Purchaser.  If
the Company  cannot deliver the original  recorded  Mortgage Loan Documents or
the original  policy of title  insurance,  including  riders and  endorsements
thereto, on the related Closing Date, the Company shall, promptly upon receipt
thereof and in any case not later than 120 days from the related Closing Date,
deliver such original documents, including original recorded documents, to the
Purchaser  or its  designee  (unless  the  Company is  delayed in making  such
delivery  by  reason  of the fact  that  such  documents  shall  not have been
returned by the appropriate  recording  office).  If delivery is not completed
within 120 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,  Company shall  deliver such document to Purchaser,  or its
designee,  within  such time  period as  specified  in a  Company's  Officer's
Certificate.  In the event that  documents  have not been received by the date
specified in the  Company's  Officer's  Certificate,  a  subsequent  Company's
Officer's  Certificate  shall be delivered by such date specified in the prior
Company's  Officer's  Certificate,  stating  a  revised  date for  receipt  of
documentation.  The procedure  shall be repeated until the documents have been
received and  delivered.  If delivery is not completed  within 180 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 Company shall continue to use its best efforts to effect  delivery as soon
as possible  thereafter,  provided that if such documents are not delivered by
the 270th day from the date of the related  Closing  Date,  the Company  shall
repurchase the related  Mortgage  Loans at the Repurchase  Price in accordance
with Section 3.03 hereof.

      The  Company  shall pay all  initial  recording  fees,  if any,  for the
assignments of mortgage and any other fees in connection  with the transfer of
all  original  documents  to the  Purchaser  or its  designee.  Company  shall
prepare,  in recordable form, all assignments of mortgage  necessary to assign
the Mortgage Loans to Purchaser, or its designee. Company shall be responsible
for recording the assignments of mortgage.

      Company  shall  provide an original or  duplicate  original of the title
insurance  policy to Purchaser or its designee  within ninety (90) days of the
receipt of the recorded documents  (required for issuance of such policy) from
the applicable recording office.

      Any review by the  Purchaser,  or its  designee,  of the Mortgage  Files
shall in no way alter or reduce the Company's obligations hereunder.

      If the Purchaser or its designee  discovers any defect with respect to a
Mortgage  File,  the  Purchaser  shall,  or shall cause its  designee to, give
written  specification of such defect to the Company which may be given in the
exception report or the certification delivered pursuant to this Section 2.07,
or otherwise in writing and the Company shall cure or repurchase such Mortgage
Loan in accordance with Section 3.03.

      The Company shall forward to the  Purchaser,  or its designee,  original
documents evidencing an assumption,  modification,  consolidation or extension
of any  Mortgage  Loan entered  into in  accordance  with Section 4.01 or 6.01
within one week of their execution;  provided, however, that the Company shall
provide the Purchaser, or its designee, with a certified true copy of any such
document submitted for recordation within one week of 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  within  sixty  (60)  days  of its
submission for recordation.

      From  time to  time  the  Company  may  have a need  for  Mortgage  Loan
Documents to be released from Purchaser, or its designee.  Purchaser shall, or
shall cause its designee,  upon the written request of the Company, within ten
(10)  Business  Days,  deliver to the  Company,  any  requested  documentation
previously  delivered to Purchaser as part of the Mortgage File, provided that
such  documentation is promptly returned to Purchaser,  or its designee,  when
the Company no longer requires  possession of the document,  and provided that
during  the time  that any such  documentation  is held by the  Company,  such
possession is in trust for the benefit of Purchaser.  Company shall  indemnify
Purchaser,  and its  designee,  from and against  any and all losses,  claims,
damages,  penalties,  fines, forfeitures,  costs and expenses (including court
costs and reasonable  attorney's  fees) resulting from or related to the loss,
damage, or misplacement of any documentation  delivered to Company pursuant to
this paragraph.

      Section 2.08      QUALITY CONTROL PROCEDURES.

      The Company must have an internal quality control program that verifies,
on a regular basis, the existence and accuracy of the legal documents,  credit
documents,  property appraisals,  and underwriting decisions. The program must
be  capable of  evaluating  and  monitoring  the  overall  quality of its loan
production  and  servicing  activities.  The  program  is to  ensure  that the
Mortgage Loans are originated and serviced in accordance with prudent mortgage
banking  practices  and  accounting   principles;   guard  against  dishonest,
fraudulent,  or negligent  acts;  and guard  against  errors and  omissions by
officers, employees, or other authorized persons.

      Section 2.09      NEAR-TERM PRINCIPAL PREPAYMENTS; NEAR TERM PAYMENT
                        DEFAULTS

      In the event any Principal Prepayment is made by a Mortgagor on or prior
to three months after the related  Closing  Date],  the Company shall remit to
the  Purchaser  an amount equal to the excess,  if any, of the Purchase  Price
Percentage  over par  multiplied by the amount of such  Principal  Prepayment.
Such  remittance  shall be made by the Company to  Purchaser no later than the
third  Business Day  following  receipt of such  Principal  Prepayment  by the
Company.

      In the event either of the first three (3)  scheduled  Monthly  Payments
which are due under any Mortgage  Loan after the related  Cut-off Date are not
made during the month in which such Monthly  Payments are due,  then not later
than five (5) Business  Days after notice to the Company by Purchaser  (and at
Purchaser's  sole option),  the Company,  shall  repurchase such Mortgage Loan
from the Purchaser  pursuant to the  repurchase  provisions  contained in this
Subsection 3.03.


      Section 2.10      MODIFICATION OF OBLIGATIONS.

      Purchaser may, without any notice to Company, extend, compromise, renew,
release,  change,  modify,  adjust or alter, by operation of law or otherwise,
any of the  obligations of the Mortgagors or other persons  obligated  under a
Mortgage  Loan without  releasing or otherwise  affecting the  obligations  of
Company under this Agreement, or with respect to such Mortgage Loan, except to
the extent Purchaser's extension,  compromise,  release, change, modification,
adjustment,  or alteration  affects  Company's ability to collect the Mortgage
Loan or realize on the security of the  Mortgage,  but then only to the extent
such action has such effect.

                                 ARTICLE III

                        REPRESENTATIONS AND WARRANTIES OF
              THE COMPANY; REPURCHASE; REVIEW OF MORTGAGE LOANS

      Section 3.01      REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

      The Company represents, warrants and covenants to the Purchaser that, as
of the related Closing Date or as of such date specifically provided herein:

      (a) The Company is a corporation,  duly organized,  validly existing and
in good standing  under the laws of the State of New York and has all licenses
necessary  to carry out its business as now being  conducted,  and is licensed
and qualified to transact  business in and is in good standing  under the laws
of each state in which any  Mortgaged  Property  is  located  or is  otherwise
exempt  under  applicable  law from  such  licensing  or  qualification  or is
otherwise  not  required  under  applicable  law to effect such  licensing  or
qualification  and no demand for such licensing or qualification has been made
upon such  Company  by any such  state,  and in any event  such  Company is in
compliance  with the laws of any such state to the extent  necessary to ensure
the  enforceability  of each  Mortgage  Loan and the servicing of the Mortgage
Loans in accordance with the terms of this Agreement;

      (b) The  Company  has the full power and  authority  and legal  right to
hold,  transfer and convey each Mortgage  Loan, to sell each Mortgage Loan and
to  execute,  deliver  and  perform,  and to  enter  into and  consummate  all
transactions  contemplated by this Agreement and the related Term Sheet and to
conduct  its  business  as  presently  conducted,   has  duly  authorized  the
execution,  delivery and  performance  of this  Agreement and the related Term
Sheet and any agreements  contemplated hereby, has duly executed and delivered
this  Agreement and the related Term Sheet,  and any  agreements  contemplated
hereby,  and this Agreement and the related Term Sheet and each  Assignment to
the Purchaser and any  agreements  contemplated  hereby,  constitutes a legal,
valid  and  binding  obligation  of the  Company,  enforceable  against  it in
accordance with its terms,  and all requisite  corporate action has been taken
by the  Company  to make this  Agreement  and the  related  Term Sheet and all
agreements   contemplated  hereby  valid  and  binding  upon  the  Company  in
accordance with their terms;

      (c) Neither the execution and delivery of this Agreement and the related
Term Sheet,  nor the  origination  or purchase  of the  Mortgage  Loans by the
Company, the sale of the Mortgage Loans to the Purchaser,  the consummation of
the transactions contemplated hereby, or the fulfillment of or compliance with
the terms and  conditions  of this  Agreement  and the related Term Sheet will
conflict  with any of the terms,  conditions  or  provisions  of the Company's
charter or by-laws or materially  conflict with or result in a material breach
of any of the terms,  conditions or provisions of any legal restriction or any
agreement or  instrument to which the Company 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 result in the material violation of any law, rule,  regulation,
order,  judgment or decree to which the Company or its properties are subject,
or impair the ability of the Purchaser to realize on the Mortgage Loans.

      (d) There is no litigation,  suit,  proceeding or investigation  pending
or, to the best of  Company's  knowledge,  threatened,  or any order or decree
outstanding,  with respect to the Company which, either in any one instance or
in the aggregate,  is reasonably  likely to have a material  adverse effect on
the sale of the  Mortgage  Loans,  the  execution,  delivery,  performance  or
enforceability  of this  Agreement  and the related  Term  Sheet,  or which is
reasonably likely to have a material adverse effect on the financial condition
of the Company.

      (e) No  consent,  approval,  authorization  or  order  of any  court  or
governmental  agency  or body is  required  for the  execution,  delivery  and
performance by the Company of or compliance by the Company with this Agreement
or the related Term Sheet,  or the sale of the Mortgage  Loans and delivery of
the Mortgage Files to the Purchaser or the  consummation  of the  transactions
contemplated by this Agreement or the related Term Sheet, except for consents,
approvals, authorizations and orders which have been obtained;

      (f) The consummation of the transactions  contemplated by this Agreement
or the related Term Sheet is in the ordinary course of business of the Company
and Company, and the transfer, assignment and conveyance of the Mortgage Notes
and the  Mortgages  by the Company  pursuant to this  Agreement or the related
Term  Sheet  are  not  subject  to  bulk  transfer  or any  similar  statutory
provisions in effect in any applicable jurisdiction;

      (g) The origination and servicing  practices used by the Company and any
prior  originator  or servicer with respect to each Mortgage Note and Mortgage
have been legal and in accordance with applicable laws and regulations and the
Mortgage Loan  Documents,  and in all material  respects proper and prudent in
the mortgage  origination and servicing business.  Each Mortgage Loan has been
serviced in all material  respects with  Accepted  Servicing  Practices.  With
respect to escrow  deposits  and payments  that the  Company,  on behalf of an
investor,  is entitled to collect, all such payments are in the possession of,
or under the  control of, the  Company,  and there  exist no  deficiencies  in
connection  therewith for which customary  arrangements for repayment  thereof
have not been made. All escrow payments have been collected in full compliance
with state and federal law and the provisions of the related Mortgage Note and
Mortgage.  As to any Mortgage Loan that is the subject of an escrow, escrow of
funds is not  prohibited  by  applicable  law and has been  established  in an
amount  sufficient to pay for every  escrowed item that remains unpaid and has
been  assessed  but is not yet due and  payable.  No escrow  deposits or other
charges or payments due under the Mortgage  Note have been  capitalized  under
any Mortgage or the related Mortgage Note;

      (h) The  Company  used  no  selection  procedures  that  identified  the
Mortgage  Loans as being less  desirable  or  valuable  than other  comparable
mortgage loans in the Company's portfolio at the related Cut-off Date;

      (i) The  Company  will  treat  the  sale of the  Mortgage  Loans  to the
Purchaser as a sale for reporting and  accounting  purposes and, to the extent
appropriate, for federal income tax purposes;

      (j) Company is an approved seller/servicer of residential mortgage loans
for Fannie Mae, FHLMC and HUD, with such facilities,  procedures and personnel
necessary for the sound servicing of such mortgage loans.  The Company is duly
qualified,  licensed, registered and otherwise authorized under all applicable
federal,  state and local laws,  and  regulations,  if  applicable,  meets the
minimum capital  requirements set forth by the OCC, and is in good standing to
sell mortgage loans to and service mortgage loans for Fannie Mae and FHLMC and
no event  has  occurred  which  would  make  Company  unable  to  comply  with
eligibility  requirements or which would require notification to either Fannie
Mae or FHLMC;

      (k) The Company does not  believe,  nor does it have any cause or reason
to believe,  that it cannot perform each and every covenant  contained in this
Agreement  or the related  Term Sheet.  The Company is solvent and the sale of
the Mortgage Loans will not cause the Company to become insolvent. The sale of
the  Mortgage  Loans is not  undertaken  with the intent to  hinder,  delay or
defraud any of the Company's creditors;

      (l) No  statement,  tape,  diskette,  form,  report  or  other  document
prepared  by, or on behalf  of,  Company  pursuant  to this  Agreement  or the
related Term Sheet or in connection with the transactions contemplated hereby,
contains  or will  contain  any  statement  that is or will be  inaccurate  or
misleading in any material respect;

      (m)  The  Company   acknowledges  and  agrees  that  the  Servicing  Fee
represents  reasonable  compensation for performing such services and that the
entire  Servicing Fee shall be treated by the Company,  for accounting and tax
purposes, as compensation for the servicing and administration of the Mortgage
Loans pursuant to this Agreement. In the opinion of Company, the consideration
received by Company  upon the sale of the Mortgage  Loans to  Purchaser  under
this Agreement and the related Term Sheet  constitutes fair  consideration for
the Mortgage Loans under current market conditions.

      (n) Company has delivered to the Purchaser  financial  statements of its
parent, for its last two complete fiscal years. All such financial information
fairly presents the pertinent results of operations and financial position for
the  period   identified  and  has  been  prepared  in  accordance  with  GAAP
consistently  applied throughout the periods involved,  except as set forth in
the notes  thereto.  There has been no  change  in the  business,  operations,
financial condition, properties or assets of the Company since the date of the
Company's  financial  information that would have a material adverse effect on
its ability to perform its obligations under this Agreement;

      (o) The Company has not dealt with any broker,  investment banker, agent
or other  person that may be entitled to any  commission  or  compensation  in
connection with the sale of the Mortgage Loans;

      Section 3.02      REPRESENTATIONS AND WARRANTIES AS TO INDIVIDUAL
                        MORTGAGE LOANS.

      References  in this Section to  percentages  of Mortgage  Loans refer in
each case to the percentage of the aggregate Stated  Principal  Balance of the
Mortgage Loans as of the related Cut-off Date, based on the outstanding Stated
Principal  Balances of the Mortgage Loans as of the related  Cut-off Date, and
giving  effect to  scheduled  Monthly  Payments due on or prior to the related
Cut-off Date, whether or not received.  References to percentages of Mortgaged
Properties  refer,  in each case,  to the  percentages  of expected  aggregate
Stated  Principal  Balances  of the  related  Mortgage  Loans  (determined  as
described  in the  preceding  sentence).  The Company  hereby  represents  and
warrants to the Purchaser, as to each Mortgage Loan, as of the related Closing
Date as follows:

      (a) The information set forth in the Mortgage Loan Schedule  attached to
the related Term Sheet is true,  complete and correct in all material respects
as of the related Cut-Off Date;

      (b) The Mortgage creates a valid,  subsisting and enforceable first lien
or a first  priority  ownership  interest  in an estate in fee  simple in real
property  securing the related  Mortgage Note subject to principles of equity,
bankruptcy,  insolvency  and other laws of general  application  affecting the
rights of creditors;

      (c) All payments due prior to the related Cut-off Date for such Mortgage
Loan have been made as of the related  Closing Date; the Mortgage Loan has not
been  dishonored;  there  are no  material  defaults  under  the  terms of the
Mortgage  Loan;  the  Company  has not  advanced  its own funds,  or  induced,
solicited or  knowingly  received any advance of funds from a party other than
the owner of the  Mortgaged  Property  subject to the  Mortgage,  directly  or
indirectly, for the payment of any amount required by the Mortgage Loan. As of
the  related  Closing  Date,  all of the  Mortgage  Loans  will have an actual
interest paid to date of their related  Cut-off Date(or later) and will be due
for the scheduled monthly payment next succeeding the Cut-off Date (or later),
as evidenced by a posting to Company's servicing collection system. No payment
under any Mortgage Loan is  delinquent as of the related  Closing Date nor has
any  scheduled  payment  been  delinquent  at any time  during the twelve (12)
months prior to the month of the related  Closing  Date.  For purposes of this
paragraph,  a  Mortgage  Loan will be deemed  delinquent  if any  payment  due
thereunder was not paid by the Mortgagor in the month such payment was due;

      (d) There are no defaults by Company in complying  with the terms of the
Mortgage, and all taxes, governmental assessments,  insurance premiums, water,
sewer  and  municipal  charges,  leasehold  payments  or  ground  rents  which
previously  became  due and owing have been  paid,  or escrow  funds have been
established in an amount  sufficient to pay for every such escrowed item which
remains unpaid and which has been assessed but is not yet due and payable;

      (e) The  terms  of the  Mortgage  Note  and the  Mortgage  have not been
impaired,  waived,  altered  or  modified  in any  respect,  except by written
instruments  which have been  recorded to the extent any such  recordation  is
required by law, or,  necessary to protect the interest of the  Purchaser.  No
instrument of waiver,  alteration or modification  has been executed except in
connection with a modification  agreement and which modification  agreement is
part of the Mortgage  File and the terms of which are reflected in the related
Mortgage Loan  Schedule,  and no Mortgagor has been  released,  in whole or in
part, from the terms thereof except in connection with an assumption agreement
and which  assumption  agreement is part of the Mortgage File and the terms of
which are reflected in the related  Mortgage Loan  Schedule;  the substance of
any such waiver, alteration or modification has been approved by the issuer of
any related Primary Mortgage  Insurance Policy and title insurance  policy, to
the extent required by the related policies;

      (f) The  Mortgage  Note and the Mortgage are not subject to any right of
rescission,  set-off,  counterclaim or defense, including, without limitation,
the  defense  of  usury,  nor will the  operation  of any of the  terms of the
Mortgage Note or the Mortgage, or the exercise of any right thereunder, render
the Mortgage Note or Mortgage  unenforceable,  in whole or in part, or subject
to any right of rescission,  set-off,  counterclaim or defense,  including the
defense of usury,  and no such right of rescission,  set-off,  counterclaim or
defense has been asserted with respect thereto;  and as of the related Closing
Date the  Mortgagor  was not a debtor in any state or  federal  bankruptcy  or
insolvency proceeding;

      (g) All buildings or other  customarily  insured  improvements  upon the
Mortgaged Property are insured by a Qualified  Insurer,  against loss by fire,
hazards of extended coverage and such other hazards as are provided for in the
Fannie Mae or FHLMC Guide, as well as all additional requirements set forth in
Section 4.10 of this Agreement.  All such standard hazard policies are in full
force and effect and contain a standard  mortgagee  clause  naming the Company
and its  successors  in interest  and assigns as loss payee and such clause is
still in effect and all premiums  due thereon  have been paid.  If required by
the Flood Disaster  Protection  Act of 1973, as amended,  the Mortgage Loan is
covered by a flood  insurance  policy meeting the  requirements of the current
guidelines of the Federal  Insurance  Administration  which policy conforms to
Fannie Mae or FHLMC requirements,  as well as all additional  requirements set
forth in Section 4.10 of this Agreement. Such policy was issued by a Qualified
Insurer.  The Mortgage obligates the Mortgagor thereunder to maintain all such
insurance at the Mortgagor's cost and expense,  and on the Mortgagor's failure
to do so,  authorizes the holder of the Mortgage to maintain such insurance at
the Mortgagor's cost and expense and to seek  reimbursement  therefor from the
Mortgagor. Neither the Company (nor any prior originator or servicer of any of
the Mortgage Loans) nor any Mortgagor has engaged in any act or omission which
has impaired or would impair the coverage of any such policy,  the benefits of
the  endorsement  provided for herein,  or the validity and binding  effect of
either;

      (h) Any  and  all  requirements  of any  federal,  state  or  local  law
including, without limitation, usury, truth-in-lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity or disclosure
laws  applicable  to the Mortgage Loan have been complied with in all material
respects.  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 or (b) classified and/or defined as a "high
cost",  "covered", or "predatory" loan under any other state, federal or local
law or regulation or ordinance,  including,  but not limited to, the States of
Georgia and North  Carolina and the City of New York.  The Company  maintains,
and shall maintain,  evidence of such compliance as required by applicable law
or  regulation  and shall make such evidence  available for  inspection at the
Company's office during normal business hours upon reasonable advance notice;

      (i) The Mortgage has not been satisfied,  canceled or  subordinated,  in
whole  or in part,  or  rescinded,  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  release,  cancellation,
subordination or rescission. The Company has not waived the performance by the
Mortgagor  of any action,  if the  Mortgagor's  failure to perform such action
would cause the Mortgage Loan to be in default, nor has the Company waived any
default resulting from any action or inaction by the Mortgagor;

      (j) The Mortgage is a valid, subsisting, enforceable and perfected first
lien on the  Mortgaged  Property,  including  all  buildings on the  Mortgaged
Property and all installations and mechanical,  electrical,  plumbing, heating
and air  conditioning  systems affixed to such  buildings,  and all additions,
alterations  and  replacements  made at any time with respect to the foregoing
securing the Mortgage Note's original  principal balance subject to principles
of  equity,  bankruptcy,  insolvency  and other  laws of  general  application
affecting the rights of  creditors.  The Mortgage and the Mortgage Note do not
contain any  evidence  of any  security  interest  or other  interest or right
thereto.  Such  lien is free  and  clear  of all  adverse  claims,  liens  and
encumbrances  having priority over the first lien of the Mortgage subject only
to (1) the lien of non-delinquent  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 which are acceptable to mortgage lending institutions  generally and
either  (A) which are  referred  to in the  lender's  title  insurance  policy
delivered to the originator or otherwise  considered in the appraisal made for
the originator of the Mortgage Loan, or (B) which do not adversely  affect the
residential use or Appraised  Value of the Mortgaged  Property as set forth in
such  appraisal,  and (3) other matters to which like  properties are commonly
subject which do not  individually  or in the aggregate  materially  interfere
with the benefits of the  security  intended to be provided by the Mortgage or
the use, enjoyment,  value or marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in  connection  with the  Mortgage  Loan  establishes  and creates a
valid,  subsisting,  enforceable  and perfected  first lien and first priority
security interest on the property described  therein,  and the Company has the
full right to sell and assign the same to the Purchaser;

      (k) The Mortgage Note and the related  Mortgage are original and genuine
and each is the legal,  valid and  binding  obligation  of the maker  thereof,
enforceable in all respects in accordance with its terms subject to principles
of  equity,  bankruptcy,  insolvency  and other  laws of  general  application
affecting  the  rights of  creditors,  and the  Company  has taken all  action
necessary to transfer  such rights of  enforceability  to the  Purchaser.  All
parties to the Mortgage Note and the Mortgage had the legal  capacity to enter
into the Mortgage  Loan and to execute and deliver the  Mortgage  Note and the
Mortgage.  The Mortgage Loan  Documents are on forms  acceptable to Fannie Mae
and FHLMC.  The  Mortgage  Note and the  Mortgage  have been duly and properly
executed  by such  parties.  No  fraud,  error,  omission,  misrepresentation,
negligence  or similar  occurrence  with respect to a Mortgage  Loan has taken
place on the part of  Company  or the  Mortgagor,  or on the part of any other
party  involved in the  origination  or servicing of the  Mortgage  Loan.  The
proceeds  of the  Mortgage  Loan have  been  fully  disbursed  and 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 disbursements of
any escrow  funds  therefor  have been  complied  with.  All  costs,  fees and
expenses  incurred in making or closing the Mortgage Loan and the recording of
the Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;

      (l) The  Company is the sole owner and holder of the  Mortgage  Loan and
the indebtedness evidenced by the Mortgage Note. Upon the sale of the Mortgage
Loan to the  Purchaser,  the Company will retain the Mortgage File or any part
thereof with respect thereto not delivered to the Purchaser or the Purchaser's
designee  in trust  only for the  purpose of  servicing  and  supervising  the
servicing  of  the  Mortgage  Loan.  Immediately  prior  to the  transfer  and
assignment to the Purchaser,  the Mortgage  Loan,  including the Mortgage Note
and the  Mortgage,  were not subject to an  assignment,  sale or pledge to any
person other than Purchaser,  and the Company had good and marketable title to
and was the sole owner  thereof  and had full right to  transfer  and sell the
Mortgage  Loan to the  Purchaser  free and clear of any  encumbrance,  equity,
lien,  pledge,  charge,  claim or security interest and has the full right and
authority  subject to no interest or participation  of, or agreement with, any
other party,  to sell and assign the Mortgage Loan pursuant to this  Agreement
and  following  the sale of the Mortgage  Loan,  the  Purchaser  will own such
Mortgage  Loan  free  and  clear  of any  encumbrance,  equity,  participation
interest,  lien,  pledge,  charge,  claim or  security  interest.  The Company
intends to relinquish all rights to possess,  control and monitor the Mortgage
Loan,  except for the purposes of servicing  the Mortgage Loan as set forth in
this Agreement.  After the related Closing Date, the Company will not have any
right to modify or alter  the terms of the sale of the  Mortgage  Loan and the
Company will not have any  obligation or right to repurchase the Mortgage Loan
or substitute another Mortgage Loan, except as provided in this Agreement,  or
as otherwise agreed to by the Company and the Purchaser;

      (m) Each Mortgage Loan is covered by an ALTA  lender's  title  insurance
policy or other generally acceptable form of policy or insurance acceptable to
Fannie Mae or FHLMC  (including  adjustable  rate  endorsements),  issued by a
title  insurer  acceptable to Fannie Mae or FHLMC and qualified to do business
in the jurisdiction where the Mortgaged Property is located, insuring (subject
to the  exceptions  contained in (j)(1),  (2) and (3) above) the Company,  its
successors  and assigns,  as to the first priority lien of the Mortgage in the
original  principal amount of the Mortgage Loan and against any loss by reason
of  the  invalidity  or  unenforceability  of  the  lien  resulting  from  the
provisions of the Mortgage  providing for adjustment in the Mortgage  Interest
Rate and  Monthly  Payment.  Where  required by state law or  regulation,  the
Mortgagor has been given the opportunity to choose the carrier of the required
mortgage title insurance. The Company, its successors and assigns, is the sole
insured of such lender's title insurance  policy,  such title insurance policy
has been duly and validly  endorsed to the Purchaser or the  assignment to the
Purchaser of the Company's interest therein does not require the consent of or
notification  to the insurer and such lender's  title  insurance  policy is in
full  force  and  effect  and  will be in  full  force  and  effect  upon  the
consummation of the  transactions  contemplated  by this Agreement.  No claims
have been made under such lender's title insurance policy, and no prior holder
or servicer of the related Mortgage, including the Company, nor any Mortgagor,
has done, by act or omission, anything which would impair the coverage of such
lender's title insurance policy;

      (n) There is no  default,  breach,  violation  or event of  acceleration
existing  under the Mortgage or the related  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 permitting
acceleration;  and neither the Company, nor any prior mortgagee has waived any
default, breach, violation or event permitting acceleration;

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

      (p) All  improvements  subject to the Mortgage which were  considered in
determining  the appraised  value of the Mortgaged  Property lie wholly within
the boundaries and building  restriction lines of the Mortgaged  Property (and
wholly  within  the  project  with  respect  to a  condominium  unit)  and  no
improvements  on adjoining  properties  encroach upon the  Mortgaged  Property
except those which are insured against by the title insurance  policy referred
to in clause (m) above and all  improvements  on the property  comply with all
applicable zoning and subdivision laws and ordinances;

      (q) Each Mortgage Loan was originated by or for the Company pursuant to,
and conforms with, the Company's underwriting guidelines attached as Exhibit H
hereto. The Mortgage Loan bears interest at an adjustable rate (if applicable)
as set forth in the related Mortgage Loan Schedule, and Monthly Payments under
the  Mortgage  Note are due and  payable on the first day of each  month.  The
Mortgage  contains the usual and enforceable  provisions of the Company at the
time  of  origination  for  the  acceleration  of the  payment  of the  unpaid
principal  amount of the Mortgage  Loan if the related  Mortgaged  Property is
sold without the prior consent of the mortgagee thereunder;

      (r) The  Mortgaged  Property is not subject to any material  damage.  At
origination  of the  Mortgage  Loan there was not,  since  origination  of the
Mortgage Loan there has not been, and there currently is no proceeding pending
for the total or partial  condemnation of the Mortgaged Property.  The Company
has not  received  notification  that any such  proceedings  are  scheduled to
commence at a future date;

      (s) The related Mortgage contains  customary and enforceable  provisions
such as to render the rights and remedies of the holder  thereof  adequate for
the realization against the Mortgaged Property of the benefits of the security
provided  thereby,  including,  (1) in the case of a Mortgage  designated as a
deed of trust, by trustee's  sale, and (2) otherwise by judicial  foreclosure.
There is no homestead or other  exemption  available  to the  Mortgagor  which
would  interfere with the right to sell the Mortgaged  Property at a trustee's
sale or the right to foreclose the Mortgage;

      (t) If the Mortgage  constitutes a deed of trust, a trustee,  authorized
and duly qualified if required  under  applicable law to act as such, has been
properly designated and currently so serves and is named in the Mortgage,  and
no fees or  expenses,  except as may be  required  by local  law,  are or will
become payable by the Purchaser to the trustee under the deed of trust, except
in  connection  with a trustee's  sale or attempted  sale after default by the
Mortgagor;

      (u) The Mortgage  File  contains an  appraisal of the related  Mortgaged
Property  signed prior to the final approval of the mortgage loan  application
by a Qualified Appraiser, approved by the Company, who had no interest, direct
or  indirect,  in the  Mortgaged  Property or in any loan made on the security
thereof, and whose compensation is not affected by the approval or disapproval
of the  Mortgage  Loan,  and the  appraisal  and  appraiser  both  satisfy the
requirements  of Fannie Mae or FHLMC and Title XI of the Federal  Institutions
Reform,  Recovery, and Enforcement Act of 1989 and the regulations promulgated
thereunder, all as in effect on the date the Mortgage Loan was originated. The
appraisal is in a form acceptable to Fannie Mae or FHLMC;

      (v) All parties which have had any interest in the Mortgage,  whether as
mortgagee, assignee, pledgee or otherwise, are (or, during the period in which
they held and disposed of such interest,  were) (A) in compliance with any and
all  applicable  licensing  requirements  of the laws of the state wherein the
Mortgaged  Property is located,  and (B) (1) organized  under the laws of such
state,  or (2) qualified to do business in such state,  or (3) federal savings
and loan associations or national banks or a Federal Home Loan Bank or savings
bank having principal offices in such state, or (4) not doing business in such
state;

      (w) The  related  Mortgage  Note is not and has not been  secured by any
collateral  except the lien of the  corresponding  Mortgage  and the  security
interest of any applicable  security agreement or chattel mortgage referred to
above and such collateral does not serve as security for any other obligation;

      (x) The Mortgagor has received and has executed,  where applicable,  all
disclosure  materials required by applicable law with respect to the making of
such mortgage loans;

      (y) The Mortgage Loan does not contain  balloon or  "graduated  payment"
features;  No Mortgage Loan is subject to a buydown  agreement or contains any
buydown provision;

      (z)  The  Mortgagor  is not in  bankruptcy  and,  the  Mortgagor  is not
insolvent and the Company has no knowledge of any  circumstances or conditions
with respect to the  Mortgage,  the Mortgaged  Property,  the Mortgagor or the
Mortgagor's  credit  standing  that  could  reasonably  be  expected  to cause
investors to regard the Mortgage Loan as an unacceptable investment, cause the
Mortgage Loan to become delinquent,  or materially  adversely affect the value
or marketability of the Mortgage Loan;

      (aa) Each  Mortgage  Loan bears  interest  based upon a thirty  (30) day
month and a three hundred and sixty (360) day year. The Mortgage Loans have an
original  term to maturity of not more than thirty (30) years,  with  interest
payable in arrears on the first day of each month.  As to each adjustable rate
Mortgage Loan, on each applicable  Adjustment Date, the Mortgage Interest Rate
will be adjusted to equal the sum of the Index,  plus the  applicable  Margin;
provided, that the Mortgage Interest Rate, on each applicable Adjustment Date,
will not increase by more than the Initial  Rate Cap or Periodic  Rate Cap, as
applicable.  Over the term of each adjustable rate Mortgage Loan, the Mortgage
Interest Rate will not exceed such Mortgage  Loan's Lifetime Rate Cap. None of
the  Mortgage   Loans  are   "interest-only"   Mortgage   Loans  or  "negative
amortization"  Mortgage  Loans.  With respect to each adjustable rate Mortgage
Loan,  each Mortgage Note requires a monthly  payment which is sufficient  (a)
during the period prior to the first adjustment to the Mortgage Interest Rate,
to fully  amortize the  original  principal  balance  over the  original  term
thereof and to pay interest at the related  Mortgage  Interest  Rate,  and (b)
during the period  following  each  Adjustment  Date,  to fully  amortize  the
outstanding principal balance as of the first day of such period over the then
remaining  term of such  Mortgage  Note  and to pay  interest  at the  related
Mortgage  Interest Rate.  With respect to each  adjustable rate Mortgage Loan,
the Mortgage Note provides that when the Mortgage  Interest Rate changes on an
Adjustment  Date, the then outstanding  principal  balance will be reamortized
over the remaining  life of the Mortgage Loan. No Mortgage Loan contains terms
or  provisions  which  would  result  in  negative  amortization.  None of the
Mortgage  Loans  contain a conversion  feature  which would cause the Mortgage
Loan interest rate to convert to a fixed interest  rate.  None of the Mortgage
Loans are considered agricultural loans;

      (bb) (INTENTIONALLY LEFT BLANK)

      (cc) (INTENTIONALLY LEFT BLANK)

      (dd) (INTENTIONALLY LEFT BLANK)

      (ee) (INTENTIONALLY LEFT BLANK)

      (ff) (INTENTIONALLY LEFT BLANK)

      (gg) (INTENTIONALLY LEFT BLANK)

      (hh) In the event the Mortgage  Loan had an LTV at  origination  greater
than 80.00%,  the excess of the  principal  balance of the Mortgage  Loan over
75.0% of the  Appraised  Value of the  Mortgaged  Property  with  respect to a
Refinanced Mortgage Loan, or the lesser of the Appraised Value or the purchase
price of the Mortgaged Property with respect to a purchase money Mortgage Loan
was insured as to payment  defaults  by a Primary  Mortgage  Insurance  Policy
issued by a  Qualified  Insurer.  No  Mortgage  Loan has an LTV over 95%.  All
provisions of such Primary  Mortgage  Insurance Policy have been and are being
complied with,  such policy is in full force and effect,  and all premiums due
thereunder have been paid. No Mortgage Loan requires payment of such premiums,
in whole or in part,  by the  Purchaser.  No  action,  inaction,  or event has
occurred  and no  state  of facts  exists  that  has,  or will  result  in the
exclusion from,  denial of, or defense to coverage.  Any Mortgage Loan subject
to a Primary Mortgage  Insurance Policy obligates the Mortgagor  thereunder to
maintain the Primary Mortgage  Insurance Policy,  subject to state and federal
law, and to pay all premiums and charges in  connection  therewith.  No action
has been taken or failed to be taken,  on or prior to the  Closing  Date which
has  resulted or will result in an  exclusion  from,  denial of, or defense to
coverage  under any Primary  Mortgage  Insurance  Policy  (including,  without
limitation,  any  exclusions,  denials or defenses which would limit or reduce
the  availability  of the  timely  payment  of the  full  amount  of the  loss
otherwise  due  thereunder  to the  insured)  whether  arising out of actions,
representations, errors, omissions, negligence, or fraud of the Company or the
Mortgagor,  or for any other reason under such coverage; The mortgage interest
rate for the Mortgage Loan as set forth on the related  Mortgage Loan Schedule
is net of any such insurance  premium.  None of the Mortgage Loans are subject
to "lender-paid" mortgage insurance;

      (ii)  The  Assignment  is in  recordable  form  and  is  acceptable  for
recording under the laws of the  jurisdiction in which the Mortgaged  Property
is located;

      (jj)  None  of the  Mortgage  Loans  are  secured  by an  interest  in a
leasehold estate. The Mortgaged Property is located in the state identified in
the related  Mortgage  Loan  Schedule and consists of a single  parcel of real
property  with a  detached  single  family  residence  erected  thereon,  or a
townhouse, or a two-to four-family dwelling, or an individual condominium unit
in a condominium  project, or an individual unit in a planned unit development
or a de minimis planned unit development, provided, however, that no residence
or dwelling is a single parcel of real property with a  manufactured  home not
affixed to a permanent  foundation,  or a mobile home. Any condominium unit or
planned unit development conforms with the Company's underwriting  guidelines.
As of the date of origination,  no portion of any Mortgaged  Property was used
for commercial  purposes,  and since the  Origination  Date, no portion of any
Mortgaged Property has been, or currently is, used for commercial purposes;

      (kk)  Payments on the  Mortgage  Loan  commenced no more than sixty (60)
days after the funds were disbursed in connection  with the Mortgage Loan. The
Mortgage  Note  is  payable  on  the  first  day  of  each  month  in  monthly
installments  of principal and  interest,  which  installments  are subject to
change due to the adjustments to the Mortgage Interest Rate on each Adjustment
Date,  with interest  calculated and payable in arrears.  Each of the Mortgage
Loans will amortize fully by the stated  maturity date,  over an original term
of not more than thirty years from commencement of amortization;

      (ll) As of the Closing Date of the Mortgage Loan, the Mortgage  Property
was lawfully occupied under applicable law, and 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 and fire
underwriting  certificates,  have been made or obtained  from the  appropriate
authorities;

      (mm) There is no pending  action or  proceeding  directly  involving the
Mortgaged  Property in which  compliance with any  environmental  law, rule or
regulation is an issue;  there is no violation of any environmental  law, rule
or regulation with respect to the Mortgaged Property;  and the Company has not
received any notice of any environmental  hazard on the Mortgaged Property and
nothing further remains to be done to satisfy in full all requirements of each
such law, rule or regulation  constituting a prerequisite to use and enjoyment
of said property;

      (nn) The Mortgagor has not notified the Company,  and the Company has no
knowledge  of any  relief  requested  or allowed  to the  Mortgagor  under the
Soldiers' and Sailors' Civil Relief Act of 1940;

      (oo) No Mortgage Loan is a construction or rehabilitation  Mortgage Loan
or was made to facilitate the trade-in or exchange of a Mortgaged Property;

      (pp) The Mortgagor for each Mortgage Loan is a natural person;

      (qq) None of the Mortgage Loans are Co-op Loans;

      (rr) With respect to each  Mortgage  Loan that has a prepayment  penalty
feature,  each such prepayment  penalty is enforceable and will be enforced by
the  Company and each  prepayment  penalty is  permitted  pursuant to federal,
state and local law. No Mortgage  Loan will impose a prepayment  penalty for a
term in excess of five years from the date such Mortgage Loan was  originated.
Except as otherwise set forth on the Mortgage Loan  Schedule,  with respect to
each Mortgage Loan that contains a prepayment penalty, such prepayment penalty
is at least  equal to the lesser of (A) the  maximum  amount  permitted  under
applicable law and (B) six months  interest at the related  Mortgage  Interest
Rate on the amount prepaid in excess of 20% of the original  principal balance
of such Mortgage Loan;

      (ss) With respect to each Mortgage Loan either (i) the fair market value
of the Mortgaged Property securing such Mortgage Loan was at least equal to 80
percent of the original  principal  balance of such  Mortgage Loan at the time
such  Mortgage  Loan  was  originated  or (ii) (a) the  Mortgage  Loan is only
secured by the Mortgage  Property and (b) substantially all of the proceeds of
such  Mortgage Loan were used to acquire or to improve or protect the Mortgage
Property. For the purposes of the preceding sentence, if the Mortgage Loan has
been  significantly  modified  other  than  as  a  result  of a  default  or a
reasonable  foreseeable  default, the modified Mortgage Loan will be viewed as
having been originated on the date of the modification;

      (tt) The Mortgage  Loan was  originated  by a mortgagee  approved by the
Secretary of Housing and Urban Development pursuant to sections 203 and 211 of
the National  Housing Act, a savings and loan  association,  a savings bank, a
commercial bank, credit union,  insurance company or similar institution which
is supervised and examined by a federal or state authority;

      (uu) None of the Mortgage Loans are simple  interest  Mortgage Loans and
none of the Mortgaged Properties are timeshares;

      (vv) All of the  terms  of the  Mortgage  pertaining  to  interest  rate
adjustments,  payment adjustments and adjustments of the outstanding principal
balance  are  enforceable,  all such  adjustments  have  been  properly  made,
including the mailing of required  notices,  and such  adjustments  do not and
will not  affect the  priority  of the  Mortgage  lien.  With  respect to each
Mortgage  Loan which has passed  its  initial  Adjustment  Date,  Company  has
performed an audit of the Mortgage Loan to determine whether all interest rate
adjustments  have been made in accordance  with the terms of the Mortgage Note
and Mortgage; and

      (ww) Each Mortgage Note,  each Mortgage,  each  Assignment and any other
documents required pursuant to this Agreement to be delivered to the Purchaser
or its  designee,  or its assignee for each  Mortgage  Loan,  have been, on or
before the related  Closing Date,  delivered to the Purchaser or its designee,
or its assignee.

      Section 3.03      REPURCHASE; SUBSTITUTION.

      It is understood and agreed that the  representations and warranties set
forth in Sections 3.01 and 3.02 shall  survive the sale of the Mortgage  Loans
and delivery of the Mortgage Loan Documents to the Purchaser, or its designee,
and  shall  inure  to  the  benefit  of  the  Purchaser,  notwithstanding  any
restrictive or qualified endorsement on any Mortgage Note or Assignment or the
examination,  or lack of examination,  of any Mortgage File. Upon discovery by
either  the  Company  or the  Purchaser  of a breach  of any of the  foregoing
representations  and warranties  which  materially  and adversely  affects the
value of the Mortgage  Loans or the interest of the  Purchaser in any Mortgage
Loan,  the party  discovering  such breach shall give prompt written notice to
the other. The Company shall have a period of sixty (60) days from the earlier
of its  discovery or its receipt of notice of any such breach  within which to
correct or cure such breach.  The Company hereby  covenants and agrees that if
any such breach is not  corrected or cured  within such sixty day period,  the
Company shall, at the  Purchaser's  option and not later than ninety (90) days
of its  discovery  or its receipt of notice of such  breach,  repurchase  such
Mortgage Loan at the Repurchase  Price or, with the Purchaser's  prior consent
and at Purchaser's sole option,  substitute a Mortgage Loan as provided below.
In the event that any such breach shall involve any representation or warranty
set forth in Section 3.01, and such breach is not cured within sixty (60) days
of the earlier of either discovery by or notice to the Company of such breach,
all Mortgage Loans shall,  at the option of the  Purchaser,  be repurchased by
the Company at the Repurchase Price. Any such repurchase shall be accomplished
by wire transfer of immediately  available funds to Purchaser in the amount of
the Repurchase Price.

      If the Company is required to  repurchase  any Mortgage Loan pursuant to
this Section 3.03, the Company may, with the Purchaser's  prior consent and at
Purchaser's  sole  option,  within  ninety (90) days from the related  Closing
Date, remove such defective Mortgage Loan from the terms of this Agreement and
substitute  another mortgage loan for such defective Mortgage Loan, in lieu of
repurchasing  such defective  Mortgage  Loan. Any substitute  Mortgage Loan is
subject to Purchaser acceptability. Any substituted Loans will comply with the
representations  and  warranties  set  forth  in  this  Agreement  as  of  the
substitution date

      The Company  shall amend the related  Mortgage  Loan Schedule to reflect
the  withdrawal  of the  removed  Mortgage  Loan from this  Agreement  and the
substitution of such substitute  Mortgage Loan therefor.  Upon such amendment,
the Purchaser  shall review the Mortgage File  delivered to it relating to the
substitute  Mortgage  Loan.  In the  event  of  such a  substitution,  accrued
interest  on  the  substitute  Mortgage  Loan  for  the  month  in  which  the
substitution  occurs and any Principal  Prepayments  made thereon  during such
month shall be the  property of the  Purchaser  and accrued  interest for such
month  on the  Mortgage  Loan  for  which  the  substitution  is made  and any
Principal  Prepayments made thereon during such month shall be the property of
the Company.  The principal  payment on a substitute  Mortgage Loan due on the
Due Date in the month of substitution shall be the property of the Company and
the principal  payment on the Mortgage Loan for which the substitution is made
due on such date shall be the property of the Purchaser.

      For any month in which the Company is  permitted  to  substitute  one or
more substitute Mortgage Loans, the Company will determine the amount (if any)
by which the aggregate  Stated  Principal  Balance  (after  application of the
principal portion of all scheduled  payments due in the month of substitution)
of all the substitute Mortgage Loans in the month of substitution is less then
the aggregate  Stated  Principal  Balance (after  application of the principal
portion of the scheduled payment due in the month of substitution) of the such
replaced  Mortgage Loan. An amount equal to the aggregate of such deficiencies
described in the preceding sentence for any Remittance Date shall be deposited
into the Custodial Account by the Company on the related Determination Date in
the month following the calendar month during which the substitution occurred.

      It is understood and agreed that the obligation of the Company set forth
in this  Section  3.03 to  cure,  repurchase  or  substitute  for a  defective
Mortgage Loan, and to indemnify Purchaser pursuant to Section 8.01, constitute
the sole  remedies  of the  Purchaser  respecting  a breach  of the  foregoing
representations  and  warranties.  If  the  Company  fails  to  repurchase  or
substitute for a defective Mortgage Loan in accordance with this Section 3.03,
or  fails  to  cure  a  defective  Mortgage  Loan  to  Purchaser's  reasonable
satisfaction in accordance  with this Section 3.03, or to indemnify  Purchaser
pursuant to Section  8.01,  that failure  shall be an Event of Default and the
Purchaser shall be entitled to pursue all remedies available in this Agreement
as a result thereof. No provision of this paragraph shall affect the rights of
the Purchaser to terminate this Agreement for cause,  as set forth in Sections
10.01 and 11.01.

      Any cause of action  against the  Company  relating to or arising out of
the breach of any  representations  and  warranties  made in Sections 3.01 and
3.02 shall accrue as to any Mortgage Loan upon (i) the earlier of discovery of
such breach by the Company or notice  thereof by the Purchaser to the Company,
(ii) failure by the Company to cure such breach or  repurchase  such  Mortgage
Loan as specified  above,  and (iii) demand upon the Company by the  Purchaser
for compliance with this Agreement.

      In the event that any Mortgage Loan is held by a REMIC,  notwithstanding
any contrary  provision of this  Agreement,  with respect to any Mortgage Loan
that is not in default or as to which no default is imminent,  no substitution
pursuant to Subsection 3.03 shall be made after the applicable  REMIC's "start
up day" (as defined in Section  860G(a)  (9) of the Code),  unless the Company
has obtained an Opinion of Counsel to the effect that such  substitution  will
not (i) result in the imposition of taxes on "prohibited transactions" of such
REMIC (as defined in Section 860F of the Code) or otherwise  subject the REMIC
to tax, or (ii) cause the REMIC to fail to qualify as a REMIC at any time.

      Section 3.04      REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.

      The Purchaser  represents,  warrants and convenants to the Company that,
as of the  related  Closing  Date or as of  such  date  specifically  provided
herein:

      (a) The Purchaser is a corporation, dully organized validly existing and
in good  standing  under the laws of the State of Delaware and is qualified to
transact business in, is in good standing under the laws of, and possesses all
licenses necessary for the conduct of its business in, each state in which any
Mortgaged  Property is located or is otherwise  except or not  required  under
applicable law to effect such qualification or license;

      (b) The  Purchaser  has full power and  authority to hold each  Mortgage
Loan,  to purchase  each  Mortgage  Loan  pursuant to this  Agreement  and the
related Term Sheet and to execute,  deliver and perform, and to enter into and
consummate  all  transactions  contemplated  by this Agreement and the related
Term  Sheet and to conduct  its  business  as  presently  conducted,  has duly
authorized the execution,  delivery and  performance of this Agreement and the
related Term Sheet,  has duly  executed and delivered  this  Agreement and the
related Term Sheet;

      (c) None of the execution and delivery of this Agreement and the related
Term Sheet,  the  purchase of the  Mortgage  Loans,  the  consummation  of the
transactions contemplated hereby, or the fulfillment of or compliance with the
terms and  conditions  of this  Agreement  and the  related  Term  Sheet  will
conflict with any of the terms,  conditions  or provisions of the  Purchaser's
charter or by-laws or materially  conflict with or result in a material breach
of any of the terms,  conditions or provisions of any legal restriction or any
agreement or  instrument  to which the Purchaser 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  result  in  the  material  violation  of any  law,  rule,
regulation,  order,  judgment or decree to which the Purchaser or its property
is subject;

      (d) There is no  litigation  pending  or to the best of the  Purchaser's
knowledge, threatened with respect to the Purchaser which is reasonably likely
to have a material  adverse  effect on the  purchase of the  related  Mortgage
Loans,  the execution,  delivery or  enforceability  of this Agreement and the
related Term Sheet, or which is reasonably  likely to have a material  adverse
effect on the financial condition of the Purchaser;

      (e) No  consent,  approval,  authorization  or  order  of any  court  or
governmental  agency  or body is  required  for the  execution,  delivery  and
performance  by the  Purchaser of or  compliance  by the  Purchaser  with this
Agreement  and the related Term Sheet,  the purchase of the Mortgage  Loans or
the  consummation of the  transactions  contemplated by this Agreement and the
related Term Sheet except for consents,  approvals,  authorizations and orders
which have been obtained;

      (f) The consummation of the transactions  contemplated by this Agreement
and the  related  Term  Sheet is in the  ordinary  course of  business  of the
Purchaser;

      (h) The Purchaser will treat the purchase of the Mortgage Loans from the
Company as a purchase for reporting, tax and accounting purposes; and

      (i) The Purchaser does not believe, nor does it have any cause or reason
to believe,  that it cannot perform each and every of its covenants  contained
in this Agreement and the related Term Sheet.

      The Purchaser shall  indemnify the Company and hold it harmless  against
any claims,  proceedings,  losses,  damages,  penalties,  fines,  forfeitures,
reasonable and necessary  legal fees and related costs,  judgments,  and other
costs  and  expenses   resulting  from  a  breach  by  the  Purchaser  of  the
representations  and  warranties   contained  in  this  Section  3.04.  It  is
understood and agreed that the  obligations of the Purchaser set forth in this
Section 3.04 to indemnify the Seller as provided  herein  constitute  the sole
remedies of the Seller  respecting a breach of the  foregoing  representations
and warranties.


<PAGE>


                                   ARTICLE IV

                ADMINISTRATION AND SERVICING OF MORTGAGE LOANS

      Section 4.01      COMPANY TO ACT AS SERVICER.

      The  Company,  as  independent  contract  servicer,  shall  service  and
administer  the  Mortgage  Loans in  accordance  with this  Agreement  and the
related Term Sheet and with Accepted Servicing Practices,  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 Company
may  deem  necessary  or  desirable  and  consistent  with  the  terms of this
Agreement and the related Term Sheet and with Accepted Servicing Practices and
exercise the same care that it customarily employs for its own account. Except
as set forth in this  Agreement and the related Term Sheet,  the Company shall
service the Mortgage Loans in strict compliance with the servicing  provisions
of the Fannie Mae Guides (special  servicing option),  which include,  but are
not limited to,  provisions  regarding the liquidation of Mortgage Loans,  the
collection  of Mortgage  Loan  payments,  the payment of taxes,  insurance and
other charges,  the maintenance of hazard insurance with a Qualified  Insurer,
the maintenance of mortgage impairment insurance,  the maintenance of fidelity
bond and errors and  omissions  insurance,  inspections,  the  restoration  of
Mortgaged  Property,  the maintenance of Primary Mortgage Insurance  Policies,
insurance  claims,  the title,  management  and  disposition  of REO Property,
permitted  withdrawals with respect to REO Property,  liquidation reports, and
reports of foreclosures and abandonments of Mortgaged  Property,  the transfer
of Mortgaged Property,  the release of Mortgage Files, annual statements,  and
examination  of  records  and  facilities.  In  the  event  of  any  conflict,
inconsistency or discrepancy  between any of the servicing  provisions of this
Agreement  and the related Term Sheet and any of the  servicing  provisions of
the Fannie Mae Guides,  the  provisions of this Agreement and the related Term
Sheet shall control and be binding upon the Purchaser and the Company.

      Consistent  with the terms of this Agreement and the related Term Sheet,
the Company may 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  Company's  reasonable  and  prudent  determination  such
waiver, modification,  postponement or indulgence is not materially adverse to
the  Purchaser,  provided,  however,  that unless the Company has obtained the
prior  written  consent of the  Purchaser,  the  Company  shall not permit any
modification  with respect to any Mortgage Loan that would change the Mortgage
Interest  Rate,  defer for more than  ninety  days or forgive  any  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.  In the  event of any such  modification  which has been
agreed to in  writing by the  Purchaser  and which  permits  the  deferral  of
interest or principal payments on any Mortgage Loan, the Company shall, on the
Business Day  immediately  preceding the 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,  the
difference  between (a) such month's principal and one month's interest at the
Mortgage Loan Remittance Rate on the unpaid principal balance of such Mortgage
Loan and (b) the amount paid by the  Mortgagor.  The Company 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 Company 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 herein to the contrary, the
Company may not enter into a forbearance agreement or similar arrangement with
respect  to any  Mortgage  Loan  which runs more than 180 days after the first
delinquent Due Date. Any such agreement shall be approved by Purchaser and, if
required, by the Primary Mortgage Insurance Policy insurer, if required.

      Notwithstanding  anything  in this  Agreement  to the  contrary,  if any
Mortgage Loan becomes subject to a Pass-Through Transfer, the Company (a) with
respect to such Mortgage Loan, shall not permit any modification  with respect
to such  Mortgage  Loan that would change the Mortgage  Interest  Rate and (b)
shall not (unless the  Mortgagor is in default  with respect to such  Mortgage
Loan  or  such  default  is,  in  the  judgment  of  the  Company,  reasonably
foreseeable) make or permit any modification,  waiver or amendment of any term
of such  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 any 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 under the REMIC Provisions.

      Prior to taking any action with respect to the Mortgage Loans subject to
a Pass-Through  Transfer,  which is not  contemplated  under the terms of this
Agreement,  the Company  will obtain an Opinion of Counsel  acceptable  to the
trustee in such  Pass-Through  Transfer  with  respect to whether  such action
could  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)(either  such event,  an "Adverse REMIC Event"),  and the
Company  shall not take any such  actions as to which it has been advised that
an Adverse REMIC Event could occur.

      The Company shall not permit the creation of any "interests" (within the
meaning of Section 860G of the Code) in any REMIC. The Company shall not enter
into any arrangement by which a REMIC will receive a fee or other compensation
for  services  nor permit a 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.

      In servicing and  administering  the Mortgage  Loans,  the Company shall
employ  Accepted  Servicing   Practices,   giving  due  consideration  to  the
Purchaser's reliance on the Company.  Unless a different time period is stated
in this Agreement or the related Term Sheet, Purchaser shall be deemed to have
given consent in  connection  with a particular  matter if Purchaser  does not
affirmatively  grant or deny consent  within five (5)  Business  Days from the
date Purchaser  receives a second written  request for consent for such matter
from Company as servicer.

      The Mortgage  Loans may be subserviced by a Subservicer on behalf of the
Company  provided  that the  Subservicer  is an  entity  that  engages  in the
business  of  servicing  loans,  and in either  case  shall be  authorized  to
transact  business,  and licensed to service  mortgage  loans, in the state or
states where the related  Mortgaged  Properties it is to service are situated,
if and to the extent  required by applicable law to enable the  Subservicer to
perform its obligations hereunder and under the Subservicing Agreement, and in
either case shall be a FHLMC or Fannie Mae approved  mortgage servicer in good
standing, and no event has occurred,  including but not limited to a change in
insurance coverage,  which would make it unable to comply with the eligibility
requirements for lenders imposed by Fannie Mae or for seller/servicers imposed
by Fannie Mae or FHLMC,  or which would require  notification to Fannie Mae or
FHLMC.   In  addition,   each   Subservicer   will  obtain  and  preserve  its
qualifications  to do business as a foreign  corporation  and its  licenses to
service  mortgage  loans, in each  jurisdiction  in which such  qualifications
and/or  licenses  are or  shall be  necessary  to  protect  the  validity  and
enforceability of this Agreement,  or any of the Mortgage Loans and to perform
or cause to be performed its duties under the related Subservicing  Agreement.
The Company may perform any of its servicing responsibilities hereunder or may
cause the  Subservicer to perform any such servicing  responsibilities  on its
behalf,  but the use by the Company of the  Subservicer  shall not release the
Company from any of its  obligations  hereunder  and the Company  shall remain
responsible  hereunder for all acts and omissions of the  Subservicer as fully
as if such acts and omissions were those of the Company. The Company shall pay
all  fees  and  expenses  of the  Subservicer  from  its  own  funds,  and the
Subservicer's  fee shall not exceed the  Servicing  Fee.  Company shall notify
Purchaser promptly in writing upon the appointment of any Subservicer.

      At  the  cost  and  expense  of  the  Company,   without  any  right  of
reimbursement  from the  Custodial  Account,  the Company shall be entitled to
terminate the rights and  responsibilities  of the 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 Company,
at the Company's  option,  from electing to service the related Mortgage Loans
itself. In the event that the Company's responsibilities and duties under this
Agreement are terminated  pursuant to Section 4.13, 8.04, 9.01 or 10.01 and if
requested  to do so by the  Purchaser,  the Company  shall at its own cost and
expense terminate the rights and responsibilities of the Subservicer effective
as of the date of termination of the Company.  The Company shall pay all fees,
expenses  or  penalties  necessary  in  order  to  terminate  the  rights  and
responsibilities  of the  Subservicer  from the  Company's  own funds  without
reimbursement from the Purchaser.

      Notwithstanding  any of the  provisions  of this  Agreement  relating to
agreements  or  arrangements  between the Company and the  Subservicer  or any
reference  herein to actions taken through the  Subservicer or otherwise,  the
Company shall not be relieved of its obligations to the Purchaser 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 Company shall
be   entitled  to  enter  into  an   agreement   with  the   Subservicer   for
indemnification  of the Company by the  Subservicer  and nothing  contained in
this Agreement  shall be deemed to limit or modify such  indemnification.  The
Company will indemnify and hold Purchaser harmless from any loss, liability or
expense  arising  out  of its  use  of a  Subservicer  to  perform  any of its
servicing duties, responsibilities and obligations hereunder.

      Any  Subservicing  Agreement  and any  other  transactions  or  services
relating to the Mortgage Loans involving the Subservicer shall be deemed to be
between the  Subservicer  and Company alone,  and the Purchaser  shall have no
obligations,  duties or liabilities with respect to the Subservicer  including
no obligation,  duty or liability of Purchaser to pay the  Subservicer's  fees
and  expenses.  For  purposes  of  distributions  and  advances by the Company
pursuant to this  Agreement,  the Company  shall be deemed to have  received a
payment on a Mortgage Loan when the Subservicer has received such payment.

      Section 4.02      COLLECTION OF MORTGAGE LOAN PAYMENTS.

      Continuously  from the date  hereof  until the date each  Mortgage  Loan
ceases to be subject to this Agreement, the Company will proceed diligently to
collect all payments due under each  Mortgage  Loan when the same shall become
due and payable and shall, to the extent such  procedures  shall be consistent
with  this  Agreement,   Accepted  Servicing  Practices,  and  the  terms  and
provisions  of any related  Primary  Mortgage  Insurance  Policy,  follow such
collection  procedures as it follows with respect to mortgage loans comparable
to the Mortgage Loans and held for its own account.  Further, the Company will
take special care in ascertaining and estimating  annual escrow payments,  and
all other  charges  that,  as  provided in the  Mortgage,  will become due and
payable, so that the installments payable by the Mortgagors will be sufficient
to pay such charges as and when they become due and payable.

      In no event will the Company waive its right to any  prepayment  penalty
or premium without the prior written consent of Purchaser and Company will use
diligent efforts to collect same when due except as otherwise  provided in the
prepayment penalty provisions provided in the Mortgage Loan Documents.

      Section 4.03      REALIZATION UPON DEFAULTED MORTGAGE

      The Company shall use its best efforts,  consistent  with the procedures
that the Company would use in servicing loans for its own account,  consistent
with Accepted Servicing Practices, any Primary Mortgage Insurance Policies and
the best  interest of  Purchaser,  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.
Foreclosure or comparable  proceedings  shall be initiated  within ninety (90)
days  of  default  for  Mortgaged   Properties   for  which  no   satisfactory
arrangements  can be made for  collection of delinquent  payments,  subject to
state and federal law and  regulation.  The Company shall use its best efforts
to realize upon  defaulted  Mortgage Loans in such manner as will maximize the
receipt of principal and interest by the Purchaser, taking into account, among
other things, the timing of foreclosure proceedings.  The foregoing is subject
to the provisions  that, in any case in which a Mortgaged  Property shall have
suffered  damage,  the  Company  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 Purchaser after  reimbursement  to itself
for such  expenses,  and (ii) that such  expenses will be  recoverable  by the
Company through  Insurance  Proceeds or Liquidation  Proceeds from the related
Mortgaged  Property,  as  contemplated  in Section 4.05.  Company shall obtain
prior approval of Purchaser as to repair or restoration  expenses in excess of
ten thousand  dollars  ($10,000).  The Company  shall notify the  Purchaser in
writing of the  commencement  of foreclosure  proceedings  and not less than 5
days prior to the acceptance or rejection of any offer of  reinstatement.  The
Company shall be responsible for all costs and expenses  incurred by it in any
such proceedings or functions; provided, however, that it shall be entitled to
reimbursement  thereof from the related  property,  as contemplated 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 Company has reasonable cause to believe that a Mortgaged Property is
contaminated by hazardous or toxic  substances or wastes,  or if the Purchaser
otherwise  requests an  environmental  inspection or review of such  Mortgaged
Property,  such an  inspection  or review is to be  conducted  by a  qualified
inspector at the Purchaser's expense.  Upon completion of the inspection,  the
Company  shall  promptly  provide the Purchaser  with a written  report of the
environmental inspection. After reviewing the environmental inspection report,
the  Purchaser  shall  determine how the Company shall proceed with respect to
the Mortgaged Property.

      Notwithstanding anything to the contrary contained herein, the Purchaser
may, at the Purchaser's sole option,  terminate the Company as servicer of any
Mortgage Loan which becomes ninety (90) days or greater  delinquent in payment
of a scheduled  Monthly  Payment,  without payment of any termination fee with
respect thereto,  provided that the Company shall on the date said termination
takes  effect be  reimbursed  for any  unreimbursed  Monthly  Advances  of the
Company's funds made pursuant to Section 5.03 and any  unreimbursed  Servicing
Advances  and  Servicing  Fees in each  case  relating  to the  Mortgage  Loan
underlying  such  delinquent  Mortgage  Loan  notwithstanding  anything to the
contrary set forth in Section 4.05. In the event of any such termination,  the
provisions  of Section  11.01 hereof shall apply to said  termination  and the
transfer  of  servicing  responsibilities  with  respect  to  such  delinquent
Mortgage Loan to the Purchaser or its designee.

      In the event that a Mortgage  Loan becomes part of a REMIC,  and becomes
REO  Property,  such  property  shall be disposed of by the Company,  with the
consent of Purchaser as required pursuant to this Agreement,  before the close
of the third  taxable  year  following  the taxable year in which the Mortgage
Loan became an REO Property,  unless the Company provides to the trustee under
such REMIC an opinion  of counsel to the effect  that the  holding of such REO
Property  subsequent  to the close of the third  taxable  year  following  the
taxable  year in which the  Mortgage  Loan  became an REO  Property,  will not
result in the imposition of taxes on "prohibited  transactions"  as defined in
Section  860F of the Code,  or cause the  transaction  to fail to qualify as a
REMIC at any time that  certificates  are  outstanding.  Company shall manage,
conserve,   protect   and   operate   each   such   REO   Property   for   the
certificateholders  solely for the purpose of its prompt  disposition and sale
in a  manner  which  does  not  cause  such  property  to fail to  qualify  as
"foreclosure  property"  within the  meaning of Section  860F(a)(2)(E)  of the
Code,  or any "net  income  from  foreclosure  property"  which is  subject to
taxation  under the REMIC  provisions of the Code.  Pursuant to its efforts to
sell such  property,  the  Company  shall  either  itself or  through an agent
selected by Company, protect and conserve such property in the same manner and
to such an extent as is  customary  in the  locality  where such  property  is
located. Additionally, Company shall perform the tax withholding and reporting
related to Sections 1445 and 6050J of the Code.

      Section 4.04      ESTABLISHMENT  OF  CUSTODIAL  ACCOUNTS;  DEPOSITS  IN
                        CUSTODIAL ACCOUNTS.

      The Company 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.  The Custodial Account shall be an Eligible Account.  Funds shall be
deposited in the Custodial  Account  within 24 hours of receipt,  and shall at
all times be insured by the FDIC up to the FDIC insurance  limits,  or must be
invested in  Permitted  Investments  for the benefit of the  Purchaser.  Funds
deposited  in  the  Custodial  Account  may be  drawn  on by  the  Company  in
accordance  with Section 4.05. The creation of any Custodial  Account shall be
evidenced  by a letter  agreement  in the form shown in Exhibit B hereto.  The
original of such letter  agreement  shall be furnished to the Purchaser on the
Closing Date, and upon the request of any subsequent Purchaser.

      The Company shall deposit in the Custodial Account on a daily basis, and
retain therein the following  payments and collections  received or made by it
subsequent  to the Cut-off  Date,  or received by it prior to the Cut-off Date
but  allocable  to a period  subsequent  thereto,  other  than in  respect  of
principal  and  interest  on the  Mortgage  Loans due on or before the Cut-off
Date:

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

      (ii) all payments on account of interest on the Mortgage  Loans adjusted
to the Mortgage Loan Remittance Rate;

      (iii) all Liquidation Proceeds;

      (iv) any amounts  required to be deposited by the Company in  connection
with any REO Property  pursuant to Section 4.13 and in  connection  therewith,
the Company shall provide the Purchaser with written  detail  itemizing all of
such amounts;

      (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
the 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 which
are not  released to the  Mortgagor  in  accordance  with  Accepted  Servicing
Practices, the loan documents or applicable law;

      (vii) any Monthly Advances;

      (viii) with respect to each full or partial  Principal  Prepayment,  any
Prepayment  Interest  Shortfalls,  to the  extent of the  Company's  aggregate
Servicing Fee received with respect to the related Prepayment Period;

      (ix) any amounts  required to be  deposited  by the Company  pursuant to
Section 4.10 in connection  with the  deductible  clause in any blanket hazard
insurance  policy,  such deposit  shall be made from the  Company's own funds,
without reimbursement therefor; and

      (x) any  amounts  required  to be  deposited  in the  Custodial  Account
pursuant to Section 4.01, 4.13 or 6.02.

      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 late payment  charges
and  assumption  fees, to the extent  permitted by Section  6.01,  need not be
deposited by the Company in the Custodial Account.  Any interest paid on funds
deposited in the Custodial Account by the depository  institution shall accrue
to the benefit of the Company and the Company  shall be entitled to retain and
withdraw such interest  from the  Custodial  Account  pursuant to Section 4.05
(iv).  The Purchaser  shall not be  responsible  for any losses  suffered with
respect to investment of funds in the Custodial Account.


      Section 4.05      PERMITTED WITHDRAWALS FROM THE CUSTODIAL ACCOUNT.

      The Company may, from time to time,  withdraw from the Custodial Account
for the following purposes:

      (i) to make  payments to the  Purchaser in the amounts and in the manner
provided for in Section 5.01;

      (ii) to reimburse  itself for Monthly  Advances,  the Company's right to
reimburse  itself  pursuant to this  subclause  (ii) being  limited to amounts
received on the related Mortgage Loan which represent late collections (net of
the related Servicing Fees) of principal and/or interest  respecting which any
such  advance  was  made,  it  being  understood  that,  in the  case  of such
reimbursement, the Company's right thereto shall be prior to the rights of the
Purchaser, except that, where the Company is required to repurchase a Mortgage
Loan,  pursuant to Section  3.03,  the Company's  right to such  reimbursement
shall be subsequent to the payment to the  Purchaser of the  Repurchase  Price
pursuant  to such  Section  and all other  amounts  required to be paid to the
Purchaser with respect to such Mortgage Loan;

      (iii) to reimburse  itself for unreimbursed  Servicing  Advances and any
unpaid Servicing Fees(or REO  administration  fees described in Section 4.13),
the Company's right to reimburse  itself pursuant to this subclause (iii) with
respect  to  any  Mortgage  Loan  being  limited  to  related   proceeds  from
Liquidation   Proceeds,   Condemnation  Proceeds  and  Insurance  Proceeds  in
accordance  with the  relevant  provisions  of the  Fannie  Mae  Guides  or as
otherwise  set  forth in this  Agreement;  any  recovery  shall  be made  upon
liquidation of the REO Property;

      (iv) to pay to  itself  as part of its  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) the Servicing
Fee from that  portion of any payment or recovery as to interest  with respect
to a particular Mortgage Loan;

      (v) to pay to itself with  respect to each  Mortgage  Loan that has been
repurchased  pursuant  to Section  3.03 all amounts  received  thereon and not
distributed  as  of  the  date  on  which  the  related  repurchase  price  is
determined,

      (vi) to transfer funds to another  Eligible  Account in accordance  with
Section 4.09 hereof;

      (vii) to remove funds  inadvertently  placed in the Custodial Account by
the Company;

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

      (vii) to reimburse itself for Nonrecoverable  Advances to the extent not
reimbursed pursuant to clause (ii) or clause (iii).

      Section 4.06      ESTABLISHMENT OF ESCROW ACCOUNTS;  DEPOSITS IN ESCROW
ACCOUNTS.

      The Company 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.  The Escrow Account shall be an Eligible
Account.  Funds deposited in each Escrow Account shall at all times be insured
in a manner to provide maximum  insurance  under the insurance  limitations of
the FDIC, or must be invested in Permitted Investments. Funds deposited in the
Escrow Account may be drawn on by the Company in accordance with Section 4.07.
The creation of any Escrow Account shall be evidenced by a letter agreement in
the form shown in Exhibit C. The  original of such letter  agreement  shall be
furnished  to the  Purchaser  on the  Closing  Date,  and upon  request to any
subsequent purchaser.

      The Company shall  deposit in the Escrow  Account or Accounts on a daily
basis, and retain therein:

      (i) all Escrow Payments  collected on account of the Mortgage Loans, for
the purpose of effecting  timely  payment of any such items as required  under
the terms of this Agreement;

      (ii) all Insurance  Proceeds which are to be applied to the  restoration
or repair of any Mortgaged Property; and

      (iii) all Servicing  Advances for Mortgagors  whose Escrow  Payments are
insufficient to cover escrow disbursements.

      The  Company  shall make  withdrawals  from the Escrow  Account  only to
effect such payments as are required under this Agreement,  and for such other
purposes as shall be as set forth or in  accordance  with  Section  4.07.  The
Company  shall be entitled to retain any interest  paid on funds  deposited in
the Escrow  Account by the  depository  institution  other  than  interest  on
escrowed  funds required by law to be paid to the Mortgagor and, to the extent
required by law,  the  Company  shall pay  interest  on escrowed  funds to the
Mortgagor  notwithstanding  that the Escrow Account is non-interest bearing or
that interest paid thereon is  insufficient  for such purposes.  The Purchaser
shall not be responsible for any losses suffered with respect to investment of
funds in the Escrow Account.


      Section 4.07      PERMITTED WITHDRAWALS FROM ESCROW ACCOUNT.

      Withdrawals from the Escrow Account may be made by Company only:

      (i) to effect timely payments of ground rents, taxes, assessments, water
rates,  Primary Mortgage  Insurance Policy premiums,  if applicable,  fire and
hazard insurance premiums, condominium assessments and comparable items;

      (ii) to reimburse Company for any Servicing Advance made by Company 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 accordance with the terms
of this Agreement;

      (v) for application to restoration or repair of the Mortgaged Property;

      (vi) to pay to the Company,  or to the Mortgagor to the extent  required
by law, any interest paid on the funds deposited in the Escrow Account;

      (vii) to clear and terminate the Escrow  Account on the  termination  of
this Agreement.  As part of its servicing duties, the Company shall pay to the
Mortgagors interest on funds in 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; and

      (viii) to pay to the  Mortgagors  or other  parties  Insurance  Proceeds
deposited in accordance with Section 4.06.

      Section 4.0       PAYMENT OF TAXES, INSURANCE AND OTHER CHARGES;
                        MAINTENANCE OF PRIMARY MORTGAGE INSURANCE POLICIES;
                        COLLECTIONS THEREUNDER.

      With respect to each Mortgage Loan, the Company shall maintain  accurate
records reflecting the status of ground rents, taxes, assessments, water rates
and other charges  which are or may become a lien upon the Mortgaged  Property
and the  status of primary  mortgage  insurance  premiums  and 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  Company  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 Company
shall  determine  that any such payments are made by the Mortgagor at the time
they first become due. The Company 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.

      The  Company  will  maintain in full force and effect  Primary  Mortgage
Insurance Policies issued by a Qualified Insurer with respect to each Mortgage
Loan for  which  such  coverage  is herein  required.  Such  coverage  will be
terminated  only with the approval of Purchaser,  or as required by applicable
law or regulation.  The Company will not cancel or refuse to renew any Primary
Mortgage Insurance Policy in effect on the Closing Date that is required to be
kept in force  under this  Agreement  unless a  replacement  Primary  Mortgage
Insurance  Policy for such canceled or nonrenewed  policy is obtained from and
maintained  with a Qualified  Insurer.  The Company  shall not take any action
which would  result in  non-coverage  under any  applicable  Primary  Mortgage
Insurance  Policy of any loss which,  but for the actions of the Company 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 Company 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 Company shall obtain a replacement  Primary
Mortgage Insurance Policy as provided above.

      In connection  with its  activities as servicer,  the Company  agrees to
prepare  and  present,  on behalf of itself and the  Purchaser,  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 Company under any
Primary Mortgage Insurance Policy shall be deposited in the Custodial Account,
subject to withdrawal pursuant to Section 4.05.

      Section 4.09      TRANSFER OF ACCOUNTS.

      The Company may transfer the Custodial  Account or the Escrow Account to
a different  Eligible  Account from time to time.  Such transfer shall be made
only upon obtaining the prior written consent of the Purchaser,  which consent
will not be unreasonably withheld.

      Section 4.10      MAINTENANCE OF HAZARD INSURANCE.

      The Company shall cause to be maintained for each Mortgage Loan fire and
hazard  insurance  with  extended  coverage as is  acceptable to Fannie Mae or
FHLMC and 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 or (ii)  the  greater  of (a) the
outstanding  principal  balance of the Mortgage  Loan,  and (b) an amount such
that the proceeds  thereof shall be sufficient to prevent the Mortgagor and/or
the mortgagee  from becoming a co-insurer.  If required by the Flood  Disaster
Protection  Act of 1973, as amended,  each Mortgage Loan shall be covered by a
flood insurance policy meeting the  requirements of the current  guidelines of
the  Federal  Insurance  Administration  in effect with an  insurance  carrier
acceptable to Fannie Mae or FHLMC, 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 or (iii) the maximum  amount of insurance  which is  available  under the
Flood Disaster  Protection Act of 1973, as amended.  If at any time during the
term  of  the  Mortgage  Loan,  the  Company  determines  in  accordance  with
applicable law and pursuant to the Fannie Mae Guides that a Mortgaged Property
is  located  in a  special  flood  hazard  area  and is not  covered  by flood
insurance  or is covered in an amount  less than the  amount  required  by the
Flood Disaster  Protection  Act of 1973, as amended,  the Company shall notify
the related  Mortgagor  that the  Mortgagor  must obtain such flood  insurance
coverage,  and if said Mortgagor  fails to obtain the required flood insurance
coverage  within  forty-five  (45) days after such  notification,  the Company
shall  immediately force place the required flood insurance on the Mortgagor's
behalf. The Company 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,
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 Company under any such policies other than amounts to
be deposited in the Escrow Account and applied to the restoration or repair of
the  Mortgaged  Property or REO  Property,  or released  to the  Mortgagor  in
accordance  with  Accepted  Servicing  Practices,  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 Company of the Mortgagor or maintained on property  acquired in respect of
the  Mortgage  Loan,  other than  pursuant to this  Agreement,  the Fannie Mae
Guides or such  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  Company 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 Company.  The Company  shall not
interfere  with the  Mortgagor's  freedom  of choice in  selecting  either his
insurance  carrier or agent,  provided,  however,  that the Company  shall not
accept any such  insurance  policies  from  insurance  companies  unless  such
companies are Qualified Insurers.

      Section 4.11      MAINTENANCE OF MORTGAGE IMPAIRMENT INSURANCE POLICY.

      In the event that the Company shall obtain and maintain a blanket policy
issued by a Qualified  Insurer  insuring  against  hazard losses on all of the
Mortgage Loans, then, to the extent such policy provides coverage in an amount
equal to the amount required  pursuant to Section 4.10 and otherwise  complies
with all other  requirements of Section 4.10, it shall  conclusively be deemed
to have  satisfied  its  obligations  as set forth in Section  4.10,  it being
understood  and agreed that such policy may contain a  deductible  clause,  in
which case the  Company  shall,  in the event  that there  shall not have been
maintained  on the  related  Mortgaged  Property  or  REO  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 amount not
otherwise payable under the blanket policy because of such deductible  clause.
In  connection  with its  activities  as servicer of the Mortgage  Loans,  the
Company  agrees to prepare and  present,  on behalf of the  Purchaser,  claims
under any such blanket policy in a timely fashion in accordance with the terms
of such policy.  Upon request of the Purchaser,  the Company shall cause to be
delivered to the Purchaser a certified  true copy of such policy and shall use
its best efforts to obtain a statement from the insurer  thereunder  that such
policy shall in no event be terminated or materially  modified  without thirty
(30) days' prior written notice to the Purchaser.

      Section 4.12      FIDELITY BOND, ERRORS AND OMISSIONS INSURANCE.

      The Company shall maintain,  at its own expense, a blanket fidelity bond
and an errors  and  omissions  insurance  policy,  with  broad  coverage  with
responsible  companies on all officers,  employees or other persons  acting in
any  capacity  with  regard  to the  Mortgage  Loan to  handle  funds,  money,
documents and papers relating to the Mortgage Loan. The Fidelity Bond shall be
in the form of the Mortgage Banker's Blanket Bond and shall protect and insure
the Company against losses,  including forgery, theft,  embezzlement and fraud
of such persons.  The errors and omissions  insurance shall protect and insure
the Company  against  losses arising out of errors and omissions and negligent
acts of such persons.  Such errors and omissions  insurance shall also protect
and  insure the  Company  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 or errors and omissions  insurance  shall diminish
or relieve the Company  from its duties and  obligations  as set forth in this
Agreement. The minimum coverage under any such bond and insurance policy shall
be at least equal to the  corresponding  amounts required by Fannie Mae in the
Fannie Mae Guides. Upon request by the Purchaser, the Company shall deliver to
the  Purchaser  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 (30) days' prior written notice to the Purchaser.  The
Company shall notify the Purchaser within five (5) business days of receipt of
notice  that such  Fidelity  Bond or  insurance  policy  will be, or has been,
materially  modified or  terminated.  The  Purchaser  (or any party having the
status of Purchaser hereunder) and any subsidiary thereof and their successors
or assigns as their  interests  may appear must be named as loss payees on the
Fidelity  Bond and as additional  insured on the errors and omissions  policy.
Upon request by Purchaser,  Company shall provide  Purchaser with an insurance
certificate  certifying  coverage under this Section 4.12, and will provide an
update  to  such  certificate  upon  request,  or  upon  renewal  or  material
modification of coverage.

      Section 4.13      TITLE, MANAGEMENT AND DISPOSITION OF REO PROPERTY.

      In the  event  that  title to the  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 Purchaser or its  designee,  or in the event
the Purchaser or its designee 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 Company from an attorney  duly licensed to practice law in the
state where the REO  Property is located.  Any Person or Persons  holding such
title other than the Purchaser shall acknowledge in writing that such title is
being held as nominee for the benefit of the Purchaser.

      The Company shall notify the Purchaser in accordance with the Fannie Mae
Guides of each acquisition of REO Property upon such acquisition  (and, in any
event, shall provide notice of the consummation of any foreclosure sale within
three  (3)  Business  Days  of  the  date  Company  receives  notice  of  such
consummation), together with a copy of the drive by appraisal or brokers price
opinion  of  the  Mortgaged   Property   obtained  in  connection   with  such
acquisition,  and thereafter assume the  responsibility for marketing such REO
property in accordance  with Accepted  Servicing  Practices.  Thereafter,  the
Company  shall  continue  to provide  certain  administrative  services to the
Purchaser  relating to such REO Property as set forth in this Section 4.13. No
Servicing  Fee shall be assessed or otherwise  accrue on any REO Property from
and after the date on which it becomes an REO Property.

      The Company  shall,  either  itself or through an agent  selected by the
Company,  and in  accordance  with the  Fannie Mae  Guides  manage,  conserve,
protect  and  operate  each 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 Company  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 least monthly thereafter or more frequently as
required by the  circumstances.  The Company  shall make or cause to be made a
written report of each such inspection.  Such reports shall be retained in the
Mortgage  File and copies  thereof  shall be  forwarded  by the Company to the
Purchaser.

      The Company shall use its best efforts to dispose of the REO Property as
soon as possible and shall sell such REO Property in any event within one year
after  title  has  been  taken  to  such  REO  Property,  unless  the  Company
determines,  and gives an appropriate  notice to the Purchaser to such effect,
that a longer  period is  necessary  for the orderly  liquidation  of such REO
Property.  If a  longer  period  than  one (1)  year is  permitted  under  the
foregoing  sentence  and is necessary  to sell any REO  Property,  the Company
shall report monthly to the Purchaser as to the progress being made in selling
such REO  Property.  No REO  Property  shall  be  marketed  for less  than the
Appraised Value, without the prior consent of Purchaser. No REO Property shall
be sold for less  than  ninety  five  percent  (95%) of its  Appraised  Value,
without the prior  consent of  Purchaser.  All requests for  reimbursement  of
Servicing  Advances  shall be in  accordance  with the Fannie Mae Guides.  The
disposition of REO Property shall be carried out by the Company at such price,
and upon such terms and  conditions,  as the  Company  deems to be in the best
interests of the  Purchaser  (subject to the above  conditions)  only with the
prior written consent of the Purchaser.  Company shall provide monthly reports
to  Purchaser  in  reference  to the  status  of  the  marketing  of  the  REO
Properties.

      Notwithstanding anything to the contrary contained herein, the Purchaser
may, at the Purchaser's sole option,  terminate the Company as servicer of any
such REO Property without payment of any termination fee with respect thereto,
provided that the Company shall on the date said  termination  takes effect be
reimbursed for any unreimbursed  advances of the Company's funds made pursuant
to Section 5.03 and any unreimbursed  Servicing Advances and Servicing Fees in
each  case  relating  to  the  Mortgage  Loan  underlying  such  REO  Property
notwithstanding  anything to the  contrary set forth in Section  4.05.  In the
event of any such  termination,  the  provisions of Section 11.01 hereof shall
apply to said termination and the transfer of servicing  responsibilities with
respect to such REO  Property to the  Purchaser or its  designee.  Within five
Business Days of any such termination,  the Company shall, if necessary convey
such property to the Purchaser  and shall further  provide the Purchaser  with
the following  information  regarding  the subject REO  Property:  the related
drive by  appraisal  or  brokers  price  opinion,  and  copies of any  related
Mortgage Impairment Insurance Policy claims. In addition, within five Business
Days, the Company shall provide the Purchaser  with the following  information
and documents  regarding the subject REO Property:  the related trustee's deed
upon sale and copies of any related hazard insurance claims, or repair bids.

      Section 4.1      NOTIFICATION OF MATURITY DATE.

      With  respect to each  Mortgage  Loan,  the  Company  shall  execute and
deliver  to the  Mortgagor  any  and  all  necessary  notices  required  under
applicable  law and the  terms  of the  related  Mortgage  Note  and  Mortgage
regarding the maturity date if required under applicable law.

                                    ARTICLE V

                            PAYMENTS TO THE PURCHASER

      Section 5.01      DISTRIBUTIONS.

      On each Remittance  Date, the Company shall  distribute by wire transfer
of immediately  available  funds to the Purchaser (i) all amounts  credited to
the  Custodial   Account  as  of  the  close  of  business  on  the  preceding
Determination  Date, net of charges against or withdrawals  from the Custodial
Account  pursuant to Section  4.05,  plus (ii) all Monthly  Advances,  if any,
which the Company is obligated to distribute  pursuant to Section 5.03,  plus,
(iii)  interest  at  the  Mortgage  Loan  Remittance  Rate  on  any  Principal
Prepayment from the date of such Principal  Prepayment  through the end of the
month for which disbursement is made provided that the Company's obligation as
to payment of such  interest  shall be  limited  to the  Servicing  Fee earned
during the month of the distribution,  minus (iv) any amounts  attributable to
Monthly  Payments  collected but due on a Due Date or Dates  subsequent to the
preceding   Determination  Date,  which  amounts  shall  be  remitted  on  the
Remittance  Date  next  succeeding  the Due  Period  for such  amounts.  It is
understood  that,  by operation of Section 4.04,  the  remittance on the first
Remittance  Date with  respect to  Mortgage  Loans  purchased  pursuant to the
related Term Sheet is to include  principal  collected  after the Cut-off Date
through  the  preceding  Determination  Date plus  interest,  adjusted  to the
Mortgage  Loan  Remittance  Rate  collected  through such  Determination  Date
exclusive of any portion thereof  allocable to the period prior to the Cut-off
Date, with the adjustments specified in clauses (ii), (iii) and (iv) above.

      With  respect to any  remittance  received  by the  Purchaser  after the
Remittance  Date, the Company shall pay to the Purchaser  interest on any such
late  payment at an annual  rate equal to the Prime  Rate,  adjusted as of the
date of each change, plus three (3) percentage points, but in no event greater
than the maximum amount permitted by applicable law. Such interest shall cover
the period commencing with the day following the Business Day such payment was
due and ending  with the  Business  Day on which  such  payment is made to the
Purchaser,  both  inclusive.  The payment by the Company of any such  interest
shall not be deemed an  extension of time for payment or a waiver of any Event
of Default by the Company.  On each Remittance Date, the Company shall provide
a remittance  report  detailing  all amounts being  remitted  pursuant to this
Section 5.01.

      Section 5.02      STATEMENTS TO THE PURCHASER.

      The Company  shall furnish to Purchaser an  individual  loan  accounting
report,  as of the last Business Day of each month, in the Company's  assigned
loan number order to document  Mortgage Loan payment activity on an individual
Mortgage Loan basis. With respect to each month, the corresponding  individual
loan  accounting  report shall be received by the  Purchaser no later than the
fifth  Business  Day  of the  following  month  on a disk  or  tape  or  other
computer-readable format in such format as may be mutually agreed upon by both
Purchaser  and  Company,  and no later  than  the  fifth  Business  Day of the
following month in hard copy, and shall contain the following:

      (i) With respect to each Monthly Payment,  the amount of such remittance
allocable  to  principal  (including  a separate  breakdown  of any  Principal
Prepayment,  including  the  date  of  such  prepayment,  and  any  prepayment
penalties or premiums,  along with a detailed  report of interest on principal
prepayment amounts remitted in accordance with Section 4.04);

      (ii) with respect to each Monthly Payment, the amount of such remittance
allocable to interest;

      (iii) the  amount of  servicing  compensation  received  by the  Company
during the prior distribution period;

      (iv) the aggregate Stated Principal Balance of the Mortgage Loans;

      (v) the aggregate of any expenses  reimbursed to the Company  during the
prior distribution period pursuant to Section 4.05;

      (vi) The number and aggregate outstanding principal balances of Mortgage
Loans  (a)  delinquent  (1) 30 to 59 days,  (2) 60 to 89 days,  (3) 90 days or
more;  (b) as to which  foreclosure  has  commenced;  and (c) as to which  REO
Property has been acquired; and

      The Company shall also provide a trial  balance,  sorted in  Purchaser's
assigned  loan number order,  in the form of Exhibit E hereto,  with each such
Report.

      The Company shall prepare and file any and all information statements or
other filings required to be delivered to any governmental taxing authority or
to Purchaser pursuant to any applicable law with respect to the Mortgage Loans
and the  transactions  contemplated  hereby.  In addition,  the Company  shall
provide  Purchaser with such  information  concerning the Mortgage Loans as is
necessary for Purchaser to prepare its federal  income tax return as Purchaser
may reasonably request from time to time.

      In  addition,  not more  than  sixty  (60)  days  after  the end of each
calendar year, the Company shall furnish to each Person who was a Purchaser at
any time during such calendar year an annual  statement in accordance with the
requirements  of  applicable  federal  income tax law as to the  aggregate  of
remittances for the applicable portion of such year.


<PAGE>


      Section 5.03      MONTHLY ADVANCES BY THE COMPANY.

      Not later than the close of business on the Business Day preceding  each
Remittance Date, the Company shall deposit in the Custodial  Account an amount
equal to all payments not previously  advanced by the Company,  whether or not
deferred  pursuant to Section 4.01, of principal  (due after the Cut-off Date)
and interest not allocable to the period prior to the Cut-off  Date,  adjusted
to the Mortgage Loan  Remittance  Rate,  which were due on a Mortgage Loan and
delinquent at the close of business on the related Determination Date.

      The  Company'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 Remittance  Date prior to
the date on which  the  Mortgaged  Property  liquidates  (including  Insurance
Proceeds,  proceeds  from the sale of REO Property or  Condemnation  Proceeds)
with respect to the Mortgage  Loan unless the Company deems such advance to be
a  Nonrecoverable  Advance.  In such event,  the Company  shall deliver to the
Purchaser  an  Officer's  Certificate  of the  Company to the  effect  that an
officer of the Company has reviewed the related Mortgage File and has made the
reasonable determination that any additional advances are nonrecoverable.

      Section 5.04      LIQUIDATION REPORTS.

      Upon the foreclosure  sale of any Mortgaged  Property or the acquisition
thereof by the  Purchaser  pursuant  to a  deed-in-lieu  of  foreclosure,  the
Company  shall submit to the  Purchaser a  liquidation  report with respect to
such  Mortgaged  Property  in  a  form  mutually  acceptable  to  Company  and
Purchaser.  The  Company  shall  also  provide  reports  on the  status of REO
Property containing such information as Purchaser may reasonably require.

      Section 5.05      PREPAYMENT INTEREST SHORTFALLS.

      Not later than the close of business on the Business Day preceding  each
Remittance  Date in the month  following the related  Prepayment  Period,  the
Company  shall  deposit  in the  Custodial  Account  an  amount  equal  to any
Prepayment Interest  Shortfalls with respect to such Prepayment Period,  which
in the  aggregate  shall not  exceed the  Company's  aggregate  Servicing  Fee
received with respect to the related Due Period.

                                   ARTICLE VI

                          GENERAL SERVICING PROCEDURES

      Section 6.01      ASSUMPTION AGREEMENTS.

      The Company will,  to the extent it has  knowledge of any  conveyance or
prospective  conveyance by any Mortgagor of the 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 Company  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 Company  reasonably  believes it is
unable under applicable law to enforce such "due-on-sale" clause, the Company,
with the approval of the  Purchaser,  will 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.  Where an assumption is allowed pursuant to
this Section  6.01,  the Company,  with the prior consent of the Purchaser and
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
Company shall follow the underwriting practices and procedures of the Company.
With respect to an  assumption  or  substitution  of  liability,  the Mortgage
Interest Rate borne by the related  Mortgage  Note,  the amount of the Monthly
Payment and the maturity date may not be changed (except pursuant to the terms
of the Mortgage Note). If the credit of the proposed  transferee does not meet
such  underwriting  criteria,  the  Company  diligently  shall,  to the extent
permitted  by the  Mortgage  or the  Mortgage  Note  and  by  applicable  law,
accelerate  the maturity of the Mortgage  Loan.  The Company  shall notify the
Purchaser that any such substitution of liability or assumption  agreement has
been  completed  by  forwarding  to the  Purchaser  the  original  of any such
substitution  of liability 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. All fees collected by the Company for
entering into an  assumption  or  substitution  of liability  agreement  shall
belong to the Company.

      Notwithstanding  the  foregoing  paragraphs of this Section or any other
provision of this Agreement, the Company 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
Company 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
                        FILES.

      Upon the  payment in full of any  Mortgage  Loan,  or the receipt by the
Company of a  notification  that  payment in full will be escrowed in a manner
customary for such purposes, the Company will immediately notify the Purchaser
by a  certification,  which  certification  shall  include a statement  to the
effect that all amounts  received  or to be received in  connection  with such
payment which are required to be deposited in the Custodial  Account  pursuant
to Section 4.04 have been or will be so deposited,  of a Servicing Officer and
shall  request  delivery to it of the portion of the Mortgage File held by the
Purchaser.  The Purchaser shall no later than five Business Days after receipt
of such  certification  and  request,  release or cause to be  released to the
Company,  the related  Mortgage Loan  Documents  and, upon its receipt of such
documents, the Company shall promptly prepare and deliver to the Purchaser the
requisite  satisfaction  or  release.  No later  than five (5)  Business  Days
following its receipt of such  satisfaction  or release,  the Purchaser  shall
deliver, or cause to be delivered,  to the Company the release or satisfaction
properly  executed  by the owner of record of the  applicable  mortgage or its
duly appointed  attorney in fact. 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 Company 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  Purchaser  may have under the mortgage
instruments,  the  Company,  upon written  demand,  shall remit within two (2)
Business Days to the Purchaser the then outstanding  principal  balance of the
related Mortgage Loan by deposit thereof in the Custodial Account. The Company
shall maintain the Fidelity Bond and errors and omissions  insurance  insuring
the Company  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 Loan,  including for the purpose of collection  under any Primary
Mortgage  Insurance  Policy,  the Purchaser shall, upon request of the Company
and  delivery to the  Purchaser of a servicing  receipt  signed by a Servicing
Officer, release the portion of the Mortgage File held by the Purchaser to the
Company.  Such  servicing  receipt  shall  obligate  the Company to return the
related  Mortgage  documents to the  Purchaser  when the need  therefor by the
Company 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 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 Company has  delivered to the Purchaser 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.  Upon  receipt of a  certificate  of a  Servicing
Officer stating that such Mortgage Loan was liquidated,  the servicing receipt
shall be released by the Purchaser to the Company.

      Section 6.03      SERVICING COMPENSATION.

      As  compensation  for its  services  hereunder,  the  Company  shall  be
entitled to  withdraw  from the  Custodial  Account (to the extent of interest
payments  collected on the Mortgage Loans) or to retain from interest payments
collected on the Mortgage  Loans,  the amounts  provided for as the  Company's
Servicing  Fee,  subject to  payment of  compensating  interest  on  Principal
Prepayments  as capped by the  Servicing  Fee  pursuant to Section 5.01 (iii).
Additional servicing  compensation in the form of assumption fees, as provided
in Section 6.01,  and late payment  charges or otherwise  shall be retained by
the  Company to the extent  not  required  to be  deposited  in the  Custodial
Account.  No Servicing Fee shall be payable in connection with partial Monthly
Payments.  The Company 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  Company  will  deliver  to the  Purchaser  not  later  than 90 days
following the end of each fiscal year of the Company  beginning in March 2004,
an Officers'  Certificate  stating,  as to each signatory thereof,  that (i) a
review of the activities of the Company during the preceding calendar 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 Company has fulfilled all of its obligations under this Agreement
throughout  such year,  or, if there has been a default in the  fulfillment of
any such  obligation,  specifying each such default known to such officers and
the nature and status of cure  provisions  thereof.  Copies of such  statement
shall be provided by the Company to the Purchaser upon request.

      Section 6.05      ANNUAL  INDEPENDENT  CERTIFIED  PUBLIC  ACCOUNTANTS'
                        SERVICING REPORT.

      Within ninety (90) days of Company's  fiscal year end beginning in March
2004,  the Company at its expense  shall  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  Purchaser to the effect that such
firm has examined  certain  documents  and records  relating to the  Company's
servicing of mortgage loans of the same type as the Mortgage Loans pursuant to
servicing agreements substantially similar to this Agreement, which agreements
may include this  Agreement,  and that,  on the basis of such an  examination,
conducted  substantially  in the uniform  single  audit  program for  mortgage
bankers,  such firm is of the opinion that the  Company's  servicing  has been
conducted in compliance with the agreements  examined pursuant to this Section
6.05,  except  for (i)  such  exceptions  as such  firm  shall  believe  to be
immaterial,  and (ii)  such  other  exceptions  as shall be set  forth in such
statement.  Copies of such  statement  shall be provided by the Company to the
Purchaser.  In addition,  on an annual basis, Company shall provided Purchaser
with copies of its audited financial statements.

      Section 6.06      PURCHASER'S RIGHT TO EXAMINE COMPANY RECORDS.

      The Purchaser  shall have the right to examine and audit upon reasonable
notice to the Company,  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 Company, or held by another
for  the  Company  or on  its  behalf  or  otherwise,  which  relates  to  the
performance or observance by the Company of the terms, covenants or conditions
of this Agreement.

      The Company shall provide to the Purchaser and any supervisory agents or
examiners   representing  a  state  or  federal   governmental  agency  having
jurisdiction  over the  Purchaser,  including but not limited to OTS, FDIC and
other similar  entities,  access to any  documentation  regarding the Mortgage
Loans in the possession of the Company 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 Company,  and
in  accordance  with the FDIC,  OTS,  or any other  similar  federal  or state
regulations, as applicable.

                                   ARTICLE VII

                       REPORTS TO BE PREPARED BY SERVICER

      Section 7.01      COMPANY  SHALL  PROVIDE  INFORMATION  AS  REASONABLY
                        REQUIRED.

      The  Company  shall  furnish  to the  Purchaser  during the term of this
Agreement,   such  periodic,   special  or  other   reports,   information  or
documentation,  whether or not  provided  for herein,  as shall be  necessary,
reasonable or appropriate in respect to the Purchaser, or otherwise in respect
to the Mortgage Loans and the performance of the Company under this Agreement,
including any reports,  information or  documentation  reasonably  required to
comply with any regulations  regarding any supervisory  agents or examiners of
the  Purchaser  all such  reports or  information  to be as provided by and in
accordance with such applicable  instructions  and directions as the Purchaser
may reasonably request in relation to this Agreement or the performance of the
Company under this  Agreement.  The Company  agrees to execute and deliver all
such instruments and take all such action as the Purchaser, from time to time,
may reasonably request in order to effectuate the purpose and to carry out the
terms of this Agreement.

      In connection with marketing the Mortgage Loans,  the Purchaser may make
available to a  prospective  purchaser  audited  financial  statements  of the
Company for the most  recently  completed  two (2) fiscal years for which such
statements are available,  as well as a Consolidated Statement of Condition at
the end of the last two (2) fiscal years covered by any Consolidated Statement
of  Operations.  If it has not  already  done so, the  Company  shall  furnish
promptly to the Purchaser or a prospective  purchaser copies of the statements
specified above.

      The Company  shall make  reasonably  available  to the  Purchaser or any
prospective Purchaser a knowledgeable  financial or accounting officer for the
purpose of  answering  questions  and to permit any  prospective  purchaser to
inspect the Company's servicing  facilities for the purpose of satisfying such
prospective purchaser that the Company has the ability to service the Mortgage
Loans as provided in this Agreement.


<PAGE>


                                  ARTICLE VIII

                                  THE SERVICER

      Section 8.01      INDEMNIFICATION; THIRD PARTY CLAIMS.

      The  Company  agrees to  indemnify  the  Purchaser  and hold it harmless
against any and all claims, losses, damages,  penalties,  fines,  forfeitures,
legal  fees and  related  costs,  judgments,  and any  other  costs,  fees and
expenses  that the  Purchaser may sustain in any way related to the failure of
the Company to observe and perform  its duties,  obligations,  covenants,  and
agreements to service the Mortgage Loans in strict  compliance  with the terms
of this  Agreement.  The Company agrees to indemnify the Purchaser and hold it
harmless  against  any and all  claims,  losses,  damages,  penalties,  fines,
forfeitures,  legal fees and related  costs,  judgments,  and any other costs,
fees and expenses  that the  Purchaser  may sustain in any way from any claim,
demand,  defense or assertion based on or grounded upon, or resulting from any
assertion based on, grounded upon or resulting from a breach or alleged breach
of any of the representation or warranty set forth in Sections 3.01 or 3.02 of
this Agreement.  The Company shall immediately notify the Purchaser if a claim
is made by a third party against Company with respect to this Agreement or the
Mortgage Loans,  assume (with the consent of the Purchaser) the defense of any
such claim and pay all expenses in  connection  therewith,  including  counsel
fees,  whether or not such claim is settled  prior to  judgment,  and promptly
pay, discharge and satisfy any judgment or decree which may be entered against
it or the  Purchaser  in respect of such claim.  The Company  shall follow any
written  instructions  received  from the  Purchaser in  connection  with such
claim.  The  Purchaser  shall  promptly  reimburse the Company for all amounts
advanced by it pursuant to the two preceding  sentences  except when the claim
relates to the failure of the Company to service and  administer the Mortgages
in  strict  compliance  with  the  terms  of this  Agreement,  the  breach  of
representation  or  warranty  set  forth  in  Sections  3.01 or  3.02,  or the
negligence, bad faith or willful misconduct of Company. The provisions of this
Section 8.01 shall survive termination of this Agreement.

      Section 8.02      MERGER OR CONSOLIDATION OF THE COMPANY.

      The  Company  will  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 Company may be merged or consolidated,  or any
corporation  resulting from any merger,  conversion or  consolidation to which
the Company shall be a party, or any Person  succeeding to the business of the
Company  whether or not related to loan  servicing,  shall be the successor of
the Company  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,  SAIF and/or
BIF,  and which is a  HUD-approved  mortgagee  whose  primary  business  is in
origination  and  servicing of first lien mortgage  loans,  and (iii) who is a
Fannie Mae or FHLMC approved seller/servicer in good standing.

      Section 8.03      LIMITATION ON LIABILITY OF THE COMPANY AND OTHERS.

      Neither the Company nor any of the officers,  employees or agents of the
Company  shall be under any liability to the Purchaser 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 Company 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
negligence,  bad faith or willful  misconduct,  or any breach of the terms and
conditions of this Agreement.  The Company and any officer,  employee or agent
of the Company may rely in good faith on any  document of any kind prima facie
properly  executed  and  submitted  by the  Purchaser  respecting  any matters
arising hereunder. The Company 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
reasonable  opinion may involve it in any  expenses  or  liability;  provided,
however,  that the Company may, with the consent of the  Purchaser,  undertake
any such action  which it may deem  necessary  or desirable in 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 Purchaser
will be liable,  and the Company shall be entitled to be  reimbursed  therefor
from the Purchaser upon written demand.

      Section 8.04      COMPANY NOT TO ASSIGN OR RESIGN.

      The  Company  shall  not  assign  this  Agreement  or  resign  from  the
obligations  and duties hereby  imposed on it except by mutual  consent of the
Company and the Purchaser or upon the determination  that its duties hereunder
are no longer  permissible  under applicable law and such incapacity cannot be
cured by the Company. Any such determination permitting the resignation of the
Company  shall be evidenced by an Opinion of Counsel to such effect  delivered
to the  Purchaser  which  Opinion  of Counsel  shall be in form and  substance
acceptable to the Purchaser.  No such resignation shall become effective until
a successor shall have assumed the Company's  responsibilities and obligations
hereunder in the manner provided in Section 11.01.

      Section 8.05      NO TRANSFER OF SERVICING.

      With  respect to the  retention  of the Company to service the  Mortgage
Loans  hereunder,  the Company  acknowledges  that the  Purchaser has acted in
reliance upon the Company'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 Company 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  Purchaser,  which consent shall be granted or withheld in the
Purchaser's sole discretion.

      Without in any way limiting the  generality of this Section 8.05, in the
event that the Company  either  shall assign this  Agreement or the  servicing
responsibilities  hereunder  or delegate  its duties  hereunder or any portion
thereof without (i) satisfying the  requirements  set forth herein or (ii) the
prior written  consent of the  Purchaser,  then the  Purchaser  shall have the
right to  terminate  this  Agreement,  without  any  payment of any penalty or
damages and without any liability  whatsoever to the Company  (other than with
respect to accrued but unpaid Servicing Fees and Servicing  Advances remaining
unpaid) or any third party.


<PAGE>


                                   ARTICLE IX

                                     DEFAULT

      Section 9.01      EVENTS OF DEFAULT.

      In case one or more of the  following  Events of Default by the  Company
shall occur and be continuing, that is to say:

      (i) any  failure by the  Company to remit to the  Purchaser  any payment
required  to be made  under  the  terms  of  this  Agreement  which  continues
unremedied for a period of one (1) Business Day; or

      (ii)  failure on the part of the  Company  duly to observe or perform in
any material  respect any other of the  covenants or agreements on the part of
the Company  set forth in this  Agreement  which  continues  unremedied  for a
period of  thirty  (30) days  after the date on which  written  notice of such
failure,  requiring  the same to be  remedied,  shall  have been  given to the
Company by the Purchaser; 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, marshalling of
assets  and  liabilities  or similar  proceedings,  or for the  winding-up  or
liquidation  of its affairs,  shall have been entered  against the Company and
such decree or order shall have remained in force undischarged or unstayed for
a period of sixty days; or

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

      (v) the Company  shall admit in writing its  inability  to pay its debts
generally  as they  become  due,  file a  petition  to take  advantage  of any
applicable  insolvency or reorganization  statute,  make an assignment for the
benefit of its creditors,  or voluntarily  suspend payment of its obligations;
or

      (vi)  Company  ceases to be approved by either  Fannie Mae or FHLMC as a
mortgage loan seller or servicer for more than thirty days; or

      (vii) the Company attempts to assign its right to servicing compensation
hereunder or the Company  attempts,  without the consent of the Purchaser,  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; or

      (viii) the  Company  ceases to be (a)  licensed  to  service  first lien
residential  mortgage loans in any jurisdiction in which a Mortgaged  Property
is located and such  licensing  is  required,  and (b)  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
Company's ability to perform its obligations hereunder; or

      (ix) the Company fails to meet the eligibility criteria set forth in the
last sentence of Section 8.02.

      Then,  and in each and every such  case,  so long as an Event of Default
shall not have been  remedied,  the  Purchaser,  by notice in  writing  to the
Company  (except in the case of an Event of Default under clauses (iii),  (iv)
or (v) above, in which case, automatically and without notice) Company may, in
addition to whatever  rights the  Purchaser  may have under  Sections 3.03 and
8.01 and at law or equity  or to  damages,  including  injunctive  relief  and
specific performance,  terminate all the rights and obligations of the Company
under this Agreement and in and to the Mortgage Loans and the proceeds thereof
without  compensating the Company for the same. On or after the receipt by the
Company of such written  notice (or, in the case of an Event of Default  under
clauses (iii),  (iv) or (v) above,  in which case,  automatically  and without
notice), all authority and power of the Company under this Agreement,  whether
with respect to the Mortgage  Loans or otherwise,  shall pass to and be vested
in the successor  appointed  pursuant to Section 11.01.  Upon written  request
from the Purchaser,  the Company shall prepare,  execute and deliver,  any and
all documents and other instruments,  place in such successor's possession all
Mortgage  Files,  and 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 Company's sole expense.  The Company
agrees to cooperate  with the  Purchaser  and such  successor in effecting the
termination of the Company'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 Company to the
Custodial Account or Escrow Account or thereafter received with respect to the
Mortgage Loans or any REO Property.

      Section 9.02      WAIVER OF DEFAULTS.

      The  Purchaser  may waive  only by  written  notice  any  default by the
Company 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.



<PAGE>



                                    ARTICLE X

                                   TERMINATION

      Section 10.01     TERMINATION.

      The respective  obligations  and  responsibilities  of the Company shall
terminate  upon: (i) the later of the final payment or other  liquidation  (or
any  advance  with  respect  thereto)  of  the  last  Mortgage  Loan  and  the
disposition  of all remaining REO Property and the remittance of all funds due
hereunder;  or (ii) by mutual  consent of the  Company  and the  Purchaser  in
writing; or (iii) termination with cause under the terms of this Agreement.

      Section 10.02     TERMINATION WITHOUT CAUSE.

      The Purchaser may, at its sole option,  terminate any rights the Company
may have hereunder,  without cause,  upon no less than 90 days written notice.
Any such  notice of  termination  shall be in  writing  and  delivered  to the
Company as provided in Section 11.05 of this Agreement.

                                   ARTICLE XI

                            MISCELLANEOUS PROVISIONS

      Section 11.01     SUCCESSOR TO THE COMPANY.

      Prior to termination of Company's responsibilities and duties under this
Agreement  pursuant to Sections 4.13,  8.04,  9.01,  10.01 (ii) or (iii),  the
Purchaser   shall  (i)   succeed   to  and   assume   all  of  the   Company's
responsibilities, rights, duties and obligations under this Agreement, or (ii)
appoint a  successor  having the  characteristics  set forth in  Section  8.02
hereof  and  which  shall  succeed  to  all  rights  and  assume  all  of  the
responsibilities,  duties and  liabilities of the Company under this Agreement
prior to the termination of Company's responsibilities, duties and liabilities
under this Agreement. In connection with such appointment and assumption,  the
Purchaser may make such  arrangements  for the  compensation of such successor
out of payments on Mortgage  Loans as the Purchaser and such  successor  shall
agree.  In  the  event  that  the  Company's  duties,   responsibilities   and
liabilities  under  this  Agreement  should  be  terminated  pursuant  to  the
aforementioned   Sections,   the  Company  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 Company
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 Company of the  representations  and  warranties  made pursuant to
Sections  3.01,  3.02 and 3.03 and the  remedies  available  to the  Purchaser
thereunder  and under Section 8.01,  it being  understood  and agreed that the
provisions of such Sections 3.01,  3.02,  3.03 and 8.01 shall be applicable to
the  Company  notwithstanding  any  such  resignation  or  termination  of the
Company, or the termination of this Agreement.

      Any successor  appointed as provided  herein shall execute,  acknowledge
and deliver to the Company and to the Purchaser an instrument  accepting  such
appointment,  whereupon such successor  shall become fully vested with all the
rights, powers, duties,  responsibilities,  obligations and liabilities of the
Company, with like effect as if originally named as a party to this Agreement.
Any  termination or  resignation of the Company or this Agreement  pursuant to
Section  4.13,  8.04,  9.01 or 10.01  shall not  affect  any  claims  that the
Purchaser may have against the Company  arising prior to any such  termination
or resignation.

      The Company  shall  promptly  deliver to the  successor the funds in the
Custodial  Account and the Escrow  Account and the Mortgage  Files and related
documents  and  statements  held by it hereunder and the Company shall account
for all funds.  The Company shall execute and deliver such  instruments and do
such  other  things  all 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 Company.  The successor
shall make  arrangements  as it may deem  appropriate to reimburse the Company
for unrecovered  Servicing  Advances which the successor retains hereunder and
which would  otherwise  have been  recovered  by the Company  pursuant to this
Agreement but for the appointment of the successor servicer.

      Upon a successor's  acceptance of appointment as such, the Company shall
notify by mail the Purchaser of such appointment.

      Section 11.02     AMENDMENT.

      This  Agreement  may be amended from time to time by the Company and the
Purchaser by written agreement signed by the Company and the Purchaser.


<PAGE>




      Section 11.03     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 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
at the  Company's  expense on direction  of the  Purchaser  accompanied  by an
opinion  of  counsel  to the  effect  that  such  recordation  materially  and
beneficially  affects the interest of the  Purchaser  or is necessary  for the
administration or servicing of the Mortgage Loans.

      Section 11.04     GOVERNING LAW.

      This  Agreement  and the  related  Term Sheet  shall be  governed by and
construed in  accordance  with the laws of the State of New York except to the
extent preempted by Federal law. The  obligations,  rights and remedies of the
parties hereunder shall be determined in accordance with such laws.

      Section 11.05     NOTICES.

      Any  demands,  notices or other  communications  permitted  or  required
hereunder  shall be in writing and shall be deemed  conclusively  to have been
given if  personally  delivered  at or  mailed  by  registered  mail,  postage
prepaid,  and return  receipt  requested or  certified  mail,  return  receipt
requested, or transmitted by telex, telegraph or telecopier and confirmed by a
similar mailed writing, as follows:

      (i)   if to the Company:

            GreenPoint Mortgage Funding, Inc.
            100 Wood Hollow Drive
            Novato, California 94945
            Attention: Susan Davia
            Telecopier No: (415) 878-4369

      (ii)  if to the Purchaser:

            EMC Mortgage Corporation
            Mac Arthur Ridge II,
            909 Hidden Ridge Drive, Suite 200
            Irving, Texas 75038
            Attention:  Ms. Ralene Ruyle
            Telecopier No.:  (972) 444-2810

            With a copy to:

            Bear Stearns Mortgage Capital Corporation
            383 Madison Avenue
            New York, New York 10179
            Attention:  Mary Haggerty

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
addressee (as evidenced,  in the case of registered or certified  mail, by the
date noted on the return receipt).

      Section 11.06     SEVERABILITY OF PROVISIONS.

      Any part,  provision,  representation  or warranty of this Agreement and
the  related  Term Sheet  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  Mortgage  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
that 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 nearly as possible  the
same  as the  economic  effect  of  this  Agreement  without  regard  to  such
invalidity.

      Section 11.07     EXHIBITS.

      The exhibits to this Agreement are hereby  incorporated  and made a part
hereof and are an integral part of this Agreement.

      Section 11.08     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;

      (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

      (viii)  headings of the Articles and Sections in this  Agreement are for
reference  purposes  only and  shall  not be  deemed  to have any  substantive
effect.

      Section 11.09     REPRODUCTION OF DOCUMENTS.

      This Agreement and all documents  relating thereto,  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 11.10     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.  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 the
Agreement,  provided that each party may provide  confidential  information to
its employees,  agents and affiliates who have a need to know such information
in order to effectuate the transaction, provided further that such information
is   identified  as   confidential   non-public   information.   In  addition,
confidential  information  may be  provided  to a  regulatory  authority  with
supervisory  power over Purchaser,  provided such information is identified as
confidential non-public information.

      Notwithstanding  other  provisions  of this  Section  16.14 or any other
express or implied agreement,  arrangement,  or understanding to the contrary,
the Company and Purchaser  (the  "Parties")  agree that the Parties (and their
employees,  representatives  and other  agents)  may  disclose  to any and all
persons,  without limitation of any kind from the commencement of discussions,
the purported or claimed U.S.  federal income tax treatment of the purchase of
the Mortgage Loans and related  transactions  covered by this letter agreement
("tax  treatment") and any fact that may be relevant to understanding  the tax
treatment ("tax structure") and all materials of any kind (including  opinions
or other tax analyses)  that are provided to the Parties  relating to such tax
treatment  and tax  structure,  except  where  confidentiality  is  reasonably
necessary to comply with securities laws.

      Section 11.11     RECORDATION OF ASSIGNMENTS OF MORTGAGE.

      To the extent  permitted by applicable  law, each of the  Assignments 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 Mortgaged  Properties  are situated,  and in any other  appropriate
public recording  office or elsewhere,  such recordation to be effected by and
at the Company's  expense in the event  recordation is either  necessary under
applicable law or requested by the Purchaser at its sole option.

      Section 11.12     ASSIGNMENT.

      The Purchaser shall have the right,  without the consent of the Company,
to assign, in whole or in part, 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 Purchaser  hereunder,  by executing an Assignment and Assumption
Agreement  substantially  in the form of Exhibit D hereto and the  assignee or
designee shall accede to the rights and obligations hereunder of the Purchaser
with  respect to such  Mortgage  Loans.  In no event  shall  Purchaser  sell a
partial  interest in any Mortgage Loan without the written consent of Company,
which  consent  shall  not  be  unreasonably  denied.  All  references  to the
Purchaser  in this  Agreement  shall be  deemed to  include  its  assignee  or
designee.  The  Company  shall  have the right,  only with the  consent of the
Purchaser or otherwise in accordance with this Agreement,  to assign, in whole
or in part,  its interest  under this Agreement with respect to some or all of
the Mortgage Loans.

      Section 11.13     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 Company shall be rendered as an  independent  contractor  and not as agent
for Purchaser.

      Section 11.14     EXECUTION: 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 this Agreement shall
inure to the benefit of and be binding upon the Company and the  Purchaser and
their respective successors and assigns.

      Section 11.15     ENTIRE AGREEMENT.

      The Company acknowledges that no representations, agreements or promises
were made to the Company by the Purchaser or any of its  employees  other than
those  representations,  agreements or promises specifically  contained herein
and in the  Confirmation.  The Confirmation and this Agreement and the related
Term Sheet sets forth the entire  understanding  between the  parties  hereto;
provided,  however,  only this  Agreement  and the related Term Sheet shall be
binding upon all successors of both parties. In the event of any inconsistency
between the  Confirmation  and this Agreement,  this Agreement and the related
Term Sheet shall control.

      Section 11.16.  NO SOLICITATION.

      From and after the Closing  Date,  the  Company  agrees that it will not
take any action or permit or cause any action to be taken by any of its agents
or affiliates,  to personally,  by telephone or mail,  solicit the borrower or
obligor under any Mortgage Loan to refinance the Mortgage Loan, in whole or in
part, without the prior written consent of the Purchaser.  Notwithstanding the
foregoing,  it is understood and agreed that (i) promotions  undertaken by the
Company or any  affiliate  of the  Company  which are  directed to the general
public at large, or segments  thereof,  provided that no segment shall consist
primarily of the Mortgage Loans, including,  without limitation,  mass mailing
based on commercially acquired mailing lists, newspaper,  radio and television
advertisements and (ii) responses to unsolicited requests or inquiries made by
a Mortgagor  or an agent of a  Mortgagor,  shall not  constitute  solicitation
under this Section  11.16.  This Section 11.16 shall not be deemed to preclude
the Company or any of its  affiliates  from  soliciting  any Mortgagor for any
other financial  products or services.  The Company shall use its best efforts
to  prevent  the sale of the name of any  Mortgagor  to any  Person who is not
affiliate of the Company.

      Section 11.17.  CLOSING.

      The closing for the purchase  and sale of the Mortgage  Loans shall take
place on the related Closing Date. The closing shall be either:  by telephone,
confirmed  by letter or wire as the  parties  shall  agree,  or  conducted  in
person, at such place as the parties shall agree.

      The  closing  for the  Mortgage  Loans to be  purchased  on the  related
Closing Date shall be subject to each of the following conditions:

      (a) at least one (1) Business Day prior to the related Closing Date, the
Company  shall deliver to the  Purchaser a magnetic  diskette,  or transmit by
modem,  a listing on a loan-level  basis of the  information  contained in the
related Mortgage Loan Schedule attached to the related Term Sheet;

      (b) all of the  representations and warranties of the Company under this
Agreement  shall be materially true and correct as of the related Closing Date
and no event shall have  occurred  which,  with notice or the passage of time,
would constitute a material default under this Agreement;

      (c) the Purchaser  shall have  received,  or the  Purchaser's  attorneys
shall have  received  in  escrow,  all  documents  required  pursuant  to this
Agreement,  the  related  Term Sheet,  an opinion of counsel and an  officer's
certificate,  all in such  forms  as are  agreed  upon and  acceptable  to the
Purchaser,  duly  executed  by all  signatories  other than the  Purchaser  as
required pursuant to the terms hereof;

      (d) the Company  shall have  delivered and released to the Purchaser (or
its designee) on or prior to the related  Closing Date all documents  required
pursuant to the terms of this Agreement and the related Term Sheet; and

      (e) all other terms and conditions of this  Agreement,  the related Term
Sheet and the Confirmation shall have been materially complied with.

      Subject to the  foregoing  conditions,  the  Purchaser  shall pay to the
Company on the related Closing Date the Purchase Price,  plus accrued interest
pursuant to Section 2.02 of this  Agreement,  by wire transfer of  immediately
available funds to the account designated by the Company.

      Section 11.18. COOPERATION OF COMPANY WITH A RECONSTITUTION.

      The Company and the Purchaser  agree that with respect to some or all of
the Mortgage Loans, on or after the related Closing Date, on one or more dates
(each a "Reconstitution  Date") at the Purchaser's sole option,  the Purchaser
may effect a sale (each,  a  "Reconstitution")  of some or all of the Mortgage
Loans then subject to this Agreement, without recourse, to:

      (a) one or more  third  party  purchasers  in one or more in whole  loan
transfers (each, a "Whole Loan Transfer"); or

      (b) one or more trusts or other  entities to be formed as part of one or
more pass-through transfers (each, a "Pass-Through Transfer").

      The Company agrees to execute in connection  with any  agreements  among
the Purchaser,  the Company,  and any servicer in connection with a Whole Loan
Transfer, an Assignment, Assumption and Recognition Agreement substantially in
the  form of  Exhibit  D  hereto,  or,  at  Purchaser's  request,  a  seller's
warranties and servicing  agreement or a participation and servicing agreement
or  similar  agreement  in form and  substance  reasonably  acceptable  to the
parties,  and in  connection  with a  Pass-Through  Transfer,  a  pooling  and
servicing  agreement  in  form  and  substance  reasonably  acceptable  to the
parties,  (collectively the agreements referred to herein are designated,  the
"Reconstitution  Agreements").  It is understood that any such  Reconstitution
Agreements  will not contain any  greater  obligations  on the part of Company
than are contained in this Agreement.

      With respect to each Whole Loan Transfer and each Pass-Through  Transfer
entered into by the Purchaser,  the Company agrees (1) to cooperate fully with
the Purchaser and any  prospective  purchaser  with respect to all  reasonable
requests and due diligence procedures; (2) to execute, deliver and perform all
Reconstitution  Agreements  required  by the  Purchaser;  (3) to  restate  the
representations  and  warranties  set  forth  in  this  Agreement  as  of  the
settlement or closing date in connection  with such  Reconstitution  (each,  a
"Reconstitution  Date");  and (4) to provide customary  indemnification to the
Purchaser  and/or  its  affiliates  for  any  losses,  claims,   damages,  and
liabilities  arising out of or based upon  information the Company provided or
caused to be provided in  connection  with a  Pass-Through  Transfer.  In that
connection,  the Company shall provide to such servicer or issuer, as the case
may be, and any other  participants  in such  Reconstitution:  (i) any and all
information   (including  servicing  portfolio  information)  and  appropriate
verification of information  (including servicing portfolio information) which
may be reasonably  available to the Company,  whether  through  letters of its
auditors  and  counsel  or  otherwise,  as the  Purchaser  or any  such  other
participant  shall request upon  reasonable  demand;  and (ii) such additional
representations,  warranties,  covenants,  opinions of counsel,  letters  from
auditors,  and  certificates of public officials or officers of the Company as
are reasonably  agreed upon by the Company and the Purchaser or any such other
participant. In connection with each Pass-Through Transfer, the Company agrees
to provide  reasonable and customary  indemnification to the Purchaser and its
affilates for disclosure  contained in any offering  document  relating to the
Company or its affilates, the Mortgage Loans and the underwriting standards of
the Mortgage Loans.  The Purchaser shall be responsible for the costs relating
to the delivery of such information.

      All Mortgage Loans not sold or transferred  pursuant to a Reconstitution
shall remain  subject to, and serviced in  accordance  with the terms of, this
Agreement and the related Term Sheet,  and with respect thereto this Agreement
and the related Term Sheet shall remain in full force and effect.

      Section 11.19.    REPORTING WITH RESPECT TO A RECONSTITUTION.

      The  Company  agrees  that with  respect  to any  Mortgage  Loan sold or
transferred pursuant to a Reconstitution as described in Section 11.18 of this
Agreement (a  "Reconstituted  Mortgage  Loan"),  the Company,  at its expense,
shall  provide  the  Purchaser  with the  information  set forth in  Exhibit J
attached hereto for each Reconstituted Mortgage Loan in such electronic format
as may be mutually agreed upon by both Purchaser and Company.


<PAGE>




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

                                    EMC MORTGAGE CORPORATION
                                         Purchaser


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


                                    GREENPOINT MORTGAGE FUNDING, INC.
                                            Company


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


<PAGE>


                                    EXHIBIT A
                            CONTENTS OF MORTGAGE FILE

      With respect to each Mortgage Loan, the Mortgage File shall include each
of the  following  items,  which  shall be  available  for  inspection  by the
Purchaser, and which shall be retained by the Company in the Servicing File or
delivered to the Purchaser or its designee  pursuant to Sections 2.04 and 2.05
of the Purchase, Warranties and Servicing Agreement.

      1.  The  original   Mortgage   Note   endorsed  "Pay  to  the  order  of
____________________________________________________,  without  recourse," and
signed via  original  signature  in the name of the  Company by an  authorized
officer,  with all intervening  endorsements showing a complete chain of title
from the originator to the Company, together with any applicable riders. In no
event may an endorsement be a facsimile endorsement.  If the Mortgage Loan was
acquired by the Company in a merger,  the  endorsement  must be by "[Company],
successor by merger to the [name of  predecessor]".  If the Mortgage  Loan was
acquired or originated by the Company while doing business under another name,
the  endorsement  must be by "[Company]  formerly  known as [previous  name]".
Mortgage  Notes  may be in  the  form  of a lost  note  affidavit  subject  to
Purchaser acceptability.

      2. The  original  Mortgage  (together  with a standard  adjustable  rate
mortgage  rider)  with  evidence  of  recording  thereon,  or a  copy  thereof
certified  by the  public  recording  office in which such  mortgage  has been
recorded  or,  if the  original  Mortgage  has  not  been  returned  from  the
applicable  public recording  office, a true certified copy,  certified by the
Company.

      3. The original or  certified  copy,  certified  by the Company,  of the
Primary Mortgage Insurance Policy, if required.

      4.    The     original     Assignment,     from    the     Company    to
_____________________________________,   or  in  accordance  with  Purchaser's
instructions,  which  assignment  shall,  but  for  any  blanks  requested  by
Purchaser,  be in form and substance acceptable for recording. If the Mortgage
Loan was acquired or  originated  by the Company  while doing  business  under
another name, the Assignment must be by "[Company] formerly known as [previous
name]".  If the  Mortgage  Loan was  acquired by the Company in a merger,  the
endorsement  must be by  "[Company],  successor  by  merger  to the  [name  of
predecessor]". None of the Assignments are blanket assignments of mortgage.

      5.  The  original  policy  of  title  insurance,  including  riders  and
endorsements  thereto,  or if the  policy has not yet been  issued,  a written
commitment  or interim  binder or  preliminary  report of title  issued by the
title insurance or escrow company.

      6. Originals of all recorded intervening Assignments, or copies thereof,
certified by the public  recording  office in which such Assignments have been
recorded showing a complete chain of title from the originator to the Company,
with evidence of recording thereon,  or a copy thereof certified by the public
recording  office  in which  such  Assignment  has been  recorded  or,  if the
original Assignment has not been returned from the applicable public recording
office, a true certified copy, certified by the Company.

      7. Originals, or copies thereof certified by the public recording office
in which such  documents have been recorded,  of each  assumption,  extension,
modification,  written assurance or substitution agreements, if applicable, or
if the original of such  document has not been  returned  from the  applicable
public recording office, a true certified copy, certified by the Company.

      8. If the Mortgage  Note or Mortgage or any other  material  document or
instrument relating to the Mortgage Loan has been signed by a person on behalf
of the  Mortgagor,  the  original  or copy  of  power  of  attorney  or  other
instrument that authorized and empowered such person to sign bearing  evidence
that such  instrument  has been  recorded,  if so required in the  appropriate
jurisdiction  where the  Mortgaged  Property  is  located,  or a copy  thereof
certified by the public  recording  office in which such  instrument  has been
recorded  or,  if the  original  instrument  has not  been  returned  from the
applicable  public recording  office, a true certified copy,  certified by the
Company.

      9. reserved.

      10.  Mortgage  Loan  closing   statement  (Form  HUD-1)  and  any  other
truth-in-lending or real estate settlement procedure forms required by law.

      11. Residential loan application.

      12. Uniform underwriter and transmittal summary (Fannie Mae Form 1008) or
reasonable equivalent.

      13. Credit report on the mortgagor.

      14. Business credit report, if applicable.

      15. Residential appraisal report and attachments thereto.

      16. The  original  of any  guarantee  executed  in  connection  with the
Mortgage Note.

      17.  Verification  of employment  and income  except for Mortgage  Loans
originated  under a limited  documentation  program,  all in  accordance  with
Company's underwriting guidelines.

      18.  Verification  of  acceptable  evidence of source and amount of down
payment, in accordance with Company's underwriting guidelines.

      19. Photograph of the Mortgaged Property (may be part of appraisal).

      20. Survey of the Mortgaged Property, if any.

      21. Sales contract, if applicable.

      22. If available,  termite report,  structural  engineer's report, water
portability and septic certification.

      23. Any original  security  agreement,  chattel  mortgage or  equivalent
executed in connection with the Mortgage.

      24. Name affidavit, if applicable.

      Notwithstanding anything to the contrary herein, Company may provide one
certificate  for all of the Mortgage Loans  indicating that the documents were
delivered for recording.


<PAGE>



                                    EXHIBIT B

                               CUSTODIAL ACCOUNT
                                LETTER AGREEMENT

                              ______________, 2003

To:   [_______________________]
      (the "Depository")

      As "Company"  under the Purchase,  Warranties  and Servicing  Agreement,
dated as of  [_____________________]  1, 200[_] (the  "Agreement"),  we hereby
authorize  and request you to  establish  an account,  as a Custodial  Account
pursuant   to  Section   4.04  of  the   Agreement,   to  be   designated   as
"[______________________________________], in trust for the [Purchaser], Owner
of  Adjustable  Rate  Mortgage  Loans".  All deposits in the account  shall be
subject to withdrawal therefrom by order signed by the Company. This letter is
submitted to you in duplicate. Please execute and return one original to us.

                                    [---------------------------------]

                                    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.  The full amount  deposited at any time in
the account  will be insured up to  applicable  limits by the Federal  Deposit
Insurance   Corporation  through  the  Bank  Insurance  Fund  or  the  Savings
Association  Insurance  Fund or will be invested in Permitted  Investments  as
defined in the Agreement.

                                    [---------------------------------]

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


<PAGE>



                                    EXHIBIT C

                         ESCROW ACCOUNT LETTER AGREEMENT
                               _____________, 2003

To:   [_______________________]
      (the "Depository")

      As "Company"  under the Purchase  Warranties  and  Servicing  Agreement,
dated as of  [____________________]1,  200[_]  (the  "Agreement"),  we  hereby
authorize  and  request you to  establish  an  account,  as an Escrow  Account
pursuant   to  Section   4.06  of  the   Agreement,   to  be   designated   as
"[__________________________],   in  trust  for  the  [Purchaser],   Owner  of
Adjustable Rate Mortgage Loans,  and various  Mortgagors." All deposits in the
account  shall be  subject  to  withdrawal  therefrom  by order  signed by the
Company.  This letter is submitted  to you in  duplicate.  Please  execute and
return one original to us.

                                    [---------------------------------]

                                    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.  The full amount  deposited at any time in the
account  will be  insured  up to  applicable  limits  by the  Federal  Deposit
Insurance   Corporation  through  the  Bank  Insurance  Fund  or  the  Savings
Association  Insurance  Fund or will be invested in Permitted  Investments  as
defined in the Agreement.

                                    [---------------------------------]


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



<PAGE>




                                    EXHIBIT D

           FORM OF ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT

      This is a Purchase,  Assignment,  Assumption and  Recognition  Agreement
(this "PAAR  Agreement")  made as of  __________,  200__,  among EMC  Mortgage
Corporation  (the  "Assignor"),   ___________________  (the  "Assignee"),  and
_______________________ (the "Company").

      In  consideration  of the mutual promises  contained  herein the parties
hereto agree that the residential mortgage loans (the "Assigned Loans") listed
on Attachment 1 annexed hereto (the "Assigned Loan  Schedule") now serviced by
Company for Assignor and its successors and assigns  pursuant to the Purchase,
Warranties  and Servicing  Agreement,  dated as of _________,  200__,  between
Assignor and Company (the "Purchase  Agreement") shall be subject to the terms
of this PAAR  Agreement.  Capitalized  terms used herein but not defined shall
have the meanings ascribed to them in the Purchase Agreement.

                       PURCHASE, ASSIGNMENT AND ASSUMPTION

      1. Assignor hereby grants,  transfers and assigns to Assignee all of the
right,  title and  interest  of Assignor  in the  Assigned  Loans and, as they
relate to the Assigned Loans, all of its right,  title and interest in, to and
under the Purchase Agreement.

      2.  Simultaneously  with the execution hereof, (i) Assignee shall pay to
Assignor the "Funding  Amount" as set forth in that certain letter  agreement,
dated as of _________ ____, between Assignee and Assignor (the "Confirmation")
and (ii)  Assignor,  at its  expense,  shall have  caused to be  delivered  to
Assignee  or its  designee  the  Mortgage  File  for  each  Assigned  Loan  in
Assignor's  or its  custodian's  possession,  as  set  forth  in the  Purchase
Agreement,  along with, for each Assigned Loan, an endorsement of the Mortgage
Note from the Company,  in blank,  and an assignment of mortgage in recordable
form from the Company, in blank. Assignee shall pay the Funding Amount by wire
transfer of immediately  available funds to the account specified by Assignor.
Assignee shall be entitled to all scheduled payments due on the Assigned Loans
after  ___________,  200__ and all  unscheduled  payments or other proceeds or
other  recoveries on the Assigned Loans  received on and after  _____________,
200__.

                  REPRESENTATIONS, WARRANTIES AND COVENANTS

      3.  Assignor  warrants and  represents to Assignee and Company as of the
date hereof:

      (a) Attached  hereto as  Attachment 2 is a true and accurate copy of the
Purchase Agreement, which agreement is 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 is 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 Purchase Agreement as 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 Purchase Agreement 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
Company with respect to the Assigned Loans or the Purchase Agreement;

      (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 PAAR Agreement,  and to consummate the
transactions   set  forth  herein.   The   consummation  of  the  transactions
contemplated  by this PAAR  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 PAAR
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 PAAR Agreement has been duly executed and delivered by Assignor
and,  upon the due  authorization,  execution  and  delivery by  Assignee  and
Company,  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 PAAR Agreement,  or the  consummation by it of
the transactions contemplated hereby; and

      (h)  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.


      4. Assignee  warrants and represents to, and covenants with,  Assignor and
Company as of the date hereof:


      (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 acquire, own and purchase the Assigned Loans;

      (b) Assignee has full corporate power and authority to execute,  deliver
and perform its obligations  under this PAAR Agreement,  and to consummate the
transactions   set  forth  herein.   The   consummation  of  the  transactions
contemplated  by this PAAR  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 which  Assignee or its  property is
subject.  The  execution,  delivery and  performance  by Assignee of this PAAR
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 PAAR Agreement has been duly executed and delivered by Assignee
and,  upon the due  authorization,  execution  and  delivery by  Assignor  and
Company,  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 PAAR Agreement,  or the  consummation by it of
the transactions contemplated hereby; and

      (d)  Assignee  agrees to be bound as  "Purchaser"  by all of the  terms,
covenants  and  conditions  of the  Purchase  Agreement  with  respect  to the
Assigned Loans,  and from and after the date hereof,  Assignee assumes for the
benefit of each of  Assignor  and  Company all of  Assignor's  obligations  as
"Purchaser" thereunder but solely with respect to such Assigned Loans.

      5. Company warrants and represents to, and covenant with, Assignor and
Assignee as of the date hereof:

      (a) Attached  hereto as  Attachment 2 is a true and accurate copy of the
Purchase Agreement, which agreement is 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 incorporation, and has all requisite
power and authority to service the Assigned Loans and otherwise to perform its
obligations under the Purchase Agreement;

      (c)   Company has full corporate power and authority to execute, deliver
            and  perform its  obligations  under this PAAR  Agreement,  and to
            consummate the transactions set forth herein.  The consummation of
            the  transactions  contemplated  by this PAAR  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 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 PAAR 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 PAAR 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  Assignee  in  connection  with  the
            execution,  delivery  or  performance  by  Company  of  this  PAAR
            Agreement,   or  the   consummation  by  it  of  the  transactions
            contemplated hereby; and

      (e)   No event has  occurred  from the  Closing  Date to the date hereof
            which would render the  representations  and  warranties as to the
            related  Assigned  Loans made by the Company in Sections  3.01 and
            3.02  of the  Purchase  Agreement  to be  untrue  in any  material
            respect.

      (f)   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.

                             RECOGNITION OF ASSIGNEE

      6. From and after the date hereof,  Company shall recognize  Assignee as
owner of the Assigned  Loans and will service the Assigned Loans in accordance
with the Purchase  Agreement.  It is the  intention  of Assignor,  Company and
Assignee that this PAAR 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 Purchase  Agreement  which  amendment,
modification,  waiver or other alteration would in any way affect the Assigned
Loans without the prior written consent of Assignee.

                                  Miscellaneous

      7. All  demands,  notices  and  communications  related to the  Assigned
Loans, the Purchase  Agreement and this PAAR 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,

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

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

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

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

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

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

            With a copy to ______________________________________.

(b) In the case of Assignor,

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

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

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

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

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

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

      (c) In the case of Assignee,

            EMC Mortgage Corporation
            Mac Arthur Ridge II
            909 Hidden Ridge Drive, Suite 200
            Irving, Texas 75038
            Attention:  Raylene Ruyle
            Telecopier No.:  (972) 444-2810

            with a copy  to:

            -------------------
            383 Madison Avenue
            New York, New York 10179
            Attention: ___________
            Telecopier No.:  (212) 272-____

      8. Each party will pay any  commissions  it has incurred and the fees of
its attorneys in connection  with the  negotiations  for,  documenting  of and
closing of the transactions contemplated by this PAAR Agreement.

      9. This PAAR 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.

      10.  No term or  provision  of this  PAAR  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.

      11. This PAAR 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.

      12. This PAAR  Agreement  shall  survive the  conveyance of the Assigned
Loans, the assignment of the Purchase  Agreement to the extent of the Assigned
Loans by Assignor to Assignee and the termination of the Purchase Agreement.

      13. This PAAR 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.

      14. In the event that any  provision  of this PAAR  Agreement  conflicts
with any  provision  of the  Purchase  Agreement  with respect to the Assigned
Loans,  the terms of this PAAR Agreement shall control.  In the event that any
provision  of  this  PAAR  Agreement  conflicts  with  any  provision  of  the
Confirmation  with  respect  to the  Assigned  Loans,  the  terms of this PAAR
Agreement shall control.


                       [Modification of Purchase Agreement

15. The Company and Assignor hereby amend the Purchase Agreement as follows:

      (a) The following definitions are added to Section 1.01 of the Purchase
      Agreement:

      SECURITIES ADMINISTRATOR:
                                   ------------------------

      SUPPLEMENTAL PMI INSURER:
                                   ------------------------

      SUPPLEMENTAL PMI POLICY: The primary guarantee insurance policy of the
      Supplemental PMI Insurer attached hereto as Exhibit J, or any successor
      Supplemental PMI Policy given to the Servicer by the Assignee.

      TRUSTEE:
                  ------------------------

      (b) The following definition is amended and restated:

      INSURANCE PROCEEDS: Proceeds of any Primary Mortgage Insurance Policy, the
      Supplemental PMI Policy, any title policy, any hazard insurance policy or
      any other insurance policy covering a Mortgage Loan or other related
      Mortgaged Property, including any amounts required to be deposited in the
      Custodial Account pursuant to Section 4.04, to the extent such proceeds
      are not to be applied to the restoration of the related Mortgaged Property
      or released to the Mortgagor in accordance with Accepted Servicing
      Practices.

      (c) The following are added as the fourth, fifth and sixth paragraphs of
      Section 4.08:

      "In connection with its activities as servicer, the Company agrees to
prepare and present, on behalf of itself and the Purchaser, claims to the
Supplemental PMI Insurer with respect to the Supplemental PMI Policy and, in
this regard, to take such action as shall be necessary to permit recovery under
any Supplemental PMI Policy respecting a defaulted Mortgage Loan. Pursuant to
Section 4.04, any amounts collected by the Company under any Supplemental PMI
Policy shall be deposited in the Custodial Account, subject to withdrawal
pursuant to Section 4.05.

      In accordance with the Supplemental PMI Policy, the Company shall provide
to the Supplemental PMI Insurer any required information regarding the Mortgage
Loans.

      The Company shall provide to the [Securities Administrator] on a monthly
basis via computer tape, or other mutually acceptable format, the unpaid
principal balance, insurer certificate number, lender loan number, and premium
due the Supplemental PMI Insurer for each Mortgage Loan covered by the
Supplemental PMI Policy. In addition, the Company agrees to forward to the
Purchaser and the [Securities Administrator] any statements or other reports
given by the Supplemental PMI Insurer to the Servicer in connection with a claim
under the Supplemental PMI Policy."

      (d) Clause (vi) of Section 6.1 is amended to read as follows:

      "Company ceases to be approved by either Fannie Mae or FHLMC as a mortgage
loan seller or servicer for more than thirty days, or the Company fails to meet
the servicer eligibility requirements of the Supplemental PMI Insurer; or"]

      (e)   Section ____ Annual Statement as to Compliance.

      The Company will deliver to the Master Servicer on or before March 15 of
each year, beginning with March 15, 200__, an Officers' Certificate stating that
(i) a review of the activities of the Company during the preceding calendar year
and of performance under this Agreement has been made under such officers'
supervision, (ii) the Company has fully complied with the provisions of this
Agreement and (iii) to the best of such officers' knowledge, based on such
review, the Company has fulfilled all of its obligations under this Agreement
throughout such year, or, if there has been a default in the fulfillment of any
such obligation, specifying each such default known to such officer and the
nature and status thereof.

      (f)   Section ____ Annual Certification.

(a) The Company will deliver to the Master Servicer, on or before March 15 of
each year beginning March 15, 200__ a certification in the form attached hereto
as Exhibit __ with respect to the servicing reports delivered by the Company
pursuant to this Agreement, the Company's compliance with the servicing
obligations set forth in this Agreement and any other information within the
control of the Company. Such certification shall be signed by the senior officer
in charge of servicing of the Company. In addition, the Company shall provide
such other information with respect to the Mortgage Loans and the servicing and
administration thereof within the control of the Company which shall be required
to enable the Master Servicer, Trustee or Depositor, as applicable, to comply
with the reporting requirements of the Securities and Exchange Act of 1934, as
amended.



<PAGE>



      IN WITNESS WHEREOF, the parties hereto have executed this PAAR Agreement
as of the day and year first above written.

                                    EMC MORTGAGE CORPORATION
                                    Assignor


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


                                    -----------------------------------------
                                    Assignee


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


                                    -----------------------------------------
                                    Company


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




<PAGE>



                                   EXHIBIT ___

                          FORM OF COMPANY CERTIFICATION

I, [identify certifying individual], certify to the [Trustee] [Seller]
[Securities Administrator] [Mortgage Loan Seller] [Purchaser] and [Master
Servicer] that:

      1. I have reviewed the servicing reports prepared by [COMPANY] (the
"Company") pursuant to the [Servicing Agreement] (the "Servicing Agreement"),
dated as of __________ between __________ and the Company (as modified by the
AAR Agreement (as defined below) and delivered to [MASTER SERVICER] (the "Master
Servicer") pursuant to the Assignment, Assumption and Recognition Agreement (the
"AAR Agreement"), dated as of __________ among [ASSIGNOR] as Assignor, Company
and [ASSIGNEE], as Assignee.

      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 such servicing reports.

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

      4. I am responsible for reviewing the activities performed the Company
under the Servicing Agreement and the AAR Agreement and based upon the review
required under the Servicing Agreement and the AAR Agreement, and except as
disclosed in the Annual Statement of Compliance, the Company has fulfilled its
obligations under the Servicing Agreement and the AAR Agreement.

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

      Capitalized terms used but not defined herein have the meanings ascribed
to them in the AAR Agreement.

Date:
     --------------

---------------------
[Signature]
[Title]



<PAGE>



                                  ATTACHMENT 1

                             ASSIGNED LOAN SCHEDULE



<PAGE>


                                  ATTACHMENT 2

                 PURCHASE, WARRANTIES AND SERVICING AGREEMENT



<PAGE>



                                    EXHIBIT E

                              FORM OF TRIAL BALANCE



<PAGE>



                                    EXHIBIT G

                  REQUEST FOR RELEASE OF DOCUMENTS AND RECEIPT

RE:   Mortgage Loan #___________________________________
BORROWER:__________________________________________________
PROPERTY: __________________________________________________


Pursuant to a Purchase, Warranties and Servicing Agreement (the "Agreement")
between the Company and the Purchaser, the undersigned hereby certifies that he
or she is an officer of the Company requesting release of the documents for the
reason specified below. The undersigned further certifies that:

(Check one of the items below)

_____ On _________________, the above captioned mortgage loan was paid in full
or that the Company has been notified that payment in full has been or will be
escrowed. The Company hereby certifies that all amounts with respect to this
loan which are required under the Agreement have been or will be deposited in
the Custodial Account as required.

_____ The above captioned loan is being repurchased pursuant to the terms of the
Agreement. The Company hereby certifies that the repurchase price has been
credited to the Custodial Account as required under the Agreement.

_____ The above captioned loan is being placed in foreclosure and the original
documents are required to proceed with the foreclosure action. The Company
hereby certifies that the documents will be returned to the Purchaser in the
event of reinstatement.

_____ Other (explain)

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

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

All capitalized terms used herein and not defined shall have the meanings
assigned to them in the Agreement.

      Based on this certification and the indemnities provided for in the
Agreement, please release to the Company all original mortgage documents in your
possession relating to this loan.

Date:
     --------------

---------------------
[Signature]

---------------------
Title


Send documents to:
                   --------------------------------------------------

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

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

Acknowledgement:

      Purchaser hereby acknowledges that all original documents previously
released on the above captioned mortgage loan have been returned and received by
the Purchaser.


Date:
     --------------
By:
   ---------------------
   [Signature]

   ---------------------
   Title


<PAGE>



                                    EXHIBIT H

                        COMPANY'S UNDERWRITING GUIDELINES



<PAGE>



                                    EXHIBIT I


                                   TERM SHEET

      This TERM SHEET (the "Term Sheet") dated [______], between Greenpoint
Mortgage Funding, Inc., a New York corporation, located at 100 Wood Hollow
Drive, Novato, California 94945 (the "Company") and EMC Mortgage Corporation, a
Delaware corporation, located at Mac Arthur Ridge II, 909 Hidden Ridge Drive,
Suite 200, Irving, Texas 75038 (the "Purchaser") is made pursuant to the terms
and conditions of that certain Purchase, Warranties and Servicing Agreement (the
"Agreement") dated as of September 1, 2003, between the Company and the
Purchaser, the provisions of which are incorporated herein as if set forth in
full herein, as such terms and conditions may be modified or supplemented
hereby. All initially capitalized terms used herein unless otherwise defined
shall have the meanings ascribed thereto in the Agreement.

      The Purchaser hereby purchases from the Company and the Company hereby
sells to the Purchaser, all of the Company's right, title and interest in and to
the Mortgage Loans described on the Mortgage Loan Schedule annexed hereto as
Schedule I, pursuant to and in accordance with the terms and conditions set
forth in the Agreement, as same may be supplemented or modified hereby.
Hereinafter, the Company shall service the Mortgage Loans for the benefit of the
Purchaser and all subsequent transferees of the Mortgage Loans pursuant to and
in accordance with the terms and conditions set forth in the Agreement.

1.    DEFINITIONS

      For purposes of the Mortgage Loans to be sold pursuant to this Term Sheet,
the following terms shall have the following meanings:

AGGREGATE PRINCIPAL BALANCE
(AS OF THE CUT-OFF DATE):

CLOSING DATE:

CUSTODIAN:

CUT-OFF DATE:

INITIAL WEIGHTED AVERAGE
MORTGAGE LOAN REMITTANCE RATE:

MORTGAGE LOAN:

PURCHASE PRICE PERCENTAGE:

SERVICING FEE RATE:

ADDITIONAL CLOSING CONDITIONS:

In addition to the conditions specified in the Agreement, the obligation of each
of the Company and the Purchaser is subject to the fulfillment, on or prior to
the applicable Closing Date, of the following additional conditions: [None].

ADDITIONAL LOAN DOCUMENTS:

In addition to the contents of the Mortgage File  specified in the  Agreement,
the  following  documents  shall be  delivered  with  respect to the  Mortgage
Loans:   [None]

[ADDITIONAL] [MODIFICATION] OF REPRESENTATIONS AND WARRANTIES:

      [In addition to the representations and warranties set forth in the
Agreement, as of the date hereof, the Company makes the following additional
representations and warranties with respect to the Mortgage Loans: [None].
[Notwithstanding anything to the contrary set forth in the Agreement, with
respect to each Mortgage Loan to be sold on the Closing Date, the representation
and warranty set forth in Section ______ of the Agreement shall be modified to
read as follows:]

      Except as modified herein, Section ______ of the Agreement shall remain in
full force and effect as of the date hereof.



<PAGE>



            IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective duly authorized officers as of the date first
above written.



                                    GREENPOINT MORTGAGE FUNDING, INC.

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


                                    EMC MORTGAGE CORPORATION

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






<PAGE>



                                   SCHEDULE I

                             MORTGAGE LOAN SCHEDULE


<PAGE>



                                    EXHIBIT J

                      RECONSTITUTED MORTGAGE LOAN REPORTING


(a)       Servicer Mortgage Loan Number (b) FNMA Mortgage Loan Number (if
          applicable) (c) Lender/Seller Mortgage Loan Number (if available)
(d)       Scheduled Balance (scheduled end of month balance reporting to Master
          Servicer/Trustee)
(e)       Actual Balance (actual end of month balance received from Mortgagor)
(f)       Gross Rate (current gross rate)
(g)       Net Rate (current passthrough)
(h)       Last Payment Date (LPI_DATE in Fannie's Laser Reporting)
(i)       Delinquency Month (if available)
(j)       Default Flag, i.e. FC, REO, etc. (if available)
(k)       Pay-In-Full Date (Mortgage Loan paid off by Mortgagor)
(l)       Foreclosure start date
(m)       Foreclosure end date
(n)       REO Property date
(o)       With respect to Liquidated Mortgage Loans:
          (i) amount of loss or gain (as applicable) (ii) the date of the loss
          or gain.
          (iii) the liquidation reason (paid in full or repurchased out of deal)
(p)       Fannie's Laser Reporting
          (i) Action Code (for default or paid off Mortgage Loans; i.e. 60, 65,
          etc.) (ii) Action Date (iii) Remit Prin (submitted principal amount)
          (iv) Remit Int (submitted interest amount) (v) Pool/Invest indicator
          (indicating Schedule/Schedule or Actual/Actual pool)


<PAGE>



                             AMENDMENT NUMBER ONE
                                    to the

                 PURCHASE, WARRANTIES AND SERVICING AGREEMENT

                         Dated as of January 1, 2006

                                   between

                          EMC MORTGAGE CORPORATION,
                                 as Purchaser

                                     and

                      GREENPOINT MORTGAGE FUNDING, INC.,
                                  as Company

      This AMENDMENT  NUMBER ONE (this  "Amendment")  is made and entered into
this 1st day of January,  2006,  by and between EMC  Mortgage  Corporation,  a
Delaware  corporation,  as purchaser (the "Purchaser") and GreenPoint Mortgage
Funding,  Inc., as company (the  "Company")  in connection  with the Purchase,
Warranties  and Servicing  Agreement,  dated as of September 1, 2003,  between
the  above  mentioned  parties  (the  "Agreement").  This  Amendment  is  made
pursuant to Section 11.02 of the Agreement.

                                   RECITALS

      WHEREAS,    the parties hereto have entered into the Agreement;

      WHEREAS,  the Agreement provides that the parties thereto may enter into
an amendment to the Agreement;

      WHEREAS,  the parties  hereto desire to amend the Agreement as set forth
in this Amendment; and

      NOW, THEREFORE,  in consideration of the premises and for other good and
valuable  consideration,  the  receipt  and  sufficiency  of which  is  hereby
acknowledged, the parties hereto agree as follows:

      1.    Capitalized  terms used herein and not defined  herein  shall have
the meanings assigned to such terms in the Agreement.

      2.    Article I of the Agreement is hereby  amended  effective as of the
date hereof by adding the following definitions to Section 1.01:

      COMMISSION OR SEC:  The Securities and Exchange Commission.

      DEPOSITOR:  The  depositor,  as such term is defined in  Regulation  AB,
      with respect to any Securitization Transaction.

      EXCHANGE ACT:  The Securities Exchange Act of 1934, as amended.

      MASTER SERVICER:  With respect to any  Securitization  Transaction,  the
"master servicer," if any, identified in the related transaction documents.

      PASS-THROUGH  TRANSFER:  Any transaction  involving either (1) a sale or
other  transfer of some or all of the Mortgage Loans directly or indirectly to
an issuing  entity in  connection  with an  issuance  of  publicly  offered or
privately  placed,  rated  or  unrated  mortgage-backed  securities  or (2) an
issuance  of  publicly   offered  or  privately   placed,   rated  or  unrated
securities,  the  payments on which are  determined  primarily by reference to
one or more portfolios of residential  mortgage loans consisting,  in whole or
in part, of some or all of the Mortgage Loans.

      PREPAYMENT CHARGE: Any prepayment premium,  penalty or charge payable by
a Mortgagor in  connection  with any  Principal  Prepayment on a Mortgage Loan
pursuant to the terms of the related Mortgage Note.

      QUALIFIED  CORRESPONDENT:  Any Person from which the  Company  purchased
Mortgage  Loans,  provided that the following  conditions are  satisfied:  (i)
such  Mortgage  Loans were  originated  pursuant to an  agreement  between the
Company and such Person that  contemplated  that such Person would  underwrite
mortgage loans from time to time, for sale to the Company,  in accordance with
underwriting  guidelines  designated by the Company ("Designated  Guidelines")
or guidelines that do not vary  materially  from such  Designated  Guidelines;
(ii) such Mortgage Loans were in fact  underwritten as described in clause (i)
above and were  acquired  by the  Company  within 180 days after  origination;
(iii) either (x) the  Designated  Guidelines  were,  at the time such Mortgage
Loans were  originated,  used by the Company in  origination of mortgage loans
of the same type as the Mortgage  Loans for the  Company's  own account or (y)
the  Designated  Guidelines  were,  at  the  time  such  Mortgage  Loans  were
underwritten,  designated  by the  Company  on a  consistent  basis for use by
lenders in  originating  mortgage  loans to be purchased  by the Company;  and
(iv) the Company  employed,  at the time such Mortgage  Loans were acquired by
the  Company,  pre-purchase  or  post-purchase  quality  assurance  procedures
(which may involve,  among other things,  review of a sample of mortgage loans
purchased  during a  particular  time period or through  particular  channels)
designed  to ensure  that  Persons  from  which it  purchased  mortgage  loans
properly applied the underwriting criteria designated by the Company.

      REGULATION AB: Subpart  229.1100 - Asset Backed  Securities  (Regulation
AB),  17 C.F.R.  ss.ss.229.1100-229.1123,  as amended  from time to time,  and
subject to such  clarification and interpretation as have been provided by the
Commission in the adopting release  (Asset-Backed  Securities,  Securities Act
Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff
of the  Commission,  or as may be provided by the Commission or its staff from
time to time.

      SECURITIES ACT:  The Securities Act of 1933, as amended.

      SECURITIZATION TRANSACTION:  Any transaction involving either (1) a sale
or other  transfer of some or all of the Mortgage Loans directly or indirectly
to an issuing  entity in  connection  with an issuance of publicly  offered or
privately  placed,  rated  or  unrated  mortgage-backed  securities  or (2) an
issuance  of  publicly   offered  or  privately   placed,   rated  or  unrated
securities,  the  payments on which are  determined  primarily by reference to
one or more portfolios of residential  mortgage loans consisting,  in whole or
in part, of some or all of the Mortgage Loans.

      SERVICING  CRITERIA:  As of any date of  determination,  the  "servicing
criteria"  set forth in Item  1122(d)  of  Regulation  AB,  or any  amendments
thereto,  a  summary  of the  requirements  of which as of the date  hereof is
attached  hereto as EXHIBIT M for  convenience of reference only. In the event
of a conflict or inconsistency  between the terms of EXHIBIT M and the text of
Item  1122(d) of  Regulation  AB, the text of Item  1122(d) of  Regulation  AB
shall control (or those  Servicing  Criteria  otherwise  mutually agreed to by
the  Purchaser,  the  Company  and any  Person  that will be  responsible  for
signing  any  Sarbanes   Certification   with  respect  to  a   Securitization
Transaction  in response  to evolving  interpretations  of  Regulation  AB and
incorporated into a revised EXHIBIT M).

      STATIC POOL  INFORMATION:  Static pool  information as described in Item
1105(a)(1)-(3) and 1105(c) of Regulation AB.

      SUBCONTRACTOR:  Any vendor,  subcontractor  or other  Person that is not
responsible for the overall  servicing (as "servicing" is commonly  understood
by participants in the  mortgage-backed  securities  market) of Mortgage Loans
but  performs one or more  discrete  functions  identified  in Item 1122(d) of
Regulation AB with respect to Mortgage  Loans under the direction or authority
of the Company or a Subservicer.

      THIRD-PARTY   ORIGINATOR:   Each   Person,   other   than  a   Qualified
Correspondent, that originated Mortgage Loans acquired by the Company.

      3.    Article I of the Agreement is hereby  amended  effective as of the
date hereof by deleting in its  entirety  the  definition  of  Subservicer  in
Section 1.01 and replacing it with the following:

      SUBSERVICER:  Any Person that services  Mortgage  Loans on behalf of the
Company or any Subservicer  and is responsible  for the  performance  (whether
directly or through  Subservicers or Subcontractors) of a substantial  portion
of the material  servicing  functions  required to be performed by the Company
under this  Agreement  or any  applicable  Reconstitution  Agreement  that are
identified in Item 1122(d) of Regulation AB.

      4.    Article I of the Agreement is hereby  amended  effective as of the
date  hereof  by  deleting  in  its  entirety  the   definition  of  Principal
Prepayment in Section 1.01 and replacing it with the following:

      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 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.

      5.    Article III of the  Agreement  is hereby  amended  effective as of
the date hereof by revising Section 3.01(n) as follows (new text underlined):

      (n)   Company has  delivered to the  Purchaser  financial  statements of
its  parent,  for its last  two  complete  fiscal  years.  All such  financial
information  fairly presents the pertinent results of operations and financial
position for the period  identified  and has been prepared in accordance  with
GAAP  consistently  applied  throughout  the periods  involved,  except as set
forth in the  notes  thereto.  There  has been no  change  in the  SERVICING
POLICIES  AND   PROCEDURES,   business,   operations,   financial   condition,
properties or assets of the Company since the date of the Company's  financial
information  that  would  have a  material  adverse  effect on its  ability to
perform its obligations under this Agreement;

      6.    Article III of the  Agreement  is hereby  amended  effective as of
the date hereof by adding the following new Section 3.01(p):

      (p)   As of the date of each  Pass-Through  Transfer,  and except as has
been  otherwise  disclosed  to the  Purchaser,  any  Master  Servicer  and any
Depositor:  (1) the Company is not aware and has not received  notice that any
default or servicing related  performance trigger has occurred as to any other
securitization  due  to any  act or  failure  to  act of the  Company;  (2) no
material  noncompliance  with  applicable  servicing  criteria as to any other
securitization has been disclosed or reported by the Company;  (3) the Company
has  not  been   terminated  as  servicer  in  a  residential   mortgage  loan
securitization,  either  due to a  servicing  default or to  application  of a
servicing  performance  test  or  trigger;  (4)  no  material  changes  to the
Company's  servicing policies and procedures for similar loans has occurred in
the  preceding  three  years;  (5)  there  are no  aspects  of  the  Company's
financial  condition  that  could  have  a  material  adverse  impact  on  the
performance  by the  Company of its  obligations  hereunder;  (6) there are no
legal  proceedings  pending,  or  known  to be  contemplated  by  governmental
authorities,  against the Company  that could be material to  investors in the
securities  issued  in  such  Pass-Through  Transfer;  and  (7)  there  are no
affiliations,  relationships or transactions relating to the Company of a type
that are described under Item 1119 of Regulation AB.

      7.    Article III of the  Agreement  is hereby  amended  effective as of
the date hereof by adding the following new Section 3.01(q):

      (q)   If so  requested by the  Purchaser  or any  Depositor on any date,
the Company shall,  within five Business Days following such request,  confirm
in writing the accuracy of the  representations  and  warranties  set forth in
Section  3.01(p) of this Section or, if any such  representation  and warranty
is not accurate as of the date of such request,  provide  reasonably  adequate
disclosure of the pertinent facts, in writing, to the requesting party.

      8.    Article III of the  Agreement  is hereby  amended  effective as of
the date hereof by adding the following new Section 3.01(r):

      (r)   Notwithstanding  anything to the  contrary in the  Agreement,  the
Company shall (or shall cause each Subservicer and Third-Party  Originator to)
(i)  immediately  notify the Purchaser,  any Master Servicer and any Depositor
in writing of (A) any litigation or governmental  proceedings  pending against
the Company,  any  Subservicer  or any  Third-Party  Originator  that could be
material to investors in the  securities  issued in a  Pass-Through  Transfer,
(B) any affiliations or relationships  that develop following the closing date
of a  Pass-Through  Transfer  between  the  Company,  any  Subservicer  or any
Third-Party  Originator  and any of the  parties  specified  in clause  (7) of
paragraph (p) of this Section (and any other parties  identified in writing by
the  requesting  party) with respect to such  Pass-Through  Transfer,  (C) any
Event  of  Default  under  the  terms  of  this  Agreement  or any  applicable
Reconstitution  Agreement  related thereto,  (D) any merger,  consolidation or
sale of substantially all of the assets of the Company,  and (E) the Company's
entry  into an  agreement  with a  Subservicer  to  perform  or  assist in the
performance  of any of the Company's  obligations  under this Agreement or any
Reconstitution  Agreement  and (ii) provide to the Purchaser and any Depositor
a description of such proceedings, affiliations or relationships.

      All  notifications  pursuant to this Section  3.01(r),  other than those
pursuant to Section 3.01(r)(i)(A), should be sent to:

      EMC Mortgage Corporation
      2780 Lake Vista Drive
      Lewisville, TX 75067-3884
      Attention:  Conduit Seller Approval Dept.
      Facsimile:  (214) 626-3751
      Email:  sellerapproval@bear.com

      With a copy to:

      Bear, Stearns & Co. Inc.
      383 Madison Avenue, 3rd Floor
      New, York, NY 10179
      Attention:  Global Credit Administration
      Facsimile:  (212) 272-6564

      Notifications pursuant to Section 3.01(r)(i)(A) should be sent to:

      EMC Mortgage Corporation
      Two Mac Arthur Ridge
      909 Hidden Ridge Drive, Suite 200
      Irving, TX 75038
      Attention:  Associate General Counsel for Loan Administration
      Facsimile:  (972) 831-2555

      With copies to:

      Bear, Stearns & Co. Inc.
      383 Madison Avenue, 3rd Floor
      New, York, NY 10179
      Attention:  Global Credit Administration
      Facsimile:  (212) 272-6564

      EMC Mortgage Corporation
      2780 Lake Vista Drive
      Lewisville, TX 75067-3884
      Attention:  Conduit Seller Approval Dept.
      Facsimile:  (214) 626-3751
      Email:  sellerapproval@bear.com

      9.    Article III of the  Agreement  is hereby  amended  effective as of
the date hereof by adding the following new Section 3.01(s):

      (s)   As  a  condition  to  the   succession   to  the  Company  or  any
Subservicer as servicer or subservicer  under this Agreement or any applicable
Reconstitution  Agreement  related  thereto  by any  Person (i) into which the
Company or such Subservicer may be merged or  consolidated,  or (ii) which may
be  appointed as a successor  to the Company or any  Subservicer,  the Company
shall provide to the  Purchaser,  any Master  Servicer and any  Depositor,  at
least 15  calendar  days prior to the  effective  date of such  succession  or
appointment,  (x) written notice to the Purchaser, any Master Servicer and any
Depositor of such  succession  or  appointment  and (y) in writing and in form
and substance  reasonably  satisfactory to the Purchaser,  any Master Servicer
and such  Depositor,  all information  reasonably  requested by the Purchaser,
any Master  Servicer or any  Depositor  in order to comply with its  reporting
obligation  under  Item  6.02  of  Form  8-K  with  respect  to any  class  of
asset-backed securities.

      10.   Article III of the  Agreement  is hereby  amended  effective as of
the date hereof by adding the following new Section 3.02(xx):

      With respect to each Mortgage Loan,  information  regarding the borrower
credit  files  related  to such  Mortgage  Loan has been  furnished  to credit
reporting  agencies  in  compliance  with the  provisions  of the Fair  Credit
Reporting Act and the applicable implementing regulations.

      11.   Article IV of the Agreement is hereby amended  effective as of the
date hereof by adding this paragraph after the first sentence of Section 4.01:

      In  addition,  the  Company  shall  furnish  information  regarding  the
borrower  credit  files  related  to such  Mortgage  Loan to credit  reporting
agencies in compliance  with the  provisions of the Fair Credit  Reporting Act
and the applicable implementing regulations.

      12.   Article IV of the Agreement is hereby amended  effective as of the
date hereof by deleting in its  entirety  the last  paragraph  of Section 4.02
and replacing it with the following:

      The  Company  shall not  waive any  Prepayment  Charge  unless:  (i) the
enforceability  thereof  shall have been  limited by  bankruptcy,  insolvency,
moratorium,  receivership and other similar laws relating to creditors' rights
generally,  (ii) the enforcement  thereof is illegal,  or any local,  state or
federal  agency  has  threatened  legal  action if the  prepayment  penalty is
enforced,  (iii) the mortgage debt has been  accelerated in connection  with a
foreclosure or other  involuntary  payment or (iv) such waiver is standard and
customary in servicing  similar  Mortgage  Loans and relates to a default or a
reasonably  foreseeable  default and would, in the reasonable  judgment of the
Company,  maximize recovery of total proceeds taking into account the value of
such Prepayment  Charge and the related Mortgage Loan. If a Prepayment  Charge
is waived,  but does not meet the standards  described above, then the Company
is required to pay the amount of such waived  Prepayment  Charge by  remitting
such amount to the Purchaser by the Remittance Date.

      13.   Article IV of the Agreement is hereby amended  effective as of the
date  hereof by revising  the first  paragraph  of Section  4.03 by adding the
following after the first sentence:

      In determining the delinquency  status of any Mortgage Loan, the Company
will use delinquency  recognition policies as described to and approved by the
Purchaser,  and shall revise these policies as requested by the Purchaser from
time to time.

      14.   Article V of the Agreement is hereby  amended  effective as of the
date hereof by deleting  Section 5.02 in its  entirety  and  replacing it with
the following:

      Section 5.02      STATEMENTS TO THE PURCHASER.

      The Company  shall furnish to Purchaser an  individual  loan  accounting
report,  as of the last Business Day of each month, in the Company's  assigned
loan number order to document  Mortgage Loan payment activity on an individual
Mortgage  Loan  basis.   With  respect  to  each  month,   the   corresponding
individual loan accounting  report shall be received by the Purchaser no later
than the fifth Business Day of the following  month on a disk or tape or other
computer-readable  format in such  format as may be  mutually  agreed  upon by
both  Purchaser and Company,  and no later than the fifth  Business Day of the
following month in hard copy, and shall contain the following:

      (i)   with respect to each Mortgage Loan and each Monthly  Payment,  the
amount  of such  remittance  allocable  to  principal  (including  a  separate
breakdown of any Principal Prepayment,  including the date of such prepayment,
and any  prepayment  penalties  or premiums,  along with a detailed  report of
interest on principal  prepayment  amounts remitted in accordance with Section
4.04);

      (ii)  with respect to each Mortgage Loan and each Monthly  Payment,  the
amount of such remittance allocable to interest;

      (iii) with  respect  to each  Mortgage  Loan,  the  amount of  servicing
compensation received by the Company during the prior distribution period;

      (iv)  the  Stated  Principal  Balance  of  each  Mortgage  Loan  and the
aggregate Stated  Principal  Balance of all Mortgage Loans as of the first day
of the distribution period and the last day of the distribution period;

      (v)   with respect to each Mortgage Loan, the current Mortgage  Interest
Rate;

      (vi)  with respect to each Mortgage  Loan,  the aggregate  amount of any
Insurance  Proceeds,  Condemnation  Proceeds,  Liquidation  Proceeds  and  REO
Disposition Proceeds received during the prior distribution period;

      (vii) with respect to each Mortgage  Loan,  the amount of any Prepayment
Interest  Shortfalls paid by the Company in accordance with Section 4.04(viii)
during the prior distribution period;

      (viii)      the beginning and ending  balances of the Custodial  Account
and Escrow Account;

      (ix)  the  number  of  Mortgage  Loans  as  of  the  first  day  of  the
distribution period and the last day of the distribution period;

      (x)   with respect to each Mortgage Loan, the Stated  Principal  Balance
of each  Mortgage Loan (a)  delinquent  as grouped in the following  intervals
through  final  liquidation  of such  Mortgage  Loan:  30 to 59 days, 60 to 89
days, 90 days or more; (b) as to which  foreclosure has commenced;  and (c) as
to which REO Property has been acquired;

      (xi)  with  respect to each  Mortgage  Loan,  the amount and severity of
any realized loss following liquidation of such Mortgage Loan;

      (xii) with respect to each Mortgage  Loan,  and in the aggregate for all
Mortgage Loans,  the amount of any Monthly Advances made by the Company during
the prior distribution period;

      (xiii)      with respect to each  Mortgage  Loan, a  description  of any
Servicing  Advances  made by the Company  with respect to such  Mortgage  Loan
including the amount,  terms and general  purpose of such Servicing  Advances,
and the aggregate  amount of Servicing  Advances for all Mortgage Loans during
the prior distribution period;

      (xiv) with  respect  to  each  Mortgage   Loan,  a  description  of  any
Nonrecoverable  Advances  made by the Company  with  respect to such  Mortgage
Loan including the amount,  terms and general  purpose of such  Nonrecoverable
Advances,  and  the  aggregate  amount  of  Nonrecoverable  Advances  for  all
Mortgage Loans during the prior distribution period;

      (xv)  with respect to each Mortgage  Loan, a description  of any Monthly
Advances,  Servicing  Advances and Nonrecoverable  Advances  reimbursed to the
Company  with  respect to such  Mortgage  Loan  during the prior  distribution
period   pursuant  to  Section  4.05,   and  the  source  of  funds  for  such
reimbursement,  and the aggregate  amount of any Monthly  Advances,  Servicing
Advances  and  Nonrecoverable  Advances  reimbursed  to the  Company  for  all
Mortgage Loans during the prior distribution period pursuant to Section 4.05;

      (xvi) with respect to any Mortgage  Loan, a description  of any material
modifications,  extensions  or  waivers  to  the  terms,  fees,  penalties  or
payments of such  Mortgage Loan during the prior  distribution  period or that
have cumulatively become material over time;

      (xvii)      a description of any material breach of a representation  or
warranty  set forth in  Section  3.01 or Section  3.02  herein or of any other
breach of a  covenant  or  condition  contained  herein  and the status of any
resolution of such breach;

      (xviii)     with respect to each  Mortgage  Loan,  the Stated  Principal
Balance of any  substitute  Mortgage  Loan  provided  by the  Company  and the
Stated  Principal  Balance of any  Mortgage  Loan that has been  replaced by a
substitute Mortgage Loan in accordance with Section 3.03 herein;

      (xix) with respect to each Mortgage Loan, the Stated  Principal  Balance
of any Mortgage  Loan that has been  repurchased  by the Company in accordance
with Section 3.03 herein.

      In  addition,  the Company  shall  provide to the  Purchaser  such other
information  known or  available  to the Company that is necessary in order to
provide the distribution  and pool  performance  information as required under
Item 1121 of  Regulation  AB, as amended from time to time,  as  determined by
the  Purchaser  in its sole  discretion.  The  Company  shall  also  provide a
monthly  report,  in the form of  EXHIBIT E hereto,  or such  other form as is
mutually  acceptable to the Company,  the  Purchaser and any Master  Servicer,
EXHIBIT  F with  respect  to  defaulted  mortgage  loans and  EXHIBIT  P, with
respect to realized losses and gains, with each such report.

      The Company  shall prepare and file any and all  information  statements
or  other  filings  required  to  be  delivered  to  any  governmental  taxing
authority or to Purchaser  pursuant to any  applicable law with respect to the
Mortgage Loans and the  transactions  contemplated  hereby.  In addition,  the
Company shall provide Purchaser with such information  concerning the Mortgage
Loans as is necessary for  Purchaser to prepare its federal  income tax return
as Purchaser may reasonably request from time to time.

      In  addition,  not more  than  sixty  (60)  days  after  the end of each
calendar  year,  the Company  shall furnish to each Person who was a Purchaser
at any time during such calendar year an annual  statement in accordance  with
the  requirements of applicable  federal income tax law as to the aggregate of
remittances for the applicable portion of such year.

      15.   Article VI of the Agreement is hereby amended  effective as of the
date hereof by deleting  Section 6.04 in its  entirety  and  replacing it with
the following:

      Section 6.04      ANNUAL   STATEMENT   AS   TO   COMPLIANCE;   ANNUAL
CERTIFICATION.

      (a)   The  Company  will  deliver  to  the   Purchaser  and  any  Master
Servicer,  not later than March 1 of each calendar year  beginning in 2007, an
Officers'  Certificate  acceptable to the  Purchaser (an "Annual  Statement of
Compliance")  stating, as to each signatory thereof,  that (i) a review of the
activities of the Company  during the preceding  calendar year (or  applicable
portion  thereof) and of performance  under this Agreement or other applicable
servicing  agreement has been made under such officers'  supervision  and (ii)
to the best of such  officers'  knowledge,  based on such review,  the Company
has fulfilled all of its obligations  under this Agreement or other applicable
servicing  agreement  in  all  material  respects  throughout  such  year  (or
applicable  portion  thereof),  or, if there has been a failure to fulfill any
such  obligation in any material  respect,  specifying each such failure known
to such  officer and the nature and status of cure  provisions  thereof.  Such
Annual  Statement of Compliance  shall contain no  restrictions or limitations
on its use.  Copies of such statement  shall be provided by the Company to the
Purchaser  upon  request and by the  Purchaser to any Person  identified  as a
prospective  purchaser  of the Mortgage  Loans.  In the event that the Company
has  delegated  any  servicing  responsibilities  with respect to the Mortgage
Loans to a  Subservicer,  the Company shall  deliver an officer's  certificate
(an "Annual  Certification")  of the Subservicer as described above as to each
Subservicer as and when required with respect to the Company.

      (b)   With  respect  to any  Mortgage  Loans  that are the  subject of a
Pass-Through  Transfer, by March 1 of each calendar year beginning in 2007, an
officer of the Company  shall execute and deliver an Annual  Certification  to
the Purchaser,  any Master Servicer and any related  Depositor for the benefit
of each such entity and such entity's  affiliates and the officers,  directors
and  agents  of any such  entity  and such  entity's  affiliates,  in the form
attached  hereto as  EXHIBIT L. In the event that the  Company  has  delegated
any  servicing  responsibilities  with  respect  to the  Mortgage  Loans  to a
Subservicer,  the  Company  shall  deliver  an  Annual  Certification  of  the
Subservicer  as described  above as to each  Subservicer  as and when required
with respect to the Company.

      (c)   If the Company  cannot  deliver the related  Annual  Statement  of
Compliance or Annual  Certification  by March 1st of such year, the Purchaser,
at its sole  option,  may permit a cure period for the Company to deliver such
Annual Statement of Compliance or Annual Certification,  but in no event later
than March 10th of such year.

      Failure of the Company to timely  comply with this Section 6.04 shall be
deemed an Event of  Default,  automatically,  without  notice and  without any
cure  period,  unless  otherwise  agreed to by the  Purchaser  as set forth in
6.04(c),  and Purchaser may, in addition to whatever  rights the Purchaser may
have  under  Sections  3.03  and  8.01  and at law or  equity  or to  damages,
including  injunctive  relief  and  specific  performance,  terminate  all the
rights and  obligations  of the Company under this Agreement and in and to the
Mortgage Loans and the proceeds  thereof without  compensating the Company for
the same, as provided in Section 9.01.  Such  termination  shall be considered
with cause pursuant to Section 10.01 of this  Agreement.  This paragraph shall
supercede any other  provision in this Agreement or any other agreement to the
contrary.


      16.   Article VI of the Agreement is hereby amended  effective as of the
date hereof by deleting  Section 6.05 in its  entirety  and  replacing it with
the following:

      Section 6.05      [RESERVED]

      17.   Article VI of the Agreement is hereby amended  effective as of the
date hereof by adding the following new Section 6.07:

      Section 6.07      ASSESSMENT OF COMPLIANCE WITH SERVICING CRITERIA.

      On and after January 1, 2006, the Company shall service and  administer,
and shall  cause each  subservicer  to servicer or  administer,  the  Mortgage
Loans  in  accordance  with  all  applicable  requirements  of  the  Servicing
Criteria.

      With  respect  to  any  Mortgage   Loans  that  are  the  subject  of  a
Pass-Through  Transfer,  the Company  shall  deliver to the  Purchaser  or its
designee,  any Master  Servicer and any Depositor on or before March 1 of each
calendar  year  beginning in 2007, a report (an  "Assessment  of  Compliance")
reasonably  satisfactory  to  the  Purchaser,  any  Master  Servicer  and  any
Depositor regarding the Company's  assessment of compliance with the Servicing
Criteria  during the  preceding  calendar year as required by Rules 13a-18 and
15d-18 of the  Exchange  Act and Item 1122 of  Regulation  AB or as  otherwise
required  by the  Master  Servicer,  which as of the date  hereof,  require  a
report by an authorized officer of the Company that contains the following:

      (a)   A statement by such officer of its  responsibility  for  assessing
compliance with the Servicing Criteria applicable to the Company;

      (b)   A statement by such  officer that such officer used the  Servicing
Criteria to assess  compliance with the Servicing  Criteria  applicable to the
Company;

      (c)   An  assessment by such officer of the  Company's  compliance  with
the applicable  Servicing  Criteria for the period consisting of the preceding
calendar year,  including disclosure of any material instance of noncompliance
with respect thereto during such period,  which  assessment  shall be based on
the   activities   it  performs  with  respect  to   asset-backed   securities
transactions  taken as a whole  involving the Company,  that are backed by the
same asset type as the Mortgage Loans;

      (d)   A statement that a registered  public  accounting  firm has issued
an  attestation  report on the  Company's  Assessment  of  Compliance  for the
period consisting of the preceding calendar year; and

      (e)   A statement  as to which of the  Servicing  Criteria,  if any, are
not  applicable  to  the  Company,  which  statement  shall  be  based  on the
activities it performs with respect to  asset-backed  securities  transactions
taken as a whole  involving  the  Company,  that are  backed by the same asset
type as the Mortgage Loans.

      Such report at a minimum shall  address each of the  Servicing  Criteria
specified  on a  certification  substantially  in the form of Exhibit O hereto
delivered to the Purchaser concurrently with the execution of this Agreement.

      With  respect  to  any  Mortgage   Loans  that  are  the  subject  of  a
Pass-Through  Transfer,  on or before March 1 of each calendar year  beginning
in 2007,  the Company  shall  furnish to the  Purchaser or its  designee,  any
Master  Servicer  and any  Depositor a report (an  "Attestation  Report") by a
registered  public  accounting  firm that  attests  to,  and  reports  on, the
Assessment of Compliance made by the Company,  as required by Rules 13a-18 and
15d-18 of the Exchange Act and Item 1122(b) of  Regulation  AB or as otherwise
required  by the Master  Servicer,  which  Attestation  Report must be made in
accordance  with  standards for  attestation  reports issued or adopted by the
Public Company Accounting Oversight Board.

      The  Company  shall  cause  each  Subservicer,  and  each  Subcontractor
determined by the Company  pursuant to Section 11.20 to be  "participating  in
the servicing  function"  within the meaning of Item 1122 of Regulation AB, to
deliver to the Purchaser,  any Master Servicer and any Depositor an assessment
of compliance  and  accountants'  attestation as and when provided in Sections
6.07.

      If the Company  cannot  deliver the related  Assessment of Compliance or
Attestation  Report  by March 1st of such  year,  the  Purchaser,  at its sole
option,  may permit a cure period for the Company to deliver  such  Assessment
of Compliance or Attestation  Report, but in no event later than March 10th of
such year.

      Failure of the Company to timely  comply with this Section 6.07 shall be
deemed an Event of  Default,  automatically,  without  notice and  without any
cure period,  unless otherwise agreed to by the Purchaser as described herein,
and  Purchaser  may, in addition to  whatever  rights the  Purchaser  may have
under  Sections  3.03 and 8.01 and at law or equity or to  damages,  including
injunctive  relief  and  specific  performance,  terminate  all the rights and
obligations  of the Company  under this  Agreement  and in and to the Mortgage
Loans and the proceeds thereof without  compensating the Company for the same,
as provided in Section 9.01. Such  termination  shall be considered with cause
pursuant to Section 10.01 of this  Agreement.  This paragraph  shall supercede
any other provision in this Agreement or any other agreement to the contrary.

      18.   Article VI of the Agreement is hereby amended  effective as of the
date hereof by adding the following new Section 6.08:

      Section 6.08      INTENT OF THE PARTIES; REASONABLENESS.

      The  Purchaser and the Company  acknowledge  and agree that a purpose of
Sections  3.01(p),  5.02,  6.04,  6.07  and  11.18  of  this  Agreement  is to
facilitate  compliance by the Purchaser and any Depositor  with the provisions
of Regulation AB and related rules and regulations of the Commission.  None of
the Purchaser,  any master  Servicer or any Depositor shall exercise its right
to  request  delivery  of  information  or  other   performance   under  these
provisions  other than in good faith,  or for purposes  other than  compliance
with the  Securities  Act, the Exchange Act and the rules and  regulations  of
the Commission  thereunder.  The Company  acknowledges that interpretations of
the  requirements  of  Regulation  AB may  change  over time,  whether  due to
interpretive  guidance  provided  by the  Commission  or its staff,  consensus
among participants in the asset-backed  securities markets, advice of counsel,
or otherwise,  and agrees to comply with requests made by the Purchaser or any
Depositor in good faith for delivery of information  under these provisions on
the basis of evolving  interpretations  of Regulation  AB. In connection  with
any  Pass-Through  Transfer,  the  Company  shall  cooperate  fully  with  the
Purchaser  to deliver to the  Purchaser  (including  any of its  assignees  or
designees)   and   any   Depositor,   any   and   all   statements,   reports,
certifications,  records and any other information necessary in the good faith
determination  of the  Purchaser or any  Depositor to permit the  Purchaser or
such Depositor to comply with the  provisions of Regulation AB,  together with
such disclosures  relating to the Company,  any  Subservicer,  any Third-Party
Originator  and the Mortgage  Loans,  or the servicing of the Mortgage  Loans,
reasonably  believed by the  Purchaser  or any  Depositor  to be  necessary in
order to effect such compliance.

      19.   Article IX of the Agreement is hereby amended  effective as of the
date hereof by deleting  the first  sentence of the last  paragraph of Section
9.01 and replacing it with the following (new text underlined):

            Then,  and in each and  every  such  case,  so long as an Event of
Default shall not have been remedied,  the Purchaser,  by notice in writing to
the Company  (except in the case of an Event of Default under  clauses  (iii),
(iv)  or  (v)  above,   OR  AS  OTHERWISE   STATED  HEREIN,   in  which  case,
automatically  and without  notice)  may,  in addition to whatever  rights the
Purchaser  may have  under  Sections  3.03 and 8.01 and at law or equity or to
damages,  including injunctive relief and specific performance,  terminate all
the rights and  obligations  of the Company  (AND IF THE COMPANY IS SERVICING
ANY  OF  THE  MORTGAGE  LOANS  IN A  SECURITIZATION  TRANSACTION,  APPOINT  A
SUCCESSOR  SERVICER  REASONABLY  ACCEPTABLE  TO ANY MASTER  SERVICER FOR SUCH
SECURITIZATION  TRANSACTION)  under this  Agreement and in and to the Mortgage
Loans and the proceeds thereof without compensating the Company for the same.

      20.   Article IX of the Agreement is hereby amended  effective as of the
date  hereof by  adding  the  following  at the end of the last  paragraph  of
Section 9.01:

      The Company shall  promptly  reimburse the Purchaser (or any designee of
the Purchaser,  such as a master  servicer) and any Depositor,  as applicable,
for all  reasonable  expenses  incurred by the Purchaser (or such designee) or
such  Depositor,  as such are incurred,  in connection with the termination of
the Company as servicer  pursuant to this Section and the  resulting  transfer
of servicing of the Mortgage Loans to a successor servicer.  The provisions of
this paragraph  shall not limit whatever rights the Purchaser or any Depositor
may have under  other  provisions  of this  Agreement  and/or  any  applicable
Reconstitution  Agreement  related thereto or otherwise,  whether in equity or
at law,  such as an action for damages,  specific  performance  or  injunctive
relief.

      21.   Article XI of the Agreement is hereby amended  effective as of the
date hereof by restating Section 11.18 in its entirety as follows:

      Section 11.18.    COOPERATION OF COMPANY WITH A RECONSTITUTION.

      The Company and the Purchaser  agree that with respect to some or all of
the  Mortgage  Loans,  on or after the related  Closing  Date,  on one or more
dates (each a  "Reconstitution  Date") at the  Purchaser's  sole  option,  the
Purchaser may effect a sale (each, a  "Reconstitution")  of some or all of the
Mortgage Loans then subject to this Agreement, without recourse, to:

      (a)   one or more third  party  purchasers  in one or more in whole loan
transfers (each, a "Whole Loan Transfer"); or

      (b)   one or more  trusts or other  entities to be formed as part of one
or more Pass-Through Transfers.

      The Company agrees to execute in connection  with any  agreements  among
the Purchaser,  the Company,  and any servicer in connection with a Whole Loan
Transfer, an Assignment,  Assumption and Recognition  Agreement  substantially
in the form of  EXHIBIT  D hereto,  or, at  Purchaser's  request,  a  seller's
warranties and servicing  agreement or a participation and servicing agreement
or  similar  agreement  in form and  substance  reasonably  acceptable  to the
parties,  and in  connection  with a  Pass-Through  Transfer,  a  pooling  and
servicing  agreement  in  form  and  substance  reasonably  acceptable  to the
parties,  (collectively the agreements referred to herein are designated,  the
"Reconstitution  Agreements").  It is understood that any such  Reconstitution
Agreements  will not contain any  greater  obligations  on the part of Company
than  are  contained  in  this  Agreement.  Notwithstanding  anything  to  the
contrary in this  Section  11.18,  the  Company  agrees that it is required to
perform the obligations described in EXHIBIT K hereto.

      With respect to each Whole Loan Transfer and each Pass-Through  Transfer
entered into by the Purchaser,  the Company agrees (1) to cooperate fully with
the Purchaser and any  prospective  purchaser  with respect to all  reasonable
requests and due  diligence  procedures;  (2) to execute,  deliver and perform
all Reconstitution  Agreements  required by the Purchaser;  (3) to restate the
representations  and  warranties  set  forth  in  this  Agreement  as  of  the
settlement or closing date in connection  with such  Reconstitution  (each,  a
"Reconstitution Date").

      In addition,  the Company shall  provide to such servicer or issuer,  as
the case may be, and any other participants in such Reconstitution:

      (i)   any  and  all   information   and   appropriate   verification  of
information which may be reasonably available to the Company,  whether through
letters of its  auditors  and counsel or  otherwise,  as the  Purchaser or any
such other participant shall request upon reasonable demand;

      (ii)  such additional representations,  warranties,  covenants, opinions
of counsel,  letters from auditors,  and  certificates of public  officials or
officers of the Company as are  reasonably  agreed upon by the Company and the
Purchaser or any such other participant;

      (iii) within  5  Business  Days  after  request  by the  Purchaser,  the
information  with respect to the Company (as originator) and each  Third-Party
Originator  of the  Mortgage  Loans as required  under Item 1110(a) and (b) of
Regulation AB, a summary of the  requirements  of which has of the date hereof
is  attached  hereto as  EXHIBIT  N for  convenience  of  reference  only,  as
determined  by  Purchaser  in  its  sole  discretion.   If  requested  by  the
Purchaser, this will include information about the applicable  credit-granting
or underwriting criteria;

      (iv)  within  5  Business  Days  after  request  by the  Purchaser,  the
Company shall provide (or, as applicable,  cause each  Third-Party  Originator
to  provide) to the extent  reasonably  available  to the Company  Static Pool
Information  with  respect  to the  mortgage  loans (of a similar  type as the
Mortgage Loans,  as reasonably  identified by the Purchaser as provided below)
serviced by or for the Company or any  Third-Party  Originator  and originated
by (i)  the  Company,  if the  Company  is an  originator  of  Mortgage  Loans
(including as an acquirer of Mortgage  Loans from a Qualified  Correspondent),
and/or (ii) each Third-Party  Originator.  Such Static Pool Information  shall
be prepared by the Company  (or  Third-Party  Originator)  on the basis of its
reasonable,   good  faith   interpretation   of  the   requirements   of  Item
1105(a)(1)-(3)  and (c) of  Regulation AB for the period of time such Mortgage
Loans were serviced by or for the Company (or Third-Party Originator).  To the
extent that there is  reasonably  available  to the  Company  (or  Third-Party
Originator)  Static Pool  Information  with  respect to more than one mortgage
loan  type,  the  Purchaser  or any  Depositor  shall be  entitled  to specify
whether  some or all of such  information  shall be provided  pursuant to this
paragraph.  The  content of such Static  Pool  Information  may be in the form
customarily  provided  by the  Company,  and  need not be  customized  for the
Purchaser  or any  Depositor.  Such Static Pool  Information  for each vintage
origination year or prior securitized pool, as applicable,  shall be presented
in increments no less  frequently than quarterly over the life of the mortgage
loans included in the vintage  origination year or prior securitized pool. The
most  recent  periodic  increment  must be as of a date no later than 135 days
prior to the date of the  prospectus or other  offering  document in which the
Static Pool  Information is to be included or incorporated  by reference.  The
Static  Pool  Information  shall be  provided  in an  electronic  format  that
provides a permanent  record of the information  provided,  such as a portable
document  format  (pdf)  file,  or other  such  electronic  format  reasonably
required by the Purchaser or the Depositor, as applicable;

      (v)   within  5   Business   Days  after   request  by  the   Purchaser,
information  with  respect to the  Company (as  servicer)  as required by Item
1108(b) and (c) of Regulation  AB, a summary of the  requirements  of which as
of the date  hereof  is  attached  hereto  as  EXHIBIT  N for  convenience  of
reference  only,  as determined  by Purchaser in its sole  discretion.  In the
event that the Company  has  delegated  any  servicing  responsibilities  with
respect to the Mortgage Loans to a Subservicer,  the Company shall provide the
information required pursuant to this clause with respect to the Subservicer;

      (vi)  within 5 Business Days after request by the Purchaser,
            (a) information  regarding any legal proceedings pending (or known
      to be contemplated)  against the Company (as originator and as servicer)
      and each other  originator of the Mortgage Loans and each Subservicer as
      required by Item 1117 of  Regulation  AB, a summary of the  requirements
      of which as of the date  hereof  is  attached  hereto  as  Exhibit N for
      convenience  of reference  only,  as determined by Purchaser in its sole
      discretion,
            (b)  information  regarding   affiliations  with  respect  to  the
      Company (as  originator  and as servicer)  and each other  originator of
      the Mortgage  Loans and each  Subservicer as required by Item 1119(a) of
      Regulation  AB, a summary  of the  requirements  of which as of the date
      hereof is  attached  hereto as EXHIBIT N for  convenience  of  reference
      only, as determined by Purchaser in its sole discretion, and
            (c) information  regarding  relationships  and  transactions  with
      respect to the Company (as  originator  and as servicer)  and each other
      originator  of the Mortgage  Loans and each  Subservicer  as required by
      Item 1119(b) and (c) of Regulation AB, a summary of the  requirements of
      which  as of the  date  hereof  is  attached  hereto  as  Exhibit  N for
      convenience  of reference  only,  as determined by Purchaser in its sole
      discretion;

      (vii) if so requested by the  Purchaser,  the Company shall provide (or,
as applicable,  cause each Third-Party  Originator to provide), at the expense
of the requesting party (to the extent of any additional  incremental  expense
associated  with delivery  pursuant to this  Agreement),  such  statements and
agreed-upon  procedures  letters of certified  public  accountants  reasonably
acceptable to the Purchaser or Depositor, as applicable,  pertaining to Static
Pool  Information  relating  to prior  securitized  pools for  securitizations
closed on or after January 1, 2006 or, in the case of Static Pool  Information
with respect to the  Company's or  Third-Party  Originator's  originations  or
purchases,  to calendar months commencing January 1, 2006, or to any financial
information  included  in any other  disclosure  provided  under this  Section
11.18,  as the Purchaser or such  Depositor  shall  reasonably  request.  Such
statements  and letters  shall be  addressed to and be for the benefit of such
parties  as the  Purchaser  or  such  Depositor  shall  designate,  which  may
include, by way of example,  any Sponsor,  any Depositor and any broker dealer
acting as underwriter,  placement agent or initial purchaser with respect to a
Pass-Through  Transfer.  Any such  statement  or letter may take the form of a
standard,  generally  applicable  document  accompanied  by a reliance  letter
authorizing  reliance by the  addressees  designated  by the Purchaser or such
Depositor;

      (viii) For the purpose of satisfying the reporting  obligation under the
Exchange  Act with  respect  to any  class  of  asset-backed  securities,  the
Company shall (or shall cause each Subservicer and Third-Party  Originator to)
(i)  provide  prompt  notice to the  Purchaser,  any Master  Servicer  and any
Depositor  in  writing  of (A)  any  litigation  or  governmental  proceedings
involving the Company,  any  Subservicer or any  Third-Party  Originator  that
could be material to  investors  in the  securities  issued in a  Pass-Through
Transfer,  (B) any  affiliations or relationships  that develop  following the
closing  date  of  a  Securitization  Transaction  between  the  Company,  any
Subservicer or any Third-Party  Originator and any of the parties specified in
clause (D) of paragraph (a) of this Section (and any other parties  identified
in writing  by the  requesting  party)  with  respect  to such  Securitization
Transaction,  (C) any Event of Default  under the terms of this  Agreement  or
any  applicable  Reconstitution  Agreement  related  thereto,  (D) any merger,
consolidation or sale of substantially  all of the assets of the Company,  and
(E) the Company's  entry into an agreement  with a  Subservicer  to perform or
assist in the  performance  of any of the  Company's  obligations  under  this
Agreement or any applicable  Reconstitution Agreement related thereto and (ii)
provide to the Purchaser and any Depositor a description of such  proceedings,
affiliations or relationships;

      (ix) As a condition to the succession to the Company or any  Subservicer
as  servicer  or   subservicer   under  this   Agreement  or  any   applicable
Reconstitution  Agreement  related  thereto  by any  Person (i) into which the
Company or such Subservicer may be merged or  consolidated,  or (ii) which may
be  appointed as a successor  to the Company or any  Subservicer,  the Company
shall provide to the Purchaser,  any Master  Servicer,  and any Depositor,  at
least 15  calendar  days prior to the  effective  date of such  succession  or
appointment,  (x) written  notice to the  Purchaser  and any Depositor of such
succession  or  appointment  and  (y) in  writing  and in form  and  substance
reasonably  satisfactory to the Purchaser and such Depositor,  all information
reasonably  requested  by the  Purchaser  or any  Depositor in order to comply
with its reporting  obligation under Item 6.02 of Form 8-K with respect to any
class of asset-backed securities;

      (x) In addition to such  information  as the Company,  as  servicer,  is
obligated  to provide  pursuant to other  provisions  of this  Agreement,  not
later than ten days prior to the deadline  for the filing of any  distribution
report  on  Form  10-D  in  respect  of any  Securitization  Transaction  that
includes  any  of  the  Mortgage   Loans   serviced  by  the  Company  or  any
Subservicer,  the Company or such  Subservicer,  as applicable,  shall, to the
extent the Company or such  Subservicer  has  knowledge,  provide to the party
responsible  for filing  such report  (including,  if  applicable,  the Master
Servicer)  notice of the occurrence of any of the following  events along with
all information,  data, and materials related thereto as may be required to be
included in the related  distribution report on Form 10-D (as specified in the
provisions of Regulation AB referenced below):

                  (A)   any material  modifications,  extensions or waivers of
pool asset terms, fees,  penalties or payments during the distribution  period
or that have  cumulatively  become  material  over time (Item  1121(a)(11)  of
Regulation AB);

                  (B)   material  breaches  of pool asset  representations  or
warranties or transaction covenants (Item 1121(a)(12) of Regulation AB); and

                  (C)   information  regarding  new  asset-backed   securities
issuances  backed by the same pool assets,  any pool asset  changes  (such as,
additions,   substitutions  or  repurchases),  and  any  material  changes  in
origination,  underwriting  or other criteria for  acquisition or selection of
pool assets (Item 1121(a)(14) of Regulation AB); and

      (xi) The Company shall  provide to the  Purchaser,  any Master  Servicer
and any  Depositor,  evidence of the  authorization  of the person signing any
certification  or  statement,  copies  or  other  evidence  of  Fidelity  Bond
Insurance and Errors and Omission Insurance policy,  financial information and
reports,  and such other information related to the Company or any Subservicer
or the Company or such Subservicer's performance hereunder.

      In the  event  of a  conflict  or  inconsistency  between  the  terms of
Exhibit  N and the  text of the  applicable  Item of  Regulation  AB as  cited
above,  the text of  Regulation  AB, its  adopting  release  and other  public
statements of the SEC shall control.

      The  Company  shall  indemnify  the  Purchaser,  each  affiliate  of the
Purchaser,  and each of the following parties  participating in a Pass-Through
Transfer:  each sponsor and issuing entity;  each Person  (including,  but not
limited  to,  any  Master  Servicer,   if  applicable)   responsible  for  the
preparation,  execution or filing of any report  required to be filed with the
Commission with respect to such Pass-Through  Transfer,  or for execution of a
certification  pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange
Act with respect to such Pass-Through  Transfer;  each broker dealer acting as
underwriter,  placement agent or initial  purchaser,  each Person who controls
any of such parties or the Depositor  (within the meaning of Section 15 of the
Securities  Act and  Section  20 of the  Exchange  Act);  and  the  respective
present and former directors,  officers,  employees,  agents and affiliates of
each of the foregoing and of the Depositor  (each,  an  "Indemnified  Party"),
and shall hold each of them  harmless  from and against  any  claims,  losses,
damages,  penalties,  fines, forfeitures,  legal fees and expenses and related
costs, judgments,  and any other costs, fees and expenses that any of them may
sustain arising out of or based upon:

      (i)(A) any untrue  statement of a material fact  contained or alleged to
be contained in any written information, written report, certification,  data,
accountants'  letter or other material provided under this Section 11.18 by or
on behalf of the  Company,  or  provided  under  this  Section  11.18 by or on
behalf  of  any   Subservicer,   Subcontractor   or   Third-Party   Originator
(collectively,  the  "Company  Information"),  or (B) the  omission or alleged
omission to state in the Company  Information  a material  fact required to be
stated  in  the  Company  Information  or  necessary  in  order  to  make  the
statements  therein,  in the light of the circumstances  under which they were
made, not misleading;  provided,  by way of clarification,  that clause (B) of
this  paragraph  shall  be  construed  solely  by  reference  to  the  Company
Information and not to any other  information  communicated in connection with
a sale or  purchase  of  securities,  without  regard to whether  the  Company
Information  or any portion  thereof is presented  together with or separately
from such other information;

      (ii) any breach by the  Company of its  obligations  under this  Section
11.18,  including  particularly  any failure by the Company,  any Subservicer,
any  Subcontractor  or any Third-Party  Originator to deliver any information,
report,  certification,  accountants'  letter  or other  material  when and as
required  under this Section  11.18,  including  any failure by the Company to
identify  pursuant to Section 11.20 any  Subcontractor  "participating  in the
servicing function" within the meaning of Item 1122 of Regulation AB;

      (iii) any breach by the  Company of a  representation  or  warranty  set
forth in Section 3.01 or in a writing  furnished  pursuant to Section  3.01(q)
and made as of a date prior to the closing  date of the  related  Pass-Through
Transfer,  to the extent that such breach is not cured by such  closing  date,
or any breach by the  Company of a  representation  or  warranty  in a writing
furnished  pursuant  to  Section  3.01(q)  to  the  extent  made  as of a date
subsequent to such closing date; or

      (iv)  the negligence  bad faith or willful  misconduct of the Company in
connection with its performance under this Section 11.18.


      If  the   indemnification   provided  for  herein  is   unavailable   or
insufficient  to hold harmless an Indemnified  Party,  then the Company agrees
that it shall  contribute  to the amount  paid or payable by such  Indemnified
Party as a result of any claims,  losses,  damages or liabilities  incurred by
such  Indemnified  Party in such  proportion as is  appropriate to reflect the
relative  fault of such  Indemnified  Party on the one hand and the Company on
the other.

      In the case of any failure of performance  described  above, the Company
shall promptly reimburse the Purchaser, any Depositor, as applicable, and each
Person  responsible  for the  preparation,  execution  or filing of any report
required to be filed with the Commission  with respect to such  Securitization
Transaction, or for execution of a certification pursuant to Rule 13a-14(d) or
Rule  15d-14(d)  under the Exchange  Act with  respect to such  Securitization
Transaction,  for all costs reasonably incurred by each such party in order to
obtain the information,  report,  certification,  accountants' letter or other
material  not  delivered  as required by the  Company,  any  Subservicer,  any
Subcontractor or any Third-Party Originator.

      This indemnification  shall survive the termination of this Agreement or
the termination of any party to this Agreement.

      All Mortgage Loans not sold or transferred  pursuant to a Reconstitution
shall remain  subject to, and serviced in  accordance  with the terms of, this
Agreement and the related Term Sheet,  and with respect thereto this Agreement
and the related Term Sheet shall remain in full force and effect.

      22.   Article XI of the Agreement is hereby amended  effective as of the
date hereof by adding the following new Section 11.20:

      Section 11.20. USE OF SUBSERVICERS AND SUBCONTRACTORS.

      (a)   The Company  shall not hire or  otherwise  utilize the services of
any  Subservicer to fulfill any of the  obligations of the Company as servicer
under  this  Agreement  or any  applicable  Reconstitution  Agreement  related
thereto  unless the Company  complies with the  provisions of paragraph (b) of
this Section.  The Company shall not hire or otherwise utilize the services of
any  Subcontractor,  and shall not permit any Subservicer to hire or otherwise
utilize the services of any  Subcontractor,  to fulfill any of the obligations
of  the  Company  as  servicer   under  this   Agreement  or  any   applicable
Reconstitution  Agreement related thereto unless the Company complies with the
provisions of paragraph (d) of this Section.

      (b)   It shall not be  necessary  for the Company to seek the consent of
the Purchaser,  any Master Servicer or any Depositor to the utilization of any
Subservicer.  The Company shall cause any Subservicer  used by the Company (or
by any  Subservicer)  for the benefit of the  Purchaser  and any  Depositor to
comply  with  the  provisions  of this  Section  and  with  Sections  3.01(p),
3.01(s),  6.04, 6.07 and 11.18 of this Agreement to the same extent as if such
Subservicer  were the Company,  and to provide the  information  required with
respect to such  Subservicer  under  Section  3.01(r) of this  Agreement.  The
Company  shall  be  responsible  for  obtaining  from  each   Subservicer  and
delivering to the Purchaser,  any Master Servicer and any Depositor any Annual
Statement of  Compliance  required to be delivered by such  Subservicer  under
Section 6.04(a),  any Assessment of Compliance and Attestation Report required
to be  delivered  by such  Subservicer  under  Section  6.07  and  any  Annual
Certification  required  under  Section  6.04(b)  as and when  required  to be
delivered.

      (c)   It shall not be  necessary  for the Company to seek the consent of
the Purchaser,  any Master Servicer or any Depositor to the utilization of any
Subcontractor.  The  Company  shall  promptly  upon  request  provide  to  the
Purchaser,  any Master  Servicer  and any  Depositor  (or any  designee of the
Depositor,  such as an  administrator)  a  written  description  (in  form and
substance  satisfactory  to  the  Purchaser,  any  Master  Servicer  and  such
Depositor)  of the role and  function  of each  Subcontractor  utilized by the
Company  or  any  Subservicer,  specifying  (i)  the  identity  of  each  such
Subcontractor,  (ii) which (if any) of such  Subcontractors are "participating
in the servicing  function"  within the meaning of Item 1122 of Regulation AB,
and (iii) which  elements  of the  Servicing  Criteria  will be  addressed  in
assessments of compliance  provided by each Subcontractor  identified pursuant
to clause (ii) of this paragraph.

      (d)   As a condition to the utilization of any Subcontractor  determined
to be  "participating  in the servicing  function"  within the meaning of Item
1122 of Regulation AB, the Company shall cause any such  Subcontractor used by
the Company (or by any  Subservicer)  for the benefit of the Purchaser and any
Depositor  to comply with the  provisions  of Sections  6.07 and 11.18 of this
Agreement to the same extent as if such  Subcontractor  were the Company.  The
Company  shall be  responsible  for  obtaining  from  each  Subcontractor  and
delivering to the  Purchaser  and any  Depositor any  Assessment of Compliance
and Attestation Report and the other certificates  required to be delivered by
such  Subservicer and such  Subcontractor  under Section 6.07, in each case as
and when required to be delivered.

      23.   Article XI of the Agreement is hereby amended  effective as of the
date hereof by adding the following new Section 11.21:

      Section 11.21. THIRD PARTY BENEFICIARY.

      For  purposes  of  this   Agreement, each   Master   Servicer  shall  be
considered a third party  beneficiary to this  Agreement,  entitled to all the
rights and benefits hereof as if it were a direct party to this Agreement.

      24.   The Agreement is hereby  amended as of the date hereof by deleting
Exhibit E in its entirety and replacing it with the following:

                                     EXHIBIT E

                         REPORTING DATA FOR MONTHLY REPORT

                         STANDARD FILE LAYOUT - MASTER SERVICING
<TABLE>
    COLUMN NAME                                 DESCRIPTION                      DECIMAL           FORMAT COMMENT          MAX
                                                                                                                           SIZE
--------------------           -----------------------------------------------   -------    -----------------------------  ----
<S>                            <C>                                               <C>        <C>                            <C>
SER_INVESTOR_NBR               A value assigned by the Servicer to define a                 Text up to 10 digits             20
                               group of loans.
LOAN_NBR                       A unique identifier assigned to each loan by                 Text up to 10 digits             10
                               the investor.
                               A unique number assigned to a loan by the
SERVICER_LOAN_NBR              Servicer.  This may be different than the
                               LOAN_NBR.                                                    Text up to 10 digits             10
BORROWER_NAME                  The borrower name as received in the file.                   Maximum length of 30 (Last,      30
                               It is not separated by first and last name.                  First)
                               Scheduled monthly principal and scheduled
SCHED_PAY_AMT                  interest payment that a borrower is expected                 No commas(,) or dollar signs
                               to pay, P&I constant.                                2       ($)                              11
NOTE_INT_RATE                  The loan interest rate as reported by the            4       Max length of 6                   6
                               Servicer.
NET_INT_RATE                   The loan gross interest rate less the service        4       Max length of 6                   6
                               fee rate as reported by the Servicer.
SERV_FEE_RATE                  The servicer's fee rate for a loan as                4       Max length of 6                   6
                               reported by the Servicer.
SERV_FEE_AMT                   The servicer's fee amount for a loan as              2       No commas(,) or dollar signs     11
                               reported by the Servicer.                                    ($)
NEW_PAY_AMT                    The new loan payment amount as reported by           2       No commas(,) or dollar signs     11
                               the Servicer.                                                ($)
NEW_LOAN_RATE                  The new loan rate as reported by the Servicer.       4       Max length of 6                   6
ARM_INDEX_RATE                 The index the Servicer is using to calculate         4       Max length of 6                   6
                               a forecasted rate.
ACTL_BEG_PRIN_BAL              The borrower's actual principal balance at           2       No commas(,) or dollar signs     11
                               the beginning of the processing cycle.                       ($)
ACTL_END_PRIN_BAL              The borrower's actual principal balance at           2       No commas(,) or dollar signs     11
                               the end of the processing cycle.                             ($)
                               The date at the end of processing cycle that
BORR_NEXT_PAY_DUE_DATE         the borrower's next payment is due to the                    MM/DD/YYYY                       10
                               Servicer, as reported by Servicer.                   2       No commas(,) or dollar signs     11
SERV_CURT_AMT_1                The first curtailment amount to be applied.                  ($)
                                                                                            MM/DD/YYYY                       10
SERV_CURT_DATE_1               The curtailment date associated with the
                               first curtailment amount.                            2       No commas(,) or dollar signs     11
CURT_ADJ_ AMT_1                The curtailment interest on the first                        ($)
                               curtailment amount, if applicable.                   2       No commas(,) or dollar signs     11
SERV_CURT_AMT_2                The second curtailment amount to be applied.                 ($)
                                                                                            MM/DD/YYYY                       10
SERV_CURT_DATE_2               The curtailment date associated with the
                               second curtailment amount.                           2       No commas(,) or dollar signs     11
CURT_ADJ_ AMT_2                The curtailment interest on the second                       ($)
                               curtailment amount, if applicable.                   2       No commas(,) or dollar signs     11
SERV_CURT_AMT_3                The third curtailment amount to be applied.                  ($)
                                                                                            MM/DD/YYYY                       10
SERV_CURT_DATE_3               The curtailment date associated with the
                               third curtailment amount.                            2       No commas(,) or dollar signs     11
CURT_ADJ_AMT_3                 The curtailment interest on the third                        ($)
                               curtailment amount, if applicable.                   2       No commas(,) or dollar signs     11
PIF_AMT                        The loan "paid in full" amount as reported by                ($)
                               the Servicer.
PIF_DATE                       The paid in full date as reported by the                     MM/DD/YYYY                       10
                               Servicer.                                                    Action Code Key:
                                                                                            15=Bankruptcy,



ACTION_CODE                    The standard FNMA numeric code used to                       30=Foreclosure, , 60=PIF,         2
                               indicate the default/delinquent status of a                  63=Substitution,
                               particular loan.                                             65=Repurchase,70=REO

INT_ADJ_AMT                    The amount of the interest adjustment as             2       No commas(,) or dollar signs     11
                               reported by the Servicer.                                    ($)
SOLDIER_SAILOR_ADJ_AMT         The Soldier and Sailor Adjustment amount, if         2       No commas(,) or dollar signs     11
                               applicable.                                                  ($)
NON_ADV_LOAN_AMT               The Non Recoverable Loan Amount, if                  2       No commas(,) or dollar signs     11
                               applicable.                                                  ($)
LOAN_LOSS_AMT                  The amount the Servicer is passing as a loss,        2       No commas(,) or dollar signs     11
                               if applicable.                                               ($)
                               The scheduled outstanding principal amount
SCHED_BEG_PRIN_BAL             due at the beginning of the cycle date to be                 No commas(,) or dollar signs
                               passed through to investors.                         2       ($)                              11
SCHED_END_PRIN_BAL             The scheduled principal balance due to               2       No commas(,) or dollar signs     11
                               investors at the end of a processing cycle.                  ($)
                               The scheduled principal amount as reported by
SCHED_PRIN_AMT                 the Servicer for the current cycle -- only                   No commas(,) or dollar signs
                               applicable for Scheduled/Scheduled Loans.            2       ($)                              11
                               The scheduled gross interest amount less the
                               service fee amount for the current cycle as
SCHED_NET_INT                  reported by the Servicer -- only applicable                  No commas(,) or dollar signs
                               for Scheduled/Scheduled Loans.                       2       ($)                              11
                               The actual principal amount collected by the
ACTL_PRIN_AMT                  Servicer for the current reporting cycle --                  No commas(,) or dollar signs
                               only applicable for Actual/Actual Loans.             2       ($)                              11
                               The actual gross interest amount less the
                               service fee amount for the current reporting                 No commas(,) or dollar signs
ACTL_NET_INT                   cycle as reported by the Servicer -- only            2       ($)                              11
                               applicable for Actual/Actual Loans.
                               The penalty amount received when a borrower
PREPAY_PENALTY_ AMT            prepays on his loan as reported by the                       No commas(,) or dollar signs
                               Servicer.                                            2       ($)                              11
PREPAY_PENALTY_ WAIVED         The prepayment penalty amount for the loan           2       No commas(,) or dollar signs     11
                               waived by the servicer.                                      ($)
MOD_DATE                       The Effective Payment Date of the                            MM/DD/YYYY                       10
                               Modification for the loan.
MOD_TYPE                       The Modification Type.                                       Varchar - value can be alpha     30
                                                                                            or numeric
DELINQ_P&I_ADVANCE_AMT         The current outstanding principal and                2       No commas(,) or dollar signs     11
                               interest advances made by Servicer.                          ($)
</TABLE>

      25.   The  Agreement  is hereby  amended as of the date hereof by adding
the following new Exhibit F:


                                     EXHIBIT F

                         REPORTING DATA FOR DEFAULTED LOANS

                  STANDARD FILE LAYOUT - DELINQUENCY REPORTING

<TABLE>
COLUMN/HEADER NAME                                   Description                               DECIMAL        FORMAT
                                                                                                             COMMENT
--------------------                  ------------------------------------------------------   -------      --------------
<S>                                    <C>                                                     <C>           <C>
SERVICER_LOAN_NBR                      A unique number assigned to a loan by the
                                       Servicer.  This may be different than the LOAN_NBR
LOAN_NBR                               A unique identifier assigned to each loan by the
                                       originator.
CLIENT_NBR                             Servicer Client Number
SERV_INVESTOR_NBR                      Contains a unique number as assigned by an
                                       external servicer to identify a group of loans in
                                       their system.
BORROWER_FIRST_NAME                    First Name of the Borrower.
BORROWER_LAST_NAME                     Last name of the borrower.
PROP_ADDRESS                           Street Name and Number of Property
PROP_STATE                             The state where the  property located.
PROP_ZIP                               Zip code where the property is located.
BORR_NEXT_PAY_DUE_DATE                 The date that the borrower's next payment is due                     MM/DD/YYYY
                                       to the servicer at the end of processing cycle, as
                                       reported by Servicer.
LOAN_TYPE                              Loan Type (i.e. FHA, VA, Conv)
BANKRUPTCY_FILED_DATE                  The date a particular bankruptcy claim was filed.                    MM/DD/YYYY
BANKRUPTCY_CHAPTER_CODE                The chapter under which the bankruptcy was filed.
BANKRUPTCY_CASE_NBR                    The case number assigned by the court to the
                                       bankruptcy filing.
POST_PETITION_DUE_DATE                 The payment due date once the bankruptcy has been                    MM/DD/YYYY
                                       approved by the courts
BANKRUPTCY_DCHRG_DISM_DATE             The Date The Loan Is Removed From Bankruptcy.                        MM/DD/YYYY
                                       Either by Dismissal, Discharged and/or a Motion
                                       For Relief Was Granted.
LOSS_MIT_APPR_DATE                     The Date The Loss Mitigation Was Approved By The                     MM/DD/YYYY
                                       Servicer
LOSS_MIT_TYPE                          The Type Of Loss Mitigation Approved For A Loan
                                       Such As;
LOSS_MIT_EST_COMP_DATE                 The Date The Loss Mitigation /Plan Is Scheduled To                   MM/DD/YYYY
                                       End/Close
LOSS_MIT_ACT_COMP_DATE                 The Date The Loss Mitigation Is Actually Completed                   MM/DD/YYYY
FRCLSR_APPROVED_DATE                   The date DA Admin sends a letter to the servicer                     MM/DD/YYYY
                                       with instructions to begin foreclosure proceedings.
ATTORNEY_REFERRAL_DATE                 Date File Was Referred To Attorney to Pursue                         MM/DD/YYYY
                                       Foreclosure
FIRST_LEGAL_DATE                       Notice of 1st legal filed by an Attorney in a                        MM/DD/YYYY
                                       Foreclosure Action
FRCLSR_SALE_EXPECTED_DATE              The date by which a foreclosure sale is expected                     MM/DD/YYYY
                                       to occur.
FRCLSR_SALE_DATE                       The actual date of the foreclosure sale.                             MM/DD/YYYY
FRCLSR_SALE_AMT                        The amount a property sold for at the foreclosure          2         No commas(,)
                                       sale.                                                                or dollar
                                                                                                            signs ($)
EVICTION_START_DATE                    The date the servicer initiates eviction of the                      MM/DD/YYYY
                                       borrower.
EVICTION_COMPLETED_DATE                The date the court revokes legal possession of the                   MM/DD/YYYY
                                       property from the borrower.
LIST_PRICE                             The price at which an REO property is marketed.            2         No commas(,)
                                                                                                            or dollar
                                                                                                            signs ($)
LIST_DATE                              The date an REO property is listed at a particular                   MM/DD/YYYY
                                       price.
OFFER_AMT                              The dollar value of an offer for an REO property.          2         No commas(,)
                                                                                                            or dollar
                                                                                                            signs ($)
OFFER_DATE_TIME                        The date an offer is received by DA Admin or by                      MM/DD/YYYY
                                       the Servicer.
REO_CLOSING_DATE                       The date the REO sale of the property is scheduled                   MM/DD/YYYY
                                       to close.
REO_ACTUAL_CLOSING_DATE                Actual Date Of REO Sale                                              MM/DD/YYYY
OCCUPANT_CODE                          Classification of how the property is occupied.
PROP_CONDITION_CODE                    A code that indicates the condition of the
                                       property.
PROP_INSPECTION_DATE                   The date a  property inspection is performed.                        MM/DD/YYYY
APPRAISAL_DATE                         The date the appraisal was done.                                     MM/DD/YYYY
CURR_PROP_VAL                           The current "as is" value of the property based           2
                                       on brokers price opinion or appraisal.
REPAIRED_PROP_VAL                      The amount the property would be worth if repairs          2
                                       are completed pursuant to a broker's price opinion
                                       or appraisal.
IF APPLICABLE:
DELINQ_STATUS_CODE                     FNMA Code Describing Status of Loan
DELINQ_REASON_CODE                     The circumstances which caused a borrower to stop
                                       paying on a loan.   Code indicates the reason why
                                       the loan is in default for this cycle.
MI_CLAIM_FILED_DATE                    Date Mortgage Insurance Claim Was Filed With                         MM/DD/YYYY
                                       Mortgage Insurance Company.
MI_CLAIM_AMT                           Amount of Mortgage Insurance Claim Filed                             No commas(,)
                                                                                                            or dollar
                                                                                                            signs ($)
MI_CLAIM_PAID_DATE                     Date Mortgage Insurance Company Disbursed Claim                      MM/DD/YYYY
                                       Payment
MI_CLAIM_AMT_PAID                      Amount Mortgage Insurance Company Paid On Claim            2         No commas(,)
                                                                                                            or dollar
                                                                                                            signs ($)
POOL_CLAIM_FILED_DATE                  Date Claim Was Filed With Pool Insurance Company                     MM/DD/YYYY
POOL_CLAIM_AMT                         Amount of Claim Filed With Pool Insurance Company          2         No commas(,)
                                                                                                            or dollar
                                                                                                            signs ($)
POOL_CLAIM_PAID_DATE                   Date Claim Was Settled and The Check Was Issued By                   MM/DD/YYYY
                                       The Pool Insurer
POOL_CLAIM_AMT_PAID                    Amount Paid On Claim By Pool Insurance Company             2         No commas(,)
                                                                                                            or dollar
                                                                                                            signs ($)
FHA_PART_A_CLAIM_FILED_DATE            Date FHA Part A Claim Was Filed With HUD                             MM/DD/YYYY
FHA_PART_A_CLAIM_AMT                   Amount of FHA Part A Claim Filed                           2         No commas(,)
                                                                                                            or dollar
                                                                                                            signs ($)
FHA_PART_A_CLAIM_PAID_DATE             Date HUD Disbursed Part A Claim Payment                              MM/DD/YYYY
FHA_PART_A_CLAIM_PAID_AMT              Amount HUD Paid on Part A Claim                            2         No commas(,)
                                                                                                            or dollar
                                                                                                            signs ($)
FHA_PART_B_CLAIM_FILED_DATE            Date FHA Part B Claim Was Filed With HUD                             MM/DD/YYYY
FHA_PART_B_CLAIM_AMT                   Amount of FHA Part B Claim Filed                           2         No commas(,)
                                                                                                            or dollar
                                                                                                            signs ($)
FHA_PART_B_CLAIM_PAID_DATE             Date HUD Disbursed Part B Claim Payment                              MM/DD/YYYY
FHA_PART_B_CLAIM_PAID_AMT              Amount HUD Paid on Part B Claim                            2         No commas(,)
                                                                                                            or dollar
                                                                                                            signs ($)
VA_CLAIM_FILED_DATE                    Date VA Claim Was Filed With the Veterans Admin                      MM/DD/YYYY
VA_CLAIM_PAID_DATE                     Date Veterans Admin. Disbursed VA Claim Payment                      MM/DD/YYYY
VA_CLAIM_PAID_AMT                      Amount Veterans Admin. Paid on VA Claim                    2         No commas(,)
                                                                                                            or dollar
                                                                                                            signs ($)
</TABLE>


EXHIBIT 2: STANDARD FILE CODES - DELINQUENCY REPORTING

The LOSS MIT TYPE field should show the approved Loss Mitigation Code as
follows:
         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

NOTE: 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 code
as follows:
         o     Mortgagor
         o     Tenant
         o     Unknown
         o     Vacant

The PROPERTY CONDITION field should show the last reported condition of the
property as follows:
         o     Damaged
         o     Excellent
         o     Fair
         o     Gone
         o     Good
         o     Poor
         o     Special Hazard
         o     Unknown

EXHIBIT 2: STANDARD FILE CODES - DELINQUENCY REPORTING, CONTINUED

The FNMA DELINQUENT REASON CODE field should show the Reason for Delinquency
as follows:

               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



<PAGE>




EXHIBIT 2: STANDARD FILE CODES - DELINQUENCY REPORTING, CONTINUED

The FNMA DELINQUENT STATUS CODE field should show the Status of Default as
follows:

                 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




      26.   The  Agreement is hereby  amended  effective as of the date hereof
by adding the following new Exhibit K:

                                     EXHIBIT K

                        COMPANY'S OBLIGATIONS IN CONNECTION
                               WITH A RECONSTITUTION

      o     The  Company  shall  (i)  possess  the  ability  to  service  to a
securitization;  (ii)  service  on  a  "Scheduled/Scheduled"  reporting  basis
(advancing   through  the   liquidation  of  an  REO  Property),   (iii)  make
compensating  interest payments on payoffs and curtailments and (iv) remit and
report to a Master  Servicer in format  acceptable to such Master  Servicer by
the 10th calendar day of each month.

      o     The  Company  shall  provide an  acceptable  annual  certification
(officer's   certificate)   to  the  Master   Servicer  (as  required  by  the
Sarbanes-Oxley  Act of  2002)  as  well  as any  other  annual  certifications
required under the  securitization  documents (i.e. the annual statement as to
compliance/annual  independent certified public accountants'  servicing report
due by March 1 of each year).

      o     The Company shall allow for the Purchaser,  the Master Servicer or
their designee to perform a review of audited  financials and net worth of the
Company.

      o     The Company shall provide  information on each  Custodial  Account
as  requested  by the Master  Servicer or the  Purchaser,  and each  Custodial
Accounts shall comply with the  requirements for such accounts as set forth in
the securitization documents.

      o     The Company  shall  maintain its  servicing  system in  accordance
with the requirements of the Master Servicer.



      27.   The  Agreement is hereby  amended  effective as of the date hereof
by adding the following new Exhibit L:

                                     EXHIBIT L

                           FORM OF COMPANY CERTIFICATION

Re:   The [ ] agreement dated as of [     l, 200[ ] (the  "Agreement"),  among
[IDENTIFY PARTIES]

      I,  ____________________________,  the  _______________________ of [NAME
OF COMPANY] (the "Company"),  certify to [the Purchaser], [the Depositor], and
the  [Master  Servicer]  [Securities   Administrator]   [Trustee],  and  their
officers,  with the  knowledge  and  intent  that  they  will  rely  upon this
certification, that:

            I have reviewed the servicer  compliance  statement of the Company
      provided in accordance with Item 1123 of Regulation AB (the  "Compliance
      Statement"),  the report on assessment of the Company's  compliance with
      the  servicing  criteria set forth in Item 1122(d) of Regulation AB (the
      "Servicing  Criteria"),  provided in  accordance  with Rules  13a-18 and
      15d-18 under Securities  Exchange Act of 1934, as amended (the "Exchange
      Act") and Item 1122 of Regulation AB (the "Servicing  Assessment"),  the
      registered  public  accounting  firm's  attestation  report  provided in
      accordance  with  Rules  13a-18 and 15d-18  under the  Exchange  Act and
      Section  1122(b) of Regulation AB (the  "Attestation  Report"),  and all
      servicing   reports,   officer's   certificates  and  other  information
      relating to the  servicing of the Mortgage  Loans by the Company  during
      200[ ] that were  delivered  by the Company to the  [Depositor]  [Master
      Servicer]   [Securities   Administrator]   [Trustee]   pursuant  to  the
      Agreement (collectively, the "Company Servicing Information");

            Based on my knowledge,  the Company Servicing  Information,  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
      the light of the  circumstances  under which such  statements were made,
      not  misleading  with  respect  to the  period  of time  covered  by the
      Company Servicing Information;

            Based on my knowledge,  all of the Company  Servicing  Information
      required  to be provided by the  Company  under the  Agreement  has been
      provided   to   the   [Depositor]    [Master    Servicer]    [Securities
      Administrator] [Trustee];

            I am  responsible  for reviewing the  activities  performed by the
      Company as servicer under the  Agreement,  and based on my knowledge and
      the compliance  review  conducted in preparing the Compliance  Statement
      and except as  disclosed  in the  Compliance  Statement,  the  Servicing
      Assessment  or the  Attestation  Report,  the Company has  fulfilled its
      obligations under the Agreement in all material respects; and

The Compliance  Statement  required to be delivered by the Company pursuant to
this Agreement,  and the Servicing  Assessment and Attestation Report required
to be  provided  by  the  Company  and by any  Subservicer  and  Subcontractor
pursuant  to the  Agreement,  have been  provided to the  [Depositor]  [Master
Servicer].  Any material instances of noncompliance  described in such reports
have  been  disclosed  to the  [Depositor]  [Master  Servicer].  Any  material
instance of  noncompliance  with the Servicing  Criteria has been disclosed in
such reports.

      28.   The  Agreement is hereby  amended  effective as of the date hereof
by adding the following new Exhibit M:

                                  EXHIBIT M

                           SUMMARY OF REGULATION AB
                              SERVICING CRITERIA

NOTE:  This Exhibit M is provided for  convenience  of reference  only. In the
event of a conflict or  inconsistency  between the terms of this Exhibit M and
the text of  Regulation  AB, the text of Regulation  AB, its adopting  release
and other public statements of the SEC shall control.

ITEM 1122(D)

      (a) General servicing considerations.

            (1)  Policies  and   procedures  are  instituted  to  monitor  any
performance  or other  triggers and events of default in  accordance  with the
transaction agreements.

            (2) If any material  servicing  activities are outsourced to third
parties,  policies and  procedures are instituted to monitor the third party's
performance and compliance with such servicing activities.


            (3) Any  requirements in the transaction  agreements to maintain a
back-up servicer for the mortgage loans are maintained.

            (4) A fidelity bond and errors and  omissions  policy is in effect
on the party  participating in the servicing function throughout the reporting
period in the amount of coverage  required by and otherwise in accordance with
the terms of the transaction agreements.

      (b) Cash collection and administration.

            (1) Payments on mortgage loans are deposited into the  appropriate
custodial  bank accounts and related bank  clearing  accounts no more than two
business days following receipt, or such other number of days specified in the
transaction agreements.

            (2)  Disbursements  made via wire transfer on behalf of an obligor
or to an investor are made only by authorized personnel.

            (3) Advances of funds or guarantees  regarding  collections,  cash
flows or  distributions,  and any  interest  or other  fees  charged  for such
advances,  are made,  reviewed and  approved as  specified in the  transaction
agreements.

            (4) The related accounts for the transaction, such as cash reserve
accounts  or  accounts  established  as a form of  overcollateralization,  are
separately maintained (e.g., with respect to commingling of cash) as set forth
in the transaction agreements.

            (5) Each  custodial  account is maintained at a federally  insured
depository  institution  as set  forth  in  the  transaction  agreements.  For
purposes of this criterion,  "federally insured  depository  institution" with
respect  to  a  foreign  financial   institution  means  a  foreign  financial
institution  that meets the requirements of Rule 13k-1(b)(1) of the Securities
Exchange Act.

            (6) Unissued checks are safeguarded so as to prevent  unauthorized
access.

            (7)  Reconciliations  are  prepared  on a  monthly  basis  for all
asset-backed  securities related bank accounts,  including  custodial accounts
and  related  bank   clearing   accounts.   These   reconciliations   are  (A)
mathematically  accurate;  (B) prepared within 30 calendar days after the bank
statement  cutoff  date,  or  such  other  number  of  days  specified  in the
transaction  agreements;  (C) reviewed and approved by someone  other than the
person who  prepared  the  reconciliation;  and (D) contain  explanations  for
reconciling  items.  These  reconciling  items are resolved within 90 calendar
days of their original identification,  or such other number of days specified
in the transaction agreements.

      (c) Investor remittances and reporting.

            (1)  Reports to  investors,  including  those to be filed with the
Commission,  are maintained in accordance with the transaction  agreements and
applicable  Commission  requirements.   Specifically,  such  reports  (A)  are
prepared  in  accordance  with  timeframes  and  other  terms set forth in the
transaction agreements;  (B) provide information calculated in accordance with
the terms  specified  in the  transaction  agreements;  (C) are filed with the
Commission  as  required  by its rules  and  regulations;  and (D) agree  with
investors' or the trustee's  records as to the total unpaid principal  balance
and number of mortgage loans serviced by the Servicer.

            (2)  Amounts  due to  investors  are  allocated  and  remitted  in
accordance with timeframes, distribution priority and other terms set forth in
the transaction agreements.

            (3)  Disbursements  made to an  investor  are  posted  within  two
business days to the Servicer's investor records, or such other number of days
specified in the transaction agreements.

            (4) Amounts  remitted to investors per the investor  reports agree
with cancelled checks, or other form of payment, or custodial bank statements.

      (d) Mortgage Loan administration.

            (1)  Collateral  or security on mortgage  loans is  maintained  as
required by the transaction agreements or related mortgage loan documents.

            (2)  Mortgage  loan  and  related  documents  are  safeguarded  as
required by the transaction agreements.

            (3) Any additions, removals or substitutions to the asset pool are
made,  reviewed and approved in accordance with any conditions or requirements
in the transaction agreements.

            (4) Payments on mortgage  loans,  including  any payoffs,  made in
accordance  with  the  related  mortgage  loan  documents  are  posted  to the
Servicer's  obligor  records  maintained  no more than two business days after
receipt, or such other number of days specified in the transaction agreements,
and  allocated  to  principal,  interest  or other  items  (e.g.,  escrow)  in
accordance with the related mortgage loan documents.

            (5) The Servicer's records regarding the mortgage loans agree with
the Servicer's records with respect to an obligor's unpaid principal balance.

            (6) Changes  with  respect to the terms or status of an  obligor's
mortgage loans (e.g., loan modifications or re-agings) are made,  reviewed and
approved by authorized personnel in accordance with the transaction agreements
and related mortgage loan documents.

            (7) Loss mitigation or recovery actions (e.g.,  forbearance plans,
modifications   and   deeds   in  lieu  of   foreclosure,   foreclosures   and
repossessions,  as  applicable)  are  initiated,  conducted  and  concluded in
accordance  with the  timeframes  or  other  requirements  established  by the
transaction agreements.

            (8) Records  documenting  collection efforts are maintained during
the period a mortgage loan is delinquent  in accordance  with the  transaction
agreements.  Such records are maintained on at least a monthly basis,  or such
other  period  specified  in the  transaction  agreements,  and  describe  the
entity's  activities in monitoring  delinquent  mortgage loans including,  for
example,  phone calls,  letters and payment  rescheduling plans in cases where
delinquency is deemed temporary (e.g., illness or unemployment).

            (9)  Adjustments to interest rates or rates of return for mortgage
loans with  variable  rates are computed  based on the related  mortgage  loan
documents.

            (10)  Regarding  any funds held in trust for an  obligor  (such as
escrow  accounts):  (A)  such  funds  are  analyzed,  in  accordance  with the
obligor's mortgage loan documents,  on at least an annual basis, or such other
period specified in the transaction agreements;  (B) interest on such funds is
paid, or credited,  to obligors in accordance  with  applicable  mortgage loan
documents  and state  laws;  and (C) such funds are  returned  to the  obligor
within 30 calendar days of full repayment of the related  mortgage  loans,  or
such other number of days specified in the transaction agreements.

            (11)  Payments  made  on  behalf  of an  obligor  (such  as tax or
insurance  payments)  are made on or before the related  penalty or expiration
dates,  as indicated on the  appropriate  bills or notices for such  payments,
provided  that such  support  has been  received  by the  Servicer at least 30
calendar days prior to these dates,  or such other number of days specified in
the transaction agreements.

            (12) Any late payment  penalties in connection with any payment to
be made on behalf of an  obligor  are paid from the  Servicer's  funds and not
charged to the obligor, unless the late payment was due to the obligor's error
or omission.

            (13)  Disbursements made on behalf of an obligor are posted within
two business days to the obligor's records maintained by the Servicer, or such
other number of days specified in the transaction agreements.

            (14)  Delinquencies,  charge-offs and  uncollectable  accounts are
recognized and recorded in accordance with the transaction agreements.

            (15) Any external enhancement or other support, identified in Item
1114(a)(1)  through (3) or Item 1115 of  Regulation  AB, is  maintained as set
forth in the transaction agreements.

      29.   The  Agreement is hereby  amended  effective as of the date hereof
by adding the following new Exhibit N:

                                  EXHIBIT N

               SUMMARY OF APPLICABLE REGULATION AB REQUIREMENTS

NOTE:  This Exhibit N is provided for  convenience  of reference  only. In the
event of a conflict or  inconsistency  between the terms of this Exhibit N and
the text of  Regulation  AB, the text of Regulation  AB, its adopting  release
and other public statements of the SEC shall control.

ITEM 1105(A)(1)-(3) AND (C)

      -Provide  static pool  information  with respect to mortgage  loans that
were  originated or purchased by the Company and which are of the same type as
the Mortgage Loans.

      -Provide static pool  information  regarding  delinquencies,  cumulative
losses and prepayments for prior securitized pools of the Company.

      -If the Company has less than 3 years experience  securitizing assets of
the same type as the Mortgage  Loans,  provide the static pool  information by
vintage  origination  years  regarding  loans  originated  or purchased by the
Company,  instead of by prior  securitized  pool. A vintage  origination  year
represents mortgage loans originated during the same year.

      -Such static pool information  shall be for the prior five years, or for
so long as the  Company has been  originating  or  purchasing  (in the case of
data by  vintage  origination  year) or  securitizing  (in the case of data by
prior securitized pools) such mortgage loans if for less than five years.

      -The static pool information for each vintage  origination year or prior
securitized  pool,  as  applicable,  shall be presented in monthly  increments
over the life of the mortgage loans included in the vintage  origination  year
or prior securitized pool.

      -Provide  summary  information for the original  characteristics  of the
prior  securitized  pools or vintage  origination  years,  as  applicable  and
material,  including:  number of pool assets, original pool balance,  weighted
average  initial  loan  balance,  weighted  average  mortgage  rate,  weighted
average and minimum and maximum  FICO,  product type,  loan purpose,  weighted
average and minimum and maximum LTV,  distribution  of loans by mortgage rate,
and geographic concentrations of 5% or more.


ITEM 1108(B) AND (C)

      Provide the  following  information  with respect to each  servicer that
will service,  including interim service, 20% or more of the mortgage loans in
any loan group in the securitization issued in the Pass-Through Transfer:

      -a description of the Company's form of organization;

      -a description  of how long the Company has been  servicing  residential
mortgage loans; a general discussion of the Company's  experience in servicing
assets  of any type as well as a more  detailed  discussion  of the  Company's
experience  in, and  procedures  for the  servicing  function it will  perform
under this Agreement and any Reconstitution Agreements;  information regarding
the size,  composition and growth of the Company's portfolio of mortgage loans
of the type similar to the Mortgage Loans and  information on factors  related
to the Company  that may be material to any  analysis of the  servicing of the
Mortgage  Loans  or  the  related  asset-backed  securities,   as  applicable,
including  whether any default or servicing  related  performance  trigger has
occurred  as to any other  securitization  due to any act or failure to act of
the Company,  whether any material  noncompliance  with  applicable  servicing
criteria as to any other  securitization has been disclosed or reported by the
Company, and the extent of outsourcing the Company uses;

      -a  description  of any material  changes to the  Company's  policies or
procedures in the servicing  function it will perform under this Agreement and
any  Reconstitution  Agreements  for mortgage loans of the type similar to the
Mortgage Loans during the past three years;

      -information  regarding the Company's  financial condition to the extent
that  there is a  material  risk  that the  effect on one or more  aspects  of
servicing  resulting  from such  financial  condition  could  have a  material
impact  on  the  performance  of the  securities  issued  in the  Pass-Through
Transfer,  or on  servicing  of  mortgage  loans of the same asset type as the
Mortgage Loans;

      -any special or unique factors  involved in servicing  loans of the same
type  as the  Mortgage  Loans,  and the  Company's  processes  and  procedures
designed to address such factors;

      -statistical  information regarding principal and interest advances made
by the  Company on the  Mortgage  Loans and the  Company's  overall  servicing
portfolio for the past three years; and

      -the Company's process for handling delinquencies,  losses, bankruptcies
and recoveries,  such as through  liquidation of REO Properties,  foreclosure,
sale of the Mortgage Loans or workouts.

ITEM 1110(A)

      -Identify  any  originator  or  group  of  affiliated  originators  that
originated,  or is expected to originate, 10% or more of the mortgage loans in
any loan group in the securitization issued in the Pass-Through Transfer.


ITEM 1110(B)

      Provide the  following  information  with respect to any  originator  or
group of affiliated originators that originated,  or is expected to originate,
20% or more of the  mortgage  loans  in any loan  group in the  securitization
issued in the Pass-Through Transfer:

      -the Company's form of organization; and

      -a  description  of the Company's  origination  program and how long the
Company has been engaged in  originating  residential  mortgage  loans,  which
description  must  include  a  discussion  of  the  Company's   experience  in
originating  mortgage  loans  of the  same  type  as the  Mortgage  Loans  and
information  regarding the size and  composition of the Company's  origination
portfolio  as well as  information  that may be material to an analysis of the
performance of the Mortgage Loans,  such as the Company's  credit-granting  or
underwriting  criteria  for  mortgage  loans of the same type as the  Mortgage
Loans.


ITEM 1117

      -describe any legal  proceedings  pending against the Company or against
any of its property,  including any  proceedings  known to be  contemplated by
governmental  authorities,  that  may  be  material  to  the  holders  of  the
securities issued in the Pass-Through Transfer.


ITEM 1119(A)

      -describe any affiliations of the Company,  each other originator of the
Mortgage  Loans and each  Subservicer  with the  sponsor,  depositor,  issuing
entity, trustee, any originator,  any other servicer, any significant obligor,
enhancement or support  provider or any other material  parties related to the
Pass-Through Transfer.


ITEM 1119(B)

      -describe   any   business   relationship,    agreement,    arrangement,
transaction or  understanding  entered into outside of the ordinary  course of
business or on terms other than those obtained in an arm's length  transaction
with an unrelated third party, apart from the Pass-Through  Transfer,  between
the  Company,   each  other   originator  of  the  Mortgage   Loans  and  each
Subservicer,  or their respective  affiliates,  and the sponsor,  depositor or
issuing entity or their  respective  affiliates,  that exists currently or has
existed during the past two years,  that may be material to the  understanding
of an investor in the securities issued in the Pass-Through Transfer.

ITEM 1119(C)

      -describe   any   business   relationship,    agreement,    arrangement,
transaction  or  understanding  involving or relating to the Mortgage Loans or
the  Pass-Through  Transfer,  including  the  material  terms and  approximate
dollar  amount  involved,  between the Company,  each other  originator of the
Mortgage Loans and each  Subservicer,  or their respective  affiliates and the
sponsor,  depositor or issuing  entity or their  respective  affiliates,  that
exists currently or has existed during the past two years.

      30.   The  Agreement is hereby  amended  effective as of the date hereof
by adding the following new Exhibit O:

                                  EXHIBIT O

        SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE

      The  assessment of compliance to be delivered by [the Company]  [Name of
Subservicer] shall address, at a minimum,  the criteria identified as below as
"Applicable Servicing Criteria":

<TABLE>
                                                                                           Applicable Servicing
                                     Servicing Criteria                                          Criteria
--------------------------------------------------------------------------------------     --------------------
     Reference                                     Criteria
                                       General Servicing Considerations
<S>                  <C>                                                                   <C>
                     Policies and procedures are instituted to monitor any performance
                     or other triggers and events of default in accordance with the
1122(d)(1)(i)        transaction agreements.                                                         X
                     If any material servicing activities are outsourced to third
                     parties, policies and procedures are instituted to monitor the
                     third party's performance and compliance with such servicing
1122(d)(1)(ii)       activities.                                                                     X
                     Any requirements in the transaction agreements to maintain a
1122(d)(1)(iii)      back-up servicer for the mortgage loans are maintained.
                     A fidelity bond and errors and omissions policy is in effect on the
                     party participating in the servicing function throughout the
                     reporting period in the amount of coverage required by and
                     otherwise in accordance with the terms of the transaction                       X
1122(d)(1)(iv)       agreements.
                                      Cash Collection and Administration
                     Payments on mortgage loans are deposited into the appropriate
                     custodial bank accounts and related bank clearing accounts no more
                     than two business days following receipt, or such other number of
1122(d)(2)(i)        days specified in the transaction agreements.                                   X
                     Disbursements made via wire transfer on behalf of an obligor or to              X
1122(d)(2)(ii)       an investor are made only by authorized personnel.
                     Advances of funds or guarantees regarding collections, cash flows
                     or distributions, and any interest or other fees charged for such
                     advances, are made, reviewed and approved as specified in the
1122(d)(2)(iii)      transaction agreements.                                                         X
                     The related accounts for the transaction, such as cash reserve
                     accounts or accounts established as a form of
                     overcollateralization, are separately maintained (e.g., with                    X
                     respect to commingling of cash) as set forth in the transaction
1122(d)(2)(iv)       agreements.
                     Each custodial account is maintained at a federally insured
                     depository institution as set forth in the transaction agreements.
                     For purposes of this criterion, "federally insured depository
                     institution" with respect to a foreign financial institution means
                     a foreign financial institution that meets the requirements of Rule             X
1122(d)(2)(v)        13k-1(b)(1) of the Securities Exchange Act.
                     Unissued checks are safeguarded so as to prevent unauthorized                   X
1122(d)(2)(vi)       access.
                      Reconciliations are prepared on a monthly basis for all
                     asset-backed securities related bank accounts, including custodial
                     accounts and related bank clearing accounts. These reconciliations
                     are (A) mathematically accurate; (B) prepared within 30 calendar
                     days after the bank statement cutoff date, or such other number of
                     days specified in the transaction agreements; (C) reviewed and
                     approved by someone other than the person who prepared the
                     reconciliation; and (D) contain explanations for reconciling items.
                     These reconciling items are resolved within 90 calendar days of                 X
                     their original identification, or such other number of days
1122(d)(2)(vii)      specified in the transaction agreements.
                                      Investor Remittances and Reporting
                     Reports to investors, including those to be filed with the
                     Commission, are maintained in accordance with the transaction
                     agreements and applicable Commission requirements. Specifically,
                     such reports (A) are prepared in accordance with timeframes and
                     other terms set forth in the transaction agreements; (B) provide
                     information calculated in accordance with the terms specified in
                     the transaction agreements; (C) are filed with the Commission as
                     required by its rules and regulations; and (D) agree with
                     investors' or the trustee's records as to the total unpaid                      X
                     principal balance and number of mortgage loans serviced by the
1122(d)(3)(i)        Servicer.
                     Amounts due to investors are allocated and remitted in accordance
                     with timeframes, distribution priority and other terms set forth in
1122(d)(3)(ii)       the transaction agreements.                                                     X
                     Disbursements made to an investor are posted within two business
                     days to the Servicer's investor records, or such other number of                X
1122(d)(3)(iii)      days specified in the transaction agreements.
                     Amounts remitted to investors per the investor reports agree with
                     cancelled checks, or other form of payment, or custodial bank                   X
1122(d)(3)(iv)       statements.
                                          Pool Asset Administration
                      Collateral or security on mortgage loans is maintained as required             X
1122(d)(4)(i)        by the transaction agreements or related mortgage loan documents.
                     Mortgage loan and related documents are safeguarded as required by              X
1122(d)(4)(ii)       the transaction agreements
                     Any additions, removals or substitutions to the asset pool are
                     made, reviewed and approved in accordance with any conditions or
1122(d)(4)(iii)      requirements in the transaction agreements.                                     X
                     Payments on mortgage loans, including any payoffs, made in
                     accordance with the related mortgage loan documents are posted to
                     the Servicer's obligor records maintained no more than two business
                     days after receipt, or such other number of days specified in the
                     transaction agreements, and allocated to principal, interest or
                     other items (e.g., escrow) in accordance with the related mortgage              X
1122(d)(4)(iv)       loan documents.
                     The Servicer's records regarding the mortgage loans agree with the
                     Servicer's records with respect to an obligor's unpaid principal
1122(d)(4)(v)        balance.                                                                        X
                     Changes with respect to the terms or status of an obligor's
                     mortgage loans (e.g., loan modifications or re-agings) are made,
                     reviewed and approved by authorized personnel in accordance with
1122(d)(4)(vi)       the transaction agreements and related pool asset documents.                    X
                     Loss mitigation or recovery actions (e.g., forbearance plans,
                     modifications and deeds in lieu of foreclosure, foreclosures and
                     repossessions, as applicable) are initiated, conducted and
                     concluded in accordance with the timeframes or other requirements               X
1122(d)(4)(vii)      established by the transaction agreements.
                     Records documenting collection efforts are maintained during the
                     period a mortgage loan is delinquent in accordance with the
                     transaction agreements. Such records are maintained on at least a
                     monthly basis, or such other period specified in the transaction
                     agreements, and describe the entity's activities in monitoring
                     delinquent mortgage loans including, for example, phone calls,
                     letters and payment rescheduling plans in cases where delinquency               X
1122(d)(4)(viii)     is deemed temporary (e.g., illness or unemployment).
                     Adjustments to interest rates or rates of return for mortgage loans
                     with variable rates are computed based on the related mortgage loan
1122(d)(4)(ix)       documents.                                                                      X
                     Regarding any funds held in trust for an obligor (such as escrow
                     accounts): (A) such funds are analyzed, in accordance with the
                     obligor's mortgage loan documents, on at least an annual basis, or
                     such other period specified in the transaction agreements; (B)
                     interest on such funds is paid, or credited, to obligors in
                     accordance with applicable mortgage loan documents and state laws;
                     and (C) such funds are returned to the obligor within 30 calendar               X
                     days of full repayment of the related mortgage loans, or such other
1122(d)(4)(x)        number of days specified in the transaction agreements.
                     Payments made on behalf of an obligor (such as tax or insurance
                     payments) are made on or before the related penalty or expiration
                     dates, as indicated on the appropriate bills or notices for such
                     payments, provided that such support has been received by the
                     servicer at least 30 calendar days prior to these dates, or such                X
1122(d)(4)(xi)       other number of days specified in the transaction agreements.
                     Any late payment penalties in connection with any payment to be
                     made on behalf of an obligor are paid from the servicer's funds and
                     not charged to the obligor, unless the late payment was due to the
1122(d)(4)(xii)      obligor's error or omission.                                                    X
                     Disbursements made on behalf of an obligor are posted within two
                     business days to the obligor's records maintained by the servicer,
                     or such other number of days specified in the transaction                       X
1122(d)(4)(xiii)     agreements.
                      Delinquencies, charge-offs and uncollectible accounts are
                     recognized and recorded in accordance with the transaction
1122(d)(4)(xiv)      agreements.                                                                     X
                     Any external enhancement or other support, identified in Item
                     1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained
1122(d)(4)(xv)       as set forth in the transaction agreements.
</TABLE>



                                    [NAME OF COMPANY] [NAME OF SUBSERVICER]

                                    Date:
                                             --------------------------------

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





      31.   The Agreement is hereby amended as of the date hereof by adding
the following new Exhibit P:

                                     EXHIBIT P

                    REPORTING DATA FOR REALIZED LOSSES AND GAINS

        CALCULATION OF REALIZED LOSS/GAIN FORM 332- INSTRUCTION SHEET

      NOTE:  DO NOT NET OR COMBINE ITEMS.  SHOW ALL EXPENSES INDIVIDUALLY AND
      ALL CREDITS AS SEPARATE LINE ITEMS.  CLAIM PACKAGES ARE DUE ON THE
      REMITTANCE REPORT DATE.  LATE SUBMISSIONS MAY RESULT IN CLAIMS NOT
      BEING PASSED UNTIL THE FOLLOWING MONTH.  THE SERVICER IS RESPONSIBLE TO
      REMIT ALL FUNDS PENDING LOSS APPROVAL AND /OR RESOLUTION OF ANY
      DISPUTED ITEMS.

                  1.

                  2.    The numbers on the 332 form  correspond with the numbers
                        listed below.

      LIQUIDATION AND ACQUISITION EXPENSES:
      1.    The Actual Unpaid Principal Balance of the Mortgage Loan.  For
            documentation, an Amortization Schedule from date of default
            through liquidation breaking out the net interest and servicing
            fees advanced is required.

      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. For documentation, an Amortization Schedule from
            date of default through liquidation breaking out the net interest
            and servicing fees advanced is required.

      3.    Accrued Servicing Fees based upon the Scheduled Principal Balance
            of the Mortgage Loan as calculated on a monthly basis. For
            documentation, an Amortization Schedule from date of default
            through liquidation breaking out the net interest and servicing
            fees advanced is required.

      4-12. Complete as applicable.  Required documentation:

            *  For taxes and insurance advances - see page 2 of 332 form -
            breakdown required showing period

              of coverage, base tax, interest, penalty.  Advances prior to
              default require evidence of servicer efforts to recover
              advances.

            *  For escrow advances - complete payment history

               (to  calculate  advances  from last  positive  escrow  balance
                forward)

            *  Other expenses -  copies of corporate advance history showing
            all payments

            *  REO repairs > $1500 require explanation

            *  REO repairs >$3000 require evidence of at least 2 bids.

            *  Short Sale or Charge Off require P&L supporting the decision
            and WFB's approved Officer Certificate

            *  Unusual or extraordinary items may require further
            documentation.

      13.   The total of lines 1 through 12.

3.    CREDITS:

      14-21. Complete as applicable.  Required documentation:

            * Copy of the HUD 1 from the REO sale.  If a 3rd Party Sale, bid
            instructions and Escrow Agent / Attorney

               Letter of Proceeds Breakdown.

            *  Copy of EOB for any MI or gov't guarantee

            *  All other credits need to be clearly defined on the 332
            form

      22.   The total of lines 14 through 21.

      PLEASE NOTE: For HUD/VA loans, use line (18a) for Part A/Initial  proceeds
                   and line (18b) for Part B/Supplemental proceeds.

      TOTAL REALIZED LOSS (OR AMOUNT OF ANY GAIN)
      23.   The  total  derived  from  subtracting  line  22 from  13.  If the
            amount  represents a realized gain, show the amount in parenthesis
            (   ).

                  CALCULATION OF REALIZED LOSS/GAIN FORM 332

      Prepared by:                                    Date:
                    ------------------                       ---------------
      Phone:                           Email Address:
              ----------------------                 ---------------------


Servicer Loan No.         Servicer Name               Servicer Address


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

      WELLS FARGO BANK, N.A. LOAN NO.
                                     -----------------------------

      Borrower's Name:
                       ---------------------------------------------------------
      Property Address:
                       ---------------------------------------------------------

      LIQUIDATION TYPE:  REO SALE          3RD PARTY SALE         SHORT SALE
      CHARGE OFF

      WAS THIS LOAN GRANTED A BANKRUPTCY DEFICIENCY OR CRAMDOWN    YES     NO
      If "Yes", provide deficiency or cramdown amount
                                                      --------------------------

<TABLE>
      LIQUIDATION AND ACQUISITION EXPENSES:
      <S>       <C>                                                   <C>                     <C>
      (1)       Actual/Unpaid/Principal/Balance1of(Mortgage Loan      $ _______________       (1)
      (2)       Interest accrued at Net Rate                           ________________       (2)
      (3)       Accrued Servicing Fees                                 ________________       (3)
      (4)       Attorney's Fees                                        ________________       (4)
      (5)       Taxes (see page 2)                                     ________________       (5)
      (6)       Property Maintenance                                   ________________       (6)
      (7)       MI/Hazard Insurance Premiums (see page 2)              ________________       (7)
      (8)       Utility Expenses                                       ________________       (8)
      (9)       Appraisal/BPO                                          ________________       (9)
      (10)      Property Inspections                                   ________________       (10)
      (11)      FC Costs/Other Legal Expenses                          ________________       (11)
      (12)      Other (itemize)                                        ________________       (12)
                Cash for Keys__________________________                ________________       (12)
                HOA/Condo Fees_______________________                  ________________       (12)
                ______________________________________                 ________________       (12)

                TOTAL EXPENSES                                        $ _______________       (13)
      CREDITS:
      (14)      Escrow Balance                                        $ _______________       (14)
      (15)      HIP Refund                                             ________________       (15)
      (16)      Rental Receipts                                        ________________       (16)
      (17)      Hazard Loss Proceeds                                   ________________       (17)
      (18)      Primary Mortgage Insurance / Gov't Insurance           ________________       (18a) HUD Part A
                                                                       ________________       (18b) HUD Part B
      (19)      Pool Insurance Proceeds                                ________________       (19)
      (20)      Proceeds from Sale of Acquired Property                ________________       (20)
      (21)      Other (itemize)                                        ________________       (21)
                _________________________________________              ________________       (21)

                TOTAL CREDITS                                         $________________       (22)
      TOTAL REALIZED LOSS (or Amount of Gain)                         $________________       (23)
</TABLE>


ESCROW DISBURSEMENT DETAIL


    TYPE     DATE PAID   PERIOD OF   TOTAL    BASE      PENALTIES    INTEREST
(TAX /INS.)              COVERAGE     PAID   AMOUNT









      32.   Except as amended  above,  the Agreement  shall  continue to be in
full force and effect in accordance with its terms.

      33.   This  Amendment  may be  executed  by one or more  of the  parties
hereto on any number of separate  counterparts and of said counterparts  taken
together shall be deemed to constitute one and the same instrument.

                           [SIGNATURE PAGES FOLLOW]

<PAGE>





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

                                    EMC MORTGAGE CORPORATION,
                                          as Purchaser


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


                                    GREENPOINT MORTGAGE FUNDING, INC.,
                                          as Company


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


<PAGE>


               ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT

      This is an Assignment,  Assumption and Recognition  Agreement (this "AAR
Agreement") made as of November 30, 2006, among EMC Mortgage  Corporation (the
"Assignor"),  U.S. Bank National  Association,  not individually but solely as
trustee  for the  holders of Bear  Stearns  Asset  Backed  Securities  I Trust
2006-AC5,   Asset-Backed  Certificates,   Series  2006-AC5  (the  "Assignee"),
National  City  Mortgage Co. (the  "Company")  and Bear  Stearns  Asset Backed
Securities I LLC ("BSABS I").

      Whereas,  the Company sold the mortgage loans identified on Attachment 1
hereto  (the  "Assigned  Loans"),  on  a  servicing  retained  basis,  to  the
Assignor; and

      Whereas,  the Assigned  Loans were  subsequently  transferred to various
trusts (the "Underlying  Trusts") in connection with various  securitizations;
and

      Whereas,  pursuant  to the  Pooling  and  Servicing  Agreements  for the
Underlying Trusts (the "Underlying Pooling Agreements"),  the Assignor had the
right to purchase the Assigned  Loans (the "Call  Right") from the  Underlying
Trusts  following  the  occurrence  of certain  trigger  events (the  "Trigger
Events") set forth in the Underlying Pooling Agreements; and

      Whereas,  following the occurrence of the Trigger  Events,  the Assignor
exercised  the related Call Right and  purchased  the Assigned  Loans from the
Underlying Trusts; and

      Whereas,  Assignor  and  Company  desire  that,  from and after the date
hereof,  the  Assigned  Loans be  serviced  in  accordance  with the terms and
conditions of that certain Purchase,  Warranties and Servicing Agreement dated
as of October 1, 2001,  between  the  Assignor  and the  Company as amended by
Amendment Reg AB to the Purchase,  Warranties and Servicing  Agreement,  dated
as of March 1, 2006 (as amended, the "Purchase Agreement").

      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  Assigned  Loans  shall be  subject  to the  terms of this AAR  Agreement.
Capitalized  terms  used  herein  but not  defined  shall  have  the  meanings
ascribed to them in the Purchase Agreement.

ASSIGNMENT AND ASSUMPTION

      1. Assignor hereby grants,  transfers and assigns to Assignee all of the
right,  title and  interest  of Assignor  in the  Assigned  Loans and, as they
relate to the Assigned Loans, all of its right,  title and interest in, to and
under the Agreements.  Assignor  specifically  reserves and does not assign to
Assignee  any right  title and  interest  in, to or under any  Mortgage  Loans
subject  to the  Agreements  other  than  those  set  forth on  Attachment  l.
Notwithstanding  anything to the contrary  contained  herein,  the Assignor is
retaining the right to enforce the representations and warranties set forth in
Article  III  of  the  Purchase  Agreement  and in the  Term  Sheet,  and  any
obligation of the Company to cure,  repurchase  or  substitute  for a mortgage
loan  and  to  indemnify  the  Assignor  with  respect  to a  breach  of  such
representations  and  warranties  pursuant to Section 3.03 and Section 8.01 of
the  Purchase  Agreement  against  the  Company.  In  addition,  the  Assignor
specifically reserves and does not assign to the Assignee any right, title and
interest in, to or under Section 2.09 of the Purchase Agreement.

REPRESENTATIONS; WARRANTIES AND COVENANTS

      2.  Assignor  warrants and  represents to Assignee and Company as of the
date hereof:

            a.    Attached hereto as Attachment 2 are true and accurate copies
                  of the  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.    Assignor is 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 Agreements as
                  they relate to the Assigned Loans, free and clear of any and
                  all liens, 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 Assignor's interests, rights
                  and  obligations  under the Agreements as they relate to the
                  Assigned Loans, free and clear of any and all liens,  claims
                  and encumbrances;

            c.    Assignor  has not  received  notice of, and has no knowledge
                  of, any offsets,  counterclaims or other defenses  available
                  to  Company  with  respect  to  the  Assigned  Loans  or the
                  Agreements;

            d.    Assignor  has not waived or agreed to any waiver  under,  or
                  agreed  to any  amendment  or other  modifications  of,  the
                  Agreements.  Assignor  has no  knowledge  of,  and  has  not
                  received  notice of, any waivers under or any  amendments or
                  other   modifications   of,  or   assignment  of  rights  or
                  obligations under the Agreements;

            e.    Assignor is a corporation  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
                  acquire, own and sell the Assigned Loans;

            f.    Assignor 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 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  action on the
                  part of Assignor.  This AAR Agreement has been duly executed
                  and delivered by Assignor  and, upon the due  authorization,
                  execution  and  delivery  by  Assignee  and  Company,   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 material 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  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;

            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
                  Assignee'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; and

            i.    Assignor has received  from  Company,  and has  delivered to
                  Assignee, all documents required to be delivered to Assignor
                  by Company prior to the date hereof pursuant to Section 2.07
                  of the  Purchase  Agreement  with  respect  to the  Assigned
                  Loans.

      3. Assignee  warrants and represents to, and covenants with,  Assignor and
Company as of the date hereof:

            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
                  acquire and hold the Assigned  Loans as trustee on behalf of
                  the holders of Bear Stearns Asset Backed  Securities I Trust
                  2006-AC5, Asset-Backed Certificates, Series 2006-AC5;

            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
                  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  action
                  on the 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
                  Company,  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 material  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;
                  and

            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.

      4. Company warrants and represents to, and covenants with,  Assignor and
Assignee as of the date hereof:

            a.    Attached  hereto  as  Attachment  2 are  true  and  accurate
                  copies  of the  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
                  incorporation,  and has all requisite power and authority to
                  service  the  Assigned  Loans and  otherwise  to perform its
                  obligations under the Agreements;

            c.    Company 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
                  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  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 the 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  Purchase  Agreement in favor of Assignee
                  with  respect  to  the  Assigned  Loans  separate  from  the
                  Custodial   Account  and  the  Escrow   Account   previously
                  established  under  the  Purchase   Agreement  in  favor  of
                  Assignor; and

            f.    No event has occurred  from the  applicable  Closing Date to
                  the date hereof which would render the  representations  and
                  warranties  as to the  related  Mortgage  Loans  made by the
                  Company in Section 3.02 of the Purchase  Agreement or in the
                  related Term Sheet to be untrue in any material respect.

      5. Company  warrants and represents to, and covenants  with,  Assignor and
BSABS I as of the date hereof:

            a.    Company is not aware and has not  received  notice  that any
                  default,  early amortization or other performance triggering
                  event has  occurred  as to any other  securitization  due to
                  any act or failure to act of the Company;

            b.    No  material  noncompliance  with the  applicable  servicing
                  criteria   with   respect   to  other   securitizations   of
                  residential   mortgage   loans   involving  the  Company  as
                  servicer has been disclosed or reported by the Company;

            c.    Company   has  not  been   terminated   as   servicer  in  a
                  residential  mortgage loan  securitization,  either due to a
                  servicing   default  or  to   application   of  a  servicing
                  performance test or trigger;

            d.    No material changes to the Company's  policies or procedures
                  with  respect  to the  servicing  function  it will  perform
                  under the  Purchase  Agreement  and this AAR  Agreement  for
                  mortgage  loans of a type similar to the Assigned Loans have
                  occurred during the three-year period immediately  preceding
                  the date hereof;

            e.    There are no aspects of the  Company's  financial  condition
                  that   could  have  a   material   adverse   effect  on  the
                  performance  by the  Company  of its  servicing  obligations
                  under the Purchase Agreement and this AAR Agreement;

            f.    There  are no  material  legal or  governmental  proceedings
                  pending (or known to be  contemplated)  against the Company,
                  any Subservicer or any third-party originator; and

            g.    There are no  affiliations,  relationships  or  transactions
                  relating to the Company or any  Subservicer  with respect to
                  this  Securitization  Transaction and any party thereto of a
                  type described in Item 1119 of Regulation AB.

      Notwithstanding  anything to the contrary in the Agreement,  the Company
shall (or shall cause any Third-Party  Originator to) (i)  immediately  notify
Assignor and BSABS I in writing of (A) legal  proceedings  pending against the
Company,  or proceedings known to be contemplated by governmental  authorities
against the  Company  which in the  judgment of the Company  would be, in each
case,  material to purchasers of securities  backed by the Assigned Loans, (B)
any  affiliations  or  relationships  of the type described in Item 1119(b) of
Regulation AB that develop  following the date hereof  between the Company and
any of the above listed parties or other parties  identified in writing by the
Assignor or BSABS I with respect to the  Securitization  Transaction  and (ii)
provide  to the  Assignor  and  BSABS I a  description  of  such  proceedings,
affiliations or relationships.

      Each  such  notice/update  should be sent to the  Assignor  by e-mail to
regABnotifications@bear.com.   Additionally,  all  such  notifications,  other
than those pursuant to (i)(A) above, should be sent to:

      EMC Mortgage Corporation
      2780 Lake Vista Drive
      Lewisville, TX 75067-3884
      Attention:  Conduit Seller Approval Dept.
      Facsimile:  (214) 626-3751
      Email:  sellerapproval@bear.com

      With a copy to:

      Bear, Stearns & Co. Inc.
      383 Madison Avenue, 3rd Floor
      New, York, NY 10179
      Attention:  Global Credit Administration
      Facsimile:  (212) 272-6564

      Notifications pursuant to (i)(A) above should be sent to:

      EMC Mortgage Corporation
      2780 Lake Vista Drive
      Lewisville, TX 75067-3884
      Attention:  Associate General Counsel for Loan Administration
      Facsimile:  (972) 831-2555

      With copies to:

      Bear, Stearns & Co. Inc.
      383 Madison Avenue, 3rd Floor
      New, York, NY 10179
      Attention:  Global Credit Administration
      Facsimile:  (212) 272-6564

      EMC Mortgage Corporation
      2780 Lake Vista Drive
      Lewisville, TX 75067-3884
      Attention:  Conduit Seller Approval Dept.
      Facsimile:  (214) 626-3751
      Email:  sellerapproval@bear.com


      6.  Notwithstanding  any term hereof to the contrary,  the execution and
delivery of this AAR  Agreement  by the  Assignee is solely in its capacity as
trustee  for  Bear  Stearns   Asset  Backed   Securities  I  Trust   2006-AC5,
Asset-Backed  Certificates,  Series  2006-AC5  and not  individually,  and any
recourse  against the Assignee in respect of any obligations it may have under
or pursuant to the terms of this AAR Agreement  shall be limited solely to the
assets it may hold as trustee of Bear Stearns Asset Backed  Securities I Trust
2006-AC5, Asset-Backed Certificates, Series 2006-AC5.

RECOGNITION OF ASSIGNEE

      7. From and after the date hereof,  Company shall recognize  Assignee as
owner of the Assigned  Loans and will service the Assigned  Loans for Assignee
as if Assignee and Company had entered into a separate servicing agreement for
the servicing of the Assigned Loans in the form of the Purchase  Agreement (as
modified herein), the terms of which are incorporated herein by reference.  In
addition, Company hereby acknowledges that from and after the date hereof, the
Assigned  Loans will be subject to the Pooling and  Servicing  Agreement  (the
"Pooling  and  Servicing  Agreement"),  dated as of November  1, 2006,  by and
among, EMC Mortgage  Corporation,  Bear Stearns Asset Backed Securities I LLC,
Wells  Fargo  Bank,  National  Association  as master  servicer  (the  "Master
Servicer") and securities  administrator  and U.S. Bank National  Association.
Pursuant to the Pooling and Servicing  Agreement,  the Master Servicer has the
right to monitor and enforce,  on behalf of the Assignee,  the  performance by
Company of its servicing obligations under this AAR Agreement. Such right will
include,  without  limitation,  the right to terminate  the Company  under the
Purchase Agreement upon the occurrence of an event of default thereunder,  the
right to receive all remittances  required to be made by the Company under the
Purchase  Agreement,  the right to receive all monthly  reports and other data
required to be delivered  by the Company  under the  Purchase  Agreement,  the
right to examine the 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. In connection  therewith,  Company hereby agrees
that all  remittances  required to be made with respect to the Assigned  Loans
pursuant  to the  Purchase  Agreement  will  be made in  accordance  with  the
following wire transfer instructions:

                        Bank: Wells Fargo Bank, National Association
                        ABA Routing Number: 121000248
                        Account Name: SAS Clearing
                        Account # 3970771416
                        FFC to: BSABS 2006-AC5, Account # 50969700

and the Company  shall  deliver all reports and other  notices  required to be
delivered  under the  Purchase  Agreement  to the  Assignee  and to the Master
Servicer at:

                        Wells Fargo Bank, National Association
                        9062 Old Annapolis Road
                        Columbia, Maryland 21045
                        Attention: Client Manager BSABS 2006-AC5

      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,  waive,  or otherwise alter any of the
terms or provisions of the Agreements  which amendment,  modification,  waiver
or other  alteration  would in any way affect the Assigned  Loans  without the
prior written consent of Assignee.

      Company shall  indemnify and hold harmless the Assignor,  each affiliate
of the  Assignor,  BSABS  I, the  Assignee,  Bear,  Stearns  & Co.  Inc.  (the
"Underwriter") and each affiliate of the Underwriter,  each Person (including,
but not  limited to, the Master  Servicer)  responsible  for the  preparation,
execution  or filing of any report  required to be filed with the  Commission,
or for  execution  of a  certification  pursuant  to  Rule  13a-14(d)  or Rule
15d-14(d)  under the Exchange  Act,  each Person who  controls  the  Assignor,
BSABS I, the Assignee or the Underwriter  (within the meaning of Section 15 of
the  Securities  Act and Section 20 of the Exchange  Act);  and the respective
present and former directors,  officers,  employees,  agents and affiliates of
each of the foregoing (each, an "Indemnified  Party"),  and shall hold each of
them harmless from and against any claims, losses, damages,  penalties, fines,
forfeitures,  legal fees and expenses and related  costs,  judgments,  and any
other costs,  fees and expenses that any of them may sustain arising out of or
based upon:

      (i) (A) any untrue  statement of a material fact contained or alleged to
be contained in any information,  report,  certification,  data,  accountants'
letter  or  other  material  provided  under  Section  11.18  of the  Purchase
Agreement by or on behalf of the Assignor,  or provided under Section 11.18 of
the Purchase  Agreement by or on behalf of any  Subservicer,  Subcontractor or
Third-Party Originator (collectively,  the "Company Information"),  or (B) the
omission or alleged  omission to state in the Company  Information  a material
fact required to be stated in the Company Information or necessary in order to
make the statements  therein,  in the light of the  circumstances  under which
they were made, not misleading; provided, by way of clarification, that clause
(B) of this  paragraph  shall be construed  solely by reference to the Company
Information and not to any other information communicated in connection with a
sale or  purchase  of  securities,  without  regard  to  whether  the  Company
Information  or any portion  thereof is presented  together with or separately
from such other information;

      (ii) any breach by the Company of its obligations under Section 11.18 of
Purchase  Agreement,  including  particularly any failure by the Company,  any
Subservicer,  any  Subcontractor or any Third-Party  Originator to deliver any
information, report, certification, accountants' letter or other material when
and as required under Section 11.18 of the Purchase  Agreement,  including any
failure by the Company to identify  any  Subcontractor  "participating  in the
servicing function" within the meaning of Item 1122 of Regulation AB;

      (iii) any breach by the  Company of a  representation  or  warranty  set
forth in Section  3.01 of the  Purchase  Agreement  or in a writing  furnished
pursuant to Section 3.01 of the Purchase Agreement and made as of a date prior
to the date  hereof,  to the extent  that such breach is not cured by the date
hereof,  or any breach by the  Company of a  representation  or  warranty in a
writing  furnished  pursuant to Section 3.01 of the Purchase  Agreement to the
extent made as of a date subsequent to the date hereof; or

      (iv) the negligence,  bad faith or willful  misconduct of the Company in
connection with its performance under Section 11.18 of the Purchase Agreement.

      If  the   indemnification   provided  for  herein  is   unavailable   or
insufficient  to hold harmless an Indemnified  Party,  then the Company agrees
that it shall  contribute  to the amount  paid or payable by such  Indemnified
Party as a result of any claims,  losses,  damages or liabilities  incurred by
such  Indemnified  Party in such  proportion as is  appropriate to reflect the
relative  fault of such  Indemnified  Party on the one hand and the Company on
the other.

      In the case of any failure of performance  described in Section 11.18 of
the Purchase  Agreement,  the Company shall  promptly  reimburse the Assignor,
BSABS I and each Person  responsible for the preparation,  execution or filing
of any report required to be filed with the Commission,  or for execution of a
certification  pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange
Act, for all costs  reasonably  incurred by each such party in order to obtain
the information, report, certification,  accountants' letter or other material
not delivered as required by the Company,  any Subservicer,  any Subcontractor
or any Third-Party Originator.

MODIFICATION OF THE PURCHASE AGREEMENT


      8. The Purchase  Agreement,  as it relates to the Assigned Loans, shall be
amended by the Company and the Assignor as follows:

            (a)   Section 1.01 of the Purchase  Agreement  shall be amended by
adding the following definitions thereto:

      MASTER  SERVICER:  Wells  Fargo  Bank,  National  Association,   or  its
successors  in  interest  who  meet  the  qualifications  of the  Pooling  and
Servicing Agreement and this Agreement.

      NONRECOVERABLE  ADVANCE:  Any  advance  previously  made by the  Company
pursuant to Section 5.03 or any  Servicing  Advance  which,  in the good faith
judgment of the  Company,  may not be  ultimately  recoverable  by the Company
from  Liquidation  Proceeds or  otherwise.  The  determination  by the Company
that it has made a Nonrecoverable  Advance, shall be evidenced by an Officer's
Certificate of the Company  delivered to the Purchaser and the Master Servicer
and detailing the reasons for such determination.

      POOLING AND  SERVICING  AGREEMENT:  That certain  pooling and  servicing
agreement,  dated as of  November 1, 2006,  among Bear  Stearns  Asset  Backed
Securities I LLC, EMC Mortgage  Corporation,  U.S. Bank National  Association,
as  trustee,   Wells   Fargo  Bank,   National   Association   as   securities
administrator and the Master Servicer.

            (b)   The  definition of "Business Day" is deleted in its entirety
and replaced with the following definition:

      BUSINESS  DAY: Any day other than:  (i) a Saturday or Sunday,  or (ii) a
legal  holiday  in the States of  Maryland,  Minnesota,  New York or Ohio,  or
(iii) a day on which banks in the States of Maryland,  Minnesota,  New York or
Ohio are authorized or obligated by law or executive order to be closed.

            (c)   The  definition  of  "Servicing  Fee Rate" is deleted in its
entirety and replaced with the following definition:

      SERVICING FEE RATE: a per annum rate to equal to 0.250%.

            (d)   Subsection  3.02(nn)  of the  Purchase  Agreement  shall  be
deleted in its entirety and replaced with the following:

      The  Mortgagor  has not  notified  the  Company,  and the Company has no
knowledge  of any  relief  requested  or allowed  to the  Mortgagor  under the
Servicemembers Civil Relief Act;

            (e)   The  Purchase  Agreement  is hereby  amended  by adding  the
following Section 4.13A:

      Section 4.13A          REMIC ADMINISTRATION OF REO PROPERTY.

            The Company  shall prepare for and deliver to the Assignee and the
Master  Servicer (and the securities  administrator,  if any) a statement with
respect  to  each  mortgaged   property   acquired   through   foreclosure  or
deed-in-lieu  of  foreclosure  in  connection  with a defaulted  Assigned Loan
("REO  Property")  that has been rented  showing the  aggregate  rental income
received and all  expenses  incurred in  connection  with the  management  and
maintenance  of such REO  Property at such times as is necessary to enable the
Assignee  (or  the  securities  administrator,  if  any) to  comply  with  the
reporting  requirements  of the REMIC  provisions of the Code. The net monthly
rental  income,  if any,  from such REO  Property  shall be  deposited  in the
related  collection  account  no later  than the  close  of  business  on each
determination  date.  The Company  shall  perform,  or caused to be performed,
the tax reporting and withholding  related to  foreclosures,  abandonments and
cancellation of indebtedness  income as specified by Sections 1445,  6050J and
6050P of the Code by preparing  and filing such tax and  information  returns,
as may  be  required.  In  the  event  that  the  Bear  Stearns  Asset  Backed
Securities  I  Trust  2006-AC5,  Asset-Backed  Certificates,  Series  2006-AC5
acquires any REO Property as  aforesaid  or  otherwise  in  connection  with a
default or default  becoming  reasonably  foreseeable on an Assigned Loan, the
Company  shall cause such REO  Property  to be  disposed  prior to three years
after its  acquisition  by the Bear Stearns  Asset  Backed  Securities I Trust
2006-AC5,  Asset-Backed  Certificates,  Series  2006-AC5 or, at the expense of
the Bear  Stearns  Asset  Backed  Securities  I Trust  2006-AC5,  Asset-Backed
Certificates,  Series 2006-AC5,  request more than 60 days prior to the day on
which such  three-year  period  would  otherwise  expire,  an extension of the
three-year grace period unless the Assignee (or the securities  administrator,
if any) shall have been supplied  with an opinion of counsel  addressed to the
Assignee  (and the  securities  administrator,  if any) rendered by nationally
recognized  tax counsel  specializing  in such matters (such opinion not to be
an expense of the Trustee or the Securities  Administrator) to the effect that
the holding by the Bear  Stearns  Asset Backed  Securities  I Trust  2006-AC5,
Asset-Backed Certificates,  Series 2006-AC5 of such REO Property subsequent to
such  three-year  period  will  not  result  in the  imposition  of  taxes  on
"prohibited  transactions" of any REMIC as defined in Section 860F of the Code
or cause  any  REMIC to fail to  qualify  as a REMIC,  in which  case the Bear
Stearns Asset Backed Securities I Trust 2006-AC5,  Asset-Backed  Certificates,
Series  2006-AC5  may  continue  to hold  such REO  Property  (subject  to any
conditions  contained in such opinion of counsel).  Notwithstanding  any other
provision of the  Servicing  Agreement,  no REO Property  acquired by the Bear
Stearns Asset Backed Securities I Trust 2006-AC5,  Asset-Backed  Certificates,
Series  2006-AC5  shall be rented  (or  allowed to  continue  to be rented) or
otherwise  used for the  production  of  income  by or on  behalf  of the Bear
Stearns Asset Backed Securities I Trust 2006-AC5,  Asset-Backed  Certificates,
Series  2006-AC5  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 to
the  imposition  of any  federal,  state or local  income  taxes on the income
earned from such REO Property under Section  860G(c) of the Code or otherwise,
unless the Company has agreed to indemnify  and hold harmless the Bear Stearns
Asset Backed Securities I Trust 2006-AC5,  Asset-Backed  Certificates,  Series
2006-AC5 with respect to the imposition of any such taxes.

            (f)   Section 5.02 of the Purchase  Agreement is hereby amended by
replacing the first two paragraphs with the following:

                  "Not later than the tenth  (10th)  calendar  day
            of each month (or if such tenth  calendar day is not a
            Business  Day,  the  immediately  succeeding  Business
            Day),   the  Servicer  shall  furnish  to  the  Master
            Servicer  (i) (a) monthly  loan data in the format set
            forth in Exhibit E-1 hereto,  (b) default loan data in
            the  format  set forth in  Exhibit  E-2 hereto and (c)
            information  regarding  realized  losses  and gains in
            the  format  set forth in  Exhibit  E-3  hereto (or in
            such  other  formats   mutually   agreed  between  the
            Servicer  and  the  Master  Servicer),  in  each  case
            relating  to the period  ending on the last day of the
            preceding  calendar month,  (ii) all such  information
            required   pursuant  to  clause   (i)(a)  above  on  a
            magnetic  tape,  electronic  mail,  or  other  similar
            media  reasonably  acceptable  to the Master  Servicer
            and (iii) all  supporting  documentation  with respect
            to the information  required pursuant to clause (i)(c)
            above."

            (g)   Section 6.02 of the Purchase  Agreement is hereby amended by
including  the words "(or if the Company does not, the Master  Servicer  may)"
after the word  "will"  and before  the word  "immediately"  in the third line
thereof.

            (h)   Section 6.04 of the Purchase  Agreement  shall be deleted in
its entirety and replaced.

            (i)   Section 6.05 of the Purchase  Agreement  shall be deleted in
its entirety.

            (j)   Section 9.01 of the Purchase  Agreement is hereby amended by
adding  the word "or" at the end of clause  (ix)  thereof  and  inserting  the
following as clause (x):

            (x)   failure by the Company to duly perform,  within the required
time period,  its  obligations  under  Section 4 and Section 5 of Article 1 of
Amendment  Reg  AB  to  the  Servicing   Agreement  which  failure   continues
unremedied  for a period  of ten (10)  days  after  the date on which  written
notice of such  failure,  requiring  the same to be remedied,  shall have been
given  to  the  Company  by any  party  to  this  Agreement  or by any  Master
Servicer.   This  paragraph  shall  supersede  any  other  provision  of  this
Agreement or other Agreement to the contrary.

            (k)   The  following  is  added  as  Subsection  4.05(vii)  of the
Purchase Agreement:

            (vii) to reimburse itself for any Nonrecoverable Advances;

            (l)   Section  6.04 is  hereby  amended  by adding  the  following
paragraph at the end of the section:

            In the event the  Servicer  or any  subservicer  or  subcontractor
engaged by it is  terminated,  assigns its rights and  obligations  under,  or
resigns  pursuant  to the terms of this  Agreement,  or any  other  applicable
agreement in the case of a subservicer or  subcontractor,  as the case may be,
such party shall provide an Annual  Statement of  Compliance  pursuant to this
Section 6.04 or to the related section of such other applicable agreement,  as
the case may be, as to the performance of its obligations  with respect to the
period  of time it was  subject  to this  Agreement  or any  other  applicable
agreement,   as  the  case  may  be,  notwithstanding  any  such  termination,
assignment or resignation.

            (m)   Section  6.05 is  hereby  amended  by adding  the  following
paragraph at the end of the section:

            In the event the  Servicer  or any  subservicer  or  subcontractor
engaged by it is  terminated,  assigns its rights and  obligations  under,  or
resigns  pursuant  to, the terms of this  Agreement,  or any other  applicable
agreement in the case of a subservicer or  subcontractor,  as the case may be,
such party shall provide an Assessment of Compliance  and cause to be provided
an Attestation  Report pursuant to this Section 6.05 or to the related section
of such other applicable  agreement,  as the case may be,  notwithstanding any
such termination, assignment or resignation.

            (n)   Section  11.04 of the  Purchase  Agreement is deleted in its
entirety and replaced with the following:

      Section 11.04      GOVERNING LAW.

      This  Agreement  and the  related  Term Sheet  shall be  governed by and
construed  in  accordance  with the laws of the  State  of New  York,  without
regard to  principles  of conflicts  of laws other than Section  5-1401 of the
New York General  Obligations Law which shall govern. The obligations,  rights
and remedies of the parties  hereunder  shall be determined in accordance with
such laws.

MISCELLANEOUS

      9. All demands,  notices and communications related to the Assigned Loans,
the Agreements and this AAR Agreement shall be in writing and shall be deemed to
have been duly  given if  personally  delivered  or mailed by  registered  mail,
postage prepaid, as follows:

      a.  In the case of Company,

          National City Mortgage Co.
          3232 Newmark Drive
          Miamisburg, Ohio 45342
          Attention: Mary Beth Criswell


      b.  In the case of Assignor,

          EMC Mortgage Corporation
          2780 Lake Vista Drive
          Lewisville, TX 75067-3884
          Attention:  Conduit Seller Approval Dept.
          Facsimile:  (214) 626-3751
          Email:  sellerapproval@bear.com

          with a copy to:

          Bear Stearns Mortgage Capital Corporation
          383 Madison Avenue
          New York, New York 10179
          Attention:  Robert Durden

      c.  In the case of Assignee,

          U.S. Bank National Association, as Trustee
          One Federal Street, 3rd Floor
          Boston, Massachusetts 02110
          Attention: Corporate Trust Services, BSABS 2006-AC5
          Telecopier No.: (617) 603-6638


      d   In the case of the Master Servicer,

          Wells Fargo Bank, National Association
          9062 Old Annapolis Road
          Columbia, Maryland 21045
          Attention:  Client Manager BSABS 2006-AC5
          Telecopier No.: (410) 715-2380

      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.  Any Master Servicer shall be considered a third party beneficiary of
this AAR  Agreement,  entitled  to all the rights and  benefits  accruing to any
Master  Servicer  herein as if it were a direct party to this AAR  Agreement.  A
copy of all assessments, attestations, reports and certifications required to be
delivered by the servicer  under the Purchase  Agreement  and this AAR Agreement
shall be delivered  to the Master  Servicer by the date(s)  specified  herein or
therein and where such  documents  are  required to be  addressed to such party,
such addressee  shall include the Master  Servicer and the Master Servicer shall
be entitled to rely on such documents.

      13. This AAR Agreement  shall survive the conveyance of the Assigned Loans
as contemplated in this AAR Agreement.

      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.

      15. In the event that any provision of this AAR Agreement  conflicts  with
any provision of the Agreements with respect to the Assigned Loans, the terms of
this AAR Agreement shall control.

      16.   Exhibit  E-1,  Exhibit  E-2 and Exhibit  E-3  (attached  hereto as
Attachment  3 to this AAR  Agreement)  and  hereby  attached  to the  Purchase
Agreement.


<PAGE>


      IN WITNESS WHEREOF,  the parties hereto have executed this AAR Agreement
as of the day and year first above written.

EMC MORTGAGE CORPORATION
Assignor


By:      /s/ Mark Novachek
         --------------------------------
Name:    Mark Novachek
Title:   Senior Vice President


U.S. BANK NATIONAL ASSOCIATION,
not  in  its  individual   capacity  but
solely as Trustee
for the  holders of Bear  Stearns  Asset
Backed
Securities     I     Trust     2006-AC5,
Asset-Backed
Certificates, Series 2006-AC5,
as Assignee


By:      /s/ Maryellen Hun
         --------------------------------
         --------------------------------
Name:    Maryellen Hun
Title:   Assistant Vice President


NATIONAL CITY MORTGAGE CO.
Company


By:      /s/ Richard Buck
         --------------------------------
         --------------------------------
Name:    Richard Buck
Title:   Assistant Vice President


ACKNOWLEDGED AND AGREED:

WELLS FARGO BANK,
NATIONAL ASSOCIATION
Master Servicer


By:      /s/ Stacey M. Taylor
         --------------------------------
Name:    Stacey M. Taylor
Title:   Vice President


BEAR STEARNS ASSET BACKED
SECURITIES I LLC


By:      /s/ Baron Silverstein
         --------------------------------
Name:    Baron Silverstein
Title:   Vice President




<PAGE>



                                 ATTACHMENT l

                            ASSIGNED LOAN SCHEDULE

                           (Provided upon request)


<PAGE>



                                 ATTACHMENT 2

                      PURCHASE AGREEMENT AND TERM SHEET

                           (Provided upon request)


<PAGE>



                                 ATTACHMENT 3

                                 EXHIBIT E-1

                      REPORTING DATA FOR MONTHLY REPORT
                   STANDARD FILE LAYOUT - MASTER SERVICING

<TABLE>
                                          .                                                                                MAX
COLUMN NAM                              DESCRIPTION                                   DECIMAL         FORMAT COMMENT      SIZE
--------------------               ----------------------------------------------     -------      --------------------   ----
<S>                                <C>                                                <C>          <C>                    <C>
SER_INVESTOR_NBR                   A value  assigned by the  Servicer to define a                  Text up to 10 digits     20
                                   group of loans.
LOAN_NBR                           A unique  identifier  assigned to each loan by                  Text up to 10 digits     10
                                   the investor.
SERVICER_LOAN_NBR                  A  unique  number  assigned  to a loan  by the                  Text up to 10 digits     10
                                   Servicer.  This  may  be  different  than  the
                                   LOAN_NBR.
BORROWER_NAME                      The  borrower  name as  received  in the file.                  Maximum  length of 30    30
                                   It is not separated by first and last name.                     (Last, First)
SCHED_PAY_AMT                      Scheduled   monthly  principal  and  scheduled        2         No    commas(,)    or    11
                                   interest  payment  that a borrower is expected                  dollar signs ($)
                                   to pay, P&I constant.
NOTE_INT_RATE                      The  loan  interest  rate as  reported  by the        4         Max length of 6           6
                                   Servicer.
NET_INT_RATE                       The loan gross  interest rate less the service        4         Max length of 6           6
                                   fee rate as reported by the Servicer.
SERV_FEE_RATE                      The   servicer's   fee  rate  for  a  loan  as        4         Max length of 6           6
                                   reported by the Servicer.
SERV_FEE_AMT                       The  servicer's  fee  amount  for  a  loan  as        2         No    commas(,)    or    11
                                   reported by the Servicer.                                       dollar signs ($)
NEW_PAY_AMT                        The new loan  payment  amount as  reported  by        2         No    commas(,)    or    11
                                   the Servicer.                                                   dollar signs ($)
NEW_LOAN_RATE                      The  new  loan   rate  as   reported   by  the        4         Max length of 6           6
                                   Servicer.
ARM_INDEX_RATE                     The index the  Servicer is using to  calculate        4         Max length of 6           6
                                   a forecasted rate.
ACTL_BEG_PRIN_BAL                  The  borrower's  actual  principal  balance at        2         No    commas(,)    or    11
                                   the beginning of the processing cycle.                          dollar signs ($)
ACTL_END_PRIN_BAL                  The  borrower's  actual  principal  balance at        2         No    commas(,)    or    11
                                   the end of the processing cycle.                                dollar signs ($)
BORR_NEXT_PAY_DUE_DATE             The date at the end of  processing  cycle that                  MM/DD/YYYY               10
                                   the  borrower's  next  payment  is  due to the
                                   Servicer, as reported by Servicer.
SERV_CURT_AMT_1                    The first curtailment amount to be applied.           2         No    commas(,)    or    11
                                                                                                   dollar signs ($)
SERV_CURT_DATE_1                   The  curtailment   date  associated  with  the                  MM/DD/YYYY               10
                                   first curtailment amount.
CURT_ADJ_ AMT_1                    The   curtailment   interest   on  the   first        2         No    commas(,)    or    11
                                   curtailment amount, if applicable.                              dollar signs ($)
SERV_CURT_AMT_2                    The second curtailment amount to be applied.          2         No    commas(,)    or    11
                                                                                                   dollar signs ($)
SERV_CURT_DATE_2                   The  curtailment   date  associated  with  the                  MM/DD/YYYY               10
                                   second curtailment amount.
CURT_ADJ_ AMT_2                    The   curtailment   interest   on  the  second        2         No    commas(,)    or    11
                                   curtailment amount, if applicable.                              dollar signs ($)
SERV_CURT_AMT_3                    The third curtailment amount to be applied.           2         No    commas(,)    or    11
                                                                                                   dollar signs ($)
SERV_CURT_DATE_3                   The  curtailment   date  associated  with  the                  MM/DD/YYYY               10
                                   third curtailment amount.
CURT_ADJ_AMT_3                     The   curtailment   interest   on  the   third        2         No    commas(,)    or    11
                                   curtailment amount, if applicable.                              dollar signs ($)
PIF_AMT                            The loan "paid in full"  amount as reported by        2         No    commas(,)    or    11
                                   the Servicer.                                                   dollar signs ($)
PIF_DATE                           The  paid in  full  date  as  reported  by the                  MM/DD/YYYY               10
                                   Servicer.
                                                                                                   Action    Code   Key:     2
                                                                                                   15=Bankruptcy,
                                                                                                   30=Foreclosure,     ,
                                                                                                   60=PIF,
                                                                                                   63=Substitution,
                                                                                                   65=Repurchase,70=REO
ACTION_CODE                        The   standard   FNMA  numeric  code  used  to
                                   indicate the default/  delinquent  status of a
                                   particular loan.
INT_ADJ_AMT                        The  amount  of  the  interest  adjustment  as        2         No    commas(,)    or    11
                                   reported by the Servicer.                                       dollar signs ($)
SOLDIER_SAILOR_ADJ_AMT             The Soldier and Sailor  Adjustment  amount, if        2         No    commas(,)    or    11
                                   applicable.                                                     dollar signs ($)
NON_ADV_LOAN_AMT                   The   Non   Recoverable   Loan   Amount,    if        2         No    commas(,)    or    11
                                   applicable.                                                     dollar signs ($)
LOAN_LOSS_AMT                      The amount the  Servicer is passing as a loss,        2         No    commas(,)    or    11
                                   if applicable.                                                  dollar signs ($)
SCHED_BEG_PRIN_BAL                 The  scheduled  outstanding  principal  amount        2         No    commas(,)    or    11
                                   due at the  beginning  of the cycle date to be                  dollar signs ($)
                                   passed through to investors.
SCHED_END_PRIN_BAL                 The   scheduled   principal   balance  due  to        2         No    commas(,)    or    11
                                   investors at the end of a processing cycle.                     dollar signs ($)
SCHED_PRIN_AMT                     The scheduled  principal amount as reported by        2         No    commas(,)    or    11
                                   the  Servicer  for the  current  cycle -- only                  dollar signs ($)
                                   applicable for Scheduled/Scheduled Loans.
SCHED_NET_INT                      The scheduled  gross interest  amount less the        2         No    commas(,)    or    11
                                   service  fee amount for the  current  cycle as                  dollar signs ($)
                                   reported by the  Servicer  -- only  applicable
                                   for Scheduled/Scheduled Loans.
ACTL_PRIN_AMT                      The actual  principal  amount collected by the        2         No    commas(,)    or    11
                                   Servicer  for the current  reporting  cycle --                  dollar signs ($)
                                   only applicable for Actual/Actual Loans.
ACTL_NET_INT                       The  actual  gross  interest  amount  less the        2         No    commas(,)    or    11
                                   service fee amount for the  current  reporting                  dollar signs ($)
                                   cycle  as  reported  by the  Servicer  -- only
                                   applicable for Actual/Actual Loans.
PREPAY_PENALTY_ AMT                The penalty  amount  received  when a borrower        2         No    commas(,)    or    11
                                   prepays  on  his  loan  as   reported  by  the                  dollar signs ($)
                                   Servicer.
PREPAY_PENALTY_ WAIVED             The  prepayment  penalty  amount  for the loan        2         No    commas(,)    or    11
                                   waived by the servicer.                                         dollar signs ($)

MOD_DATE                           The    Effective    Payment    Date   of   the                  MM/DD/YYYY               10
                                   Modification for the loan.
MOD_TYPE                           The Modification Type.                                          Varchar  - value  can    30
                                                                                                   be alpha or numeric
DELINQ_P&I_ADVANCE_AMT             The   current   outstanding    principal   and        2         No    commas(,)    or    11
                                   interest advances made by Servicer.                             dollar signs ($)
</TABLE>


                                   EXHIBIT E-2
                       REPORTING DATA FOR DEFAULTED LOANS
                  STANDARD FILE LAYOUT - DELINQUENCY REPORTING

<TABLE>
 COLUMN/HEADER NAME                                   DESCRIPTION                                     DECIMAL   FORMAT COMMENT
--------------------              ------------------------------------------------------------------  -------   --------------
<S>                               <C>                                                                 <C>       <C>
SERVICER_LOAN_NBR                 A unique number  assigned to a loan by the  Servicer.  This may be
                                  different than the LOAN_NBR
LOAN_NBR                          A unique identifier assigned to each loan by the originator.
CLIENT_NBR                        Servicer Client Number
SERV_INVESTOR_NBR                 Contains a unique  number as assigned  by an external  servicer to
                                  identify a group of loans in their system.
BORROWER_FIRST_NAME               First Name of the Borrower.
BORROWER_LAST_NAME                Last name of the borrower.
PROP_ADDRESS                      Street Name and Number of Property
PROP_STATE                        The state where the  property located.
PROP_ZIP                          Zip code where the property is located.
BORR_NEXT_PAY_DUE_DATE            The date that the  borrower's  next payment is due to the servicer            MM/DD/YYYY
                                  at the end of processing cycle, as reported by Servicer.
LOAN_TYPE                         Loan Type (i.e. FHA, VA, Conv)
BANKRUPTCY_FILED_DATE             The date a particular bankruptcy claim was filed.                             MM/DD/YYYY
BANKRUPTCY_CHAPTER_CODE           The chapter under which the bankruptcy was filed.
BANKRUPTCY_CASE_NBR               The case number assigned by the court to the bankruptcy filing.
POST_PETITION_DUE_DATE            The payment due date once the  bankruptcy has been approved by the            MM/DD/YYYY
                                  courts
BANKRUPTCY_DCHRG_DISM_DATE        The  Date  The  Loan  Is  Removed  From   Bankruptcy.   Either  by            MM/DD/YYYY
                                  Dismissal, Discharged and/or a Motion For Relief Was Granted.
LOSS_MIT_APPR_DATE                The Date The Loss Mitigation Was Approved By The Servicer                     MM/DD/YYYY
LOSS_MIT_TYPE                     The Type Of Loss Mitigation Approved For A Loan Such As;
LOSS_MIT_EST_COMP_DATE            The Date The Loss Mitigation /Plan Is Scheduled To End/Close                  MM/DD/YYYY
LOSS_MIT_ACT_COMP_DATE            The Date The Loss Mitigation Is Actually Completed                            MM/DD/YYYY
FRCLSR_APPROVED_DATE              The  date  DA  Admin   sends  a  letter  to  the   servicer   with            MM/DD/YYYY
                                  instructions to begin foreclosure proceedings.
ATTORNEY_REFERRAL_DATE            Date File Was Referred To Attorney to Pursue Foreclosure                      MM/DD/YYYY
FIRST_LEGAL_DATE                  Notice of 1st legal filed by an Attorney in a Foreclosure Action              MM/DD/YYYY
FRCLSR_SALE_EXPECTED_DATE         The date by which a foreclosure sale is expected to occur.                    MM/DD/YYYY
FRCLSR_SALE_DATE                  The actual date of the foreclosure sale.                                      MM/DD/YYYY
FRCLSR_SALE_AMT                   The amount a property sold for at the foreclosure sale.                2      No  commas(,) or
                                                                                                                dollar signs ($)
EVICTION_START_DATE               The date the servicer initiates eviction of the borrower.                     MM/DD/YYYY
EVICTION_COMPLETED_DATE           The date the court revokes  legal  possession of the property from            MM/DD/YYYY
                                  the borrower.
LIST_PRICE                        The price at which an REO property is marketed.                        2      No  commas(,) or
                                                                                                                dollar signs ($)
LIST_DATE                         The date an REO property is listed at a particular price.                     MM/DD/YYYY
OFFER_AMT                         The dollar value of an offer for an REO property.                      2      No  commas(,) or
                                                                                                                dollar signs ($)
OFFER_DATE_TIME                   The date an offer is received by DA Admin or by the Servicer.                 MM/DD/YYYY
REO_CLOSING_DATE                  The date the REO sale of the property is scheduled to close.                  MM/DD/YYYY
REO_ACTUAL_CLOSING_DATE           Actual Date Of REO Sale                                                       MM/DD/YYYY
OCCUPANT_CODE                     Classification of how the property is occupied.
PROP_CONDITION_CODE               A code that indicates the condition of the property.
PROP_INSPECTION_DATE              The date a  property inspection is performed.                                 MM/DD/YYYY
APPRAISAL_DATE                    The date the appraisal was done.                                              MM/DD/YYYY
CURR_PROP_VAL                     The current "as is" value of the property  based on brokers  price     2
                                  opinion or appraisal.
REPAIRED_PROP_VAL                 The amount the  property  would be worth if repairs are  completed     2
                                  pursuant to a broker's price opinion or appraisal.
IF APPLICABLE:
DELINQ_STATUS_CODE                FNMA Code Describing Status of Loan
DELINQ_REASON_CODE                The  circumstances  which  caused a borrower  to stop  paying on a
                                  loan.  Code  indicates  the reason why the loan is in default  for
                                  this cycle.
MI_CLAIM_FILED_DATE               Date Mortgage  Insurance  Claim Was Filed With Mortgage  Insurance            MM/DD/YYYY
                                  Company.
MI_CLAIM_AMT                      Amount of Mortgage Insurance Claim Filed                                      No  commas(,) or
                                                                                                                dollar signs ($)
MI_CLAIM_PAID_DATE                Date Mortgage Insurance Company Disbursed Claim Payment                       MM/DD/YYYY
MI_CLAIM_AMT_PAID                 Amount Mortgage Insurance Company Paid On Claim                        2      No  commas(,) or
                                                                                                                dollar signs ($)
POOL_CLAIM_FILED_DATE             Date Claim Was Filed With Pool Insurance Company                              MM/DD/YYYY
POOL_CLAIM_AMT                    Amount of Claim Filed With Pool Insurance Company                      2      No  commas(,) or
                                                                                                                dollar signs ($)
POOL_CLAIM_PAID_DATE              Date  Claim  Was  Settled  and The  Check  Was  Issued By The Pool            MM/DD/YYYY
                                  Insurer
POOL_CLAIM_AMT_PAID               Amount Paid On Claim By Pool Insurance Company                         2      No  commas(,) or
                                                                                                                dollar signs ($)
FHA_PART_A_CLAIM_FILED_DATE       Date FHA Part A Claim Was Filed With HUD                                      MM/DD/YYYY
FHA_PART_A_CLAIM_AMT              Amount of FHA Part A Claim Filed                                       2      No  commas(,) or
                                                                                                                dollar signs ($)
FHA_PART_A_CLAIM_PAID_DATE        Date HUD Disbursed Part A Claim Payment                                       MM/DD/YYYY
FHA_PART_A_CLAIM_PAID_AMT         Amount HUD Paid on Part A Claim                                        2      No  commas(,) or
                                                                                                                dollar signs ($)
FHA_PART_B_CLAIM_FILED_DATE       Date FHA Part B Claim Was Filed With HUD                                      MM/DD/YYYY
FHA_PART_B_CLAIM_AMT              Amount of FHA Part B Claim Filed                                       2      No  commas(,) or
                                                                                                                dollar signs ($)
FHA_PART_B_CLAIM_PAID_DATE        Date HUD Disbursed Part B Claim Payment                                       MM/DD/YYYY
FHA_PART_B_CLAIM_PAID_AMT         Amount HUD Paid on Part B Claim                                        2      No  commas(,) or
                                                                                                                dollar signs ($)
VA_CLAIM_FILED_DATE               Date VA Claim Was Filed With the Veterans Admin                               MM/DD/YYYY
VA_CLAIM_PAID_DATE                Date Veterans Admin. Disbursed VA Claim Payment                               MM/DD/YYYY
VA_CLAIM_PAID_AMT                 Amount Veterans Admin. Paid on VA Claim                                2      No  commas(,) or
                                                                                                                dollar signs ($)
</TABLE>

EXHIBIT 2: STANDARD FILE CODES - DELINQUENCY REPORTING

The LOSS MIT TYPE field should show the approved Loss Mitigation Code as
follows:
         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

NOTE: 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 code
as follows:
         o     Mortgagor
         o     Tenant
         o     Unknown
         o     Vacant

The PROPERTY CONDITION field should show the last reported condition of the
property as follows:
         o     Damaged
         o     Excellent
         o     Fair
         o     Gone
         o     Good
         o     Poor
         o     Special
         Hazard
         o     Unknown




<PAGE>



                                   EXHIBIT E-3
                  REPORTING DATA FOR REALIZED LOSSES AND GAINS
       EXHIBIT: CALCULATION OF REALIZED LOSS/GAIN FORM 332- INSTRUCTION SHEET

      NOTE:  DO NOT NET OR COMBINE ITEMS.  SHOW ALL EXPENSES INDIVIDUALLY AND
      ALL CREDITS AS SEPARATE LINE ITEMS.  CLAIM PACKAGES ARE DUE ON THE
      REMITTANCE REPORT DATE.  LATE SUBMISSIONS MAY RESULT IN CLAIMS NOT
      BEING PASSED UNTIL THE FOLLOWING MONTH.  THE SERVICER IS RESPONSIBLE TO
      REMIT ALL FUNDS PENDING LOSS APPROVAL AND /OR RESOLUTION OF ANY
      DISPUTED ITEMS.

      The numbers on the 332 form correspond with the numbers listed below.

      LIQUIDATION AND ACQUISITION EXPENSES:
      1.    The Actual Unpaid Principal Balance of the Mortgage Loan.  For
            documentation, an Amortization Schedule from date of default
            through liquidation breaking out the net interest and servicing
            fees advanced is required.

      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. For documentation, an Amortization Schedule from
            date of default through liquidation breaking out the net interest
            and servicing fees advanced is required.

      3.    Accrued Servicing Fees based upon the Scheduled Principal Balance
            of the Mortgage Loan as calculated on a monthly basis. For
            documentation, an Amortization Schedule from date of default
            through liquidation breaking out the net interest and servicing
            fees advanced is required.

      4-12. Complete as applicable.  Required documentation:

            *  For taxes and insurance advances - see page 2 of 332 form -
            breakdown required showing period

               of coverage,  base tax, interest,  penalty.  Advances prior to
               default  require  evidence  of  servicer  efforts  to  recover
               advances.

            *  For escrow advances - complete payment history

               (to  calculate  advances  from last  positive  escrow  balance
               forward)

            *  Other expenses -  copies of corporate advance history showing
            all payments

            *  REO repairs > $1500 require explanation

            *  REO repairs >$3000 require evidence of at least 2 bids.

            *  Short Sale or Charge Off require P&L supporting the decision
            and WFB's approved Officer Certificate

            *  Unusual or extraordinary items may require further
            documentation.

      13.   The total of lines 1 through 12.

3.    CREDITS:

      14-21. Complete as applicable.  Required documentation:

            * Copy of the HUD 1 from the REO sale.  If a 3rd Party Sale, bid
            instructions and Escrow Agent / Attorney

               Letter of Proceeds Breakdown.

            *  Copy of EOB for any MI or gov't guarantee

            *  All other credits need to be clearly defined on the 332
            form

      22.   The total of lines 14 through 21.

      PLEASE NOTE: For HUD/VA loans, use line (18a) for Part A/Initial  proceeds
                   and line (18b) for Part B/Supplemental proceeds.

      TOTAL REALIZED LOSS (OR AMOUNT OF ANY GAIN)
      23.   The  total  derived  from  subtracting  line  22 from  13.  If the
            amount  represents a realized gain, show the amount in parenthesis
            (   ).


<PAGE>


                 EXHIBIT 3A: CALCULATION OF REALIZED LOSS/GAIN FORM 332

      Prepared by:                                    Date:
                    ------------------                       ---------------
      Phone:                           Email Address:
              ----------------------                 ---------------------


Servicer Loan No.         Servicer Name               Servicer Address


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

      WELLS FARGO BANK, N.A. LOAN NO.
                                     -----------------------------

      Borrower's Name:
                       ---------------------------------------------------------
      Property Address:
                       ---------------------------------------------------------

      LIQUIDATION TYPE:  REO SALE          3RD PARTY SALE         SHORT SALE
      CHARGE OFF

      WAS THIS LOAN GRANTED A BANKRUPTCY DEFICIENCY OR CRAMDOWN    YES     NO
      If "Yes", provide deficiency or cramdown amount
                                                      --------------------------

<TABLE>
      LIQUIDATION AND ACQUISITION EXPENSES:
      <S>       <C>                                                   <C>                     <C>
      (1)       Actual/Unpaid/Principal/Balance1of(Mortgage Loan      $ _______________       (1)
      (2)       Interest accrued at Net Rate                           ________________       (2)
      (3)       Accrued Servicing Fees                                 ________________       (3)
      (4)       Attorney's Fees                                        ________________       (4)
      (5)       Taxes (see page 2)                                     ________________       (5)
      (6)       Property Maintenance                                   ________________       (6)
      (7)       MI/Hazard Insurance Premiums (see page 2)              ________________       (7)
      (8)       Utility Expenses                                       ________________       (8)
      (9)       Appraisal/BPO                                          ________________       (9)
      (10)      Property Inspections                                   ________________       (10)
      (11)      FC Costs/Other Legal Expenses                          ________________       (11)
      (12)      Other (itemize)                                        ________________       (12)
                Cash for Keys__________________________                ________________       (12)
                HOA/Condo Fees_______________________                  ________________       (12)
                ______________________________________                 ________________       (12)

                TOTAL EXPENSES                                        $ _______________       (13)
      CREDITS:
      (14)      Escrow Balance                                        $ _______________       (14)
      (15)      HIP Refund                                             ________________       (15)
      (16)      Rental Receipts                                        ________________       (16)
      (17)      Hazard Loss Proceeds                                   ________________       (17)
      (18)      Primary Mortgage Insurance / Gov't Insurance           ________________       (18a) HUD Part A
                                                                       ________________       (18b) HUD Part B
      (19)      Pool Insurance Proceeds                                ________________       (19)
      (20)      Proceeds from Sale of Acquired Property                ________________       (20)
      (21)      Other (itemize)                                        ________________       (21)
                _________________________________________              ________________       (21)

                TOTAL CREDITS                                         $________________       (22)
      TOTAL REALIZED LOSS (or Amount of Gain)                         $________________       (23)
</TABLE>


<PAGE>


ESCROW DISBURSEMENT DETAIL


    TYPE     DATE PAID   PERIOD OF   TOTAL    BASE      PENALTIES    INTEREST
(TAX /INS.)              COVERAGE     PAID   AMOUNT


<PAGE>




                           EMC MORTGAGE CORPORATION
                                  Purchaser,

                        NATIONAL CITY MORTGAGE COMPANY

                                   Company,

                 PURCHASE, WARRANTIES AND SERVICING AGREEMENT
                         Dated as of October 1, 2001





                  (Fixed and Adjustable Rate Mortgage Loans)


<PAGE>




                              TABLE OF CONTENTS

                                  ARTICLE I


Section 1.01    Defined Terms

                                  ARTICLE II

Section 2.01    Agreement to Purchase
Section 2.02    Purchase Price
Section 2.03    Servicing of Mortgage Loans
Section 2.04    Record Title and Possession of Mortgage Files; Maintenance of
                Servicing Files
Section 2.05    Books and Records
Section 2.06    Transfer of Mortgage Loans
Section 2.07    Delivery of Mortgage Loan Documents
Section 2.08    Quality Control Procedures
Section 2.09    Near-term Principal Prepayments; Near Term Payment Defaults

                                 ARTICLE III

Section 3.01    Representations and Warranties of the Company
Section 3.02    Representations and Warranties as to Individual Mortgage Loans
Section 3.03    Repurchase; Substitution
Section 3.04    Representations and Warranties of the Purchaser

                                  ARTICLE IV

Section 4.01    Company to Act as Servicer
Section 4.02    Collection of Mortgage Loan Payments
Section 4.03    Realization Upon Defaulted Mortgage Loan
Section 4.04    Establishment of Custodial Accounts; Deposits in Custodial
                Accounts
Section 4.05    Permitted Withdrawals from the Custodial Account
Section 4.06    Establishment of Escrow Accounts; Deposits in Escrow Accounts
Section 4.07    Permitted Withdrawals From Escrow Account
Section 4.08    Payment of Taxes, Insurance and Other Charges; Maintenance of
                Primary Mortgage Insurance Policies; Collections Thereunder
Section 4.09    Transfer of Accounts
Section 4.10    Maintenance of Hazard Insurance
Section 4.11    Maintenance of Mortgage Impairment Insurance Policy
Section 4.12    Fidelity Bond, Errors and Omissions Insurance
Section 4.13    Title, Management and Disposition of REO Property
Section 4.14    Notification of Maturity Date

                                  ARTICLE V

Section 5.01    Distributions
Section 5.02    Statements to the Purchaser
Section 5.03    Monthly Advances by the Company
Section 5.04    Liquidation Reports

                                  ARTICLE VI

Section 6.01    Assumption Agreements
Section 6.02    Satisfaction of Mortgages and Release of Mortgage Files
Section 6.03    Servicing Compensation
Section 6.04    Annual Statement as to Compliance
Section 6.05    Annual Independent Certified Public Accountants' Servicing
                Report
Section 6.06    Purchaser's Right to Examine Company Records

                                 ARTICLE VII

Section 7.01    Company Shall Provide Information as Reasonably Required

                                 ARTICLE VIII

Section 8.01    Indemnification; Third Party Claims
Section 8.02    Merger or Consolidation of the Company
Section 8.0     Limitation on Liability of the Company and Others
Section 8.04    Company Not to Assign or Resign
Section 8.05    No Transfer of Servicing

                                  ARTICLE IX

Section 9.01    Events of Default
Section 9.02    Waiver of Defaults

                                  ARTICLE X

Section 10.01   Termination

                                  ARTICLE XI

Section 11.01   Successor to the Company
Section 11.02   Amendment
Section 11.03   Recordation of Agreement
Section 11.04   Governing Law
Section 11.05   Notices
Section 11.06   Severability of Provisions
Section 11.07   Exhibits
Section 11.08   General Interpretive Principles
Section 11.09   Reproduction of Documents
Section 11.10   Confidentiality of Information
Section 11.11   Recordation of Assignment of Mortgage
Section 11.12   Assignment by Purchaser
Section 11.13   No Partnership
Section 11.14   Execution: Successors and Assigns
Section 11.15   Entire Agreement
Section 11.16   No Solicitation
Section 11.17   Closing
Section 11.18   Cooperation of Company with Reconstitution

EXHIBITS
A               Contents of Mortgage File
B               Custodial Account Letter Agreement
C               Escrow Account Letter Agreement
D               Form of Assignment, Assumption and Recognition Agreement
E               Form of Trial Balance
F               [reserved]
G               Request for Release of Documents and Receipt
H               Company's Underwriting Guidelines
I               Form of Term Sheet



<PAGE>


      This is a Purchase,  Warranties  and  Servicing  Agreement,  dated as of
October  1,  2001  and  is  executed  between  EMC  MORTGAGE  CORPORATION,  as
Purchaser  (the   "Purchaser"),   and  NATIONAL  CITY  MORTGAGE  COMPANY  (the
"Company").

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

      WHEREAS,  the  Purchaser  has  heretofore  agreed to  purchase  from the
Company and the Company has heretofore  agreed to sell to the Purchaser,  from
time to time, certain Mortgage Loans on a servicing  retained basis,  pursuant
to the terms of this Agreement and the related Term Sheet.

      WHEREAS,  each of the Mortgage  Loans is secured by a mortgage,  deed of
trust or other  security  instrument  creating a first  lien on a  residential
dwelling located in the jurisdiction  indicated on the Mortgage Loan Schedule,
which is annexed to the related Term Sheet; and

      WHEREAS,   the   Purchaser   and  the  Company  wish  to  prescribe  the
representations  and  warranties of the Company with respect to itself and the
Mortgage  Loans and the  management,  servicing  and  control of the  Mortgage
Loans;

      NOW,  THEREFORE,  in consideration of the mutual agreements  hereinafter
set forth,  and for other good and  valuable  consideration,  the  receipt and
adequacy of which is hereby acknowledged,  the Purchaser and the Company agree
as follows:


<PAGE>




                                  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  meaning
specified in this Article:

      ACCEPTED SERVICING  PRACTICES:  With respect to any Mortgage Loan, those
mortgage  servicing  practices  (including  collection  procedures) of prudent
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,  and which are in  accordance  with Fannie Mae  servicing
practices and  procedures,  for MBS pool  mortgages,  as defined in the Fannie
Mae Guides including future updates.

      ADJUSTMENT  DATE: As to each  adjustable rate Mortgage Loan, the date on
which the Mortgage  Interest Rate is adjusted in accordance  with the terms of
the related Mortgage Note.

      AGREEMENT:  This Purchase,  Warranties and Servicing Agreement including
all exhibits hereto, amendments hereof and supplements hereto.

      APPRAISED  VALUE:  With  respect to any  Mortgaged  Property,  the value
thereof as determined by an appraisal  made for the originator of the Mortgage
Loan at the time of  origination  of the Mortgage Loan by an appraiser who met
the requirements of the Company and Fannie Mae.

      ASSIGNMENT:   An  individual  assignment  of  the  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 of record the sale or transfer of the Mortgage Loan.

      BIF:  The Bank Insurance Fund, or any successor thereto.

      BUSINESS  DAY: Any day other than:  (i) a Saturday or Sunday,  or (ii) a
legal  holiday in the State of New York or Ohio, or (iii) a day on which banks
in the  State  of New  York or Ohio  are  authorized  or  obligated  by law or
executive order to be closed.

      CLOSING  DATE:  With  respect to any Mortgage  Loan,  the date stated on
the related  Term Sheet,  which are  expected to be the dates set forth in the
related Confirmation.

      CODE:  The  Internal  Revenue  Code of 1986,  or any  successor  statute
thereto.

      COMPANY:  National City Mortgage  Company,  their successors in interest
and assigns, as permitted by this Agreement.

      COMPANY'S  OFFICER'S  CERTIFICATE:  A certificate signed by the Chairman
of the Board,  President,  any Vice President or Treasurer of Company  stating
the date by which Company  expects to receive any missing  documents  sent for
recording from the applicable recording office.

      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.

      CONFIRMATION:  The Trade  Confirmation  Letter between the Purchaser and
the Company which relates to the Mortgage Loans.

      CO-OP LEASE:  With respect to a Co-op Loan,  the lease with respect to a
dwelling unit  occupied by the  Mortgagor and relating to the stock  allocated
to the related dwelling unit.

      CO-OP LOAN:  A Mortgage  Loan  secured by the pledge of stock  allocated
to a dwelling  unit in a residential  cooperative  housing  corporation  and a
collateral assignment of the related Co-op Lease.

      CURRENT  APPRAISED VALUE:  With respect to any Mortgaged  Property,  the
value  thereof as  determined  by an  appraisal  made for the  Company  (by an
appraiser  who met the  requirements  of the  Company  and Fannie  Mae) at the
request  of a  Mortgagor  for the  purpose  of  canceling  a Primary  Mortgage
Insurance  Policy  in  accordance  with  federal,  state  and  local  laws and
regulations or otherwise made at the request of the Company or Mortgagor.

      CURRENT  LTV:  The ratio of the Stated  Principal  Balance of a Mortgage
Loan to the Current Appraised Value of the Mortgaged Property.

      CUSTODIAL  ACCOUNT:  Each separate  demand  account or accounts  created
and  maintained  pursuant to Section  4.04 which  shall be entitled  "National
City Mortgage Company, in trust for the [Purchaser],  Owner of Mortgage Loans"
and shall be  established  in an Eligible  Account,  in the name of the Person
that is the "Purchaser" with respect to the related Mortgage Loans.

      CUSTODIAN:  With respect to any Mortgage  Loan, the entity stated on the
related  Term Sheet,  and its  successors  and assigns,  as custodian  for the
Purchaser.

      CUT-OFF  DATE:  With  respect to any Mortgage  Loan,  the date stated on
the related Term Sheet.

      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 Remittance Date.

      DUE DATE:  The day of the month on which the  Monthly  Payment is due on
a Mortgage  Loan,  exclusive  of any days of grace,  which is the first day of
the month.

      DUE PERIOD:  With respect to any 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 the Remittance Date.

      ELIGIBLE  ACCOUNT:  An account  established and  maintained:  (i) within
FDIC insured  accounts  created,  maintained  and  monitored by the Company so
that  all  funds  deposited  therein  are  fully  insured,  or (ii) as a trust
account with the corporate  trust  department of a depository  institution  or
trust company  organized under the laws of the United States of America or any
one of the states  thereof or the District of Columbia which is not affiliated
with the Company  (or any  sub-servicer)  or (iii) with an entity  which is an
institution  whose  deposits  are  insured  by the  FDIC,  the  unsecured  and
uncollateralized  long-term  debt  obligations of which shall be rated "A2" or
higher by  Moody's  and "A" or higher  by either  Standard  & Poor's or Fitch,
Inc. or one of the two highest  short-term  ratings by any  applicable  Rating
Agency, and which is either (a) a federal savings  association duly organized,
validly  existing and in good standing under the federal  banking laws, (b) an
institution  duly organized,  validly  existing and in good standing under the
applicable  banking  laws of any  state,  (c) a national  banking  association
under the  federal  banking  laws,  or (d) a  principal  subsidiary  of a bank
holding  company,  or (iv) if ownership of the Mortgage  Loans is evidenced by
mortgaged-backed  securities,  the equivalent  required ratings of each Rating
Agency,  and held such that the rights of the  Purchaser  and the owner of the
Mortgage  Loans shall be fully  protected  against the claims of any creditors
of the Company (or any  sub-servicer)  and of any  creditors or  depositors of
the  institution  in which  such  account is  maintained  or (v) in a separate
non-trust   account   without   FDIC  or  other   insurance   in  an  Eligible
Institution.  In the event that a Custodial  Account is  established  pursuant
to clause  (iii),  (iv) or (v) of the  preceding  sentence,  the Company shall
provide the  Purchaser  with written  notice on the Business Day following the
date on which the applicable  institution fails to meet the applicable ratings
requirements.

      ELIGIBLE  INSTITUTION:  National  City  Bank  Ohio,  or  an  institution
having (i) the  highest  short-term  debt  rating,  and one of the two highest
long-term  debt  ratings of each Rating  Agency;  or (ii) with  respect to any
Custodial Account,  an unsecured  long-term debt rating of at least one of the
two highest unsecured long-term debt ratings of each Rating Agency.

      EQUITY  TAKE-OUT  REFINANCED  MORTGAGE LOAN: A Refinanced  Mortgage Loan
the proceeds of which were in excess of the outstanding  principal  balance of
the existing mortgage loan as defined in the Fannie Mae Guide(s).

      ESCROW  ACCOUNT:  Each separate  trust  account or accounts  created and
maintained  pursuant to Section  4.06 which shall be entitled " National  City
Mortgage Company,  in trust for the [Purchaser],  Owner of Mortgage Loans, and
various  Mortgagors" and shall be established in an Eligible  Account,  in the
name of the  Person  that  is the  "Purchaser"  with  respect  to the  related
Mortgage Loans.

      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
document.

      EVENT  OF  DEFAULT:   Any  one  of  the   conditions  or   circumstances
enumerated in Section 9.01.

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

      FANNIE MAE  GUIDE(S):  The Fannie Mae  Selling  Guide and the Fannie Mae
Servicing Guide and all amendments or additions thereto.

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

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

      FHLMC  GUIDE:  The FHLMC  Single  Family  Seller/Servicer  Guide and all
amendments or additions thereto.

      FIDELITY  BOND:  A  fidelity  bond  to  be  maintained  by  the  Company
pursuant to Section 4.12.

      FIRREA: The Financial  Institutions  Reform,  Recovery,  and Enforcement
Act of 1989.

      GAAP:  Generally accepted accounting principles, consistently applied.

      HUD: The United States  Department of Housing and Urban  Development  or
any successor.

      INDEX:  With respect to any  adjustable  rate Mortgage  Loan,  the index
identified  on the  Mortgage  Loan  Schedule  and  set  forth  in the  related
Mortgage Note for the purpose of calculating the interest rate thereon.

      INITIAL  RATE CAP:  As to each  adjustable  rate  Mortgage  Loan,  where
applicable,  the maximum increase or decrease in the Mortgage Interest Rate on
the first Adjustment Date.

      INSURANCE  PROCEEDS:  With respect to each  Mortgage  Loan,  proceeds of
insurance  policies  insuring  the  Mortgage  Loan  or the  related  Mortgaged
Property.

      LENDER  PRIMARY  MORTGAGE   INSURANCE   POLICY:   Any  Primary  Mortgage
Insurance Policy for which premiums are paid by the Company.

      LENDER  PAID  MORTGAGE   INSURANCE   RATE:   The  Lender  Paid  Mortgage
Insurance Rate shall be a rate per annum equal to the percentage  shown on the
Mortgage Loan Schedule.

      LIFETIME  RATE CAP:  As to each  Mortgage  Loan,  the  maximum  Mortgage
Interest Rate over the term of such Mortgage Loan.

      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.

      LOAN-TO-VALUE  RATIO OR LTV:  With  respect to any  Mortgage  Loan,  the
ratio of the original  outstanding  principal  amount of the Mortgage Loan, to
(i) the Appraised Value of the Mortgaged  Property as of the Origination  Date
with  respect  to a  Refinanced  Mortgage  Loan,  and (ii) the  lesser  of the
Appraised Value of the Mortgaged  Property as of the  Origination  Date or the
purchase  price of the Mortgaged  Property with respect to all other  Mortgage
Loans.

      MARGIN:  With respect to each  adjustable  rate Mortgage Loan, the fixed
percentage  amount set forth in each related  Mortgage  Note which is added to
the Index in order to determine  the related  Mortgage  Interest  Rate, as set
forth in the Mortgage Loan Schedule.

      MONTHLY  ADVANCE:  The  aggregate of the advances made by the Company on
any Remittance Date pursuant to Section 5.03.

      MONTHLY  PAYMENT:   The  scheduled  monthly  payment  of  principal  and
interest on a Mortgage Loan which is payable by a Mortgagor  under the related
Mortgage Note.

      MORTGAGE:  The mortgage,  deed of trust or other  instrument  securing a
Mortgage  Note which creates a first lien on an  unsubordinated  estate in fee
simple in real property securing the Mortgage Note.

      MORTGAGE  FILE:  The  mortgage  documents  pertaining  to  a  particular
Mortgage  Loan which are  specified  in  Exhibit A hereto  and any  additional
documents  required  to be  added  to  the  Mortgage  File  pursuant  to  this
Agreement.

      MORTGAGE  IMPAIRMENT  INSURANCE POLICY: A mortgage impairment or blanket
hazard insurance policy as required by Section 4.11.

      MORTGAGE  INTEREST RATE:  The annual rate at which  interest  accrues on
any Mortgage  Loan,  which may be adjusted from time to time for an adjustable
rate Mortgage Loan, in accordance with the provisions of the related  Mortgage
Note.

      MORTGAGE  LOAN:  An  individual  mortgage  loan which is the  subject of
this  Agreement,  each  Mortgage  Loan  originally  sold and  subject  to this
Agreement  being  identified  on the Mortgage  Loan  Schedule  attached to the
related Term Sheet,  which  Mortgage  Loan  includes  without  limitation  the
Mortgage  File,  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,  excluding  replaced  or
repurchased mortgage loans.

      MORTGAGE LOAN DOCUMENTS:  The documents listed in EXHIBIT A.

      MORTGAGE LOAN  REMITTANCE  RATE: With respect to each Mortgage Loan, the
annual rate of interest  remitted  to the  Purchaser,  which shall be equal to
the Mortgage  Interest Rate minus the Servicing Fee Rate minus the Lender Paid
Mortgage Insurance Rate, if any.

      MORTGAGE LOAN  SCHEDULE:  The schedule of Mortgage  Loans annexed to the
related Term Sheet,  such schedule  setting  forth the  following  information
with respect to each Mortgage Loan in the related Mortgage Loan Package:

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

      (2)   the Mortgagor's first and last name;

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

      (4)   a   code   indicating    whether   the   Mortgaged   Property   is
            owner-occupied, a second home or an investor property;

      (5)   the  type  of  residential   property   constituting  the  Mortgaged
            Property;

      (6)   the original months to maturity of the Mortgage Loan;

      (7)   the  remaining  months to maturity  from the related  Cut-off  Date,
            based on the original amortization  schedule and, if different,  the
            maturity  expressed  in the same  manner  but  based  on the  actual
            amortization schedule;

      (8)   the Sales Price, if applicable,  Appraised Value and Loan-to-Value
            Ratio, at origination;

      (9)   the  Mortgage  Interest  Rate  as of  origination  and  as of  the
            related  Cut-off  Date;  with  respect  to  each  adjustable  rate
            Mortgage Loan, the initial  Adjustment  Date, the next  Adjustment
            Date  immediately  following the related  Cut-off Date, the Index,
            the Margin,  the Initial Rate Cap, if any,  Periodic  Rate Cap, if
            any,  minimum  Mortgage  Interest  Rate  under  the  terms  of the
            Mortgage Note and the Lifetime Rate Cap;

      (10)  the Origination Date of the Mortgage Loan;

      (11)  the stated maturity date;

      (12)  the amount of the Monthly Payment at origination;

      (13)  the amount of the Monthly Payment as of the related  Cut-off Date;

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

      (15)  the scheduled Stated Principal  Balance of the Mortgage Loan as of
            the  close  of  business  on  the  related  Cut-off  Date,   after
            deduction  of payments of  principal  due on or before the related
            Cut-off Date whether or not collected;

      (16)  a  code  indicating  the  purpose  of  the  Mortgage  Loan  (i.e.,
            purchase, rate and term refinance, equity take-out refinance);

      (17)  a code indicating the documentation  style (i.e. full,  alternative,
            etc.);

      (18)  the number of times during the twelve (12) month period  preceding
            the  related  Closing  Date  that  any  Monthly  Payment  has been
            received after the month of its scheduled due date;

      (19)  the date on which the first payment is or was due;

      (20)  a code indicating whether or not the Mortgage Loan is the subject of
            a Primary  Mortgage  Insurance  Policy  and the name of the  related
            insurance carrier;

      (21)  a code indicating whether or not the Mortgage Loan is the subject of
            a  Lender  Primary  Mortgage  Insurance  Policy  and the name of the
            related insurance carrier;

      (22)  a code  indicating  whether or not the  Mortgage  Loan is  currently
            convertible and the conversion spread;

      (23)  the last Due Date on which a Monthly Payment was actually applied to
            the unpaid principal balance of the Mortgage Loan.

      (24)  product type (i.e. fixed, 3/1, 5/1, etc.);

      (25)  credit score and/or mortgage score, if applicable;

      (26)  the Lender Paid Mortgage Insurance Rate;

      (27)  a code indicating  whether or not the Mortgage Loan has a prepayment
            penalty and if so, the amount and term thereof; and

      (28)  the Current  Appraised Value of the Mortgage Loan and Current LTV,
            if applicable.

      With respect to the Mortgage Loans in the  aggregate,  the Mortgage Loan
Schedule  attached  to the related  Term Sheet  shall set forth the  following
information, as of the related Cut-off Date:

      (1)   the number of Mortgage Loans;

      (2)   the current aggregate  outstanding principal balance of the Mortgage
            Loans;

      (3)   the weighted average Mortgage Interest Rate of the Mortgage Loans;

      (4)   the weighted average maturity of the Mortgage Loans; and

      (5)   the weighted average months to next Adjustment Date;

      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
a Mortgage  Note,  consisting of a single parcel of real estate  considered to
be real  estate  under the laws of the state in which  such real  property  is
located  which may include  condominium  units and planned unit  developments,
improved by a residential dwelling;  except that with respect to real property
located  in  jurisdictions   in  which  the  use  of  leasehold   estates  for
residential  properties is a widely-accepted  practice,  a leasehold estate of
the  Mortgage,  the term of which is equal to or  longer  than the term of the
Mortgage.

      MORTGAGOR:  The obligor on a Mortgage Note.

      OCC:  Office of the  Comptroller  of the Currency,  its  successors  and
assigns.

      OFFICERS'  CERTIFICATE:  A  certificate  signed by the  Chairman  of the
Board, the Vice Chairman of the Board, the President,  a Senior Vice President
or a  Vice  President  or by the  Treasurer  or  the  Secretary  or one of the
Assistant  Treasurers or Assistant  Secretaries of the Company,  and delivered
to the Purchaser as required by this Agreement.

      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 Purchaser.

      ORIGINATION  DATE: The date on which a Mortgage Loan funded,  which date
shall not, in connection  with a Refinanced  Mortgage Loan, be the date of the
funding of the debt  being  refinanced,  but  rather  the  closing of the debt
currently outstanding under the terms of the Mortgage Loan Documents.

      PERIODIC  RATE  CAP:  As to each  adjustable  rate  Mortgage  Loan,  the
maximum  increase or decrease in the Mortgage  Interest Rate on any Adjustment
Date, as set forth in the related  Mortgage Note and the related Mortgage Loan
Schedule.

      PERMITTED  INVESTMENTS:  Any one or more of the following obligations or
securities:

            (i)   direct  obligations of, and 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;

            (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 a term  not to  exceed  thirty
            (30)  days and  with  respect  to (a) any  security  described  in
            clause (i) above and 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 one of the two
            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 of all of the Mortgage  Loans and
            Permitted Investments;

            (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 one of the two
            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
            as evidenced in writing by each Rating Agency; 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
            other  securities 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 or if
such investment or security is purchased at a price greater than par.

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

      PREPAYMENT  INTEREST  SHORTFALL:  With respect to any  Remittance  Date,
for each Mortgage Loan that was the subject of a Principal  Prepayment  during
the related  Prepayment  Period,  an amount equal to the excess of one month's
interest at the  applicable  Mortgage  Loan  Remittance  Rate on the amount of
such  Principal  Prepayment  over the  amount  of  interest  (adjusted  to the
Mortgage Loan  Remittance  Rate)  actually paid by the related  Mortgagor with
respect to such Prepayment Period.

      PREPAYMENT  PERIOD:  With respect to any  Remittance  Date, the calendar
month preceding the month in which such Remittance Date occurs.

      PRIMARY  MORTGAGE  INSURANCE  POLICY:  Each  primary  policy of mortgage
insurance  represented to be in effect  pursuant to Section  3.02(hh),  or any
replacement policy therefor obtained by the Company pursuant to Section 4.08.

      PRIME RATE:  The prime rate  announced to be in effect from time to time
as  published  as the  average  rate in the  Wall  Street  Journal  (Northeast
Edition).

      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  penalty 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.

      PURCHASE PRICE:  As defined in Section 2.02.

      PURCHASER:  EMC Mortgage  Corporation,  its  successors  in interest and
assigns.

      QUALIFIED  APPRAISER:  An appraiser,  duly appointed by the Company, who
had no interest,  direct or indirect in the Mortgaged  Property or in any loan
made on the security  thereof,  and whose  compensation is not affected by the
approval or  disapproval  of the Mortgage  Loan,  and such  appraiser  and the
appraisal made by such appraiser both satisfy the  requirements of Title XI of
FIRREA and the  regulations  promulgated  thereunder and the  requirements  of
Fannie Mae, all as in effect on the date the Mortgage Loan was originated.

      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,  approved  as an  insurer  by
Fannie Mae or FHLMC.

      RATING AGENCY:  Moody's  Investors  Service,  Standard & Poor's,  Fitch,
Inc. or, in the event that some or all of the ownership of the Mortgage  Loans
is evidenced by mortgage-backed  securities,  the nationally recognized rating
agencies issuing ratings with respect to such securities, if any.

      REFINANCED   MORTGAGE  LOAN:  A  Mortgage  Loan  which  was  made  to  a
Mortgagor who owned the Mortgaged  Property  prior to the  origination of such
Mortgage  Loan and the proceeds of which were used in whole or part to satisfy
an existing mortgage.

      REMIC:  A "real  estate  mortgage  investment  conduit," as such term is
defined in Section 860D of the Code.

      REMIC  PROVISIONS:   The  provisions  of  the  federal  income  tax  law
relating to REMICs,  which  appear at Sections  860A through 860G of the Code,
and the related  provisions and  regulations  promulgated  thereunder,  as the
foregoing may be in effect from time to time.

      REMITTANCE  DATE:  The 18th day of any month,  beginning  with the First
Remittance  Date,  or if  such  18th  day is not a  Business  Day,  the  first
Business Day immediately preceding such 18th day.

      REO DISPOSITION:  The final sale by the Company of any REO Property.

      REO   DISPOSITION   PROCEEDS:   Amounts   received  by  the  Company  in
connection with a related REO Disposition.

      REO  PROPERTY:  A Mortgaged  Property  acquired by the Company on behalf
of the Purchaser as described in Section 4.13.

      REPURCHASE  PRICE:  With respect to any Mortgage  Loan, a price equal to
(i) the product of the greater of 100% or the  percentage  of par as stated in
the Confirmation  multiplied by the Stated Principal  Balance of such Mortgage
Loan on the repurchase date, plus (ii) interest on such outstanding  principal
balance at the Mortgage Loan  Remittance Rate from the last date through which
interest  has been paid and  distributed  to the  Purchaser  to the end of the
month of repurchase,  plus, (iii) third party expenses  incurred in connection
with the  transfer  of the  Mortgage  Loan  being  repurchased;  less  amounts
received or advanced in respect of such  repurchased  Mortgage  Loan which are
being  held  in  the  Custodial  Account  for  distribution  in the  month  of
repurchase.

      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 Company of its  servicing
obligations,  including, but not limited to, the cost of (a) the 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  but not
limited  to,  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 Company  specifies the Mortgage
Loan(s) to which such expenses relate and, upon Purchaser's request,  provides
documentation   supporting   such  expense  (which   documentation   would  be
acceptable  to Fannie Mae),  and provided  further that any such  enforcement,
administrative  or judicial  proceeding  does not arise out of a breach of any
representation,  warranty  or  covenant  of the  Company  hereunder),  (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,  (e) any  expenses
reasonably  sustained by the Company with  respect to the  liquidation  of the
Mortgaged  Property in  accordance  with the terms of this  Agreement  and (f)
compliance with the obligations under Section 4.08.

      SERVICING  FEE:  With respect to each Mortgage  Loan,  the amount of the
annual fee the Purchaser shall pay to the Company,  which shall,  for a period
of one  full  month,  be  equal  to  one-twelfth  of the  product  of (a)  the
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  Purchaser  to pay the
Servicing  Fee is limited to, and the  Servicing  Fee is payable  solely from,
the interest portion of such Monthly Payment  collected by the Company,  or as
otherwise  provided  under Section 4.05 and in accordance  with the Fannie Mae
Guide(s).  Any fee payable to the Company for administrative  services related
to any REO  Property  as  described  in Section  4.13  shall be  payable  from
Liquidation Proceeds of the related REO Property.

      SERVICING FEE RATE:  As set forth in the related Term Sheet.

      SERVICING  FILE:  With respect to each Mortgage  Loan, the file retained
by the Company  consisting  of originals of all documents in the Mortgage File
which are not  delivered  to the  Purchaser  and copies of the  Mortgage  Loan
Documents  listed in Exhibit A, the  originals  of which are  delivered to the
Purchaser or its designee pursuant to Section 2.04.

      SERVICING   OFFICER:   Any  officer  of  the  Company  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 Company to the
Purchaser upon request, as such list may from time to time be amended.

      STATED  PRINCIPAL  BALANCE:  As to each  Mortgage Loan as of any date of
determination,  (i) the principal balance of such Mortgage Loan at the Cut-off
Date after giving  effect to payments of principal due on or before such date,
whether or not received,  minus (ii) all amounts previously distributed to the
Purchaser  with  respect  to  the  Mortgage  Loan  representing   payments  or
recoveries of principal or advances in lieu thereof.

      SUBSERVICER:  Any subservicer  which is subservicing  the Mortgage Loans
pursuant  to  a  Subservicing  Agreement.   Any  subservicer  shall  meet  the
qualifications set forth in Section 4.01.

      SUBSERVICING   AGREEMENT:   An  agreement  between  the  Company  and  a
Subservicer, if any, for the servicing of the Mortgage Loans.

      TERM SHEET:  A  supplemental  agreement in the form  attached  hereto as
Exhibit  I which  shall be  executed  and  delivered  by the  Company  and the
Purchaser to provide for the sale and servicing  pursuant to the terms of this
Agreement of the Mortgage Loans listed on Schedule I attached  thereto,  which
supplemental  agreement shall contain certain specific information relating to
such  sale  of  such  Mortgage  Loans  and may  contain  additional  covenants
relating to such sale of such Mortgage Loans.



<PAGE>


                                  ARTICLE II

                         SERVICING OF MORTGAGE LOANS;
                RECORD TITLE AND POSSESSION OF MORTGAGE FILES;
                   BOOKS AND RECORDS; CUSTODIAL AGREEMENT;
                     DELIVERY OF MORTGAGE LOAN DOCUMENTS

      Section 2.01      AGREEMENT TO PURCHASE.

      The Company  agrees to sell and the  Purchaser  agrees to  purchase  the
Mortgage  Loans having an aggregate  Stated  Principal  Balance on the related
Cut-off  Date set forth in the related Term Sheet in an amount as set forth in
the  Confirmation,  or in such other amount as agreed by the Purchaser and the
Company as evidenced by the actual aggregate  Stated Principal  Balance of the
Mortgage  Loans  accepted by the Purchaser on the related  Closing Date,  with
servicing  retained  by the  Company.  The Company  shall  deliver the related
Mortgage  Loan  Schedule  attached to the related  Term Sheet for the Mortgage
Loans to be  purchased on the related  Closing Date to the  Purchaser at least
two (2) Business Days prior to the related  Closing Date.  The Mortgage  Loans
shall be sold pursuant to this Agreement,  and the related Term Sheet shall be
executed and delivered on the related Closing Date.

      Section 2.02      PURCHASE PRICE.

      The Purchase  Price for each  Mortgage  Loan shall be the  percentage of
par  as  stated  in  the  Confirmation  (subject  to  adjustment  as  provided
therein),  multiplied  by the  Stated  Principal  Balance,  as of the  related
Cut-off  Date,  of the  Mortgage  Loan  listed on the  related  Mortgage  Loan
Schedule  attached to the related Term Sheet,  after  application of scheduled
payments of  principal  due on or before the related  Cut-off  Date whether or
not collected.

      In addition to the Purchase  Price as  described  above,  the  Purchaser
shall  pay to  the  Company,  at  closing,  accrued  interest  on  the  Stated
Principal  Balance of each Mortgage Loan as of the related Cut-off Date at the
Mortgage Loan  Remittance  Rate of each Mortgage Loan from the related Cut-off
Date through the day prior to the related Closing Date, inclusive.

      The Purchase  Price plus accrued  interest as set forth in the preceding
paragraph  shall  be paid on the  related  Closing  Date by wire  transfer  of
immediately available funds.

      Purchaser  shall be entitled to (1) all  scheduled  principal  due after
the related Cut-off Date, (2) all other  recoveries of principal  collected on
or after the related  Cut-off  Date  (provided,  however,  that all  scheduled
payments of principal due on or before the related  Cut-off Date and collected
by the Company or any successor  servicer after the related Cut-off Date shall
belong to the  Company),  and (3) all  payments of  interest  on the  Mortgage
Loans  net of  applicable  Servicing  Fees  (minus  that  portion  of any such
payment which is allocable to the period prior to the related  Cut-off  Date).
The  outstanding  principal  balance of each  Mortgage  Loan as of the related
Cut-off Date is determined  after  application of payments of principal due on
or before the related  Cut-off Date whether or not  collected,  together  with
any unscheduled  principal  prepayments collected prior to the related Cut-off
Date;  provided,  however,  that payments of scheduled  principal and interest
prepaid for a Due Date beyond the  related  Cut-off  Date shall not be applied
to the  principal  balance  as of  the  related  Cut-off  Date.  Such  prepaid
amounts  shall be the property of the  Purchaser.  The Company  shall  deposit
any such  prepaid  amounts  into  the  Custodial  Account,  which  account  is
established for the benefit of the Purchaser for subsequent  remittance by the
Company to the Purchaser.

      Section 2.03      SERVICING OF MORTGAGE LOANS.

      Simultaneously  with the execution and delivery of each Term Sheet,  the
Company  does hereby agree to directly  service the  Mortgage  Loans listed on
the related Mortgage Loan Schedule  attached to the related Term Sheet subject
to the terms of this  Agreement and the related Term Sheet.  The rights of the
Purchaser  to receive  payments  with  respect to the related  Mortgage  Loans
shall be as set forth in this Agreement.

      Section 2.04      RECORD TITLE AND POSSESSION OF MORTGAGE FILES;
                        MAINTENANCE OF SERVICING FILES.

      As  of  the  related  Closing  Date,  the  Company  sold,   transferred,
assigned,  set over and conveyed to the Purchaser,  without recourse,  and the
Company hereby  acknowledges  that the Purchaser has, but subject to the terms
of this  Agreement  and the  related  Term  Sheet,  all the  right,  title and
interest of the Company in and to the  Mortgage  Loans.  Company  will deliver
the Mortgage Files to the Custodian designated by Purchaser,  on or before the
related  Closing  Date,  at the  expense of the  Company.  The  Company  shall
maintain  a  Servicing  File  consisting  of a copy  of the  contents  of each
Mortgage  File and the  originals of the  documents in each  Mortgage File not
delivered to the  Purchaser.  The  Servicing  File shall contain all documents
necessary to service the Mortgage  Loans.  The  possession  of each  Servicing
File by the Company is at the will of the  Purchaser,  for the sole purpose of
servicing the related  Mortgage Loan, and such retention and possession by the
Company is in a custodial  capacity only.  From the related  Closing Date, the
ownership of each Mortgage  Loan,  including the Mortgage  Note, the Mortgage,
the contents of the related Mortgage File and all rights,  benefits,  proceeds
and obligations arising therefrom or in connection therewith,  has been vested
in the  Purchaser.  All rights  arising out of the Mortgage  Loans  including,
but not limited to, 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  Company  shall be
received and held by the Company in trust for the benefit of the  Purchaser as
the owner of the Mortgage  Loans.  Any portion of the Mortgage  Files retained
by the Company shall be  appropriately  identified  in the Company's  computer
system  to  clearly  reflect  the  ownership  of  the  Mortgage  Loans  by the
Purchaser.  The  Company  shall  release  its  custody of the  contents of the
Mortgage Files only in accordance with written  instructions of the Purchaser,
except when such release is required as incidental to the Company's  servicing
of the Mortgage  Loans or is in  connection  with a repurchase of any Mortgage
Loan or Loans with respect thereto  pursuant to this Agreement and the related
Term Sheet, such written instructions shall not be required.

      Section 2.05      BOOKS AND RECORDS.

      The  sale of each  Mortgage  Loan has been  reflected  on the  Company's
balance  sheet  and  other  financial  statements  as a sale of  assets by the
Company.  The  Company  shall  be  responsible  for  maintaining,   and  shall
maintain,  a complete  set of books and  records for the  Mortgage  Loans that
shall be appropriately  identified in the Company's computer system to clearly
reflect the ownership of the Mortgage Loan by the  Purchaser.  In  particular,
the Company shall maintain in its possession,  available for inspection by the
Purchaser,  or its designee and shall  deliver to the  Purchaser  upon demand,
evidence of  compliance  with all  federal,  state and local  laws,  rules and
regulations,   and  requirements  of  Fannie  Mae  or  FHLMC,  as  applicable,
including  but  not  limited  to  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  of any  condominium  project as  required  by
Fannie Mae or FHLMC,  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 Company may be in the form of microfilm or microfiche.

      The Company shall  maintain with respect to each Mortgage Loan and shall
make  available  for  inspection  by any Purchaser or its designee the related
Servicing File during the time the Purchaser  retains  ownership of a Mortgage
Loan and thereafter in accordance with applicable laws and regulations.

      In addition to the foregoing,  Company shall provide to any  supervisory
agents or examiners  that  regulate  Purchaser,  including but not limited to,
the FDIC and other similar  entities,  access,  during normal  business hours,
upon  reasonable  advance  notice to Company and without  charge to Company or
such  supervisory  agents or  examiners,  to any  documentation  regarding the
Mortgage Loans that may be required by any applicable regulator.

      Section 2.06.     TRANSFER OF MORTGAGE LOANS.

      The  Company  shall keep at its  servicing  office  books and records in
which,  subject  to  such  reasonable  regulations  as it may  prescribe,  the
Company  shall note  transfers  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 Company  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 Company in  accordance  with this Section 2.06 and the books
and  records  of the  Company  show such  person as the owner of the  Mortgage
Loan.  The Purchaser  may,  subject to the terms of this  Agreement,  sell and
transfer  one or more of the  Mortgage  Loans,  provided,  however,  that  the
transferee  will not be deemed to be a Purchaser  hereunder  binding  upon the
Company  unless  such  transferee  shall  agree in  writing to be bound by the
terms of this  Agreement  and an original  counterpart  of the  instrument  of
transfer in an Assignment and Assumption of this  Agreement  substantially  in
the form of  Exhibit  D hereto  executed  by the  transferee  shall  have been
delivered to the Company.  The Purchaser  also shall advise the Company of the
transfer.  Upon receipt of notice of the transfer,  the Company shall mark its
books and  records to reflect  the  ownership  of the  Mortgage  Loans of such
assignee,  and the previous  Purchaser  shall be released from its obligations
hereunder with respect to the Mortgage Loans sold or transferred.

      Section 2.07      DELIVERY OF MORTGAGE LOAN DOCUMENTS.

      The Company  shall  deliver and release to the Purchaser or its designee
the Mortgage  Loan  Documents in accordance  with the terms of this  Agreement
and the related Term Sheet.  The documents  enumerated as items (1), (2), (3),
(4),  (5),  (6), (7), (8), (9) and (16) in Exhibit A hereto shall be delivered
by the  Company  to the  Purchaser  or its  designee  no later  than three (3)
Business  Days prior to the related  Closing Date  pursuant to a bailee letter
agreement.  All other  documents in Exhibit A hereto,  together with all other
documents  executed in connection with the Mortgage Loan that Company may have
in its  possession,  shall  be  retained  by the  Company  in  trust  for  the
Purchaser.  If the Company cannot deliver the original  recorded Mortgage Loan
Documents  or the original  policy of title  insurance,  including  riders and
endorsements  thereto,  on  the  related  Closing  Date,  the  Company  shall,
promptly  upon  receipt  thereof  and in any case not later than 120 days from
the related Closing Date, deliver such original documents,  including original
recorded  documents,  to the Purchaser or its designee  (unless the Company is
delayed  in making  such  delivery  by reason of the fact that such  documents
shall  not  have  been  returned  by the  appropriate  recording  office).  If
delivery is not completed  within 120 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,  Company  shall  deliver such
document to Purchaser,  or its designee,  within such time period as specified
in a Company's  Officer's  Certificate.  In the event that  documents have not
been received by the date specified in the Company's Officer's Certificate,  a
subsequent  Company's  Officer's  Certificate  shall be delivered by such date
specified  in the prior  Company's  Officer's  Certificate,  stating a revised
date for receipt of  documentation.  The procedure shall be repeated until the
documents  have been  received  and  delivered.  If delivery is not  completed
within 180 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  Company  shall  continue  to use its best  efforts to
effect  delivery  as  soon  as  possible  thereafter,  provided  that  if such
documents  are not  delivered  by the 270th  day from the date of the  related
Closing Date, the Company shall  repurchase the related  Mortgage Loans at the
Repurchase Price in accordance with Section 3.03 hereof.

      The  Company  shall pay all  initial  recording  fees,  if any,  for the
assignments of mortgage and any other fees in connection  with the transfer of
all  original  documents  to the  Purchaser  or its  designee.  Company  shall
prepare,  in recordable form, all assignments of mortgage  necessary to assign
the  Mortgage  Loans  to  Purchaser,   or  its  designee.   Company  shall  be
responsible for recording the assignments of mortgage.

      Company  shall  provide an original or  duplicate  original of the title
insurance  policy to Purchaser or its designee  within ninety (90) days of the
receipt of the recorded documents  (required for issuance of such policy) from
the applicable recording office.

      Any review by the  Purchaser,  or its  designee,  of the Mortgage  Files
shall in no way alter or reduce the Company's obligations hereunder.

      If the Purchaser or its designee  discovers any defect with respect to a
Mortgage  File,  the  Purchaser  shall,  or shall cause its  designee to, give
written  specification of such defect to the Company which may be given in the
exception  report or the  certification  delivered  pursuant  to this  Section
2.07, or otherwise in writing and the Company  shall cure or  repurchase  such
Mortgage Loan in accordance with Section 3.03.

      The Company shall forward to the  Purchaser,  or its designee,  original
documents evidencing an assumption,  modification,  consolidation or extension
of any  Mortgage  Loan entered  into in  accordance  with Section 4.01 or 6.01
within one week of their execution;  provided, however, that the Company shall
provide the  Purchaser,  or its  designee,  with a certified  true copy of any
such document submitted for recordation within one week of 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  within  sixty (60) days of its
submission for recordation.

      From  time to  time  the  Company  may  have a need  for  Mortgage  Loan
Documents to be released from  Purchaser,  or its designee.  Purchaser  shall,
or shall cause its designee,  upon the written request of the Company,  within
ten (10) Business Days,  deliver to the Company,  any requested  documentation
previously  delivered to Purchaser as part of the Mortgage File, provided that
such  documentation is promptly returned to Purchaser,  or its designee,  when
the Company no longer requires  possession of the document,  and provided that
during  the time  that any such  documentation  is held by the  Company,  such
possession is in trust for the benefit of Purchaser.  Company shall  indemnify
Purchaser,  and its  designee,  from and against  any and all losses,  claims,
damages,  penalties,  fines, forfeitures,  costs and expenses (including court
costs and reasonable  attorney's  fees) resulting from or related to the loss,
damage, or misplacement of any documentation  delivered to Company pursuant to
this paragraph.

      Section 2.08      QUALITY CONTROL PROCEDURES.

      The  Company  must  have  an  internal   quality  control  program  that
verifies,  on a  regular  basis,  the  existence  and  accuracy  of the  legal
documents,   credit   documents,   property   appraisals,   and   underwriting
decisions.  The  program  must be capable of  evaluating  and  monitoring  the
overall quality of its loan production and servicing  activities.  The program
is  to  ensure  that  the  Mortgage  Loans  are  originated  and  serviced  in
accordance with prudent mortgage banking practices and accounting  principles;
guard against  dishonest,  fraudulent,  or negligent  acts;  and guard against
errors and omissions by officers, employees, or other authorized persons.

      Section 2.09      NEAR-TERM  PRINCIPAL  PREPAYMENTS;  NEAR TERM PAYMENT
                        DEFAULTS

      In the event  any  Principal  Prepayment  is made by a  Mortgagor  on or
prior to sixty (60) days after the related  Closing  Date,  the Company  shall
remit to the Purchaser an amount equal to the excess,  if any, of the Purchase
Price  Percentage  over  par  multiplied  by  the  amount  of  such  Principal
Prepayment.  Such  remittance  shall be made by the  Company to  Purchaser  no
later  than  the  third  Business  Day  following  receipt  of such  Principal
Prepayment by the Company.

      In the event any of the first two (2) scheduled  Monthly  Payments which
are due under any  Mortgage  Loan after the related  Cut-off Date are not made
during the month in which such Monthly  Payments are due,  then not later than
five (5)  Business  Days  after  notice to the  Company by  Purchaser  (and at
Purchaser's  sole option),  the Company,  shall  repurchase such Mortgage Loan
from the Purchaser  pursuant to the  repurchase  provisions  contained in this
Subsection 3.03.



<PAGE>


                                 ARTICLE III

                      REPRESENTATIONS AND WARRANTIES OF
              THE COMPANY; REPURCHASE; REVIEW OF MORTGAGE LOANS

      Section 3.01      REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

      The Company  represents,  warrants and covenants to the Purchaser  that,
as of the  related  Closing  Date or as of  such  date  specifically  provided
herein:

      (a)   The Company is a corporation,  duly  organized,  validly  existing
and in good standing  under the laws of the State of Ohio and has all licenses
necessary  to carry out its business as now being  conducted,  and is licensed
and qualified to transact  business in and is in good standing  under the laws
of each state in which any  Mortgaged  Property  is  located  or is  otherwise
exempt  under  applicable  law from  such  licensing  or  qualification  or is
otherwise  not  required  under  applicable  law to effect such  licensing  or
qualification  and no demand for such licensing or qualification has been made
upon such  Company  by any such  state,  and in any event  such  Company is in
compliance  with the laws of any such state to the extent  necessary to ensure
the  enforceability  of each  Mortgage  Loan and the servicing of the Mortgage
Loans in accordance with the terms of this Agreement;

      (b)   The  Company has the full power and  authority  and legal right to
hold,  transfer and convey each Mortgage  Loan, to sell each Mortgage Loan and
to  execute,  deliver  and  perform,  and to  enter  into and  consummate  all
transactions  contemplated by this Agreement and the related Term Sheet and to
conduct  its  business  as  presently  conducted,   has  duly  authorized  the
execution,  delivery and  performance  of this  Agreement and the related Term
Sheet and any agreements  contemplated hereby, has duly executed and delivered
this  Agreement and the related Term Sheet,  and any  agreements  contemplated
hereby,  and this Agreement and the related Term Sheet and each  Assignment to
the Purchaser and any  agreements  contemplated  hereby,  constitutes a legal,
valid  and  binding  obligation  of the  Company,  enforceable  against  it in
accordance with its terms,  and all requisite  corporate action has been taken
by the  Company  to make this  Agreement  and the  related  Term Sheet and all
agreements   contemplated  hereby  valid  and  binding  upon  the  Company  in
accordance with their terms;

      (c)   Neither  the  execution  and  delivery of this  Agreement  and the
related Term Sheet,  nor the  origination or purchase of the Mortgage Loans by
the  Company,   the  sale  of  the  Mortgage  Loans  to  the  Purchaser,   the
consummation of the transactions  contemplated  hereby,  or the fulfillment of
or compliance  with the terms and conditions of this Agreement and the related
Term Sheet will  conflict  with any of the terms,  conditions or provisions of
the Company's  charter or by-laws or  materially  conflict with or result in a
material  breach of any of the terms,  conditions  or  provisions of any legal
restriction  or any  agreement  or  instrument  to which the  Company 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 result in the material violation
of any law, rule,  regulation,  order, judgment or decree to which the Company
or its  properties  are  subject,  or impair the ability of the  Purchaser  to
realize on the Mortgage Loans.

      (d)   There is no litigation,  suit, proceeding or investigation pending
or, to the best of  Company's  knowledge,  threatened,  or any order or decree
outstanding,  with respect to the Company which, either in any one instance or
in the aggregate,  is reasonably  likely to have a material  adverse effect on
the sale of the  Mortgage  Loans,  the  execution,  delivery,  performance  or
enforceability  of this  Agreement  and the related  Term  Sheet,  or which is
reasonably  likely  to  have  a  material  adverse  effect  on  the  financial
condition of the Company.

      (e)   No  consent,  approval,  authorization  or order  of any  court or
governmental  agency  or body is  required  for the  execution,  delivery  and
performance  by  the  Company  of or  compliance  by  the  Company  with  this
Agreement  or the related Term Sheet,  or the sale of the  Mortgage  Loans and
delivery of the Mortgage  Files to the  Purchaser or the  consummation  of the
transactions  contemplated by this Agreement or the related Term Sheet, except
for consents, approvals, authorizations and orders which have been obtained;

      (f)   The  consummation  of  the   transactions   contemplated  by  this
Agreement or the related  Term Sheet is in the ordinary  course of business of
the Company and Company,  and the transfer,  assignment  and conveyance of the
Mortgage Notes and the Mortgages by the Company  pursuant to this Agreement or
the  related  Term  Sheet are not  subject  to bulk  transfer  or any  similar
statutory provisions in effect in any applicable jurisdiction;

      (g)   The  origination  and servicing  practices used by the Company and
any prior  originator  or  servicer  with  respect to each  Mortgage  Note and
Mortgage  have  been  legal  and  in  accordance   with  applicable  laws  and
regulations  and the Mortgage  Loan  Documents,  and in all material  respects
proper and prudent in the mortgage  origination and servicing  business.  Each
Mortgage  Loan  has been  serviced  in all  material  respects  with  Accepted
Servicing  Practices.  With respect to escrow  deposits and payments  that the
Company, on behalf of an investor,  is entitled to collect,  all such payments
are in the  possession  of, or under the  control of, the  Company,  and there
exist  no   deficiencies   in  connection   therewith   for  which   customary
arrangements  for repayment  thereof have not been made.  All escrow  payments
have been  collected  in full  compliance  with state and  federal law and the
provisions  of the related  Mortgage  Note and  Mortgage.  As to any  Mortgage
Loan that is the subject of an escrow,  escrow of funds is not  prohibited  by
applicable  law and has been  established  in an amount  sufficient to pay for
every  escrowed item that remains  unpaid and has been assessed but is not yet
due and  payable.  No escrow  deposits or other  charges or payments due under
the  Mortgage  Note have been  capitalized  under any  Mortgage or the related
Mortgage Note;

      (h)   The Company  used no  selection  procedures  that  identified  the
Mortgage  Loans as being less  desirable  or  valuable  than other  comparable
mortgage loans in the Company's portfolio at the related Cut-off Date;

      (i)   The  Company  will  treat  the sale of the  Mortgage  Loans to the
Purchaser as a sale for reporting and  accounting  purposes and, to the extent
appropriate, for federal income tax purposes;

      (j)   Company is an approved  seller/servicer  of  residential  mortgage
loans for Fannie Mae,  FHLMC and HUD,  with such  facilities,  procedures  and
personnel  necessary  for the sound  servicing  of such  mortgage  loans.  The
Company is duly  qualified,  licensed,  registered  and  otherwise  authorized
under all  applicable  federal,  state and local  laws,  and  regulations,  if
applicable,  meets the minimum capital  requirements set forth by the OCC, and
is in good standing to sell mortgage  loans to and service  mortgage loans for
Fannie  Mae and FHLMC and no event  has  occurred  which  would  make  Company
unable  to  comply  with  eligibility  requirements  or  which  would  require
notification to either Fannie Mae or FHLMC;

      (k)   The  Company  does not  believe,  nor  does it have  any  cause or
reason to believe,  that it cannot perform each and every  covenant  contained
in this  Agreement or the related  Term Sheet.  The Company is solvent and the
sale of the  Mortgage  Loans will not cause the  Company to become  insolvent.
The sale of the Mortgage  Loans is not  undertaken  with the intent to hinder,
delay or defraud any of the Company's creditors;

      (l)   No  statement,  tape,  diskette,  form,  report or other  document
prepared  by, or on behalf  of,  Company  pursuant  to this  Agreement  or the
related  Term  Sheet  or in  connection  with  the  transactions  contemplated
hereby,  contains or will contain any statement  that is or will be inaccurate
or misleading in any material respect;

      (m)   The  Company  acknowledges  and  agrees  that  the  Servicing  Fee
represents  reasonable  compensation for performing such services and that the
entire  Servicing Fee shall be treated by the Company,  for accounting and tax
purposes,  as  compensation  for  the  servicing  and  administration  of  the
Mortgage  Loans  pursuant to this  Agreement.  In the opinion of Company,  the
consideration  received  by  Company  upon the sale of the  Mortgage  Loans to
Purchaser  under this  Agreement and the related Term Sheet  constitutes  fair
consideration for the Mortgage Loans under current market conditions.

      (n)   Company has  delivered to the  Purchaser  financial  statements of
its  parent,  for its last  two  complete  fiscal  years.  All such  financial
information  fairly presents the pertinent results of operations and financial
position for the period  identified  and has been prepared in accordance  with
GAAP  consistently  applied  throughout  the periods  involved,  except as set
forth  in the  notes  thereto.  There  has  been no  change  in the  business,
operations,  financial  condition,  properties  or assets of the Company since
the date of the  Company's  financial  information  that would have a material
adverse effect on its ability to perform its obligations under this Agreement;

      (o)   The  Company  has not dealt with any  broker,  investment  banker,
agent or other person that may be entitled to any  commission or  compensation
in connection with the sale of the Mortgage Loans;

      Section 3.02      REPRESENTATIONS  AND  WARRANTIES  AS  TO  INDIVIDUAL
                        MORTGAGE LOANS.

      References  in this Section to  percentages  of Mortgage  Loans refer in
each case to the percentage of the aggregate Stated  Principal  Balance of the
Mortgage  Loans as of the  related  Cut-off  Date,  based  on the  outstanding
Stated  Principal  Balances of the  Mortgage  Loans as of the related  Cut-off
Date, and giving effect to scheduled  Monthly  Payments due on or prior to the
related  Cut-off Date,  whether or not received.  References to percentages of
Mortgaged  Properties  refer,  in each case,  to the  percentages  of expected
aggregate Stated Principal  Balances of the related Mortgage Loans (determined
as described in the preceding  sentence).  The Company  hereby  represents and
warrants  to the  Purchaser,  as to  each  Mortgage  Loan,  as of the  related
Closing Date as follows:

      (a)   The information  set forth in the Mortgage Loan Schedule  attached
to the  related  Term Sheet is true,  complete  and  correct  in all  material
respects as of the related Cut-Off Date;

      (b)   The Mortgage  creates a valid,  subsisting and  enforceable  first
lien or a first  priority  ownership  interest  in an estate in fee  simple in
real  property  securing the related  Mortgage  Note subject to  principles of
equity,   bankruptcy,   insolvency  and  other  laws  of  general  application
affecting the rights of creditors;

      (c)   All  payments  due  prior  to the  related  Cut-off  Date for such
Mortgage  Loan have been made as of the related  Closing  Date;  the  Mortgage
Loan has not been dishonored;  there are no material  defaults under the terms
of the Mortgage Loan; the Company has not advanced its own funds,  or induced,
solicited or  knowingly  received any advance of funds from a party other than
the owner of the  Mortgaged  Property  subject to the  Mortgage,  directly  or
indirectly,  for the payment of any amount  required by the Mortgage  Loan. As
of the related  Closing  Date,  all of the Mortgage  Loans will have an actual
Interest Paid to Date of their related  Cut-off Date(or later) and will be due
for the  scheduled  monthly  payment  next  succeeding  the  Cut-off  Date (or
later), as evidenced by a posting to Company's  servicing  collection  system.
No payment under any Mortgage  Loan is  delinquent  as of the related  Closing
Date nor has any  scheduled  payment  been  delinquent  at any time during the
twelve  (12)  months  prior to the  month of the  related  Closing  Date.  For
purposes of this paragraph,  a Mortgage Loan will be deemed  delinquent if any
payment  due  thereunder  was not  paid by the  Mortgagor  in the  month  such
payment was due;

      (d)   There are no  defaults by Company in  complying  with the terms of
the Mortgage,  and all taxes,  governmental  assessments,  insurance premiums,
water, sewer and municipal  charges,  leasehold payments or ground rents which
previously  became  due and owing have been  paid,  or escrow  funds have been
established in an amount  sufficient to pay for every such escrowed item which
remains unpaid and which has been assessed but is not yet due and payable;

      (e)   The  terms of the  Mortgage  Note and the  Mortgage  have not been
impaired,  waived,  altered  or  modified  in any  respect,  except by written
instruments  which have been  recorded to the extent any such  recordation  is
required by law, or,  necessary to protect the interest of the  Purchaser.  No
instrument of waiver,  alteration or modification  has been executed except in
connection with a modification  agreement and which modification  agreement is
part of the Mortgage  File and the terms of which are reflected in the related
Mortgage Loan  Schedule,  and no Mortgagor has been  released,  in whole or in
part,  from  the  terms  thereof  except  in  connection  with  an  assumption
agreement and which assumption  agreement is part of the Mortgage File and the
terms of which are  reflected  in the  related  Mortgage  Loan  Schedule;  the
substance of any such waiver,  alteration or modification has been approved by
the issuer of any related Primary Mortgage  Insurance  Policy,  Lender Primary
Mortgage  Insurance Policy and title insurance  policy, to the extent required
by the related policies;

      (f)   The  Mortgage  Note and the  Mortgage are not subject to any right
of  rescission,   set-off,   counterclaim  or  defense,   including,   without
limitation,  the defense of usury,  nor will the operation of any of the terms
of  the  Mortgage  Note  or  the  Mortgage,  or  the  exercise  of  any  right
thereunder,  render the Mortgage Note or Mortgage  unenforceable,  in whole or
in part,  or  subject to any right of  rescission,  set-off,  counterclaim  or
defense,  including  the  defense of usury,  and no such right of  rescission,
set-off,  counterclaim or defense has been asserted with respect thereto;  and
as of the related  Closing Date the Mortgagor was not a debtor in any state or
federal bankruptcy or insolvency proceeding;

      (g)   All buildings or other customarily  insured  improvements upon the
Mortgaged  Property are insured by an insurer  acceptable under the Fannie Mae
or FHLMC Guides,  against loss by fire,  hazards of extended coverage and such
other  hazards as are provided  for in the Fannie Mae or FHLMC Guide,  as well
as all additional  requirements  set forth in Section 4.10 of this  Agreement.
All such standard  hazard  policies are in full force and effect and contain a
standard  mortgagee  clause naming the Company and its  successors in interest
and assigns as loss payee and such clause is still in effect and all  premiums
due thereon have been paid. If required by the Flood  Disaster  Protection Act
of 1973, as amended,  the Mortgage Loan is covered by a flood insurance policy
meeting the  requirements of the current  guidelines of the Federal  Insurance
Administration  which policy conforms to Fannie Mae or FHLMC requirements,  as
well  as all  additional  requirements  set  forth  in  Section  4.10  of this
Agreement.  Such policy was issued by an insurer  acceptable  under Fannie Mae
or FHLMC  guidelines.  The Mortgage  obligates  the  Mortgagor  thereunder  to
maintain all such insurance at the  Mortgagor's  cost and expense,  and on the
Mortgagor's  failure  to do so,  authorizes  the  holder  of the  Mortgage  to
maintain  such  insurance  at the  Mortgagor's  cost and  expense  and to seek
reimbursement therefor from the Mortgagor.  Neither the Company (nor any prior
originator  or servicer of any of the Mortgage  Loans) nor any  Mortgagor  has
engaged  in any act or  omission  which  has  impaired  or  would  impair  the
coverage of any such  policy,  the  benefits of the  endorsement  provided for
herein, or the validity and binding effect of either;

      (h)   Any and all  requirements  of any  federal,  state  or  local  law
including,   without   limitation,   usury,   truth-in-lending,   real  estate
settlement  procedures,  consumer credit protection,  equal credit opportunity
or disclosure  laws applicable to the Mortgage Loan have been complied with in
all material respects; the Company maintains, and shall maintain,  evidence of
such  compliance  as required by applicable  law or regulation  and shall make
such evidence  available for inspection at the Company's  office during normal
business hours upon reasonable advance notice;

      (i)   The Mortgage has not been satisfied,  canceled or subordinated, in
whole  or in part,  or  rescinded,  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  release,  cancellation,
subordination  or  rescission.  The Company has not waived the  performance by
the  Mortgagor  of any  action,  if the  Mortgagor's  failure to perform  such
action  would cause the  Mortgage  Loan to be in default,  nor has the Company
waived any default resulting from any action or inaction by the Mortgagor;

      (j)   The Mortgage is a valid,  subsisting,  enforceable  and  perfected
first  lien  on  the  Mortgaged  Property,  including  all  buildings  on  the
Mortgaged   Property  and  all  installations   and  mechanical,   electrical,
plumbing,  heating and air conditioning systems affixed to such buildings, and
all additions,  alterations and replacements  made at any time with respect to
the foregoing  securing the Mortgage Note's original principal balance subject
to  principles  of equity,  bankruptcy,  insolvency  and other laws of general
application  affecting the rights of creditors.  The Mortgage and the Mortgage
Note do not contain any  evidence of any security  interest or other  interest
or right  thereto.  Such lien is free and clear of all adverse  claims,  liens
and  encumbrances  having priority over the first lien of the Mortgage subject
only to (1)  the  lien of  non-delinquent  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  which  are  acceptable  to  mortgage  lending
institutions  generally  and either (A) which are  referred to in the lender's
title insurance policy delivered to the originator or otherwise  considered in
the appraisal  made for the  originator of the Mortgage  Loan, or (B) which do
not adversely  affect the  residential use or Appraised Value of the Mortgaged
Property as set forth in such  appraisal,  and (3) other matters to which like
properties are commonly  subject which do not individually or in the aggregate
materially  interfere  with  the  benefits  of  the  security  intended  to be
provided by the Mortgage or the use, enjoyment,  value or marketability of the
related  Mortgaged  Property.  Any  security  agreement,  chattel  mortgage or
equivalent  document  related to and delivered in connection with the Mortgage
Loan  establishes and creates a valid,  subsisting,  enforceable and perfected
first lien and first  priority  security  interest on the  property  described
therein,  and the  Company  has the full  right to sell and assign the same to
the Purchaser;

      (k)   The  Mortgage  Note and the  related  Mortgage  are  original  and
genuine  and each is the  legal,  valid and  binding  obligation  of the maker
thereof,  enforceable in all respects in accordance  with its terms subject to
principles  of  equity,  bankruptcy,  insolvency  and  other  laws of  general
application  affecting the rights of creditors,  and the Company has taken all
action necessary to transfer such rights of  enforceability  to the Purchaser.
All parties to the Mortgage  Note and the  Mortgage had the legal  capacity to
enter into the Mortgage  Loan and to execute and deliver the Mortgage Note and
the Mortgage.  The Mortgage Loan  Documents are on forms  acceptable to Fannie
Mae and  FHLMC.  The  Mortgage  Note  and the  Mortgage  have  been  duly  and
properly   executed   by   such   parties.   No   fraud,   error,    omission,
misrepresentation,   negligence  or  similar  occurrence  with  respect  to  a
Mortgage Loan has taken place on the part of Company or the  Mortgagor,  or on
the part of any other party  involved in the  origination  or servicing of the
Mortgage  Loan.  The proceeds of the Mortgage  Loan have been fully  disbursed
and 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  disbursements  of any escrow funds  therefor have been complied  with. All
costs,  fees and expenses  incurred in making or closing the Mortgage Loan and
the recording of the Mortgage were paid,  and the Mortgagor is not entitled to
any refund of any amounts paid or due under the Mortgage Note or Mortgage;

      (l)   The Company is the sole owner and holder of the Mortgage  Loan and
the  indebtedness  evidenced  by the  Mortgage  Note.  Upon  the  sale  of the
Mortgage Loan to the  Purchaser,  the Company will retain the Mortgage File or
any part thereof with respect  thereto not  delivered to the  Purchaser or the
Purchaser's   designee  in  trust  only  for  the  purpose  of  servicing  and
supervising  the  servicing of the  Mortgage  Loan.  Immediately  prior to the
transfer and  assignment to the Purchaser,  the Mortgage  Loan,  including the
Mortgage Note and the  Mortgage,  were not subject to an  assignment,  sale or
pledge to any  person  other  than  Purchaser,  and the  Company  had good and
marketable  title  to and was the sole  owner  thereof  and had full  right to
transfer and sell the  Mortgage  Loan to the  Purchaser  free and clear of any
encumbrance,  equity, lien, pledge, charge, claim or security interest and has
the full right and authority  subject to no interest or  participation  of, or
agreement  with,  any  other  party,  to sell and  assign  the  Mortgage  Loan
pursuant to this  Agreement and following the sale of the Mortgage  Loan,  the
Purchaser  will own such  Mortgage  Loan  free and  clear of any  encumbrance,
equity,  participation  interest,  lien,  pledge,  charge,  claim or  security
interest.  The Company  intends to relinquish  all rights to possess,  control
and monitor the  Mortgage  Loan,  except for the  purposes  of  servicing  the
Mortgage  Loan as set  forth in this  Agreement.  After  the  related  Closing
Date,  the Company will not have any right to modify or alter the terms of the
sale of the  Mortgage  Loan and the Company  will not have any  obligation  or
right to repurchase  the Mortgage Loan or substitute  another  Mortgage  Loan,
except  as  provided  in this  Agreement,  or as  otherwise  agreed  to by the
Company and the Purchaser;

      (m)   Each Mortgage Loan is covered by an ALTA lender's title  insurance
policy or other generally  acceptable  form of policy or insurance  acceptable
to Fannie Mae or FHLMC (including  adjustable rate endorsements),  issued by a
title  insurer  acceptable to Fannie Mae or FHLMC and qualified to do business
in  the  jurisdiction  where  the  Mortgaged  Property  is  located,  insuring
(subject  to the  exceptions  contained  in  (j)(1),  (2) and (3)  above)  the
Company,  its  successors  and assigns,  as to the first  priority lien of the
Mortgage in the original  principal  amount of the  Mortgage  Loan and against
any  loss  by  reason  of the  invalidity  or  unenforceability  of  the  lien
resulting from the provisions of the Mortgage  providing for adjustment in the
Mortgage  Interest Rate and Monthly  Payment.  Where  required by state law or
regulation,  the  Mortgagor  has been  given the  opportunity  to  choose  the
carrier  of  the  required   mortgage  title  insurance.   The  Company,   its
successors and assigns,  is the sole insured of such lender's title  insurance
policy,  such title insurance policy has been duly and validly endorsed to the
Purchaser  or the  assignment  to the  Purchaser  of  the  Company's  interest
therein  does not require the  consent of or  notification  to the insurer and
such lender's title  insurance  policy is in full force and effect and will be
in  full  force  and  effect  upon  the   consummation  of  the   transactions
contemplated by this  Agreement.  No claims have been made under such lender's
title  insurance  policy,  and no prior  holder  or  servicer  of the  related
Mortgage,  including  the  Company,  nor any  Mortgagor,  has done,  by act or
omission,  anything  which would  impair the coverage of such  lender's  title
insurance policy;

      (n)   There is no default,  breach,  violation or event of  acceleration
existing  under the Mortgage or the related  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
permitting acceleration;  and neither the Company, nor any prior mortgagee has
waived any default, breach, violation or event permitting acceleration;

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

      (p)   All improvements  subject to the Mortgage which were considered in
determining  the appraised  value of the Mortgaged  Property lie wholly within
the boundaries and building  restriction lines of the Mortgaged  Property (and
wholly  within  the  project  with  respect  to a  condominium  unit)  and  no
improvements  on adjoining  properties  encroach upon the  Mortgaged  Property
except those which are insured against by the title insurance  policy referred
to in clause (m) above and all  improvements  on the property  comply with all
applicable zoning and subdivision laws and ordinances;

      (q)   Each Mortgage Loan was  originated by or for the Company  pursuant
to, and conforms  with,  the  Company's  underwriting  guidelines  attached as
Exhibit H hereto.  The Mortgage Loan bears interest at an adjustable  rate (if
applicable) as set forth in the related  Mortgage Loan  Schedule,  and Monthly
Payments  under the Mortgage Note are due and payable on the first day of each
month.  The Mortgage  contains  the usual and  enforceable  provisions  of the
Company at the time of origination for the  acceleration of the payment of the
unpaid  principal  amount  of  the  Mortgage  Loan  if the  related  Mortgaged
Property is sold without the prior consent of the mortgagee thereunder;

      (r)   The Mortgaged  Property is not subject to any material damage.  At
origination  of the  Mortgage  Loan there was not,  since  origination  of the
Mortgage  Loan  there  has not  been,  and there  currently  is no  proceeding
pending for the total or partial  condemnation of the Mortgaged Property.  The
Company has not received  notification that any such proceedings are scheduled
to commence at a future date;

      (s)   The  related   Mortgage   contains   customary   and   enforceable
provisions  such as to render the rights and  remedies  of the holder  thereof
adequate for the  realization  against the Mortgaged  Property of the benefits
of the security  provided  thereby,  including,  (1) in the case of a Mortgage
designated  as a deed of  trust,  by  trustee's  sale,  and (2)  otherwise  by
judicial  foreclosure.  There is no homestead or other exemption  available to
the  Mortgagor  which  would  interfere  with the right to sell the  Mortgaged
Property at a trustee's sale or the right to foreclose the Mortgage;

      (t)   If  the  Mortgage   constitutes  a  deed  of  trust,   a  trustee,
authorized  and duly  qualified  if required  under  applicable  law to act as
such,  has been  properly  designated  and currently so serves and is named in
the  Mortgage,  and no fees or  expenses,  except as may be  required by local
law,  are or will become  payable by the  Purchaser  to the trustee  under the
deed of trust,  except in connection  with a trustee's  sale or attempted sale
after default by the Mortgagor;

      (u)   The Mortgage File  contains an appraisal of the related  Mortgaged
Property  signed prior to the final approval of the mortgage loan  application
by a  Qualified  Appraiser,  approved  by the  Company,  who had no  interest,
direct  or  indirect,  in the  Mortgaged  Property  or in any loan made on the
security  thereof,  and whose  compensation is not affected by the approval or
disapproval  of the  Mortgage  Loan,  and the  appraisal  and  appraiser  both
satisfy  the  requirements  of Fannie Mae or FHLMC and Title XI of the Federal
Institutions   Reform,   Recovery,   and  Enforcement  Act  of  1989  and  the
regulations promulgated thereunder,  all as in effect on the date the Mortgage
Loan was  originated.  The appraisal is in a form  acceptable to Fannie Mae or
FHLMC;

      (v)   All parties which have had any interest in the  Mortgage,  whether
as mortgagee,  assignee,  pledgee or otherwise,  are (or, during the period in
which they held and disposed of such  interest,  were) (A) in compliance  with
any  and all  applicable  licensing  requirements  of the  laws  of the  state
wherein the Mortgaged  Property is located,  and (B) (1)  organized  under the
laws of such state,  or (2)  qualified  to do  business in such state,  or (3)
federal  savings and loan  associations  or national  banks or a Federal  Home
Loan Bank or savings bank having  principal  offices in such state, or (4) not
doing business in such state;

      (w)   The related  Mortgage  Note is not and has not been secured by any
collateral  except the lien of the  corresponding  Mortgage  and the  security
interest of any applicable  security agreement or chattel mortgage referred to
above and such collateral does not serve as security for any other obligation;

      (x)   The  Mortgagor has received and has  executed,  where  applicable,
all  disclosure  materials  required  by  applicable  law with  respect to the
making of such mortgage loans;

      (y)   The Mortgage Loan does not contain balloon or "graduated  payment"
features;  No Mortgage Loan is subject to a buydown  agreement or contains any
buydown provision;

      (z)   The  Mortgagor  is not in  bankruptcy  and,  the  Mortgagor is not
insolvent and the Company has no knowledge of any  circumstances or conditions
with respect to the  Mortgage,  the Mortgaged  Property,  the Mortgagor or the
Mortgagor's  credit  standing  that  could  reasonably  be  expected  to cause
investors to regard the Mortgage  Loan as an  unacceptable  investment,  cause
the Mortgage Loan to become  delinquent,  or materially  adversely  affect the
value or marketability of the Mortgage Loan;

      (aa)  Each  Mortgage  Loan bears  interest  based upon a thirty (30) day
month and a three  hundred and sixty (360) day year.  The Mortgage  Loans have
an  original  term to  maturity  of not more  than  thirty  (30)  years,  with
interest  payable  in  arrears  on the  first  day of each  month.  As to each
adjustable  rate  Mortgage  Loan,  on each  applicable  Adjustment  Date,  the
Mortgage  Interest  Rate will be adjusted to equal the sum of the Index,  plus
the  applicable  Margin;  provided,  that the Mortgage  Interest Rate, on each
applicable  Adjustment  Date,  will not increase by more than the Initial Rate
Cap or Periodic  Rate Cap,  as  applicable.  Over the term of each  adjustable
rate Mortgage Loan,  the Mortgage  Interest Rate will not exceed such Mortgage
Loan's  Lifetime  Rate Cap.  None of the  Mortgage  Loans are  "interest-only"
Mortgage Loans or "negative  amortization" Mortgage Loans. With the respect to
each  adjustable  rate  Mortgage  Loan,  each Mortgage Note requires a monthly
payment  which  is  sufficient  (a)  during  the  period  prior  to the  first
adjustment  to the  Mortgage  Interest  Rate,  to fully  amortize the original
principal  balance over the  original  term thereof and to pay interest at the
related  Mortgage  Interest  Rate,  and (b) during the period  following  each
Adjustment  Date, to fully amortize the  outstanding  principal  balance as of
the first day of such period  over the then  remaining  term of such  Mortgage
Note and to pay  interest  at the related  Mortgage  Interest  Rate.  With the
respect to each  adjustable  rate  Mortgage  Loan,  the Mortgage Note provides
that when the Mortgage  Interest Rate changes on an Adjustment  Date, the then
outstanding  principal  balance will be reamortized over the remaining life of
the Mortgage Loan. No Mortgage Loan contains  terms or provisions  which would
result  in  negative  amortization.  None  of the  Mortgage  Loans  contain  a
conversion  feature  which  would cause the  Mortgage  Loan  interest  rate to
convert to a fixed  interest  rate.  None of the Mortgage Loans are considered
agricultural loans;

      (bb)  (INTENTIONALLY LEFT BLANK)

      (cc)  (INTENTIONALLY LEFT BLANK)

      (dd)  (INTENTIONALLY LEFT BLANK)

      (ee)  (INTENTIONALLY LEFT BLANK)

      (ff)  (INTENTIONALLY LEFT BLANK)

      (gg)  (INTENTIONALLY LEFT BLANK)

      (hh)  Unless  set  forth in the  related  Term  Sheet,  in the event the
Mortgage Loan had an LTV at  origination  greater than 80.00%,  either (i) the
excess  of the  principal  balance  of the  Mortgage  Loan  over  75.0% of the
Appraised  Value  of the  Mortgaged  Property  with  respect  to a  Refinanced
Mortgage  Loan, or the lesser of the Appraised  Value or the purchase price of
the  Mortgaged  Property  with respect to a purchase  money  Mortgage Loan was
insured as to payment defaults by a Primary  Mortgage  Insurance Policy issued
by a  Qualified  Insurer or (ii) the  Mortgage  Loan was insured as to payment
defaults by a Lender Primary  Mortgage  Insurance Policy issued by a Qualified
Insurer.  No  Mortgage  Loan  has an LTV  over  95%.  All  provisions  of such
Primary  Mortgage  Insurance  Policy  or  Lender  Primary  Mortgage  Insurance
Policy,  as applicable,  have been and are being complied with, such policy is
in full force and effect,  and all premiums due thereunder  have been paid. No
Mortgage Loan requires  payment of such premiums,  in whole or in part, by the
Purchaser.  No action,  inaction,  or event has occurred and no state of facts
exists that has, or will result in the exclusion  from,  denial of, or defense
to  coverage.  Any  Mortgage  Loan  subject  to a Primary  Mortgage  Insurance
Policy  obligates  the Mortgagor  thereunder to maintain the Primary  Mortgage
Insurance  Policy,  subject to state and federal  law, and to pay all premiums
and charges in  connection  therewith.  Any Mortgage  Loan subject to a Lender
Primary  Mortgage  Insurance  Policy  obligates  the Company to  maintain  the
Lender Primary  Mortgage  Insurance Policy and to pay all premiums and charges
in connection  therewith.  No action has been taken or failed to be taken,  on
or  prior  to the  Closing  Date  which  has  resulted  or will  result  in an
exclusion from,  denial of, or defense to coverage under any Primary  Mortgage
Insurance  Policy or Lender  Primary  Mortgage  Insurance  Policy  (including,
without limitation,  any exclusions,  denials or defenses which would limit or
reduce the  availability  of the timely payment of the full amount of the loss
otherwise  due  thereunder  to the  insured)  whether  arising out of actions,
representations,  errors,  omissions,  negligence,  or fraud of the Company or
the Mortgagor,  or for any other reason under such  coverage;  With respect to
any Primary  Mortgage  Insurance  Policy,  the mortgage  interest rate for the
Mortgage  Loan as set forth on the related  Mortgage  Loan  Schedule is net of
any such insurance premium;

      (ii)  The  Assignment  is in  recordable  form  and  is  acceptable  for
recording under the laws of the  jurisdiction in which the Mortgaged  Property
is located;

      (jj)  Unless otherwise  specified in the related Term Sheet, none of the
Mortgage  Loans  are  secured  by  an  interest  in a  leasehold  estate.  The
Mortgaged  Property is located in the state identified in the related Mortgage
Loan  Schedule  and  consists  of a  single  parcel  of real  property  with a
detached single family residence erected thereon, or a townhouse,  or a two-to
four-family  dwelling,  or an  individual  condominium  unit in a  condominium
project,  or an individual unit in a planned unit  development or a de minimis
planned unit development,  provided, however, that no residence or dwelling is
a single  parcel of real property  with a  manufactured  home not affixed to a
permanent  foundation,  or a mobile home. Any condominium unit or planned unit
development  conforms with the Company's  underwriting  guidelines.  As of the
date of  origination,  no  portion  of any  Mortgaged  Property  is  used  for
commercial  purposes,  and since  the  Origination  Date,  no  portion  of any
Mortgaged Property has been, or currently is, used for commercial purposes;

      (kk)  Payments on the  Mortgage  Loan  commenced no more than sixty (60)
days after the funds were  disbursed in  connection  with the  Mortgage  Loan.
The  Mortgage  Note is  payable  on the  first  day of each  month in  monthly
installments  of principal and  interest,  which  installments  are subject to
change  due  to  the  adjustments  to  the  Mortgage  Interest  Rate  on  each
Adjustment  Date,  with interest  calculated  and payable in arrears.  Each of
the Mortgage  Loans will amortize fully by the stated  maturity date,  over an
original term of not more than thirty years from commencement of amortization;

      (ll)  As of  the  Closing  Date  of  the  Mortgage  Loan,  the  Mortgage
Property was lawfully  occupied  under  applicable  law, and 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
and fire  underwriting  certificates,  have  been  made or  obtained  from the
appropriate authorities;

      (mm)  There is no pending  action or proceeding  directly  involving the
Mortgaged  Property in which  compliance with any  environmental  law, rule or
regulation is an issue;  there is no violation of any environmental  law, rule
or regulation with respect to the Mortgaged Property;  and the Company has not
received any notice of any environmental  hazard on the Mortgaged Property and
nothing  further  remains to be done to satisfy  in full all  requirements  of
each such law,  rule or  regulation  constituting  a  prerequisite  to use and
enjoyment of said property;

      (nn)  The  Mortgagor  has not notified the Company,  and the Company has
no knowledge of any relief  requested  or allowed to the  Mortgagor  under the
Soldiers' and Sailors' Civil Relief Act of 1940;

      (oo)  No Mortgage  Loan is a  construction  or  rehabilitation  Mortgage
Loan or was  made to  facilitate  the  trade-in  or  exchange  of a  Mortgaged
Property;

      (pp)  The Mortgagor for each Mortgage Loan is a natural person;

      (qq)  None of the Mortgage Loans are Co-op Loans;

      (rr)  With respect to each Mortgage  Loan that has a prepayment  penalty
feature,  each such prepayment  penalty is enforceable and will be enforced by
the  Company and each  prepayment  penalty is  permitted  pursuant to federal,
state and local law. No Mortgage  Loan will impose a prepayment  penalty for a
term in excess of five years from the date such Mortgage Loan was  originated.
Except as otherwise set forth on the Mortgage Loan  Schedule,  with respect to
each  Mortgage  Loan that  contains  a  prepayment  penalty,  such  prepayment
penalty is at least  equal to the lesser of (A) the maximum  amount  permitted
under  applicable  law and (B) six months  interest  at the  related  Mortgage
Interest  Rate  on the  amount  prepaid  in  excess  of  20%  of the  original
principal balance of such Mortgage Loan;

      (ss)  With  respect to each  Mortgage  Loan  either (i) the fair  market
value of the  Mortgaged  Property  securing  such  Mortgage  Loan was at least
equal to 80 percent of the original  principal  balance of such  Mortgage Loan
at the time such  Mortgage  Loan was  originated or (ii) (a) the Mortgage Loan
is only secured by the  Mortgage  Property  and (b)  substantially  all of the
proceeds of such  Mortgage  Loan were used to acquire or to improve or protect
the Mortgage  Property.  For the purposes of the  preceding  sentence,  if the
Mortgage  Loan has been  significantly  modified  other  than as a result of a
default or a reasonable  foreseeable  default, the modified Mortgage Loan will
be viewed as having been originated on the date of the modification;

      (tt)  The Mortgage Loan was  originated  by a mortgagee  approved by the
Secretary  of Housing and Urban  Development  pursuant to sections 203 and 211
of the National Housing Act, a savings and loan  association,  a savings bank,
a commercial  bank,  credit union,  insurance  company or similar  institution
which is supervised and examined by a federal or state authority;

      (uu)  None of the Mortgage Loans are simple interest  Mortgage Loans and
none of the Mortgaged Properties are timeshares;

      (vv)  All of the  terms of the  Mortgage  pertaining  to  interest  rate
adjustments,  payment adjustments and adjustments of the outstanding principal
balance  are  enforceable,  all such  adjustments  have  been  properly  made,
including the mailing of required  notices,  and such  adjustments  do not and
will not  affect the  priority  of the  Mortgage  lien.  With  respect to each
Mortgage  Loan which has passed  its  initial  Adjustment  Date,  Company  has
performed  an audit of the  Mortgage  Loan to  determine  whether all interest
rate  adjustments  have been made in accordance with the terms of the Mortgage
Note and Mortgage; and

      (ww)  Each Mortgage Note,  each Mortgage,  each Assignment and any other
documents  required  pursuant  to  this  Agreement  to  be  delivered  to  the
Purchaser or its designee,  or its assignee for each Mortgage Loan, have been,
on or before the related  Closing  Date,  delivered  to the  Purchaser  or its
designee, or its assignee.

      Section 3.03      REPURCHASE; SUBSTITUTION.

      It is understood and agreed that the  representations and warranties set
forth in Sections 3.01 and 3.02 shall  survive the sale of the Mortgage  Loans
and  delivery  of  the  Mortgage  Loan  Documents  to  the  Purchaser,  or its
designee,  and shall  inure to the benefit of the  Purchaser,  notwithstanding
any  restrictive  or qualified  endorsement on any Mortgage Note or Assignment
or the  examination,  or lack  of  examination,  of any  Mortgage  File.  Upon
discovery  by either the  Company or the  Purchaser  of a breach of any of the
foregoing  representations  and  warranties  which  materially  and  adversely
affects the value of the Mortgage  Loans or the  interest of the  Purchaser in
any  Mortgage  Loan,  the party  discovering  such  breach  shall give  prompt
written  notice to the other.  The  Company  shall have a period of sixty (60)
days from the  earlier of its  discovery  or its receipt of notice of any such
breach  within  which to  correct  or cure such  breach.  The  Company  hereby
covenants  and agrees that if any such breach is not corrected or cured within
such sixty day period,  the Company shall, at the  Purchaser's  option and not
later than ninety (90) days of its  discovery or its receipt of notice of such
breach,  repurchase  such Mortgage Loan at the  Repurchase  Price or, with the
Purchaser's  prior  consent  and at  Purchaser's  sole  option,  substitute  a
Mortgage  Loan as  provided  below.  In the event that any such  breach  shall
involve any  representation  or warranty set forth in Section  3.01,  and such
breach is not cured within sixty (60) days of the earlier of either  discovery
by or notice to the Company of such breach,  all Mortgage Loans shall,  at the
option of the  Purchaser,  be  repurchased  by the  Company at the  Repurchase
Price.  Any  such  repurchase  shall  be  accomplished  by  wire  transfer  of
immediately  available  funds to  Purchaser  in the  amount of the  Repurchase
Price.

      If the Company is required to  repurchase  any Mortgage Loan pursuant to
this Section 3.03, the Company may, with the Purchaser's  prior consent and at
Purchaser's  sole  option,  within  ninety (90) days from the related  Closing
Date,  remove such  defective  Mortgage Loan from the terms of this  Agreement
and  substitute  another  mortgage loan for such  defective  Mortgage Loan, in
lieu of  repurchasing  such defective  Mortgage Loan. Any substitute  Mortgage
Loan is  subject  to  Purchaser  acceptability.  Any  substituted  Loans  will
comply with the  representations and warranties set forth in this Agreement as
of the substitution date

      The Company  shall amend the related  Mortgage  Loan Schedule to reflect
the  withdrawal  of the  removed  Mortgage  Loan from this  Agreement  and the
substitution of such substitute  Mortgage Loan therefor.  Upon such amendment,
the Purchaser  shall review the Mortgage File  delivered to it relating to the
substitute  Mortgage  Loan.  In the  event  of  such a  substitution,  accrued
interest  on  the  substitute  Mortgage  Loan  for  the  month  in  which  the
substitution  occurs and any Principal  Prepayments  made thereon  during such
month shall be the  property of the  Purchaser  and accrued  interest for such
month  on the  Mortgage  Loan  for  which  the  substitution  is made  and any
Principal  Prepayments made thereon during such month shall be the property of
the Company.  The principal  payment on a substitute  Mortgage Loan due on the
Due Date in the month of  substitution  shall be the  property  of the Company
and the principal  payment on the Mortgage Loan for which the  substitution is
made due on such date shall be the property of the Purchaser.

      It is  understood  and agreed  that the  obligation  of the  Company set
forth in this Section 3.03 to cure,  repurchase or substitute  for a defective
Mortgage  Loan,  and  to  indemnify   Purchaser   pursuant  to  Section  8.01,
constitute  the sole  remedies  of the  Purchaser  respecting  a breach of the
foregoing  representations and warranties.  If the Company fails to repurchase
or substitute  for a defective  Mortgage Loan in accordance  with this Section
3.03,  or fails to cure a defective  Mortgage Loan to  Purchaser's  reasonable
satisfaction in accordance  with this Section 3.03, or to indemnify  Purchaser
pursuant to Section  8.01,  that failure  shall be an Event of Default and the
Purchaser  shall  be  entitled  to  pursue  all  remedies  available  in  this
Agreement as a result  thereof.  No provision of this  paragraph  shall affect
the rights of the  Purchaser to terminate  this  Agreement  for cause,  as set
forth in Sections 10.01 and 11.01.

      Any cause of action  against the  Company  relating to or arising out of
the breach of any  representations  and  warranties  made in Sections 3.01 and
3.02 shall  accrue as to any  Mortgage  Loan upon (i) the earlier of discovery
of such  breach by the  Company  or notice  thereof  by the  Purchaser  to the
Company,  (ii) failure by the Company to cure such breach or  repurchase  such
Mortgage  Loan as  specified  above,  and (iii) demand upon the Company by the
Purchaser for compliance with this Agreement.

      In the event that any Mortgage Loan is held by a REMIC,  notwithstanding
any contrary  provision of this  Agreement,  with respect to any Mortgage Loan
that is not in default or as to which no default is imminent,  no substitution
pursuant to Subsection 3.03 shall be made after the applicable  REMIC's "start
up day" (as defined in Section  860G(a)  (9) of the Code),  unless the Company
has obtained an Opinion of Counsel to the effect that such  substitution  will
not (i) result in the  imposition  of taxes on  "prohibited  transactions"  of
such REMIC (as defined in Section 860F of the Code) or  otherwise  subject the
REMIC to tax,  or (ii)  cause the REMIC to fail to  qualify  as a REMIC at any
time.

      Section 3.04      REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.

      The Purchaser  represents,  warrants and convenants to the Company that,
as of the  related  Closing  Date or as of  such  date  specifically  provided
herein:

(a)   The Purchaser is a corporation,  dully organized validly existing and in
good  standing  under the laws of the State of Delaware  and is  qualified  to
transact  business in, is in good  standing  under the laws of, and  possesses
all  licenses  necessary  for the  conduct of its  business  in, each state in
which  any  Mortgaged  Property  is  located  or is  otherwise  except  or not
required under applicable law to effect such qualification or license;

(b)   The Purchaser  has full power and authority to hold each Mortgage  Loan,
to purchase  each  Mortgage  Loan  pursuant to this  Agreement and the related
Term  Sheet  and to  execute,  deliver  and  perform,  and to  enter  into and
consummate  all  transactions  contemplated  by this Agreement and the related
Term  Sheet and to conduct  its  business  as  presently  conducted,  has duly
authorized the execution,  delivery and  performance of this Agreement and the
related Term Sheet,  has duly  executed and delivered  this  Agreement and the
related Term Sheet;

      (c)   None of the  execution  and  delivery  of this  Agreement  and the
related Term Sheet,  the purchase of the Mortgage Loans,  the  consummation of
the  transactions  contemplated  hereby,  or the  fulfillment of or compliance
with the terms and  conditions  of this  Agreement  and the related Term Sheet
will  conflict  with  any  of  the  terms,  conditions  or  provisions  of the
Purchaser's  charter  or by-laws or  materially  conflict  with or result in a
material  breach of any of the terms,  conditions  or  provisions of any legal
restriction  or any  agreement or  instrument  to which the Purchaser 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 result in the material violation
of any  law,  rule,  regulation,  order,  judgment  or  decree  to  which  the
Purchaser or its property is subject;

      (d)   There is no litigation  pending or to the best of the  Purchaser's
knowledge,  threatened  with  respect  to the  Purchaser  which is  reasonably
likely to have a  material  adverse  effect  on the  purchase  of the  related
Mortgage Loans, the execution,  delivery or  enforceability  of this Agreement
and the related Term Sheet,  or which is reasonably  likely to have a material
adverse effect on the financial condition of the Purchaser;

      (e)   No  consent,  approval,  authorization  or order  of any  court or
governmental  agency  or body is  required  for the  execution,  delivery  and
performance  by the  Purchaser of or  compliance  by the  Purchaser  with this
Agreement  and the related Term Sheet,  the purchase of the Mortgage  Loans or
the  consummation of the  transactions  contemplated by this Agreement and the
related Term Sheet except for consents,  approvals,  authorizations and orders
which have been obtained;

      (f)   The  consummation  of  the   transactions   contemplated  by  this
Agreement and the related Term Sheet is in the ordinary  course of business of
the Purchaser;

      (h)   The Purchaser  will treat the purchase of the Mortgage  Loans from
the Company as a purchase for reporting, tax and accounting purposes; and

      (i)   The  Purchaser  does not  believe,  nor does it have any  cause or
reason to  believe,  that it cannot  perform  each and every of its  covenants
contained in this Agreement and the related Term Sheet.

      The Purchaser shall  indemnify the Company and hold it harmless  against
any claims,  proceedings,  losses,  damages,  penalties,  fines,  forfeitures,
reasonable and necessary  legal fees and related costs,  judgments,  and other
costs  and  expenses   resulting  from  a  breach  by  the  Purchaser  of  the
representations  and  warranties   contained  in  this  Section  3.04.  It  is
understood and agreed that the  obligations of the Purchaser set forth in this
Section 3.04 to indemnify the Seller as provided  herein  constitute  the sole
remedies of the Seller  respecting a breach of the  foregoing  representations
and warranties.



<PAGE>



                                  ARTICLE IV

                ADMINISTRATION AND SERVICING OF MORTGAGE LOANS

      Section 4.01      COMPANY TO ACT AS SERVICER.

      The  Company,  as  independent  contract  servicer,  shall  service  and
administer  the  Mortgage  Loans in  accordance  with this  Agreement  and the
related Term Sheet and with Accepted Servicing Practices,  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 Company
may  deem  necessary  or  desirable  and  consistent  with  the  terms of this
Agreement  and the related Term Sheet and with  Accepted  Servicing  Practices
and  exercise the same care that it  customarily  employs for its own account.
Except as set forth in this Agreement and the related Term Sheet,  the Company
shall  service the  Mortgage  Loans in strict  compliance  with the  servicing
provisions  of  the  Fannie  Mae  Guides  (special  servicing  option),  which
include,  but are not limited to,  provisions  regarding  the  liquidation  of
Mortgage  Loans,  the  collection  of Mortgage Loan  payments,  the payment of
taxes,  insurance and other charges,  the maintenance of hazard insurance with
a Qualified Insurer,  the maintenance of mortgage  impairment  insurance,  the
maintenance of fidelity bond and errors and omissions insurance,  inspections,
the restoration of Mortgaged  Property,  the  maintenance of Primary  Mortgage
Insurance Policies and Lender Primary Mortgage Insurance  Policies,  insurance
claims,  the title,  management  and  disposition  of REO Property,  permitted
withdrawals with respect to REO Property,  liquidation reports, and reports of
foreclosures  and  abandonments  of  Mortgaged   Property,   the  transfer  of
Mortgaged  Property,  the release of Mortgage Files,  annual  statements,  and
examination  of  records  and  facilities.  In  the  event  of  any  conflict,
inconsistency or discrepancy  between any of the servicing  provisions of this
Agreement  and the related Term Sheet and any of the  servicing  provisions of
the Fannie Mae Guides,  the  provisions of this Agreement and the related Term
Sheet shall control and be binding upon the Purchaser and the Company.

      Consistent  with the terms of this Agreement and the related Term Sheet,
the  Company  may  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  Company's  reasonable  and  prudent
determination  such waiver,  modification,  postponement  or indulgence is not
materially  adverse  to the  Purchaser,  provided,  however,  that  unless the
Company has obtained the prior written  consent of the Purchaser,  the Company
shall not permit any  modification  with  respect  to any  Mortgage  Loan that
would change the Mortgage  Interest  Rate,  defer for more than ninety days or
forgive  any  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.  In the event of any
such  modification  which has been agreed to in writing by the  Purchaser  and
which  permits the deferral of interest or principal  payments on any Mortgage
Loan,  the Company  shall,  on the  Business  Day  immediately  preceding  the
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,  the  difference  between  (a)  such  month's
principal  and one month's  interest at the Mortgage Loan  Remittance  Rate on
the unpaid principal  balance of such Mortgage Loan and (b) the amount paid by
the  Mortgagor.  The  Company  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 Company 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  herein to the  contrary,  the Company may not enter
into a  forbearance  agreement  or  similar  arrangement  with  respect to any
Mortgage  Loan which runs more than 180 days  after the first  delinquent  Due
Date. Any such agreement  shall be approved by Purchaser and, if required,  by
the Primary  Mortgage  Insurance  Policy insurer and Lender  Primary  Mortgage
Insurance Policy insurer, if required.

      Notwithstanding  anything  in this  Agreement  to the  contrary,  if any
Mortgage  Loan becomes  subject to a  Pass-Through  Transfer,  the Company (a)
with respect to such Mortgage  Loan,  shall not permit any  modification  with
respect to such  Mortgage  Loan that would change the Mortgage  Interest  Rate
and (b) shall not (unless the  Mortgagor  is in default  with  respect to such
Mortgage  Loan or such default is, in the judgment of the Company,  reasonably
foreseeable) make or permit any modification,  waiver or amendment of any term
of such  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  any REMIC to fail to  qualify  as a
REMIC  under  the  Code  or  the   imposition   of  any  tax  on   "prohibited
transactions"  or  "contriburions"  after  the  startup  date  under the REMIC
Provisions.

      Prior to taking any action with  respect to the Mortgage  Loans  subject
to a Pass-Through Transfer,  which is not contemplated under the terms of this
Agreement,  the Company  will obtain an Opinion of Counsel  acceptable  to the
trustee in such  Pass-Through  Transfer  with  respect to whether  such action
could  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)(either  such event,  an "Adverse REMIC Event"),
and the  Company  shall  not  take any  such  actions  as to which it has been
advised that an Adverse REMIC Event could occur.

      The Company  shall not permit the  creation of any  "interests"  (within
the meaning of Section 860G of the Code) in any REMIC.  The Company  shall not
enter  into any  arrangement  by  which a REMIC  will  receive  a fee or other
compensation  for  services  nor  permit a 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.

      In servicing and  administering  the Mortgage  Loans,  the Company shall
employ  Accepted  Servicing   Practices,   giving  due  consideration  to  the
Purchaser's reliance on the Company.  Unless a different time period is stated
in this  Agreement  or the related  Term Sheet,  Purchaser  shall be deemed to
have given consent in connection  with a particular  matter if Purchaser  does
not  affirmatively  grant or deny consent  within five (5) Business  Days from
the date  Purchaser  receives a second  written  request  for consent for such
matter from Company as servicer.

      The Mortgage  Loans may be subserviced by a Subservicer on behalf of the
Company  provided  that the  Subservicer  is an  entity  that  engages  in the
business  of  servicing  loans,  and in either  case  shall be  authorized  to
transact  business,  and licensed to service  mortgage  loans, in the state or
states where the related  Mortgaged  Properties it is to service are situated,
if and to the extent  required by applicable law to enable the  Subservicer to
perform its obligations  hereunder and under the Subservicing  Agreement,  and
in either case shall be a FHLMC or Fannie Mae  approved  mortgage  servicer in
good  standing,  and no event has  occurred,  including  but not  limited to a
change in  insurance  coverage,  which would make it unable to comply with the
eligibility   requirements   for   lenders   imposed  by  Fannie  Mae  or  for
seller/servicers  imposed  by Fannie  Mae or  FHLMC,  or which  would  require
notification  to Fannie  Mae or FHLMC.  In  addition,  each  Subservicer  will
obtain  and  preserve  its   qualifications   to  do  business  as  a  foreign
corporation and its licenses to service  mortgage loans, in each  jurisdiction
in which such  qualifications  and/or  licenses  are or shall be  necessary to
protect the  validity  and  enforceability  of this  Agreement,  or any of the
Mortgage  Loans and to perform or cause to be  performed  its duties under the
related Subservicing  Agreement.  The Company may perform any of its servicing
responsibilities  hereunder or may cause the  Subservicer  to perform any such
servicing  responsibilities  on its behalf,  but the use by the Company of the
Subservicer  shall  not  release  the  Company  from  any of  its  obligations
hereunder and the Company shall remain responsible  hereunder for all acts and
omissions  of the  Subservicer  as fully as if such  acts and  omissions  were
those of the  Company.  The  Company  shall pay all fees and  expenses  of the
Subservicer  from its own funds,  and the  Subservicer's  fee shall not exceed
the Servicing  Fee.  Company shall notify  Purchaser  promptly in writing upon
the appointment of any Subservicer.

      At  the  cost  and  expense  of  the  Company,   without  any  right  of
reimbursement  from the  Custodial  Account,  the Company shall be entitled to
terminate the rights and  responsibilities  of the 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 Company,
at the Company's  option,  from electing to service the related Mortgage Loans
itself.  In the event that the  Company's  responsibilities  and duties  under
this Agreement are terminated  pursuant to Section 4.13,  8.04,  9.01 or 10.01
and if requested to do so by the Purchaser,  the Company shall at its own cost
and  expense  terminate  the rights and  responsibilities  of the  Subservicer
effective  as of the date of  termination  of the Company.  The Company  shall
pay all fees,  expenses  or  penalties  necessary  in order to  terminate  the
rights and  responsibilities  of the Subservicer  from the Company's own funds
without reimbursement from the Purchaser.

      Notwithstanding  any of the  provisions  of this  Agreement  relating to
agreements  or  arrangements  between the Company and the  Subservicer  or any
reference  herein to actions taken through the  Subservicer or otherwise,  the
Company  shall not be relieved of its  obligations  to the Purchaser 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 Company
shall be  entitled  to  enter  into an  agreement  with  the  Subservicer  for
indemnification  of the Company by the  Subservicer  and nothing  contained in
this Agreement  shall be deemed to limit or modify such  indemnification.  The
Company will  indemnify and hold Purchaser  harmless from any loss,  liability
or expense  arising  out of its use of a  Subservicer  to  perform  any of its
servicing duties, responsibilities and obligations hereunder.

      Any  Subservicing  Agreement  and any  other  transactions  or  services
relating to the Mortgage Loans  involving the  Subservicer  shall be deemed to
be between the Subservicer and Company alone,  and the Purchaser shall have no
obligations,  duties or liabilities with respect to the Subservicer  including
no obligation,  duty or liability of Purchaser to pay the  Subservicer's  fees
and  expenses.  For  purposes  of  distributions  and  advances by the Company
pursuant to this  Agreement,  the Company  shall be deemed to have  received a
payment on a Mortgage Loan when the Subservicer has received such payment.

      Section 4.02      COLLECTION OF MORTGAGE LOAN PAYMENTS.

      Continuously  from the date  hereof  until the date each  Mortgage  Loan
ceases to be subject to this  Agreement,  the Company will proceed  diligently
to  collect  all  payments  due under each  Mortgage  Loan when the same shall
become due and  payable  and shall,  to the extent  such  procedures  shall be
consistent with this Agreement,  Accepted Servicing  Practices,  and the terms
and provisions of any related  Primary  Mortgage  Insurance  Policy and Lender
Primary Mortgage  Insurance  Policy,  follow such collection  procedures as it
follows with respect to mortgage  loans  comparable to the Mortgage  Loans and
held for its own  account.  Further,  the Company  will take  special  care in
ascertaining  and  estimating  annual escrow  payments,  and all other charges
that,  as provided in the Mortgage,  will become due and payable,  so that the
installments  payable by the Mortgagors will be sufficient to pay such charges
as and when they become due and payable.

      In no event will the Company waive its right to any  prepayment  penalty
or premium  without the prior  written  consent of Purchaser  and Company will
use diligent efforts to collect same when due except as otherwise  provided in
the prepayment penalty rider to the Mortgage.

      Section 4.03      REALIZATION UPON DEFAULTED MORTGAGE

      The Company shall use its best efforts,  consistent  with the procedures
that the Company would use in servicing loans for its own account,  consistent
with Accepted  Servicing  Practices,  any Primary Mortgage  Insurance Policies
and Lender  Primary  Mortgage  Insurance  Policies  and the best  interest  of
Purchaser,  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.  Foreclosure  or
comparable  proceedings  shall be initiated or a notice of default sent within
ninety  (90)  days  of  default  for   Mortgaged   Properties   for  which  no
satisfactory  arrangements can be made for collection of delinquent  payments,
subject to state and federal  law and  regulation.  The Company  shall use its
best efforts to realize upon  defaulted  Mortgage Loans in such manner as will
maximize the receipt of principal and interest by the  Purchaser,  taking into
account,  among  other  things,  the timing of  foreclosure  proceedings.  The
foregoing is subject to the provisions  that, in any case in which a Mortgaged
Property  shall have  suffered  damage,  the Company  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 Purchaser  after
reimbursement  to itself for such  expenses,  and (ii) that such expenses will
be  recoverable  by the Company  through  Insurance  Proceeds  or  Liquidation
Proceeds  from the related  Mortgaged  Property,  as  contemplated  in Section
4.05.  Company  shall  obtain  prior  approval  of  Purchaser  as to repair or
restoration  expenses  in  excess  of  ten  thousand  dollars  ($10,000).  The
Company  shall  notify  the  Purchaser  in  writing  of  the  commencement  of
foreclosure  proceedings.  The Company shall be responsible  for all costs and
expenses  incurred  by it in any  such  proceedings  or  functions;  provided,
however,  that it shall be entitled to reimbursement  thereof from the related
property,  as  contemplated 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 Company has reasonable  cause
to believe  that a Mortgaged  Property is  contaminated  by hazardous or toxic
substances or wastes, or if the Purchaser  otherwise requests an environmental
inspection or review of such Mortgaged Property,  such an inspection or review
is to be conducted by a qualified inspector at the Purchaser's  expense.  Upon
completion  of  the  inspection,   the  Company  shall  promptly  provide  the
Purchaser  with a  written  report  of  the  environmental  inspection.  After
reviewing the environmental  inspection  report, the Purchaser shall determine
how the Company shall proceed with respect to the Mortgaged Property.

      Notwithstanding   anything  to  the  contrary   contained  herein,   the
Purchaser  may,  at the  Purchaser's  sole  option,  terminate  the Company as
servicer  of any  Mortgage  Loan  which  becomes  ninety  (90) days or greater
delinquent in payment of a scheduled  Monthly Payment,  without payment of any
termination fee with respect  thereto,  provided that the Company shall on the
date  said  termination  takes  effect  be  reimbursed  for  any  unreimbursed
advances  of the  Company's  funds  made  pursuant  to  Section  5.03  and any
unreimbursed  Servicing  Advances and Servicing  Fees in each case relating to
the Mortgage Loan  underlying such  delinquent  Mortgage Loan  notwithstanding
anything to the contrary set forth in Section  4.05.  In the event of any such
termination,  the  provisions  of Section  11.01  hereof  shall  apply to said
termination  and the  transfer of servicing  responsibilities  with respect to
such delinquent Mortgage Loan to the Purchaser or its designee.

      In the event that a Mortgage  Loan becomes part of a REMIC,  and becomes
REO  Property,  such  property  shall be disposed of by the Company,  with the
consent of Purchaser as required pursuant to this Agreement,  before the close
of the third  taxable  year  following  the taxable year in which the Mortgage
Loan became an REO Property,  unless the Company provides to the trustee under
such REMIC an opinion  of counsel to the effect  that the  holding of such REO
Property  subsequent  to the close of the third  taxable  year  following  the
taxable  year in which the  Mortgage  Loan  became an REO  Property,  will not
result in the imposition of taxes on "prohibited  transactions"  as defined in
Section  860F of the Code,  or cause the  transaction  to fail to qualify as a
REMIC at any time that  certificates  are  outstanding.  Company shall manage,
conserve,   protect   and   operate   each   such   REO   Property   for   the
certificateholders  solely for the purpose of its prompt  disposition and sale
in a  manner  which  does  not  cause  such  property  to fail to  qualify  as
"foreclosure  property"  within the  meaning of Section  860F(a)(2)(E)  of the
Code,  or any "net  income  from  foreclosure  property"  which is  subject to
taxation  under the REMIC  provisions of the Code.  Pursuant to its efforts to
sell such  property,  the  Company  shall  either  itself or  through an agent
selected by Company,  protect and  conserve  such  property in the same manner
and to such an extent as is customary in the locality  where such  property is
located.

      Section 4.04      ESTABLISHMENT  OF  CUSTODIAL  ACCOUNTS;  DEPOSITS  IN
                        CUSTODIAL ACCOUNTS.

      The Company 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.   The  Custodial  Account  shall  be  an  Eligible  Account.   Funds
deposited in the Custodial  Account,  which shall be deposited within 24 hours
of  receipt,  shall  at all  times  be  insured  by the  FDIC  up to the  FDIC
insurance  limits,  or must  be  invested  in  Permitted  Investments  for the
benefit of the  Purchaser.  Funds  deposited in the  Custodial  Account may be
drawn on by the Company in accordance  with Section 4.05.  The creation of any
Custodial  Account shall be evidenced by a letter  agreement in the form shown
in  Exhibit  B  hereto.  The  original  of  such  letter  agreement  shall  be
furnished to the  Purchaser on the Closing  Date,  and upon the request of any
subsequent Purchaser.

      The Company  shall  deposit in the  Custodial  Account on a daily basis,
and retain therein the following payments and collections  received or made by
it  subsequent  to the  Cut-off  Date,  or received by it prior to the Cut-off
Date but allocable to a period  subsequent  thereto,  other than in respect of
principal  and  interest  on the  Mortgage  Loans due on or before the Cut-off
Date:

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

      (ii)  all  payments  on  account  of  interest  on  the  Mortgage  Loans
adjusted to the Mortgage Loan Remittance Rate;

      (iii) all Liquidation Proceeds;

      (iv)  any amounts  required to be deposited by the Company in connection
with any REO Property  pursuant to Section 4.13 and in  connection  therewith,
the Company shall provide the Purchaser with written  detail  itemizing all of
such amounts;

      (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
the 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 which
are not  released to the  Mortgagor  in  accordance  with  Accepted  Servicing
Practices, the loan documents or applicable law;

      (vii) any Monthly Advances;

      (viii)      with respect to each full or partial  Principal  Prepayment,
any Prepayment Interest  Shortfalls,  to the extent of the Company's aggregate
Servicing Fee received with respect to the related Prepayment Period;

      (ix)  any amounts  required to be deposited  by the Company  pursuant to
Section 4.10 in connection  with the  deductible  clause in any blanket hazard
insurance  policy,  such deposit  shall be made from the  Company's own funds,
without reimbursement therefor; and

      (x)   any amounts  required to be  deposited  in the  Custodial  Account
pursuant to Section 4.01, 4.13 or 6.02.

      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 late payment  charges
and  assumption  fees, to the extent  permitted by Section  6.01,  need not be
deposited  by the  Company in the  Custodial  Account.  Any  interest  paid on
funds deposited in the Custodial  Account by the depository  institution shall
accrue to the  benefit of the  Company  and the  Company  shall be entitled to
retain and withdraw  such  interest  from the  Custodial  Account  pursuant to
Section  4.05 (iv).  The  Purchaser  shall not be  responsible  for any losses
suffered with respect to investment of funds in the Custodial Account.


      Section 4.05      PERMITTED WITHDRAWALS FROM THE CUSTODIAL ACCOUNT.

      The Company may, from time to time,  withdraw from the Custodial Account
for the following purposes:

      (i)   to  make  payments  to the  Purchaser  in the  amounts  and in the
manner provided for in Section 5.01;

      (ii)  to reimburse itself for Monthly  Advances,  the Company's right to
reimburse  itself  pursuant to this  subclause  (ii) being  limited to amounts
received on the related  Mortgage Loan which represent late  collections  (net
of the related  Servicing Fees) of principal and/or interest  respecting which
any such  advance  was made,  it being  understood  that,  in the case of such
reimbursement,  the  Company's  right  thereto shall be prior to the rights of
the  Purchaser,  except  that,  where the Company is required to  repurchase a
Mortgage  Loan,  pursuant  to  Section  3.03,  the  Company's  right  to  such
reimbursement  shall be  subsequent  to the  payment to the  Purchaser  of the
Repurchase  Price  pursuant to such Section and all other amounts  required to
be paid to the Purchaser with respect to such Mortgage Loan;

      (iii) to reimburse  itself for unreimbursed  Servicing  Advances and any
unpaid Servicing Fees(or REO  administration  fees described in Section 4.13),
the Company's right to reimburse  itself pursuant to this subclause (iii) with
respect  to  any  Mortgage  Loan  being  limited  to  related   proceeds  from
Liquidation   Proceeds,   Condemnation  Proceeds  and  Insurance  Proceeds  in
accordance  with the  relevant  provisions  of the  Fannie  Mae  Guides  or as
otherwise  set  forth in this  Agreement;  any  recovery  shall  be made  upon
liquidation of the REO Property;

      (iv)  to pay to itself  as part of its  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) the Servicing
Fee from that  portion of any payment or recovery as to interest  with respect
to a particular Mortgage Loan;

      (v)   to pay to itself with respect to each  Mortgage Loan that has been
repurchased  pursuant  to Section  3.03 all amounts  received  thereon and not
distributed  as  of  the  date  on  which  the  related  repurchase  price  is
determined,

      (vi)  to transfer funds to another  Eligible  Account in accordance with
Section 4.09 hereof;

      (vii) to remove funds  inadvertently  placed in the Custodial Account by
the Company; and

      (vi)  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 Company 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.  The  Escrow  Account  shall  be an
Eligible  Account.  Funds  deposited in each Escrow Account shall at all times
be  insured  in a manner to  provide  maximum  insurance  under the  insurance
limitations of the FDIC, or must be invested in Permitted  Investments.  Funds
deposited in the Escrow  Account may be drawn on by the Company in  accordance
with Section  4.07.  The creation of any Escrow  Account shall be evidenced by
a letter  agreement  in the form  shown in  Exhibit  C. The  original  of such
letter  agreement shall be furnished to the Purchaser on the Closing Date, and
upon request to any subsequent purchaser.

      The Company shall  deposit in the Escrow  Account or Accounts on a daily
basis, and retain therein:

      (i)   all Escrow  Payments  collected on account of the Mortgage  Loans,
for the  purpose of  effecting  timely  payment of any such items as  required
under the terms of this Agreement;

      (ii)  all Insurance  Proceeds which are to be applied to the restoration
or repair of any Mortgaged Property; and

      (iii) all Servicing  Advances for Mortgagors  whose Escrow  Payments are
insufficient to cover escrow disbursements.

      The  Company  shall make  withdrawals  from the Escrow  Account  only to
effect such payments as are required under this Agreement,  and for such other
purposes as shall be as set forth or in  accordance  with  Section  4.07.  The
Company  shall be entitled to retain any interest  paid on funds  deposited in
the Escrow  Account by the  depository  institution  other  than  interest  on
escrowed  funds required by law to be paid to the Mortgagor and, to the extent
required by law,  the  Company  shall pay  interest  on escrowed  funds to the
Mortgagor  notwithstanding  that the Escrow Account is non-interest bearing or
that interest paid thereon is  insufficient  for such purposes.  The Purchaser
shall not be  responsible  for any losses  suffered with respect to investment
of funds in the Escrow Account.

      Section 4.07      PERMITTED WITHDRAWALS FROM ESCROW ACCOUNT.

      Withdrawals from the Escrow Account may be made by Company only:

      (i)   to effect  timely  payments of ground rents,  taxes,  assessments,
water rates, Primary Mortgage Insurance Policy premiums,  if applicable,  fire
and hazard insurance premiums, condominium assessments and comparable items;

      (ii)  to  reimburse  Company for any  Servicing  Advance made by Company
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  accordance  with the
terms of this Agreement;

      (v)   for   application  to  restoration  or  repair  of  the  Mortgaged
Property;

      (vi)  to pay to the Company,  or to the Mortgagor to the extent required
by law, any interest paid on the funds deposited in the Escrow Account;

      (vii) to clear and terminate the Escrow  Account on the  termination  of
this  Agreement.  As part of its  servicing  duties,  the Company shall pay to
the Mortgagors  interest on funds in 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; and

      (viii)      to  pay  to  the  Mortgagors  or  other  parties   Insurance
Proceeds deposited in accordance with Section 4.06.

      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 Company shall maintain  accurate
records  reflecting  the status of ground  rents,  taxes,  assessments,  water
rates and other  charges  which  are or may  become a lien upon the  Mortgaged
Property and the status of primary  mortgage  insurance  premiums and 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  Company  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
Company  shall  determine  that any such payments are made by the Mortgagor at
the time they first become due. The Company  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.

      The  Company  will  maintain in full force and effect  Primary  Mortgage
Insurance  Policies and Lender Primary Mortgage Insurance Policies issued by a
Qualified  Insurer with respect to each  Mortgage Loan for which such coverage
is herein  required.  Such coverage will be terminated  only with the approval
of Purchaser,  or as required by  applicable  law or  regulation.  The Company
will not cancel or refuse to renew any Primary  Mortgage  Insurance  Policy or
Lender Primary  Mortgage  Insurance  Policy in effect on the Closing Date that
is  required  to be kept in force under this  Agreement  unless a  replacement
Primary Mortgage  Insurance Policy or Lender Primary Mortgage Insurance Policy
for such canceled or nonrenewed  policy is obtained from and maintained with a
Qualified  Insurer.  The Company  shall not take any action which would result
in non-coverage  under any applicable  Primary  Mortgage  Insurance  Policy or
Lender  Primary  Mortgage  Insurance  Policy  of any loss  which,  but for the
actions of the  Company  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 Company shall  promptly  notify the insurer
under  the  related  Primary  Mortgage  Insurance  Policy  or  Lender  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 or
Lender Primary Mortgage  Insurance Policy. If such Primary Mortgage  Insurance
Policy or Lender Primary  Mortgage  Insurance Policy is terminated as a result
of such assumption or  substitution  of liability,  the Company shall obtain a
replacement  Primary  Mortgage  Insurance  Policy or Lender  Primary  Mortgage
Insurance Policy as provided above.

      In connection  with its  activities as servicer,  the Company  agrees to
prepare  and  present,  on behalf of itself and the  Purchaser,  claims to the
insurer  under  any  Primary  Mortgage  Insurance  Policy  or  Lender  Primary
Mortgage  Insurance Policy in a timely fashion in accordance with the terms of
such Primary Mortgage  Insurance  Policy or Lender 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 or Lender Primary
Mortgage  Insurance Policy respecting a defaulted  Mortgage Loan.  Pursuant to
Section 4.04, any amounts  collected by the Company under any Primary Mortgage
Insurance  Policy  or  Lender  Primary  Mortgage  Insurance  Policy  shall  be
deposited in the Custodial Account,  subject to withdrawal pursuant to Section
4.05.

      Section 4.09      TRANSFER OF ACCOUNTS.

      The Company may transfer the Custodial  Account or the Escrow Account to
a different  Eligible  Account from time to time.  Such transfer shall be made
only upon obtaining the prior written consent of the Purchaser,  which consent
will not be unreasonably withheld.

      Section 4.10      MAINTENANCE OF HAZARD INSURANCE.

      The Company  shall cause to be  maintained  for each  Mortgage Loan fire
and hazard insurance with extended  coverage as is acceptable to Fannie Mae or
FHLMC and 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 or (ii)  the  greater  of (a) the
outstanding  principal  balance of the Mortgage  Loan,  and (b) an amount such
that the proceeds  thereof shall be sufficient to prevent the Mortgagor and/or
the mortgagee  from becoming a co-insurer.  If required by the Flood  Disaster
Protection  Act of 1973, as amended,  each Mortgage Loan shall be covered by a
flood insurance policy meeting the  requirements of the current  guidelines of
the  Federal  Insurance  Administration  in effect with an  insurance  carrier
acceptable  to Fannie Mae or FHLMC,  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 or (iii) the maximum  amount of  insurance  which is  available
under the Flood Disaster  Protection  Act of 1973, as amended.  If at any time
during the term of the Mortgage  Loan,  the Company  determines  in accordance
with  applicable  law and  pursuant  to the Fannie Mae Guides that a Mortgaged
Property  is  located in a special  flood  hazard  area and is not  covered by
flood  insurance  or is covered in an amount less than the amount  required by
the Flood  Disaster  Protection  Act of 1973,  as amended,  the Company  shall
notify  the  related  Mortgagor  that the  Mortgagor  must  obtain  such flood
insurance  coverage,  and if said Mortgagor fails to obtain the required flood
insurance  coverage within forty-five (45) days after such  notification,  the
Company  shall  immediately  force place the required  flood  insurance on the
Mortgagor's  behalf.  The Company  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,  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 Company  under any
such  policies  other than amounts to be  deposited in the Escrow  Account and
applied  to the  restoration  or  repair  of  the  Mortgaged  Property  or REO
Property,  or released to the Mortgagor in accordance with Accepted  Servicing
Practices,  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  Company of the  Mortgagor  or
maintained on property  acquired in respect of the Mortgage  Loan,  other than
pursuant to this Agreement,  the Fannie Mae Guides or such 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  Company  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 Company.  The Company shall not  interfere  with the
Mortgagor's  freedom of choice in selecting  either his  insurance  carrier or
agent,  provided,  however,  that  the  Company  shall  not  accept  any  such
insurance  policies  from  insurance   companies  unless  such  companies  are
Qualified Insurers.

      Section 4.11      MAINTENANCE OF MORTGAGE IMPAIRMENT INSURANCE POLICY.

      In the event  that the  Company  shall  obtain  and  maintain  a blanket
policy  issued  by an  insurer  acceptable  to  Fannie  Mae or FHLMC  insuring
against hazard losses on all of the Mortgage  Loans,  then, to the extent such
policy provides  coverage in an amount equal to the amount  required  pursuant
to Section 4.10 and otherwise  complies with all other requirements of Section
4.10, it shall  conclusively  be deemed to have  satisfied its  obligations as
set forth in Section  4.10,  it being  understood  and agreed that such policy
may  contain a  deductible  clause,  in which case the Company  shall,  in the
event that  there  shall not have been  maintained  on the  related  Mortgaged
Property or REO  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 amount not  otherwise  payable under the blanket
policy because of such  deductible  clause.  In connection with its activities
as servicer of the Mortgage Loans,  the Company agrees to prepare and present,
on behalf of the  Purchaser,  claims under any such blanket policy in a timely
fashion  in  accordance  with the terms of such  policy.  Upon  request of the
Purchaser,  the  Company  shall  cause  to be  delivered  to the  Purchaser  a
certified  true copy of such policy and shall use its best efforts to obtain a
statement  from the insurer  thereunder  that such policy shall in no event be
terminated  or  materially  modified  without  thirty (30) days' prior written
notice to the Purchaser.

      Section 4.12      FIDELITY BOND, ERRORS AND OMISSIONS INSURANCE.

      The Company shall maintain,  at its own expense, a blanket fidelity bond
and an errors  and  omissions  insurance  policy,  with  broad  coverage  with
responsible  companies on all officers,  employees or other persons  acting in
any  capacity  with  regard  to the  Mortgage  Loan to  handle  funds,  money,
documents and papers  relating to the Mortgage  Loan.  The Fidelity Bond shall
be in the form of the Mortgage  Banker's  Blanket  Bond and shall  protect and
insure the Company against losses, including forgery, theft,  embezzlement and
fraud of such persons.  The errors and omissions  insurance  shall protect and
insure the Company  against  losses  arising out of errors and  omissions  and
negligent  acts of such  persons.  Such errors and omissions  insurance  shall
also  protect and insure the Company  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 or errors and  omissions
insurance   shall  diminish  or  relieve  the  Company  from  its  duties  and
obligations  as set forth in this  Agreement.  The minimum  coverage under any
such bond and  insurance  policy shall be at least equal to the  corresponding
amounts  required by Fannie Mae in the Fannie Mae Guides.  Upon request by the
Purchaser,  the Company shall deliver to the Purchaser 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 (30) days' prior written
notice to the  Purchaser.  The Company shall notify the Purchaser  within five
(5) business  days of receipt of notice that such  Fidelity  Bond or insurance
policy  will  be,  or  has  been,  materially  modified  or  terminated.   The
Purchaser  (or any party  having the status of  Purchaser  hereunder)  and any
subsidiary  thereof and their  successors  or assigns as their  interests  may
appear must be named as loss  payees on the  Fidelity  Bond and as  additional
insured  on the errors  and  omissions  policy.  Upon  request  by  Purchaser,
Company  shall  provide  Purchaser  with an insurance  certificate  certifying
coverage  under  this  Section  4.12,  and  will  provide  an  update  to such
certificate  upon  request,  or  upon  renewal  or  material  modification  of
coverage.

      Section 4.13      TITLE, MANAGEMENT AND DISPOSITION OF REO PROPERTY.

      In the  event  that  title to the  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  Purchaser or its  designee,  or in the
event the  Purchaser  or its designee 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 Company  from an attorney  duly  licensed to practice
law in the state  where the REO  Property  is  located.  Any Person or Persons
holding such title other than the Purchaser shall  acknowledge in writing that
such title is being held as nominee for the benefit of the Purchaser.

      The Company  shall notify the  Purchaser in  accordance  with the Fannie
Mae Guides of each acquisition of REO Property upon such acquisition  (and, in
any event,  shall provide notice of the  consummation of any foreclosure  sale
within three (3) Business  Days of the date  Company  receives  notice of such
consummation),  together  with a copy of the  drive by  appraisal  or  brokers
price  opinion of the  Mortgaged  Property  obtained in  connection  with such
acquisition,  and thereafter assume the  responsibility for marketing such REO
property in accordance  with Accepted  Servicing  Practices.  Thereafter,  the
Company  shall  continue  to provide  certain  administrative  services to the
Purchaser  relating to such REO  Property as set forth in this  Section  4.13.
The fee for such  administrative  services  shall be  $2,000  to be paid  upon
liquidation  of the REO  Property.  No  Servicing  Fee  shall be  assessed  or
otherwise  accrue  on any REO  Property  from and  after  the date on which it
becomes an REO Property.

      The Company  shall,  either  itself or through an agent  selected by the
Company,  and in  accordance  with the  Fannie Mae  Guides  manage,  conserve,
protect  and  operate  each 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 Company  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 least monthly  thereafter  or more  frequently
as required by the  circumstances.  The Company shall make or cause to be made
a written  report of each such  inspection.  Such reports shall be retained in
the Mortgage File and copies  thereof shall be forwarded by the Company to the
Purchaser.

      The Company  shall use its best  efforts to dispose of the REO  Property
as soon as possible  and shall sell such REO  Property in any event within one
year after  title has been  taken to such REO  Property,  unless  the  Company
determines,  and gives an appropriate  notice to the Purchaser to such effect,
that a longer  period is  necessary  for the orderly  liquidation  of such REO
Property.  If a  longer  period  than  one (1)  year is  permitted  under  the
foregoing  sentence  and is necessary  to sell any REO  Property,  the Company
shall  report  monthly  to the  Purchaser  as to the  progress  being  made in
selling such REO  Property.  No REO  Property  shall be marketed for less than
the Appraised Value,  without the prior consent of Purchaser.  No REO Property
shall be sold for less than ninety five percent (95%) of its Appraised  Value,
without the prior  consent of  Purchaser.  All requests for  reimbursement  of
Servicing  Advances  shall be in  accordance  with the Fannie Mae Guides.  The
disposition  of REO  Property  shall be  carried  out by the  Company  at such
price,  and upon such terms and conditions,  as the Company deems to be in the
best interests of the Purchaser  (subject to the above  conditions)  only with
the prior written  consent of the  Purchaser.  Company  shall provide  monthly
reports to Purchaser  in  reference to the status of the  marketing of the REO
Properties.

      Notwithstanding   anything  to  the  contrary   contained  herein,   the
Purchaser  may,  at the  Purchaser's  sole  option,  terminate  the Company as
servicer of any such REO Property  without payment of any termination fee with
respect thereto,  provided that the Company shall on the date said termination
takes effect be  reimbursed  for any  unreimbursed  advances of the  Company's
funds made pursuant to Section 5.03 and any  unreimbursed  Servicing  Advances
and Servicing Fees in each case relating to the Mortgage Loan  underlying such
REO  Property  notwithstanding  anything to the  contrary set forth in Section
4.05. In the event of any such  termination,  the  provisions of Section 11.01
hereof  shall  apply  to  said  termination  and  the  transfer  of  servicing
responsibilities  with  respect to such REO  Property to the  Purchaser or its
designee.  Within  five  Business  Days of any such  termination,  the Company
shall,  if necessary  convey such  property to the Purchaser and shall further
provide the  Purchaser  with the following  information  regarding the subject
REO Property:  the related drive by appraisal or brokers  price  opinion,  and
copies  of  any  related  Mortgage  Impairment  Insurance  Policy  claims.  In
addition,  within five Business  Days, the Company shall provide the Purchaser
with the  following  information  regarding  the  subject  REO  Property:  the
related  trustee's deed upon sale and copies of any related  hazard  insurance
claims, or repair bids.

      Section 4.14      NOTIFICATION OF MATURITY DATE.

      With  respect to each  Mortgage  Loan,  the  Company  shall  execute and
deliver  to the  Mortgagor  any  and  all  necessary  notices  required  under
applicable  law and the  terms  of the  related  Mortgage  Note  and  Mortgage
regarding the maturity date if required under applicable law.


<PAGE>


                                  ARTICLE V

                          PAYMENTS TO THE PURCHASER

      Section 5.01      DISTRIBUTIONS.

      On each Remittance  Date, the Company shall  distribute by wire transfer
of immediately  available  funds to the Purchaser (i) all amounts  credited to
the  Custodial   Account  as  of  the  close  of  business  on  the  preceding
Determination  Date, net of charges against or withdrawals  from the Custodial
Account  pursuant to Section  4.05,  plus (ii) all Monthly  Advances,  if any,
which the Company is obligated to distribute  pursuant to Section 5.03,  plus,
(iii)  interest  at  the  Mortgage  Loan  Remittance  Rate  on  any  Principal
Prepayment from the date of such Principal  Prepayment  through the end of the
month for which  disbursement  is made provided that the Company's  obligation
as to payment of such  interest  shall be limited to the  Servicing Fee earned
during the month of the  distribution,  plus (iv) unless  otherwise  stated in
the related  Confirmation  or related Term Sheet,  any amount  received by the
Company that represents a prepayment  penalty with respect to a Mortgage Loan,
minus (v) any amounts  attributable to Monthly Payments collected but due on a
Due  Date or Dates  subsequent  to the  preceding  Determination  Date,  which
amounts  shall be  remitted on the  Remittance  Date next  succeeding  the Due
Period for such  amounts.  It is  understood  that,  by  operation  of Section
4.04,  the  remittance on the first  Remittance  Date with respect to Mortgage
Loans  purchased  pursuant to the related  Term Sheet is to include  principal
collected  after the Cut-off Date  through the  preceding  Determination  Date
plus  interest,  adjusted  to the  Mortgage  Loan  Remittance  Rate  collected
through such  Determination Date exclusive of any portion thereof allocable to
the period  prior to the  Cut-off  Date,  with the  adjustments  specified  in
clauses (ii), (iii) and (iv) above.

      With  respect to any  remittance  received  by the  Purchaser  after the
Remittance  Date, the Company shall pay to the Purchaser  interest on any such
late  payment at an annual  rate equal to the Prime  Rate,  adjusted as of the
date of each  change,  plus  three  (3)  percentage  points,  but in no  event
greater than the maximum  amount  permitted by  applicable  law. Such interest
shall cover the period  commencing  with the day  following  the  Business Day
such  payment was due and ending with the  Business  Day on which such payment
is made to the Purchaser,  both  inclusive.  The payment by the Company of any
such  interest  shall not be  deemed an  extension  of time for  payment  or a
waiver of any Event of Default by the Company.  On each  Remittance  Date, the
Company  shall  provide  a  remittance  report  detailing  all  amounts  being
remitted pursuant to this Section 5.01.

      Section 5.02      STATEMENTS TO THE PURCHASER.

      The Company  shall furnish to Purchaser an  individual  loan  accounting
report,  as of the last Business Day of each month, in the Company's  assigned
loan number order to document  Mortgage Loan payment activity on an individual
Mortgage  Loan  basis.   With  respect  to  each  month,   the   corresponding
individual loan accounting  report shall be received by the Purchaser no later
than the fifth Business Day of the following  month on a disk or tape or other
computer-readable  format in such  format as may be  mutually  agreed  upon by
both  Purchaser and Company,  and no later than the fifth  Business Day of the
following month in hard copy, and shall contain the following:

      (i)   With  respect  to  each  Monthly  Payment,   the  amount  of  such
remittance  allocable  to  principal  (including  a separate  breakdown of any
Principal  Prepayment,   including  the  date  of  such  prepayment,  and  any
prepayment penalties or premiums,  along with a detailed report of interest on
principal prepayment amounts remitted in accordance with Section 4.04);

      (ii)  with  respect  to  each  Monthly  Payment,   the  amount  of  such
remittance allocable to interest;

      (iii) the  amount of  servicing  compensation  received  by the  Company
during the prior distribution period;

      (iv)  the aggregate Stated Principal Balance of the Mortgage Loans;

      (v)   the  aggregate of any expenses  reimbursed  to the Company  during
the prior distribution period pursuant to Section 4.05;

      (vi)  The  number  and  aggregate   outstanding  principal  balances  of
Mortgage  Loans (a)  delinquent  (1) 30 to 59 days,  (2) 60 to 89 days, (3) 90
days or more; (b) as to which  foreclosure has commenced;  and (c) as to which
REO Property has been acquired; and

      The Company shall also provide a trial  balance,  sorted in  Purchaser's
assigned  loan number order,  in the form of Exhibit E hereto,  with each such
Report.

      The Company  shall prepare and file any and all  information  statements
or  other  filings  required  to  be  delivered  to  any  governmental  taxing
authority or to Purchaser  pursuant to any  applicable law with respect to the
Mortgage Loans and the transactions contemplated hereby.

      Section 5.03      MONTHLY ADVANCES BY THE COMPANY.

      Not later than the close of business on the Business Day preceding  each
Remittance Date, the Company shall deposit in the Custodial  Account an amount
equal to all payments not previously  advanced by the Company,  whether or not
deferred  pursuant to Section 4.01, of principal  (due after the Cut-off Date)
and interest not allocable to the period prior to the Cut-off  Date,  adjusted
to the Mortgage Loan  Remittance  Rate,  which were due on a Mortgage Loan and
delinquent at the close of business on the related Determination Date.

      The  Company'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 Remittance  Date prior to
the date on which  the  Mortgaged  Property  liquidates  (including  Insurance
Proceeds,  proceeds  from the sale of REO Property or  Condemnation  Proceeds)
with respect to the Mortgage  Loan unless the Company deems such advance to be
nonrecoverable.  In such event,  the Company shall deliver to the Purchaser an
Officer's  Certificate  of the  Company to the  effect  that an officer of the
Company has reviewed  the related  Mortgage  File and has made the  reasonable
determination that any additional advances are nonrecoverable.

      Section 5.04      LIQUIDATION REPORTS.

      Upon the foreclosure  sale of any Mortgaged  Property or the acquisition
thereof by the  Purchaser  pursuant  to a  deed-in-lieu  of  foreclosure,  the
Company  shall submit to the  Purchaser a  liquidation  report with respect to
such  Mortgaged  Property  in  a  form  mutually  acceptable  to  Company  and
Purchaser.  The  Company  shall  also  provide  reports  on the  status of REO
Property containing such information as Purchaser may reasonably require.


<PAGE>


                                  ARTICLE VI

                         GENERAL SERVICING PROCEDURES

      Section 6.01      ASSUMPTION AGREEMENTS.

      The Company will,  to the extent it has  knowledge of any  conveyance or
prospective  conveyance by any Mortgagor of the 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 Company  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  or  Lender  Primary  Mortgage  Insurance
Policy,  if  any.  If the  Company  reasonably  believes  it is  unable  under
applicable law to enforce such  "due-on-sale"  clause,  the Company,  with the
approval of the  Purchaser,  will 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.  Where an  assumption  is allowed  pursuant  to this
Section  6.01,  the Company,  with the prior  consent of the Purchaser and 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 Company  shall follow the  underwriting  practices  and  procedures of the
Company.  With respect to an assumption  or  substitution  of  liability,  the
Mortgage  Interest Rate borne by the related  Mortgage Note, the amount of the
Monthly Payment and the maturity date may not be changed  (except  pursuant to
the terms of the  Mortgage  Note).  If the credit of the  proposed  transferee
does not meet such  underwriting  criteria,  the Company  diligently shall, to
the extent  permitted by the Mortgage or the Mortgage  Note and by  applicable
law,  accelerate  the maturity of the Mortgage  Loan. The Company shall notify
the Purchaser that any such substitution of liability or assumption  agreement
has been  completed by  forwarding  to the  Purchaser the original of any such
substitution  of liability 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.  All fees  collected by the Company
for entering into an assumption or substitution  of liability  agreement shall
belong to the Company.

      Notwithstanding  the  foregoing  paragraphs of this Section or any other
provision  of  this  Agreement,  the  Company  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 Company 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
                        FILES.

      Upon the  payment in full of any  Mortgage  Loan,  or the receipt by the
Company of a  notification  that  payment in full will be escrowed in a manner
customary  for  such  purposes,   the  Company  will  immediately  notify  the
Purchaser by a certification,  which  certification  shall include a statement
to the effect that all amounts  received or to be received in connection  with
such  payment  which are required to be  deposited  in the  Custodial  Account
pursuant  to Section  4.04 have been or will be so  deposited,  of a Servicing
Officer and shall  request  delivery to it of the portion of the Mortgage File
held by the  Purchaser.  The Purchaser  shall no later than five Business Days
after  receipt  of such  certification  and  request,  release  or cause to be
released to the Company,  the related  Mortgage Loan  Documents  and, upon its
receipt of such documents,  the Company shall promptly  prepare and deliver to
the Purchaser the requisite  satisfaction  or release.  No later than five (5)
Business  Days  following  its receipt of such  satisfaction  or release,  the
Purchaser shall deliver, or cause to be delivered,  to the Company the release
or  satisfaction  properly  executed by the owner of record of the  applicable
mortgage  or its duly  appointed  attorney  in fact.  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  Company  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  Purchaser may have under the
mortgage  instruments,  the Company,  upon written demand,  shall remit within
two (2) Business Days to the Purchaser the then outstanding  principal balance
of the related  Mortgage  Loan by deposit  thereof in the  Custodial  Account.
The  Company  shall  maintain  the  Fidelity  Bond and  errors  and  omissions
insurance  insuring  the Company  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  Loan,  including  for the  purpose of  collection  under any
Primary  Mortgage  Insurance  Policy  or  Lender  Primary  Mortgage  Insurance
Policy,  the Purchaser shall,  upon request of the Company and delivery to the
Purchaser of a servicing  receipt signed by a Servicing  Officer,  release the
portion  of the  Mortgage  File held by the  Purchaser  to the  Company.  Such
servicing  receipt shall  obligate the Company to return the related  Mortgage
documents  to the  Purchaser  when the need  therefor by the Company 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 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 Company has  delivered to the Purchaser 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.  Upon  receipt of a  certificate  of a  Servicing
Officer stating that such Mortgage Loan was liquidated,  the servicing receipt
shall be released by the Purchaser to the Company.

      Section 6.03      SERVICING COMPENSATION.

      As  compensation  for its  services  hereunder,  the  Company  shall  be
entitled to  withdraw  from the  Custodial  Account (to the extent of interest
payments  collected on the Mortgage Loans) or to retain from interest payments
collected on the Mortgage  Loans,  the amounts  provided for as the  Company's
Servicing  Fee,  subject to  payment of  compensating  interest  on  Principal
Prepayments  as capped by the  Servicing  Fee  pursuant to Section 5.01 (iii).
Additional servicing  compensation in the form of assumption fees, as provided
in Section 6.01,  and late payment  charges or otherwise  shall be retained by
the  Company to the extent  not  required  to be  deposited  in the  Custodial
Account.  No  Servicing  Fee  shall be  payable  in  connection  with  partial
Monthly  Payments.  The Company 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  Company  will  deliver  to the  Purchaser  not  later  than 90 days
following the end of each fiscal year of the Company  beginning in March 2002,
an Officers'  Certificate  stating,  as to each signatory thereof,  that (i) a
review of the  activities of the Company  during the  preceding  calendar 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 Company has fulfilled all of its obligations under this Agreement
throughout  such year,  or, if there has been a default in the  fulfillment of
any such  obligation,  specifying each such default known to such officers and
the nature and status of cure  provisions  thereof.  Copies of such  statement
shall be provided by the Company to the Purchaser upon request.

      Section 6.05      ANNUAL  INDEPENDENT  CERTIFIED  PUBLIC  ACCOUNTANTS'
                        SERVICING REPORT.

      Within ninety (90) days of Company's  fiscal year end beginning in March
2002 the  Company at its  expense  shall  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  Purchaser to the effect that such
firm has examined  certain  documents  and records  relating to the  Company's
servicing of mortgage  loans of the same type as the Mortgage  Loans  pursuant
to  servicing  agreements  substantially  similar  to  this  Agreement,  which
agreements  may  include  this  Agreement,  and that,  on the basis of such an
examination,  conducted  substantially in the uniform single audit program for
mortgage  bankers,  such firm is of the opinion that the  Company's  servicing
has been  conducted in compliance  with the  agreements  examined  pursuant to
this Section 6.05,  except for (i) such  exceptions as such firm shall believe
to be  immaterial,  and (ii) such  other  exceptions  as shall be set forth in
such  statement.  Copies of such statement shall be provided by the Company to
the  Purchaser.  In  addition,  on an annual  basis,  Company  shall  provided
Purchaser with copies of its audited financial statements.

      Section 6.06      PURCHASER'S RIGHT TO EXAMINE COMPANY RECORDS.

      The Purchaser  shall have the right to examine and audit upon reasonable
notice to the Company,  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  Company,  or  held by
another for the Company or on its behalf or  otherwise,  which  relates to the
performance  or  observance  by  the  Company  of  the  terms,   covenants  or
conditions of this Agreement.

      The Company shall provide to the  Purchaser and any  supervisory  agents
or  examiners  representing  a state or  federal  governmental  agency  having
jurisdiction  over the Purchaser,  including but not limited to FDIC and other
similar entities,  access to any documentation regarding the Mortgage Loans in
the  possession  of the  Company  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 Company,  and
in  accordance  with  the  federal  government,  FDIC,  or any  other  similar
regulations.




<PAGE>




                                 ARTICLE VII

                      REPORTS TO BE PREPARED BY SERVICER

      Section 7.01      COMPANY  SHALL  PROVIDE  INFORMATION  AS  REASONABLY
                        REQUIRED.

      The  Company  shall  furnish  to the  Purchaser  during the term of this
Agreement   such   periodic,   special  or  other   reports,   information  or
documentation,  not provided for herein, as shall be necessary,  reasonable or
appropriate  in  respect  to the  Purchaser,  or  otherwise  in respect to the
Mortgage  Loans and the  performance  of the  Company  under  this  Agreement,
including any reports,  information or  documentation  reasonably  required to
comply with any regulations  regarding any supervisory  agents or examiners of
the  Purchaser  all such  reports or  information  to be as provided by and in
accordance with such applicable  instructions  and directions as the Purchaser
may  reasonably  request in relation to this  Agreement or the  performance of
the Company under this  Agreement.  Such  periodic,  special or other reports,
information  or  documentation  furnished to the Purchaser at the  Purchaser's
request  pursuant  to the  preceding  sentence  shall be at the expense of the
Purchaser.  The Company  agrees to execute  and  deliver all such  instruments
and take all such action as the  Purchaser,  from time to time, may reasonably
request in order to effectuate  the purpose and to carry out the terms of this
Agreement.

      In connection with marketing the Mortgage Loans,  the Purchaser may make
available to a  prospective  purchaser  audited  financial  statements  of the
Company for the most  recently  completed  two (2) fiscal years for which such
statements are available,  as well as a Consolidated Statement of Condition at
the  end  of the  last  two  (2)  fiscal  years  covered  by any  Consolidated
Statement  of  Operations.  If it has not already  done so, the Company  shall
furnish  promptly to the  Purchaser or a prospective  purchaser  copies of the
statements specified above.

      The Company  shall make  reasonably  available  to the  Purchaser or any
prospective Purchaser a knowledgeable  financial or accounting officer for the
purpose of  answering  questions  and to permit any  prospective  purchaser to
inspect the Company's servicing  facilities for the purpose of satisfying such
prospective  purchaser  that  the  Company  has the  ability  to  service  the
Mortgage Loans as provided in this Agreement.



<PAGE>




                                 ARTICLE VIII

                                 THE SERVICER

      Section 8.01      INDEMNIFICATION; THIRD PARTY CLAIMS.

      The  Company  agrees to  indemnify  the  Purchaser  and hold it harmless
against any and all claims, losses, damages,  penalties,  fines,  forfeitures,
legal  fees and  related  costs,  judgments,  and any  other  costs,  fees and
expenses  that the  Purchaser may sustain in any way related to the failure of
the Company to observe and perform  its duties,  obligations,  covenants,  and
agreements to service the Mortgage Loans in strict  compliance  with the terms
of this  Agreement.  The Company agrees to indemnify the Purchaser and hold it
harmless  against  any and all  claims,  losses,  damages,  penalties,  fines,
forfeitures,  legal fees and related  costs,  judgments,  and any other costs,
fees and  expenses  that the  Purchaser  may sustain in any way related to the
breach of a  representation  or warranty set forth in Sections 3.01 or 3.02 of
this  Agreement.  The Company  shall  immediately  notify the  Purchaser  if a
claim is made by a third party against  Company with respect to this Agreement
or the Mortgage Loans,  assume (with the consent of the Purchaser) the defense
of any such claim and pay all  expenses  in  connection  therewith,  including
counsel  fees,  whether or not such claim is settled  prior to  judgment,  and
promptly  pay,  discharge  and  satisfy any  judgment  or decree  which may be
entered  against it or the  Purchaser  in respect of such  claim.  The Company
shall  follow  any  written  instructions   received  from  the  Purchaser  in
connection  with such  claim.  The  Purchaser  shall  promptly  reimburse  the
Company  for  all  amounts  advanced  by it  pursuant  to  the  two  preceding
sentences  except  when the claim  relates to the  failure  of the  Company to
service and  administer the Mortgages in strict  compliance  with the terms of
this  Agreement,  the  breach  of  representation  or  warranty  set  forth in
Sections  3.01  or  3.02,  or the  gross  negligence,  bad  faith  or  willful
misconduct  of Company.  The  provisions  of this Section  8.01 shall  survive
termination of this Agreement.

      Section 8.02      MERGER OR CONSOLIDATION OF THE COMPANY.

      The  Company  will  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 Company may be merged or consolidated,  or any
corporation  resulting from any merger,  conversion or  consolidation to which
the Company shall be a party, or any Person  succeeding to the business of the
Company  whether or not related to loan  servicing,  shall be the successor of
the Company  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 and/or BIF,
and  which  is  a  HUD-approved   mortgagee  whose  primary   business  is  in
origination  and  servicing of first lien mortgage  loans,  and (iii) who is a
Fannie  Mae or FHLMC  approved  seller/servicer  in good  standing;  provided,
further,  however,  that the Company shall give sixty (60) days written notice
to the  Purchaser  of any merger,  conversion  or  consolidation  to which the
Company shall be a party,  or of any Person  succeeding to the business of the
Company,  and the Purchaser,  at it sole option,  shall make the determination
as to whether  such  successor  of the Company  shall  continue to service the
Mortgage Loans hereunder.

      Section 8.03      LIMITATION ON LIABILITY OF THE COMPANY AND OTHERS.

      Neither the Company nor any of the officers,  employees or agents of the
Company  shall be under any liability to the Purchaser 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 Company 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 negligence,  bad faith or willful  misconduct,  or any breach of the
terms  and  conditions  of  this  Agreement.  The  Company  and  any  officer,
employee  or agent of the  Company  may rely in good faith on any  document of
any  kind  prima  facie  properly  executed  and  submitted  by the  Purchaser
respecting any matters arising  hereunder.  The Company 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  reasonable  opinion  may  involve it in any
expenses or  liability;  provided,  however,  that the Company  may,  with the
consent  of the  Purchaser,  undertake  any  such  action  which  it may  deem
necessary or desirable in 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 Purchaser will be liable,  and the Company shall
be entitled to be reimbursed therefor from the Purchaser upon written demand.

      Section 8.04      COMPANY NOT TO ASSIGN OR RESIGN.

      The  Company  shall  not  assign  this  Agreement  or  resign  from  the
obligations  and duties hereby  imposed on it except by mutual  consent of the
Company and the Purchaser or upon the determination  that its duties hereunder
are no longer  permissible  under applicable law and such incapacity cannot be
cured by the Company.  Any such  determination  permitting the  resignation of
the  Company  shall be  evidenced  by an Opinion  of  Counsel  to such  effect
delivered  to the  Purchaser  which  Opinion of  Counsel  shall be in form and
substance  acceptable  to the  Purchaser.  No such  resignation  shall  become
effective until a successor shall have assumed the Company's  responsibilities
and obligations hereunder in the manner provided in Section 11.01.

      Section 8.05      NO TRANSFER OF SERVICING.

      With  respect to the  retention  of the Company to service the  Mortgage
Loans  hereunder,  the Company  acknowledges  that the  Purchaser has acted in
reliance upon the Company'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 Company 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  Purchaser,  which consent shall be granted or withheld in the
Purchaser's sole discretion.

      Without in any way limiting the  generality of this Section 8.05, in the
event that the Company  either  shall assign this  Agreement or the  servicing
responsibilities  hereunder  or delegate  its duties  hereunder or any portion
thereof without (i) satisfying the  requirements  set forth herein or (ii) the
prior written  consent of the  Purchaser,  then the  Purchaser  shall have the
right to  terminate  this  Agreement,  without  any  payment of any penalty or
damages and without any liability  whatsoever to the Company  (other than with
respect to accrued but unpaid Servicing Fees and Servicing  Advances remaining
unpaid) or any third party.




<PAGE>




                                  ARTICLE IX

                                   DEFAULT

      Section 9.01      EVENTS OF DEFAULT.

      In case one or more of the  following  Events of Default by the  Company
shall occur and be continuing, that is to say:

      (i)   any failure by the Company to remit to the  Purchaser  any payment
required  to be made  under  the  terms  of  this  Agreement  which  continues
unremedied for a period of one (1) Business Day; or

      (ii)  failure on the part of the  Company  duly to observe or perform in
any material  respect any other of the  covenants or agreements on the part of
the Company  set forth in this  Agreement  which  continues  unremedied  for a
period of  thirty  (30) days  after the date on which  written  notice of such
failure,  requiring  the same to be  remedied,  shall  have been  given to the
Company by the Purchaser; 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,  marshalling
of assets and  liabilities  or similar  proceedings,  or for the winding-up or
liquidation  of its affairs,  shall have been entered  against the Company and
such decree or order shall have  remained  in force  undischarged  or unstayed
for a period of sixty days; or

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

      (v)   the Company  shall admit in writing its inability to pay its debts
generally  as they  become  due,  file a  petition  to take  advantage  of any
applicable  insolvency or reorganization  statute,  make an assignment for the
benefit of its creditors,  or voluntarily  suspend payment of its obligations;
or

      (vi)  Company  ceases to be approved by either  Fannie Mae or FHLMC as a
mortgage loan seller or servicer for more than thirty days; or

      (vii) the   Company   attempts   to  assign   its  right  to   servicing
compensation  hereunder  or the Company  attempts,  without the consent of the
Purchaser,  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; or

      (viii)      the Company  ceases to be (a) licensed to service first lien
residential  mortgage loans in any jurisdiction in which a Mortgaged  Property
is located and such  licensing  is  required,  and (b)  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
Company's ability to perform its obligations hereunder; or

      (ix)  the Company  fails to meet the  eligibility  criteria set forth in
the last sentence of Section 8.02.

      Then,  and in each and every such  case,  so long as an Event of Default
shall not have been  remedied,  the  Purchaser,  by notice in  writing  to the
Company  (except in the case of an Event of Default under clauses (iii),  (iv)
or (v) above,  in which case,  automatically  and without notice) Company may,
in addition to whatever  rights the Purchaser may have under Sections 3.03 and
8.01 and at law or equity  or to  damages,  including  injunctive  relief  and
specific performance,  terminate all the rights and obligations of the Company
under  this  Agreement  and in and to the  Mortgage  Loans  and  the  proceeds
thereof  without  compensating  the  Company  for the  same.  On or after  the
receipt by the Company of such written  notice (or, in the case of an Event of
Default under clauses (iii),  (iv) or (v) above, in which case,  automatically
and  without  notice),  all  authority  and power of the  Company  under  this
Agreement,  whether  with respect to the Mortgage  Loans or  otherwise,  shall
pass to and be vested in the successor  appointed  pursuant to Section  11.01.
Upon written  request from the Purchaser,  the Company shall prepare,  execute
and  deliver,  any and all  documents  and  other  instruments,  place in such
successor's  possession  all Mortgage  Files,  and 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
Company's  sole expense.  The Company  agrees to cooperate  with the Purchaser
and  such   successor  in  effecting   the   termination   of  the   Company'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  Company  to the  Custodial  Account or
Escrow  Account or thereafter  received with respect to the Mortgage  Loans or
any REO Property.

      Section 9.02      WAIVER OF DEFAULTS.

      The  Purchaser  may waive  only by  written  notice  any  default by the
Company   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.





<PAGE>




                                  ARTICLE X

                                 TERMINATION

      Section 10.01     TERMINATION.

      The respective  obligations  and  responsibilities  of the Company shall
terminate  upon: (i) the later of the final payment or other  liquidation  (or
any  advance  with  respect  thereto)  of  the  last  Mortgage  Loan  and  the
disposition  of all remaining REO Property and the remittance of all funds due
hereunder;  or (ii) by mutual  consent of the  Company  and the  Purchaser  in
writing; or (iii) termination with cause under the terms of this Agreement.


<PAGE>





                                  ARTICLE XI

                           MISCELLANEOUS PROVISIONS

      Section 11.01  SUCCESSOR TO THE COMPANY.

      Prior to  termination  of  Company's  responsibilities  and duties under
this Agreement  pursuant to Sections 4.13,  8.04,  9.01,  10.01 (ii) or (iii),
the  Purchaser   shall  (i)  succeed  to  and  assume  all  of  the  Company's
responsibilities,  rights,  duties and obligations  under this  Agreement,  or
(ii) appoint a successor having the  characteristics set forth in Section 8.02
hereof  and  which  shall  succeed  to  all  rights  and  assume  all  of  the
responsibilities,  duties and  liabilities of the Company under this Agreement
prior  to  the   termination   of  Company's   responsibilities,   duties  and
liabilities  under this  Agreement.  In connection  with such  appointment and
assumption,  the Purchaser may make such  arrangements for the compensation of
such  successor  out of payments on Mortgage  Loans as the  Purchaser and such
successor   shall   agree.   In  the   event   that  the   Company's   duties,
responsibilities  and  liabilities  under this Agreement  should be terminated
pursuant to the  aforementioned  Sections,  the Company 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 Company  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 Company of the  representations  and  warranties
made pursuant to Sections  3.01,  3.02 and 3.03 and the remedies  available to
the Purchaser  thereunder  and under Section  8.01,  it being  understood  and
agreed that the  provisions of such Sections 3.01,  3.02,  3.03 and 8.01 shall
be  applicable  to  the  Company   notwithstanding  any  such  resignation  or
termination of the Company, or the termination of this Agreement.

      Any successor  appointed as provided  herein shall execute,  acknowledge
and deliver to the Company and to the Purchaser an instrument  accepting  such
appointment,  whereupon such successor  shall become fully vested with all the
rights, powers, duties,  responsibilities,  obligations and liabilities of the
Company,  with  like  effect  as  if  originally  named  as a  party  to  this
Agreement.  Any  termination  or  resignation of the Company or this Agreement
pursuant  to Section  4.13,  8.04,  9.01 or 10.01  shall not affect any claims
that the  Purchaser  may have  against the Company  arising  prior to any such
termination or resignation.

      The Company  shall  promptly  deliver to the  successor the funds in the
Custodial  Account and the Escrow  Account and the Mortgage  Files and related
documents  and  statements  held by it hereunder and the Company shall account
for all funds.  The Company shall execute and deliver such  instruments and do
such  other  things  all 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 Company.  The successor
shall make  arrangements  as it may deem  appropriate to reimburse the Company
for unrecovered  Servicing  Advances which the successor retains hereunder and
which would  otherwise  have been  recovered  by the Company  pursuant to this
Agreement but for the appointment of the successor servicer.

      Upon a successor's  acceptance of appointment as such, the Company shall
notify by mail the Purchaser of such appointment.

      Section 11.02  AMENDMENT.

      This  Agreement  may be amended from time to time by the Company and the
Purchaser by written agreement signed by the Company and the Purchaser.

      Section 11.03  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 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  at  the  Company's  expense  on  direction  of the
Purchaser  accompanied  by an  opinion  of  counsel  to the  effect  that such
recordation  materially and beneficially affects the interest of the Purchaser
or is necessary for the administration or servicing of the Mortgage Loans.

      Section 11.04  GOVERNING LAW.

      This  Agreement  and the  related  Term Sheet  shall be  governed by and
construed in  accordance  with the laws of the State of New York except to the
extent preempted by Federal law. The  obligations,  rights and remedies of the
parties hereunder shall be determined in accordance with such laws.

      Section 11.05  NOTICES.

      Any  demands,  notices or other  communications  permitted  or  required
hereunder  shall be in writing and shall be deemed  conclusively  to have been
given if  personally  delivered  at or  mailed  by  registered  mail,  postage
prepaid,  and return  receipt  requested or  certified  mail,  return  receipt
requested,  or transmitted by telex,  telegraph or telecopier and confirmed by
a similar mailed writing, as follows:

        (i)   if to the Company:
              National City Mortgage Company
              3232 Newmark Drive
              Miamisburg, Ohio 45342
              Attention:  Sheila N. Hansford
              Telecopier No.:  (937) 910-4137

              Servicing contact:

              National City Mortgage Company
              3232 Newmark Drive
              Miamisburg, Ohio 45342
              Attention:  T. Jackson Case

        (ii)  if to the Purchaser:

              EMC Mortgage Corporation
              Mac Arthur Ridge II,
              909 Hidden Ridge Drive, Suite 200
              Irving, Texas 75038
              Attention:  Mr. Edward Raice
              Telecopier No.:  (972) 444-2810

              With a copy to:

              Bear Stearns Mortgage Capital Corporation
              245 Park Avenue
              New York, New York 10167
              Attention:  Mary Haggerty

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  addressee  (as  evidenced,  in the  case  of  registered  or
certified mail, by the date noted on the return receipt).

      Section 11.06  SEVERABILITY OF PROVISIONS.


      Any part,  provision,  representation  or warranty of this Agreement and
the  related  Term Sheet  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  Mortgage  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
that 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 nearly as possible  the
same  as the  economic  effect  of  this  Agreement  without  regard  to  such
invalidity.

      Section 11.07  EXHIBITS.

      The exhibits to this Agreement are hereby  incorporated  and made a part
hereof and are an integral part of this Agreement.

      Section 11.08  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;

      (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

      (viii)      headings of the Articles and Sections in this  Agreement are
for reference  purposes  only and shall not be deemed to have any  substantive
effect.

      Section 11.09  REPRODUCTION OF DOCUMENTS.

      This Agreement and all documents  relating thereto,  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 11.10  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.  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 the
Agreement,  provided that each party may provide  confidential  information to
its employees,  agents and affiliates who have a need to know such information
in  order  to  effectuate  the   transaction,   provided   further  that  such
information  is  identified  as  confidential   non-public   information.   In
addition,  confidential  information may be provided to a regulatory authority
with   supervisory   power  over  Purchaser,   provided  such  information  is
identified as confidential non-public information.

      Section 11.11  RECORDATION OF ASSIGNMENTS OF MORTGAGE.

      To the extent  permitted by applicable  law, each of the  Assignments 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 Mortgaged  Properties  are situated,  and in any other  appropriate
public recording  office or elsewhere,  such recordation to be effected by and
at the Company's  expense in the event  recordation is either  necessary under
applicable law or requested by the Purchaser at its sole option.

      Section 11.12  ASSIGNMENT BY PURCHASER.

      The Purchaser shall have the right,  without the consent of the Company,
to  assign,  in whole or in part,  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  Purchaser  hereunder,  by executing an  Assignment
and  Assumption  Agreement  substantially  in the form of Exhibit D hereto and
the assignee or designee shall accede to the rights and obligations  hereunder
of the  Purchaser  with  respect to such  Mortgage  Loans.  In no event  shall
Purchaser  sell a partial  interest in any  Mortgage  Loan without the written
consent of  Company,  which  consent  shall not be  unreasonably  denied.  All
references to the Purchaser in this  Agreement  shall be deemed to include its
assignee or designee.

      Section 11.13  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  Company  shall be  rendered as an  independent  contractor  and not as
agent for Purchaser.

      Section 11.14  EXECUTION: 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 8.04,  this
Agreement  shall inure to the  benefit of and be binding  upon the Company and
the Purchaser and their respective successors and assigns.

      Section 11.15  ENTIRE AGREEMENT.

      The  Company   acknowledges  that  no  representations,   agreements  or
promises  were made to the Company by the  Purchaser  or any of its  employees
other  than  those   representations,   agreements  or  promises  specifically
contained herein and in the Confirmation.  The Confirmation and this Agreement
and the  related  Term Sheet sets forth the entire  understanding  between the
parties hereto;  provided,  however,  only this Agreement and the related Term
Sheet shall be binding upon all  successors of both  parties.  In the event of
any inconsistency between the Confirmation and this Agreement,  this Agreement
and the related Term Sheet shall control.

      Section 11.16. NO SOLICITATION.

      From and after the Closing  Date,  the  Company  agrees that it will not
take any  action  or  permit  or cause  any  action  to be taken by any of its
agents or  affiliates,  to  personally,  by  telephone  or mail,  solicit  the
borrower or obligor under any Mortgage  Loan to refinance  the Mortgage  Loan,
in whole or in part,  without  the prior  written  consent  of the  Purchaser.
Notwithstanding   the  foregoing,   it  is  understood  and  agreed  that  (i)
promotions  undertaken  by the Company or any  affiliate of the Company  which
are directed to the general  public at large,  or segments  thereof,  provided
that no segment  shall  consist  primarily of the Mortgage  Loans,  including,
without  limitation,  mass  mailing  based on  commercially  acquired  mailing
lists, newspaper, radio and television advertisements,  and customer portfolio
and (ii)  responses to  unsolicited  requests or inquiries made by a Mortgagor
or an agent of a  Mortgagor,  shall not  constitute  solicitation  under  this
Section  11.16.  This  Section  11.16  shall  not be deemed  to  preclude  the
Company or any of its affiliates  from  soliciting any Mortgagor for any other
financial  products  or  services.  From  and  after  the  Closing  Date,  the
Purchaser  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  on the  Purchaser's  behalf,  to personally by telephone or mail,
solicit the  borrower or obligor  under any  Mortgage  Loan to  refinance  the
Mortgage Loan, in whole or in part,  without the prior written  consent of the
Company,.  In  addition,  the  Purchaser  or any of its  affiliates  shall not
solicit  any  Mortgagor  for  any  other   financial   products  or  services.
Notwithstanding   the  foregoing,   it  is  understood  and  agreed  that  (i)
promotions  undertaken by the Purchasr or any affiliate of the Purchaser which
are directed to the general  public at large,  or segments  thereof,  provided
that no segment  shall  consist  primarily of the Mortgage  Loans,  including,
without  limitation,  mass  mailing  based on  commercially  acquired  mailing
lists,  newspaper,  radio and television  advertisements and (ii) responses to
unsolicited  requests  or  inquiries  made by a  Mortgagor  or an  agent  of a
Mortgagor,  shall not  constitute  solicitation  under this Section  11.16 The
Company  shall use its best  efforts  to  prevent  the sale of the name of any
Mortgagor to any Person who is not affiliate of the Company.

      Section 11.17. CLOSING.

      The closing for the purchase  and sale of the Mortgage  Loans shall take
place  on  the  related  Closing  Date.  The  closing  shall  be  either:   by
telephone,  confirmed  by  letter  or  wire as the  parties  shall  agree,  or
conducted in person, at such place as the parties shall agree.

      The  closing  for the  Mortgage  Loans to be  purchased  on the  related
Closing Date shall be subject to each of the following conditions:

      (a)   at least one (1) Business Day prior to the related  Closing  Date,
the Company shall deliver to the  Purchaser a magnetic  diskette,  or transmit
by modem, a listing on a loan-level basis of the information  contained in the
related Mortgage Loan Schedule attached to the related Term Sheet;

      (b)   all of the  representations  and  warranties  of the Company under
this Agreement  shall be materially true and correct as of the related Closing
Date and no event  shall have  occurred  which,  with notice or the passage of
time, would constitute a material default under this Agreement;

      (c)   the Purchaser shall have received,  or the  Purchaser's  attorneys
shall have  received  in  escrow,  all  documents  required  pursuant  to this
Agreement,  the  related  Term Sheet,  an opinion of counsel and an  officer's
certificate,  all in such  forms  as are  agreed  upon and  acceptable  to the
Purchaser,  duly  executed  by all  signatories  other than the  Purchaser  as
required pursuant to the terms hereof;

      (d)   the Company  shall have  delivered  and released to the  Purchaser
(or its  designee)  on or  prior to the  related  Closing  Date all  documents
required  pursuant to the terms of this  Agreement and the related Term Sheet;
and

      (e)   all other  terms and  conditions  of this  Agreement,  the related
Term Sheet and the Confirmation shall have been materially complied with.

      Subject to the  foregoing  conditions,  the  Purchaser  shall pay to the
Company on the related Closing Date the Purchase Price,  plus accrued interest
pursuant to Section 2.02 of this  Agreement,  by wire transfer of  immediately
available funds to the account designated by the Company.

      Section 11.18. COOPERATION OF COMPANY WITH A RECONSTITUTION.

      The Company and the Purchaser  agree that with respect to some or all of
the  Mortgage  Loans,  on or after the related  Closing  Date,  on one or more
dates (each a  "Reconstitution  Date") at the  Purchaser's  sole  option,  the
Purchaser may effect a sale (each, a  "Reconstitution")  of some or all of the
Mortgage Loans then subject to this Agreement, without recourse, to:

      (a)   one or more third  party  purchasers  in one or more in whole loan
transfers (each, a "Whole Loan Transfer"); or

      (b)   one or more  trusts or other  entities to be formed as part of one
or more pass-through transfers (each, a "Pass-Through Transfer").

      The Company agrees to execute in connection  with any  agreements  among
the Purchaser,  the Company,  and any servicer in connection with a Whole Loan
Transfer, an Assignment,  Assumption and Recognition  Agreement  substantially
in the form of  Exhibit  D hereto,  or, at  Purchaser's  request,  a  seller's
warranties and servicing  agreement or a participation and servicing agreement
or  similar  agreement  in form and  substance  reasonably  acceptable  to the
parties,  and in  connection  with a  Pass-Through  Transfer,  a  pooling  and
servicing  agreement  in  form  and  substance  reasonably  acceptable  to the
parties,  (collectively the agreements referred to herein are designated,  the
"Reconstitution  Agreements").  It is understood that any such  Reconstitution
Agreements  will not contain any  greater  obligations  on the part of Company
than are contained in this Agreement.

      With respect to each Whole Loan Transfer and each Pass-Through  Transfer
entered into by the Purchaser,  the Company agrees (1) to cooperate fully with
the Purchaser and any  prospective  purchaser  with respect to all  reasonable
requests and due  diligence  procedures;  (2) to execute,  deliver and perform
all Reconstitution  Agreements  required by the Purchaser;  (3) to restate the
representations  and  warranties  set  forth  in  this  Agreement  as  of  the
settlement or closing date in connection  with such  Reconstitution  (each,  a
"Reconstitution  Date").  In that  connection,  the Company  shall  provide to
such  servicer or issuer,  as the case may be, and any other  participants  in
such  Reconstitution:   (i)  any  and  all  information  (including  servicing
portfolio information) and appropriate  verification of information (including
servicing  portfolio  information)  which may be  reasonably  available to the
Company,  whether through letters of its auditors and counsel or otherwise, as
the  Purchaser or any such other  participant  shall  request upon  reasonable
demand;  and (ii)  such  additional  representations,  warranties,  covenants,
opinions  of  counsel,  letters  from  auditors,  and  certificates  of public
officials  or  officers of the  Company as are  reasonably  agreed upon by the
Company and the Purchaser or any such other  participant.  In connection  with
each  Pass-Through  Transfer,  the Company  agrees to provide  reasonable  and
customary  indemnification  to the Purchaser and its affiliates for disclosure
contained in any offering  document relating to the Company or its affiliates,
the Mortgage Loans and the  underwriting  standards of the Mortgage Loans. The
Purchaser  shall be responsible for the costs relating to the delivery of such
information.  With respect to each Pass-Through  Transfer, the Purchaser shall
provide thirty (30) days notice of such transfer,  unless  otherwise agreed by
the  parties  in the  related  Confirmation.  With  respect to each Whole Loan
Transfer,  limits  on  frequency  of  Reconstitution  may be  provided  in the
related Confirmation or related Term Sheet for the related Mortgage Loans.

      All Mortgage Loans not sold or transferred  pursuant to a Reconstitution
shall remain  subject to, and serviced in  accordance  with the terms of, this
Agreement and the related Term Sheet,  and with respect thereto this Agreement
and the related Term Sheet shall remain in full force and effect.


<PAGE>




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

                                        EMC MORTGAGE CORPORATION
                                        Purchaser


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


                                        NATIONAL CITY MORTGAGE COMPANY
                                        Company

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




<PAGE>




                                  EXHIBIT A
                          CONTENTS OF MORTGAGE FILE

      With respect to each  Mortgage  Loan,  the Mortgage  File shall  include
each of the following  items,  which shall be available for  inspection by the
Purchaser,  and which shall be retained by the Company in the  Servicing  File
or delivered to the  Purchaser or its designee  pursuant to Sections  2.04 and
2.05 of the Purchase, Warranties and Servicing Agreement.

      1.    The original Mortgage Note endorsed "Pay to the order of
________________________, without recourse," and signed via original
signature in the name of the Company by an authorized officer, with all
intervening endorsements showing a complete chain of title from the
originator to the Company, together with any applicable riders.  In no event
may an endorsement be a facsimile endorsement.  If the Mortgage Loan was
acquired by the Company in a merger, the endorsement must be by "[Company],
successor by merger to the [name of predecessor]".  If the Mortgage Loan was
acquired or originated by the Company while doing business under another
name, the endorsement must be by "[Company] formerly known as [previous
name]".  Mortgage Notes may be in the form of a lost note affidavit subject
to Purchaser acceptability.

      2.    The original  Mortgage  (together with a standard  adjustable rate
mortgage  rider)  with  evidence  of  recording  thereon,  or a  copy  thereof
certified  by the  public  recording  office in which such  mortgage  has been
recorded  or,  if the  original  Mortgage  has  not  been  returned  from  the
applicable  public recording  office, a true certified copy,  certified by the
Company.

      3.    The original or certified copy,  certified by the Company,  of the
Primary  Mortgage  Insurance  Policy  or  Lender  Primary  Mortgage  Insurance
Policy, if required.

      4.    The original Assignment, from the Company to
___________________________, or in accordance with Purchaser's instructions,
which assignment shall, but for any blanks requested by Purchaser, be in form
and substance acceptable for recording.  If the Mortgage Loan was acquired or
originated by the Company while doing business under another name, the
Assignment must be by "[Company] formerly known as [previous name]". If the
Mortgage Loan was acquired by the Company in a merger, the endorsement must
be by "[Company], successor by merger to the [name of predecessor]".  None of
the Assignments are blanket assignments of mortgage.

      5.    The  original  policy of title  insurance,  including  riders  and
endorsements  thereto,  or if the  policy has not yet been  issued,  a written
commitment  or interim  binder or  preliminary  report of title  issued by the
title insurance or escrow company.

      6.    Originals  of all  recorded  intervening  Assignments,  or  copies
thereof,  certified by the public  recording  office in which such Assignments
have been recorded  showing a complete  chain of title from the  originator to
the Company,  with evidence of recording thereon,  or a copy thereof certified
by the public  recording office in which such Assignment has been recorded or,
if the original  Assignment has not been returned from the  applicable  public
recording office, a true certified copy, certified by the Company.

      7.    Originals,  or copies  thereof  certified by the public  recording
office  in which  such  documents  have  been  recorded,  of each  assumption,
extension,  modification,  written  assurance or substitution  agreements,  if
applicable,  or if the original of such  document has not been  returned  from
the applicable  public recording  office, a true certified copy,  certified by
the Company.

      8.    If the Mortgage  Note or Mortgage or any other  material  document
or  instrument  relating to the  Mortgage  Loan has been signed by a person on
behalf of the  Mortgagor,  the  original or copy of power of attorney or other
instrument that authorized and empowered such person to sign bearing  evidence
that such  instrument  has been  recorded,  if so required in the  appropriate
jurisdiction  where the  Mortgaged  Property  is  located,  or a copy  thereof
certified by the public  recording  office in which such  instrument  has been
recorded  or,  if the  original  instrument  has not  been  returned  from the
applicable  public recording  office, a true certified copy,  certified by the
Company.

      9.    reserved.

      10.   Mortgage  Loan  closing  statement  (Form  HUD-1)  and  any  other
truth-in-lending or real estate settlement procedure forms required by law.

      11.   Residential loan application.

      12.   Uniform  underwriter  and  transmittal  summary  (Fannie  Mae Form
1008) or reasonable equivalent.

      13.   Credit report on the mortgagor.

      14.   Business credit report, if applicable.

      15.   Residential appraisal report and attachments thereto.

      16.   The  original of any  guarantee  executed in  connection  with the
Mortgage Note.

      17.   Verification  of employment  and income except for Mortgage  Loans
originated  under a limited  documentation  program,  all in  accordance  with
Company's underwriting guidelines.

      18.   Verification  of acceptable  evidence of source and amount of down
payment, in accordance with Company's underwriting guidelines.

      19.   Photograph of the Mortgaged Property (may be part of appraisal).

      20.   Survey of the Mortgaged Property, if any.

      21.   Sales contract, if applicable.

      22.   If available,  termite report, structural engineer's report, water
portability and septic certification.

      23.   Any original  security  agreement,  chattel mortgage or equivalent
executed in connection with the Mortgage.

      24.   Name affidavit, if applicable.

      Notwithstanding  anything to the  contrary  herein,  Company may provide
one  certificate  for all of the Mortgage Loans  indicating that the documents
were delivered for recording.


<PAGE>



                                  EXHIBIT B

                      CUSTODIAL ACCOUNT LETTER AGREEMENT

                             ______________, 2001

To:     [_______________________]
        (the "Depository")


      As "Company"  under the Purchase,  Warranties  and Servicing  Agreement,
dated as of  October  1,  2001 (the  "Agreement"),  we  hereby  authorize  and
request you to  establish  an  account,  as a  Custodial  Account  pursuant to
Section 4.04 of the  Agreement,  to be  designated as " National City Mortgage
Company,  in  trust  for  the  [Purchaser],  Owner  of  Mortgage  Loans".  All
deposits  in the account  shall be subject to  withdrawal  therefrom  by order
signed by the Company.  This letter is submitted to you in  duplicate.  Please
execute and return one original to us.

                                        NATIONAL CITY MORTGAGE COMPANY

                                        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.  The full amount  deposited at any time in
the account  will be insured up to  applicable  limits by the Federal  Deposit
Insurance   Corporation  through  the  Bank  Insurance  Fund  or  the  Savings
Association  Insurance  Fund or will be invested in Permitted  Investments  as
defined in the Agreement.

                                        [---------------------------]

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


<PAGE>



                                  EXHIBIT C

                       ESCROW ACCOUNT LETTER AGREEMENT
                             _____________, 2001

To:     [_______________________]
        (the "Depository")


      As "Company"  under the Purchase  Warranties  and  Servicing  Agreement,
dated as of  October  1,  2001 (the  "Agreement"),  we  hereby  authorize  and
request you to establish an account,  as an Escrow Account pursuant to Section
4.06 of the Agreement,  to be designated as "National  City Mortgage  Company,
in  trust  for  the   [Purchaser],   Owner  of  Mortgage  Loans,  and  various
Mortgagors."  All  deposits  in the  account  shall be subject  to  withdrawal
therefrom by order  signed by the Company.  This letter is submitted to you in
duplicate.  Please execute and return one original to us.

                                        NATIONAL CITY MORTGAGE COMPANY


                                        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.  The full amount  deposited at any time in
the account  will be insured up to  applicable  limits by the Federal  Deposit
Insurance   Corporation  through  the  Bank  Insurance  Fund  or  the  Savings
Association  Insurance  Fund or will be invested in Permitted  Investments  as
defined in the Agreement.

                                        [---------------------------]


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


<PAGE>




                                  EXHIBIT D

           FORM OF ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT

      This is a Purchase,  Assignment,  Assumption and  Recognition  Agreement
(this "PAAR  Agreement")  made as of  __________,  200__,  among EMC  Mortgage
Corporation  (the  "Assignor"),   ___________________  (the  "Assignee"),  and
_______________________ (the "Company").

      In  consideration  of the mutual promises  contained  herein the parties
hereto  agree  that the  residential  mortgage  loans (the  "Assigned  Loans")
listed on  Attachment 1 annexed  hereto (the  "Assigned  Loan  Schedule")  now
serviced by Company for Assignor and its  successors  and assigns  pursuant to
the  Purchase,  Warranties  and  Servicing  Agreement,  dated as of _________,
200__,  between  Assignor  and Company  (the  "Purchase  Agreement")  shall be
subject to the terms of this PAAR  Agreement.  Capitalized  terms used  herein
but not  defined  shall have the  meanings  ascribed  to them in the  Purchase
Agreement.

                     PURCHASE, ASSIGNMENT AND ASSUMPTION

      1.    Assignor  hereby grants,  transfers and assigns to Assignee all of
the right,  title and interest of Assignor in the Assigned  Loans and, as they
relate to the Assigned Loans, all of its right,  title and interest in, to and
under the Purchase Agreement.

      2.    Simultaneously  with the execution hereof,  (i) Assignee shall pay
to  Assignor  the  "Funding  Amount"  as set  forth  in  that  certain  letter
agreement,  dated as of _________  ____,  between  Assignee and Assignor  (the
"Confirmation")  and (ii)  Assignor,  at its expense,  shall have caused to be
delivered  to Assignee or its designee  the  Mortgage  File for each  Assigned
Loan  in  Assignor's  or  its  custodian's  possession,  as set  forth  in the
Purchase Agreement,  along with, for each Assigned Loan, an endorsement of the
Mortgage  Note from the  applicable  Company,  in blank,  and an assignment of
mortgage in recordable form from the applicable  Company,  in blank.  Assignee
shall pay the Funding Amount by wire transfer of immediately  available  funds
to the  account  specified  by  Assignor.  Assignee  shall be  entitled to all
scheduled payments due on the Assigned Loans after ___________,  200__ and all
unscheduled  payments or other  proceeds or other  recoveries  on the Assigned
Loans received on and after _____________, 200__.

                  REPRESENTATIONS, WARRANTIES AND COVENANTS

      3.    Assignor  warrants  and  represents  to Assignee and Company as of
the date hereof:

      (a)   Attached  hereto as  Attachment 2 is a true and  accurate  copy of
the Purchase Agreement,  which agreement is 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  is 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 Purchase  Agreement as 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 Purchase Agreement
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 Company with respect to the Assigned Loans or the Purchase Agreement;

      (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  PAAR  Agreement,  and to
consummate  the  transactions  set  forth  herein.  The  consummation  of  the
transactions  contemplated by this PAAR 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  PAAR  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 PAAR  Agreement  has been duly  executed and
delivered by Assignor and, upon the due authorization,  execution and delivery
by  Assignee  and  Company,  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 PAAR Agreement,  or the  consummation by it of
the transactions contemplated hereby; and

      (h)   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.


      4.    Assignee warrants and represents to, and covenants with,  Assignor
and Company as of the date hereof:


      (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 acquire, own and purchase the Assigned Loans;

      (b)   Assignee  has full  corporate  power  and  authority  to  execute,
deliver  and  perform  its  obligations  under  this  PAAR  Agreement,  and to
consummate  the  transactions  set  forth  herein.  The  consummation  of  the
transactions  contemplated by this PAAR 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 which Assignee or
its property is subject.  The execution,  delivery and performance by Assignee
of  this  PAAR  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 PAAR  Agreement  has been duly  executed and
delivered by Assignee and, upon the due authorization,  execution and delivery
by  Assignor  and  Company,  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 PAAR Agreement,  or the  consummation by it of
the transactions contemplated hereby; and

      (d)   Assignee  agrees to be bound as  "Purchaser"  by all of the terms,
covenants  and  conditions  of the  Purchase  Agreement  with  respect  to the
Assigned Loans,  and from and after the date hereof,  Assignee assumes for the
benefit of each of  Assignor  and  Company all of  Assignor's  obligations  as
"Purchaser" thereunder but solely with respect to such Assigned Loans.

      5.    Company  warrants and represents  to, and covenant with,  Assignor
and Assignee as of the date hereof:

      (a)   Attached  hereto as  Attachment 2 is a true and  accurate  copy of
the Purchase Agreement,  which agreement is 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  incorporation,  and  has  all
requisite  power and authority to service the Assigned  Loans and otherwise to
perform its obligations under the Purchase Agreement;

      (c) Company has full corporate  power and authority to execute,  deliver
and perform its obligations  under this PAAR Agreement,  and to consummate the
transactions   set  forth  herein.   The   consummation  of  the  transactions
contemplated  by this PAAR  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 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 PAAR
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 PAAR 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 Assignee in  connection  with the  execution,  delivery or
performance by Company of this PAAR  Agreement,  or the  consummation by it of
the transactions contemplated hereby; and

      (e) No event has occurred from the Closing Date to the date hereof which
would render the  representations  and  warranties as to the related  Assigned
Loans made by the Company in Sections 3.01 and 3.02 of the Purchase  Agreement
to be untrue in any material respect.

                           RECOGNITION OF ASSIGNEE

      6.    From and after the date hereof,  Company shall recognize  Assignee
as  owner of the  Assigned  Loans  and  will  service  the  Assigned  Loans in
accordance  with the  Purchase  Agreement.  It is the  intention  of Assignor,
Company and Assignee  that this PAAR  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 Purchase  Agreement
which  amendment,  modification,  waiver or other  alteration would in any way
affect the Assigned Loans without the prior written consent of Assignee.


                                MISCELLANEOUS

      7.    All demands,  notices and  communications  related to the Assigned
Loans, the Purchase  Agreement and this PAAR 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,

              --------------------
              --------------------
              --------------------
              --------------------
              --------------------
              With a copy to ______________________________________.

        (b)   In the case of Assignor,

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

        (c)   In the case of Assignee,

              EMC Mortgage Corporation
              Mac Arthur Ridge II
              909 Hidden Ridge Drive, Suite 200
              Irving, Texas 75038
              Attention:  Mr. Edward Raice
              Telecopier No.:  (972) 444-2810

              with a copy  to:

              -------------------
              245 Park Avenue
              New York, New York 10167
              Attention: ___________
              Telecopier No.:  (212) 272-____

      8.    Each party will pay any  commissions  it has incurred and the fees
of its attorneys in connection with the negotiations  for,  documenting of and
closing of the transactions contemplated by this PAAR Agreement.

      9.    This PAAR  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.

      10.   No term or  provision  of this  PAAR  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.

      11.   This PAAR  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.

      12.   This PAAR  Agreement  shall survive the conveyance of the Assigned
Loans, the assignment of the Purchase  Agreement to the extent of the Assigned
Loans by Assignor to Assignee and the termination of the Purchase Agreement.

      13.   This PAAR 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.

      14.   In the event that any provision of this PAAR  Agreement  conflicts
with any  provision  of the  Purchase  Agreement  with respect to the Assigned
Loans,  the terms of this PAAR Agreement shall control.  In the event that any
provision  of  this  PAAR  Agreement  conflicts  with  any  provision  of  the
Confirmation  with  respect  to the  Assigned  Loans,  the  terms of this PAAR
Agreement shall control.


                     [MODIFICATION OF PURCHASE AGREEMENT

15.   The Company and Assignor hereby amend the Purchase Agreement as follows:

      (a)   The  following  definitions  are  added  to  Section  1.01  of the
      Purchase Agreement:

      SECURITIES ADMINISTRATOR:
                                  ------------------------

      SUPPLEMENTAL PMI INSURER:
                                  ------------------------

      SUPPLEMENTAL PMI POLICY:The primary  guarantee  insurance  policy of the
      Supplemental  PMI Insurer attached hereto as Exhibit J, or any successor
      Supplemental PMI Policy given to the Servicer by the Assignee.

      TRUSTEE:
                  ------------------------

      (b)   The following definition is amended and restated:

      INSURANCE PROCEEDS:     Proceeds  of  any  Primary  Mortgage   Insurance
      Policy or Lender Primary  Mortgage  Insurance  Policy,  the Supplemental
      PMI Policy,  any title policy,  any hazard insurance policy or any other
      insurance  policy  covering a Mortgage Loan or other  related  Mortgaged
      Property,  including  any  amounts  required  to  be  deposited  in  the
      Custodial  Account pursuant to Section 4.04, to the extent such proceeds
      are  not to be  applied  to the  restoration  of the  related  Mortgaged
      Property  or released  to the  Mortgagor  in  accordance  with  Accepted
      Servicing Practices.

      (c)   The following are added as the fourth,  fifth and sixth paragraphs
      of Section 4.08:

      "In connection  with its  activities as servicer,  the Company agrees to
prepare  and  present,  on behalf of itself and the  Purchaser,  claims to the
Supplemental  PMI Insurer with respect to the  Supplemental PMI Policy and, in
this  regard,  to take such action as shall be  necessary  to permit  recovery
under any  Supplemental  PMI Policy  respecting  a  defaulted  Mortgage  Loan.
Pursuant to Section  4.04,  any  amounts  collected  by the Company  under any
Supplemental PMI Policy shall be deposited in the Custodial  Account,  subject
to withdrawal pursuant to Section 4.05.

      In  accordance  with the  Supplemental  PMI Policy,  the  Company  shall
provide to the  Supplemental  PMI Insurer any required  information  regarding
the Mortgage Loans.

      The  Company  shall  provide  to  the  [Securities  Administrator]  on a
monthly basis via computer  tape, or other  mutually  acceptable  format,  the
unpaid principal balance,  insurer certificate number, lender loan number, and
premium due the  Supplemental  PMI Insurer for each  Mortgage  Loan covered by
the  Supplemental  PMI Policy.  In addition,  the Company agrees to forward to
the  Purchaser  and the  [Securities  Administrator]  any  statements or other
reports  given by the  Supplemental  PMI Insurer to the Servicer in connection
with a claim under the Supplemental PMI Policy."

      (d)   Clause (vi) of Section 6.1 is amended to read as follows:

      "Company  ceases  to be  approved  by  either  Fannie  Mae or FHLMC as a
mortgage  loan seller or servicer  for more than thirty  days,  or the Company
fails to meet the servicer  eligibility  requirements of the  Supplemental PMI
Insurer; or"]



<PAGE>



      IN  WITNESS  WHEREOF,   the  parties  hereto  have  executed  this  PAAR
Agreement as of the day and year first above written.

                                        EMC MORTGAGE CORPORATION
                                        Assignor


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


                                        Assignee


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


                                        Company


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





<PAGE>



                                 ATTACHMENT 1

                            ASSIGNED LOAN SCHEDULE



<PAGE>


                                 ATTACHMENT 2

                 PURCHASE, WARRANTIES AND SERVICING AGREEMENT



<PAGE>



                                  EXHIBIT E

                            FORM OF TRIAL BALANCE



<PAGE>



                                  EXHIBIT G

                 REQUEST FOR RELEASE OF DOCUMENTS AND RECEIPT

RE:             Mortgage Loan #________________________________________________
BORROWER:                      ________________________________________________
PROPERTY:                      ________________________________________________


Pursuant to a Purchase,  Warranties and Servicing  Agreement (the "Agreement")
between the Company and the Purchaser,  the undersigned  hereby certifies that
he or she is an officer of the  Company  requesting  release of the  documents
for the reason specified below.  The undersigned further certifies that:

(Check one of the items below)

_____ On  _________________,  the above  captioned  mortgage  loan was paid in
full or that the Company has been  notified  that  payment in full has been or
will be escrowed.  The Company hereby  certifies that all amounts with respect
to this loan  which are  required  under  the  Agreement  have been or will be
deposited in the Custodial Account as required.

_____ The above captioned loan is being  repurchased  pursuant to the terms of
the  Agreement.  The Company hereby  certifies  that the repurchase  price has
been credited to the Custodial Account as required under the Agreement.

_____  The  above  captioned  loan is  being  placed  in  foreclosure  and the
original  documents are required to proceed with the foreclosure  action.  The
Company hereby  certifies that the documents will be returned to the Purchaser
in the event of reinstatement.

_____ Other (explain)

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

All  capitalized  terms used  herein and not defined  shall have the  meanings
assigned to them in the Agreement.

      Based on this  certification  and the  indemnities  provided  for in the
Agreement,  please release to the Company all original  mortgage  documents in
your possession relating to this loan.


RE:             Mortgage Loan #________________________________________________
BORROWER:                      ________________________________________________
PROPERTY:                      ________________________________________________


Dated:
      ----------------

By:
    ---------------------------------
          Signature

    ---------------------------------
          Title


Send documents to:
                        ---------------------------------------------
----------------------------------------------------------
----------------------------------------------------------

Acknowledgement:

      Purchaser hereby  acknowledges  that all original  documents  previously
released  on  the  above  captioned  mortgage  loan  have  been  returned  and
received by the Purchaser.


Dated:
      ----------------

By:
    ---------------------------------
          Signature

    ---------------------------------
          Title



<PAGE>


                                  EXHIBIT H

                      COMPANY'S UNDERWRITING GUIDELINES



<PAGE>


                                  EXHIBIT I


                                  TERM SHEET

      This  TERM  SHEET  (the  "Term  Sheet")  dated  _____________,   between
National  City  Mortgage  Company,  a  ________  corporation,  located at 3232
Newmark  Drive,  Miamisburg,  Ohio  45342  (the  "Company")  and EMC  Mortgage
Corporation,   a  Delaware   corporation,   located  at  ______________   (the
"Purchaser")  is made  pursuant to the terms and  conditions  of that  certain
Purchase,  Warranties and Servicing  Agreement (the  "Agreement")  dated as of
October 1, 2001,  between the Company and the  Purchaser,  the  provisions  of
which are  incorporated  herein as if set forth in full herein,  as such terms
and  conditions  may  be  modified  or  supplemented   hereby.  All  initially
capitalized  terms  used  herein  unless  otherwise  defined  shall  have  the
meanings ascribed thereto in the Agreement.

      The Purchaser  hereby  purchases from the Company and the Company hereby
sells to the Purchaser,  all of the Company's right, title and interest in and
to the Mortgage Loans  described on the Mortgage Loan Schedule  annexed hereto
as SCHEDULE I,  pursuant to and in  accordance  with the terms and  conditions
set forth in the Agreement,  as same may be supplemented  or modified  hereby.
Hereinafter,  the Company shall service the Mortgage  Loans for the benefit of
the Purchaser and all  subsequent  transferees  of the Mortgage Loans pursuant
to  and  in  accordance  with  the  terms  and  conditions  set  forth  in the
Agreement.

1.    DEFINITIONS

      For  purposes  of the  Mortgage  Loans to be sold  pursuant to this Term
Sheet, the following terms shall have the following meanings:

AGGREGATE PRINCIPAL BALANCE
(AS OF THE CUT-OFF DATE):

CLOSING DATE:

CUSTODIAN:

CUT-OFF DATE:

INITIAL WEIGHTED AVERAGE
MORTGAGE LOAN REMITTANCE RATE:

MORTGAGE LOAN:

PURCHASE PRICE PERCENTAGE:

SERVICING FEE RATE:

ADDITIONAL CLOSING CONDITIONS:

In addition to the conditions  specified in the  Agreement,  the obligation of
each of the Company and the  Purchaser  is subject to the  fulfillment,  on or
prior  to  the   applicable   Closing  Date,   of  the  following   additional
conditions:   [None].

ADDITIONAL LOAN DOCUMENTS:

In addition to the contents of the Mortgage File  specified in the  Agreement,
the  following  documents  shall be  delivered  with  respect to the  Mortgage
Loans:   [None]

[ADDITIONAL] [MODIFICATION] OF REPRESENTATIONS AND WARRANTIES:

      [In  addition to the  representations  and  warranties  set forth in the
Agreement,  as of the date hereof, the Company makes the following  additional
representations  and warranties  with respect to the Mortgage  Loans:  [None].
[Notwithstanding  anything to the  contrary set forth in the  Agreement,  with
respect  to  each  Mortgage  Loan  to  be  sold  on  the  Closing  Date,   the
representation  and  warranty  set forth in  Section  ______ of the  Agreement
shall be modified to read as follows:]

      Except as modified herein,  Section ______ of the Agreement shall remain
in full force and effect as of the date hereof.



<PAGE>



      IN WITNESS  WHEREOF,  the parties  hereto have caused  their names to be
signed  hereto by their  respective  duly  authorized  officers as of the date
first above written.


                                        NATIONAL CITY MORTGAGE COMPANY


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

                                        EMC MORTGAGE CORPORATION


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




<PAGE>



                                  SCHEDULE I

                            MORTGAGE LOAN SCHEDULE


<PAGE>



                               AMENDMENT REG AB
             TO THE PURCHASE, WARRANTIES AND SERVICING AGREEMENT

            This is Amendment  Reg AB (the  "AMENDMENT  REG AB"),  dated as of
March 1, 2006 (the "AMENDMENT DATE"), by and between EMC Mortgage  Corporation
(the  "PURCHASER"),  and National City Mortgage,  Co. (the  "COMPANY") to that
certain  Seller's  Purchase,  Warranties and Servicing  Agreement  dated as of
October 1, 2001 between the Company and the Purchaser (the "AGREEMENT").

                             W I T N E S S E T H

            WHEREAS,  the Company and the  Purchaser  have agreed,  subject to
the  terms and  conditions  of this  Amendment  Reg AB that the  Agreement  be
amended  to  reflect  certain  agreed  upon  revisions  to  the  terms  of the
Agreement.

            Accordingly,  the  Company  and the  Purchaser  hereby  agree,  in
consideration of the mutual premises and mutual  obligations set forth herein,
that the Agreement is hereby amended as follows:


<PAGE>


                                DEFINED TERMS

[Capitalized  terms not defined are  presumed to be defined in the  applicable
Agreement.]

      COMMISSION:  The United States Securities and Exchange Commission.

      COMPANY INFORMATION:  As defined in Section 7(a).

      DEPOSITOR:  The  depositor,  as such term is defined in  Regulation  AB,
with respect to any Securitization Transaction.

      EXCHANGE ACT.  The Securities Exchange Act of 1934, as amended.

      MASTER SERVICER:  With respect to any  Securitization  Transaction,  the
"master servicer," if any, identified in the related transaction documents.

      QUALIFIED  CORRESPONDENT:  Any Person from which the  Company  purchased
Mortgage  Loans,  provided that the following  conditions are  satisfied:  (i)
such  Mortgage  Loans were  originated  pursuant to an  agreement  between the
Company and such Person that  contemplated  that such Person would  underwrite
mortgage loans from time to time, for sale to the Company,  in accordance with
underwriting  guidelines  designated by the Company ("Designated  Guidelines")
or guidelines that do not vary  materially  from such  Designated  Guidelines;
(ii) such Mortgage Loans were in fact  underwritten as described in clause (i)
above and were  acquired  by the  Company  within 180 days after  origination;
(iii) either (x) the  Designated  Guidelines  were,  at the time such Mortgage
Loans were  originated,  used by the Company in  origination of mortgage loans
of the same type as the Mortgage  Loans for the  Company's  own account or (y)
the  Designated  Guidelines  were,  at  the  time  such  Mortgage  Loans  were
underwritten,  designated  by the  Company  on a  consistent  basis for use by
lenders in  originating  mortgage  loans to be purchased  by the Company;  and
(iv) the Company  employed,  at the time such Mortgage  Loans were acquired by
the  Company,  pre-purchase  or  post-purchase  quality  assurance  procedures
(which may involve,  among other things,  review of a sample of mortgage loans
purchased  during a  particular  time period or through  particular  channels)
designed  to ensure  that  Persons  from  which it  purchased  mortgage  loans
properly applied the underwriting  criteria designated by the Company. For the
avoidance of doubt, a "Qualified  Correspondent"  includes a "table broker" or
mortgage lender that originates  loans  underwritten and funded by the Company
or an Affiliate of the Company.

      RECONSTITUTION:  Any Securitization Transaction or Whole Loan Transfer.

      RECONSTITUTION   AGREEMENT:   Any  servicing  agreement  relating  to  a
Reconstitution.

      REGULATION AB: Subpart  229.1100 - Asset Backed  Securities  (Regulation
AB), 17 C.F.R.  ss.ss.229.1100-229.1123,  as such may be amended  from time to
time,  and  subject  to such  clarification  and  interpretation  as have been
provided by the Commission in the adopting release  (Asset-Backed  Securities,
Securities Act Release No. 33-8518,  70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005))
or by the staff of the Commission,  or as may be provided by the Commission or
its staff from time to time.

      SECURITIES ACT:  The Securities Act of 1933, as amended.

      SECURITIZATION  TRANSACTION.  Any  transaction  involving  either  (1) a
sale or  other  transfer  of some or all of the  Mortgage  Loans  directly  or
indirectly  to an issuing  entity in  connection  with an issuance of publicly
offered or privately placed,  rated or unrated  mortgage-backed  securities or
(2) an issuance  of publicly  offered or  privately  placed,  rated or unrated
securities,  the  payments on which are  determined  primarily by reference to
one or more portfolios of residential  mortgage loans consisting,  in whole or
in part, of some or all of the Mortgage Loans.

      SERVICER:  As defined in Section 3(c).

      SERVICING CRITERIA:  The "servicing  criteria" set forth in Item 1122(d)
of Regulation AB, as such may be amended from time to time.

      STATIC POOL  INFORMATION:  Static pool  information as described in Item
1105(a)(1)-(3) and 1105(c) of Regulation AB.

      SUBCONTRACTOR:  Any vendor,  subcontractor  or other  Person that is not
responsible for the overall  servicing (as "servicing" is commonly  understood
by participants in the  mortgage-backed  securities  market) of Mortgage Loans
but  performs  one or more  discrete  material  functions  identified  in Item
1122(d) of  Regulation  AB with respect to Mortgage  Loans under the direction
or authority of the Company or a Subservicer.

      SUBSERVICER:  Any Person that services  Mortgage  Loans on behalf of the
Company or any Subservicer  and is responsible  for the  performance  (whether
directly or through  Subservicers or Subcontractors) of a substantial  portion
of the material  servicing  functions  required to be performed by the Company
under this  Agreement or any  Reconstitution  Agreement that are identified in
Item 1122(d) of Regulation AB; provided,  however, that the term "Subservicer"
shall not include any master servicer,  or any special servicer other than the
Company  engaged at the  request of a  Depositor,  Purchaser  or investor in a
Securitization  Transaction,  nor any "back-up servicer" or trustee performing
servicing functions on behalf of a Securitization Transaction.

      THIRD-PARTY   ORIGINATOR:   Each   Person,   other   than  a   Qualified
Correspondent,  that  originated  Mortgage  Loans  acquired by the Company and
shall not include a mortgage broker that does not fund loans.

      WHOLE  LOAN  TRANSFER:  Any  sale  or  transfer  of  some  or all of the
Mortgage Loans, other than a Securitization Transaction.


<PAGE>


                                  ARTICLE 1
                        COMPLIANCE WITH REGULATION AB

      Section 1  INTENT OF THE PARTIES.

      The Purchaser and the Company  acknowledge and agree that the purpose of
Article 1 of this  Agreement is to facilitate  compliance by the Purchaser and
any  Depositor  with the  provisions  of  Regulation  AB and related rules and
regulations  of the  Commission.  Although  Regulation AB is applicable by its
terms only to offerings of asset-backed  securities that are registered  under
the  Securities  Act,  the Company  acknowledges  that  investors in privately
offered  securities  may require that the Purchaser or any  Depositor  provide
comparable  disclosure  in  unregistered   offerings  and  will  provide  such
comparable disclosure in unregistered  offerings to the extent such disclosure
becomes  consistent  with industry  practice.  References in this Agreement to
compliance  with Regulation AB include  provision of comparable  disclosure in
private  offerings.  Neither the Purchaser nor any  Depositor  shall  exercise
its right to request (if any request is required)  delivery of  information or
other  performance  under these  provisions  other than in good faith,  or for
purposes other than  compliance with the provisions of the Securities Act, the
Exchange Act and the rules and  regulations of the  Commission  thereunder (or
the provision in a private offering of disclosure  comparable to that required
under the Securities Act). The Company  acknowledges that  interpretations  of
the  requirements  of  Regulation  AB may  change  over time,  whether  due to
interpretive  guidance  provided  by the  Commission  or its staff,  consensus
among participants in the asset-backed  securities markets, advice of counsel,
or  otherwise,  and  agrees to comply  with  reasonable  requests  made by the
Purchaser,  any Master Servicer or any Depositor in good faith for delivery of
information  under these  provisions on the basis of evolving  interpretations
of  Regulation  AB. In connection  with any  Securitization  Transaction,  the
Company  shall  cooperate as set forth herein with the Purchaser to deliver to
the  Purchaser   (including  any  of  its  assignees  or  designees)  and  any
Depositor, any and all statements,  reports,  certifications,  records and any
other information  necessary in the good faith  determination of the Purchaser
or any Depositor to permit the Purchaser or such  Depositor to comply with the
provisions of Regulation AB,  together with such  disclosures  relating to the
Company, any Subservicer,  any Third-Party  Originator and the Mortgage Loans,
or the servicing of the Mortgage Loans,  reasonably  believed by the Purchaser
or any Depositor to be necessary in order to effect such compliance.

      Section 2  Additional Representations and Warranties of the Company.

      (a)   The Company  shall be deemed to represent to the  Purchaser and to
any  Depositor,  as of the date on which  information is first provided to the
Purchaser  or any  Depositor  under  Section 3 that,  except as  disclosed  in
writing  to the  Purchaser  or such  Depositor  prior to such date and  unless
otherwise  disclosed in such  information  provided  under  Section 3: (i) the
Company  is not aware and has not  received  notice  that any  default,  early
amortization  or other  performance  triggering  event has  occurred as to any
other  securitization  due to any act or failure to act of the  Company;  (ii)
the Company has not been  terminated  as  servicer in a  residential  mortgage
loan securitization,  either due to a servicing default or to application of a
servicing  performance test or trigger;  (iii) no material  noncompliance with
the applicable  servicing  criteria with respect to other  securitizations  of
residential  mortgage  loans  involving  the  Company  as  servicer  has  been
disclosed  or  reported  by the  Company;  (iv)  no  material  changes  to the
Company's  policies or procedures  with respect to the  servicing  function it
will  perform  under  this  Agreement  and any  Reconstitution  Agreement  for
mortgage  loans of a type similar to the Mortgage  Loans have occurred  during
the three-year period immediately  preceding the scheduled closing date of the
related Securitization Transaction;  (v) there are no aspects of the Company's
financial  condition  that  could  have  a  material  adverse  effect  on  the
performance by the Company of its servicing  obligations  under this Agreement
or  any  Reconstitution   Agreement;  (v)  there  are  no  material  legal  or
governmental  proceedings  pending (or known to be  contemplated by Government
authorities)  against the Company,  or to the  knowledge  of the Company,  any
Subservicer   or  any   Third-Party   Originator;   and  (vi)   there  are  no
affiliations,  relationships  or  transactions  relating to the  Company,  any
Subservicer or any Third-Party  Originator with respect to any  Securitization
Transaction  and any party thereto  identified  by the related  Depositor of a
type described in Item 1119 of Regulation AB.

      (b)   If so  requested  by the  Purchaser  or any  Depositor on any date
following the date on which  information is first provided to the Purchaser or
any Depositor  under Section 3, the Company  shall,  within five business days
following   such   request,   confirm  in   writing   the   accuracy   of  the
representations  and warranties set forth in paragraph (a) of this Section or,
if any such  representation  and  warranty  is not  accurate as of the date of
such request,  provide reasonably  adequate disclosure of the pertinent facts,
in writing, to the requesting party.

      Section 3  INFORMATION TO BE PROVIDED BY THE COMPANY.

      In connection with any Securitization  Transaction the Company shall (i)
within  five  business  days  following   request  by  the  Purchaser  or  any
Depositor,  provide to the Purchaser and such  Depositor  (or, as  applicable,
cause  each  Third-Party  Originator  and each  Subservicer  to  provide),  in
writing,  or in a mutually  agreed  upon  electronic  format,  and in form and
substance  reasonably  satisfactory to the Purchaser and such  Depositor,  the
information  and materials  specified in  paragraphs  (a), (b), (c) and (f) of
this  Section,  and (ii) as promptly  as  practicable  following  notice to or
discovery by the  Company,  provide to the  Purchaser  and any  Depositor  (in
writing,  or in a mutually  agreed  upon  electronic  format,  and in form and
substance  reasonably  satisfactory  to the Purchaser and such  Depositor) the
information specified in paragraph (d) of this Section.

      (a)   If so requested by the  Purchaser  or any  Depositor,  the Company
shall  provide  (or cause  each  Third-Party  Originator  or  Subservicer,  as
applicable,  to provide)  such  information,  as  mutually  agreed upon by the
Purchaser or any Depositor and the Company (or such Third-Party  Originator or
Subservicer,  as applicable),  regarding (i) the Company, as originator of the
Mortgage  Loans  (including as an acquirer of Mortgage  Loans from a Qualified
Correspondent),  or (ii) each Third-Party Originator, and (iii) as applicable,
each  Subservicer,  as is requested for the purpose of  compliance  with Items
1103(a)(1),  1105,  1110,  1117 and 1119 of  Regulation  AB. Such  information
shall include, at a minimum:

            (A)   the originator's form of organization;

            (B)   a description of the  originator's  origination  program and
      how long the  originator  has been  engaged in  originating  residential
      mortgage  loans,  which  description  shall  include a discussion of the
      originator's  experience in originating mortgage loans of a similar type
      as the Mortgage  Loans;  information  regarding the size and composition
      of the originator's  origination portfolio;  and information that may be
      materialin  the good faith  judgment of the Purchaser or any  Depositor,
      to an analysis of the performance of the Mortgage  Loans,  including the
      originators'  credit-granting  or  underwriting  criteria  for  mortgage
      loans  of  similar   type(s)  as  the  Mortgage  Loans  and  such  other
      information  as the Purchaser or any Depositor  may  reasonably  request
      for the purpose of compliance with Item 1110(b)(2) of Regulation AB;

            (C)   a  description  of any material  legal  proceedings  pending
      (or known to be contemplated by  governmental  authorities)  against the
      Company,   or  to  the  knowledge  of  the  Company,   each  Third-Party
      Originator and each Subservicer; and

            (D)   a description  of any  affiliation or  relationship  between
      the Company,  each Third-Party  Originator,  each Subservicer and any of
      the following parties to a Securitization  Transaction,  as such parties
      are  identified  and  noticed  to the  Company by the  Purchaser  or any
      Depositor in writing in advance of such Securitization Transaction:

                  (1)   the sponsor;
                  (2)   the depositor;
                  (3)   the issuing entity;
                  (4)   any servicer;
                  (5)   any trustee;
                  (6)   any originator;
                  (7)   any significant obligor;
                  (8)   any enhancement or support provider; and
                  (9)   any other material transaction party.

      (b)   If so requested by the  Purchaser  or any  Depositor,  the Company
shall  provide  (or,  as  applicable,  cause each  Third-Party  Originator  to
provide)  Static Pool  Information  with respect to the  mortgage  loans (of a
similar type as the Mortgage Loans, as reasonably  identified by the Purchaser
as  provided  below)  originated  by (i) the  Company,  if the  Company  is an
originator of Mortgage Loans  (including as an acquirer of Mortgage Loans from
a Qualified  Correspondent),  and/or (ii) each  Third-Party  Originator.  Such
Static Pool  Information  shall be  prepared  by the  Company (or  Third-Party
Originator) on the basis of its reasonable,  good faith  interpretation of the
requirements  of Item  1105(a)(1)-(3)  of  Regulation  AB. To the extent  that
there is  reasonably  available  to the  Company (or  Third-Party  Originator)
Static Pool  Information with respect to more than one mortgage loan type, the
Purchaser or any  Depositor  shall be entitled to specify  whether some or all
of  such  information  shall  be  provided  pursuant  to this  paragraph.  The
content  of  such  Static  Pool  Information  may be in the  form  customarily
provided by the Company,  and need not be customized  for the Purchaser or any
Depositor.  Such Static Pool Information for each vintage  origination year or
prior  securitized  pool, as  applicable,  shall be presented in increments no
less  frequently  than  quarterly over the life of the mortgage loans included
in the vintage  origination  year or prior  securitized  pool. The most recent
periodic  increment  must be as of a date no later  than 135 days prior to the
date of the  prospectus  or other  offering  document in which the Static Pool
Information is to be included or  incorporated  by reference.  The Static Pool
Information  shall  be  provided  in an  electronic  format  that  provides  a
permanent  record of the  information  provided,  such as a portable  document
format (.pdf) file, or other such  electronic  format as mutually  agreed upon
by the Purchaser or the Depositor and the Company, as applicable.

Promptly  following  notice or  discovery  of a material  error in Static Pool
Information   provided  pursuant  to  the  immediately   preceding   paragraph
(including an omission to include therein information  required to be provided
pursuant to such paragraph),  the Company shall provide  corrected Static Pool
Information  to the Purchaser or any  Depositor,  as  applicable,  in the same
format in which Static Pool Information was previously  provided to such party
by the Company.

      If so requested by the  Purchaser or any  Depositor,  the Company  shall
provide (or, as applicable,  cause each Third-Party Originator to provide), at
the expense of the  Purchaser or Depositor,  as  applicable  (to the extent of
any additional  incremental  expense associated with delivery pursuant to this
Agreement),   such   agreed-upon   procedures   letters  of  certified  public
accountants   reasonably   acceptable  to  the  Purchaser  or  Depositor,   as
applicable,   pertaining  to  Static  Pool   Information   relating  to  prior
securitized pools for  securitizations  closed on or after January 1, 2006 or,
in the case of Static  Pool  Information  with  respect  to the  Company's  or
Third-Party  Originator's   originations  or  purchases,  to  calendar  months
commencing  January  1,  2006,  as  the  Purchaser  or  such  Depositor  shall
reasonably  request.  Such statements and letters shall be addressed to and be
for the  benefit of such  parties as the  Purchaser  or such  Depositor  shall
designate,  which may include, by way of example,  any Sponsor,  any Depositor
and any  broker  dealer  acting as  underwriter,  placement  agent or  initial
purchaser  with respect to a  Securitization  Transaction[,  and shall also be
addressed  to and for the  benefit  of the  Company,  its  assignees  and such
Third-Party  Originator.  Any such  statement or letter may take the form of a
standard,  generally  applicable  document  accompanied  by a reliance  letter
authorizing  reliance by the  addressees  designated  by the Purchaser or such
Depositor.

      (c)   If so requested by the  Purchaser  or any  Depositor,  the Company
shall  provide such  information  regarding  the  Company,  as servicer of the
Mortgage  Loans,  and cause each  Subservicer  to so provide such  information
(each of the Company and each Subservicer,  for purposes of this paragraph,  a
"Servicer"),  as is requested for the purpose of compliance  with Item 1108 of
Regulation AB.  Such information shall include, at a minimum:

            (A)   the Servicer's form of organization;

            (B)   a  description  of how long the Servicer has been  servicing
      residential  mortgage  loans;  a general  discussion  of the  Servicer's
      experience  in servicing  assets of any type as well as a more  detailed
      discussion of the  Servicer's  experience  in, and  procedures  for, the
      servicing  function  it  will  perform  under  this  Agreement  and  any
      Reconstitution  Agreements;  information regarding the size, composition
      and growth of the Servicer's  portfolio of residential mortgage loans of
      a type similar to the Mortgage Loans and  information on factors related
      to the Servicer that may be material,  in the good faith judgment of the
      Purchaser  or any  Depositor,  to any  analysis of the  servicing of the
      Mortgage Loans or the related  asset-backed  securities,  as applicable,
      including, without limitation:

                  (1)   whether any prior  securitizations  of mortgage  loans
            of a type similar to the  Mortgage  Loans  involving  the Servicer
            have  defaulted  or  experienced  an early  amortization  or other
            performance  triggering  event  because  of  servicing  during the
            three-year  period  immediately  preceding the  scheduled  closing
            date of the related Securitization Transaction;
                  (2)   the extent of outsourcing the Servicer utilizes;
                  (3)   whether   there  has  been   previous   disclosure  of
            material  noncompliance  with the  applicable  servicing  criteria
            with  respect to other  securitizations  of  residential  mortgage
            loans  involving the Servicer as a servicer  during the three-year
            period  immediately  preceding the  scheduled  closing date of the
            related Securitization Transaction; and
                  (4)   whether the Servicer has been  terminated  as servicer
            in a  residential  mortgage loan  securitization,  either due to a
            servicing  default or to  application  of a servicing  performance
            test or trigger; and
                  (5)   such  other   information  as  the  Purchaser  or  any
            Depositor  may  reasonably  request for the purpose of  compliance
            with Item 1108(b)(2) of Regulation AB;

            (C)   a description of any material  changes during the three-year
      period  immediately  preceding the scheduled closing date of the related
      Securitization  Transaction  to the  Servicer's  policies or  procedures
      with  respect  to the  servicing  function  it will  perform  under this
      Agreement  and any  Reconstitution  Agreements  for mortgage  loans of a
      type similar to the Mortgage Loans;

            (D)   information  regarding the Servicer's  financial  condition,
      to the extent  that  there is a material  risk that the effect on one or
      more aspects of servicing  resulting from such financial condition would
      have a material impact on pool  performance or on the performance by the
      Company  of  its  servicing  obligations  under  this  Agreement  or any
      Reconstitution Agreement;

            (E)   information  regarding  advances made by the Servicer on the
      Mortgage  Loans  and  the  Servicer's  overall  servicing  portfolio  of
      residential   mortgage  loans  for  the  three-year  period  immediately
      preceding  the  scheduled  closing  date of the  related  Securitization
      Transaction,  which  may be  limited  to a  statement  by an  authorized
      officer of the  Servicer  to the effect that the  Servicer  has made all
      advances  required to be made on residential  mortgage loans serviced by
      it during such  period,  or, if such  statement  would not be  accurate,
      information  regarding the  percentage  and type of advances not made as
      required, and the reasons for such failure to advance;

            (F)   a description  of the  Servicer's  processes and  procedures
      designed to address any special or unique factors  involved in servicing
      loans of a similar type as the Mortgage Loans;

            (G)   a  description  of the  Servicer's  processes  for  handling
      delinquencies,  losses,  bankruptcies  and  recoveries,  such as through
      liquidation of mortgaged  properties,  sale of defaulted  mortgage loans
      or workouts; and

            (H)   information  as to how the  Servicer  defines or  determines
      delinquencies  and  charge-offs,  including  the  effect  of  any  grace
      period, re-aging, restructuring,  partial payments considered current or
      other practices with respect to delinquency and loss experience.

      (d)   For the purpose of satisfying the reporting  obligation  under the
Exchange  Act with  respect to any class of  asset-backed  securities,  at the
time the  Company  knows or should have known of any of the  circumstances  in
subsection  (i) of this  paragraph,  the  Company  shall (or shall  cause each
Subservicer  and  Third-Party   Originator  to)  (i)  immediately  notify  the
Purchaser,  any  Master  Servicer  and any  Depositor  in  writing  of (A) any
material litigation  proceedings pending or governmental  proceedings known to
be  contemplated  against the  Company,  any  Subservicer  or any  Third-Party
Originator, as applicable,  (B) any affiliations or relationships that develop
following  the  closing  date  of a  Securitization  Transaction  between  the
Company, any Subservicer or any Third-Party  Originator and any of the parties
specified  in  clause  (D) of  paragraph  (a) of this  Section  (and any other
parties  identified in writing by the  requesting  party) with respect to such
Securitization  Transaction,  (C) any Event of Default under the terms of this
Agreement or any Reconstitution  Agreement,  (D) any merger,  consolidation or
sale of substantially all of the assets of the Company,  and (E) the Company's
entry  into an  agreement  with a  Subservicer  to  perform  or  assist in the
performance  of any of the Company's  obligations  under this Agreement or any
Reconstitution  Agreement  and (ii) provide to the Purchaser and any Depositor
a description of such proceedings, affiliations or relationships.

      All notification  pursuant to this Section 3(d) should be sent to EMC by
e-mail to  regABnotifications@bear.com.  In  addition,  each such notice other
than those pursuant to Section 3(d)(i)(A), should be sent to:

      EMC Mortgage Corporation
      2780 Lake Vista Drive
      Lewisville, TX 75067-3884
      Attention:  Conduit Seller Approval Dept.
      Facsimile:  (214) 626-3751
      Email:  sellerapproval@bear.com

      With a copy to:

      Bear, Stearns & Co. Inc.
      383 Madison Avenue, 3rd Floor
      New, York, NY 10179
      Attention:  Global Credit Administration
      Facsimile:  (212) 272-6564

      Notifications pursuant to Section 3(d)(i)(A) should be sent to:

      EMC Mortgage Corporation
      Two Mac Arthur Ridge
      909 Hidden Ridge Drive, Suite 200
      Irving, TX 75038
      Attention:  Associate General Counsel for Loan Administration
      Facsimile:  (972) 831-2555

      With copies to:

      Bear, Stearns & Co. Inc.
      383 Madison Avenue, 3rd Floor
      New, York, NY 10179
      Attention:  Global Credit Administration
      Facsimile:  (212) 272-6564

      EMC Mortgage Corporation
      2780 Lake Vista Drive
      Lewisville, TX 75067-3884
      Attention:  Conduit Seller Approval Dept.
      Facsimile:  (214) 626-3751
      Email:  sellerapproval@bear.com

      (e)   As  a  condition  to  the   succession   to  the  Company  or  any
Subservicer   as  servicer  or   subservicer   under  this  Agreement  or  any
Reconstitution  Agreement  by any Person  (i) into  which the  Company or such
Subservicer may be merged or  consolidated,  or (ii) which may be appointed as
a successor to the Company or any  Subservicer,  the Company  shall provide to
the  Purchaser,  any  Master  Servicer  and any  Depositor,  at least  fifteen
calendar days prior to the effective date of such  succession or  appointment,
(x) written  notice to the Purchaser  and any Depositor of such  succession or
appointment  and  (y)  in  writing  and  in  form  and  substance   reasonably
satisfactory to the Purchaser and such Depositor,  all information  reasonably
requested  by the  Purchaser  or any  Depositor  in order to  comply  with its
reporting  obligation  under Item 6.02 of Form 8-K with respect to the related
Securitization Transaction.

      (f)   In addition to such  information as the Company,  as servicer,  is
obligated to provide  pursuant to other  provisions of this  Agreement,  if so
requested by the  Purchaser or any  Depositor,  the Company shall provide such
information  regarding the  performance  or servicing of the Mortgage Loans as
is reasonably  required to facilitate  preparation of distribution  reports in
accordance  with Item 1121 of Regulation AB as applicable to the Company.  The
Company shall also provide a monthly report,  in the form of EXHIBIT C hereto,
or such other form as is mutually  acceptable  to the Company,  the  Purchaser
and any Master  Servicer,  EXHIBIT D with respect to defaulted  mortgage loans
and  EXHIBIT E, with  respect  to  realized  losses and gains,  with each such
report.  Such  information  shall be  provided  concurrently  with the monthly
reports  otherwise  required  to be  delivered  by  the  servicer  under  this
Agreement,  commencing  with the  first  such  report  due not  less  than ten
Business Days following such request.

      (g) In addition to such  information  as the Company,  as  servicer,  is
obligated  to provide  pursuant to other  provisions  of this  Agreement,  not
later than ten days prior to the deadline  for the filing of any  distribution
report  on  Form  10-D  in  respect  of any  Securitization  Transaction  that
includes  any  of  the  Mortgage   Loans   serviced  by  the  Company  or  any
Subservicer,  the Company or such  Subservicer,  as applicable,  shall, to the
extent the Company or such  Subservicer  has  knowledge,  provide to the party
responsible  for filing  such report  (including,  if  applicable,  the Master
Servicer)  notice of the occurrence of any of the following  events along with
all information,  data, and materials related thereto as may be required to be
included in the related  distribution report on Form 10-D (as specified in the
provisions of Regulation AB referenced below):

                  (i)   any material  modifications,  extensions or waivers of
            pool  asset  terms,   fees,   penalties  or  payments  during  the
            distribution  period or that  have  cumulatively  become  material
            over time (Item 1121(a)(11) of Regulation AB);

                  (ii)  material  breaches  of pool asset  representations  or
            warranties  or   transaction   covenants   (Item   1121(a)(12)  of
            Regulation AB); and

                  (iii) information  regarding  any pool asset  changes  (such
            as,  additions,  substitutions or  repurchases),  and any material
            changes  in  origination,   underwriting  or  other  criteria  for
            acquisition  or  selection  of pool assets  (Item  1121(a)(14)  of
            Regulation AB).

      (h) The Company shall  provide,  as may be  reasonably  requested by the
Purchaser,   any  Master   Servicer   or  any   Depositor,   evidence  of  the
authorization of the person signing any certification or statement,  copies or
other  evidence of Fidelity Bond  Insurance and Errors and Omission  Insurance
policy,  financial information and reports, and such other information related
to the  Company  or any  Subservicer  or the  Company  or  such  Subservicer's
performance hereunder to the Purchaser, any Master Servicer and any Depositor.

      Section 4  SERVICER COMPLIANCE STATEMENT.

      On or before March 1 of each  calendar  year,  commencing  in 2007,  the
Company shall deliver to the Purchaser,  any Master Servicer and any Depositor
a statement of compliance  addressed to the  Purchaser,  such Master  Servicer
and such Depositor and signed by an authorized officer of the Company,  to the
effect that (i) a review of the Company's  activities  as servicer  during the
immediately  preceding  calendar year (or applicable  portion  thereof) and of
its  performance  under  this  Agreement  and  any  applicable  Reconstitution
Agreement  during such period has been made under such officer's  supervision,
and (ii) to the best of such officers'  knowledge,  based on such review,  the
Company has  fulfilled  all of its  obligations  under this  Agreement and any
applicable  Reconstitution  Agreement in all material respects throughout such
calendar year (or applicable  portion thereof) or, if there has been a failure
to  fulfill  any  such  obligation  in  any  material  respect,   specifically
identifying  each such  failure  known to such  officer and the nature and the
status thereof.


      Section 5  REPORT ON ASSESSMENT OF COMPLIANCE AND ATTESTATION.

      (a)   On or before March 1 of each  calendar  year,  commencing in 2007,
the
Company shall:

            (i)   deliver  to the  Purchaser,  any  Master  Servicer  and  any
      Depositor a report (in form and  substance  reasonably  satisfactory  to
      the Purchaser,  such Master Servicer and such  Depositor)  regarding the
      Company's  assessment of compliance  with the Servicing  Criteria during
      the immediately  preceding calendar year, as required under Rules 13a-18
      and 15d-18 of the  Exchange  Act and Item 1122 of  Regulation  AB.  Such
      report  shall be addressed to the  Purchaser,  such Master  Servicer and
      such Depositor and signed by an authorized  officer of the Company,  and
      shall address each of the  applicable  Servicing  Criteria  specified on
      Exhibit B hereto;

            (ii)  deliver  to the  Purchaser,  any  Master  Servicer  and  any
      Depositor a report of a registered  public  accounting  firm  reasonably
      acceptable to the  Purchaser,  such Master  Servicer and such  Depositor
      that attests to, and reports on, the  assessment of  compliance  made by
      the Company and  delivered  pursuant to the  preceding  paragraph.  Such
      attestation  shall be in accordance with Rules 1-02(a)(3) and 2-02(g) of
      Regulation S-X under the Securities Act and the Exchange Act;

            (iii) cause each Subservicer,  and each  Subcontractor  determined
      by the Company  pursuant  to Section  6(b) to be  "participating  in the
      servicing  function"  within the meaning of Item 1122 of Regulation  AB,
      to deliver to the  Purchaser,  any Master  Servicer and any Depositor an
      assessment  of  compliance  and  accountants'  attestation  as and  when
      provided in paragraphs (a) and (b) of this Section; and

            (iv)  deliver  and  cause  each   Subservicer  and   Subcontractor
      described  in clause  (iii) to  provide  to the  Purchaser,  any  Master
      Servicer any  Depositor  and any other  Person that will be  responsible
      for signing the certification (a "Sarbanes  Certification")  required by
      Rules  13a-14(d)  and  15d-14(d)  under the  Exchange  Act  (pursuant to
      Section  302  of  the  Sarbanes-Oxley  Act  of  2002)  on  behalf  of an
      asset-backed  issuer  with  respect to a  Securitization  Transaction  a
      certification  signed by the  appropriate  officer of the Company in the
      form  attached  hereto as Exhibit A;  provided  that such  certification
      delivered  by the Company may not be filed as an exhibit to, or included
      in, any offering document or registration statement.

The Company  acknowledges that the parties  identified in clause (a)(iv) above
may rely on the certification  provided by the Company pursuant to such clause
in signing a Sarbanes Certification and filing such with the Commission.

      (b)   Each assessment of compliance  provided by a Subservicer  pursuant
to
Section  5(a)(i)  shall address each of the  Servicing  Criteria  specified on
Exhibit B hereto.  An  assessment of  compliance  provided by a  Subcontractor
pursuant to Section  5(a)(iii)  need not address any elements of the Servicing
Criteria other than those specified by the Company pursuant to Section 6.

      Section 6  USE OF SUBSERVICERS AND SUBCONTRACTORS.

      The Company  shall not hire or  otherwise  utilize  the  services of any
Subservicer  to fulfill  any of the  obligations  of the  Company as  servicer
under this  Agreement  or any  Reconstitution  Agreement  unless  the  Company
complies with the  provisions  of paragraph  (a) of this Section.  The Company
shall not hire or  otherwise  utilize the services of any  Subcontractor,  and
shall not permit any Subservicer to hire or otherwise  utilize the services of
any  Subcontractor,  to  fulfill  any of the  obligations  of the  Company  as
servicer  under this  Agreement  or any  Reconstitution  Agreement  unless the
Company complies with the provisions of paragraph (b) of this Section.

      (a)   It shall not be  necessary  for the Company to seek the consent of
the Purchaser,  any Master Servicer or any Depositor to the utilization of any
Subservicer.  The Company shall cause any Subservicer  used by the Company (or
by any  Subservicer)  for the benefit of the  Purchaser  and any  Depositor to
comply with the  provisions  of this Section and with  Sections 2, 3(c),  (e),
(f) and (g),  4, 5, and 07 of this  Agreement  to the same  extent  as if such
Subservicer  were the Company,  and to provide the  information  required with
respect  to  such  Subservicer  under  Section  3(d) of  this  Agreement.  The
Company  shall  be  responsible  for  obtaining  from  each   Subservicer  and
delivering  to  the  Purchaser  and  any  Depositor  any  servicer  compliance
statement  required to be delivered by such  Subservicer  under Section 4, any
assessment  of  compliance  and  attestation  required to be delivered by such
Subservicer under Section 5 and any certification  required to be delivered to
the Person that will be  responsible  for signing the  Sarbanes  Certification
under Section 5 as and when required to be delivered.

      (b)   It shall not be  necessary  for the Company to seek the consent of
the Purchaser,  any Master Servicer or any Depositor to the utilization of any
Subcontractor.  The  Company  shall  promptly  upon  request  provide  to  the
Purchaser,  any Master  Servicer  and any  Depositor  (or any  designee of the
Depositor,  such as a master servicer or administrator) a written  description
(in form and substance satisfactory to the Purchaser,  any Master Servicer and
such  Depositor)  of the role and function of each  Subcontractor  utilized by
the  Company or any  Subservicer,  specifying  (i) the  identity  of each such
Subcontractor,  (ii) which (if any) of such  Subcontractors are "participating
in the servicing  function"  within the meaning of Item 1122 of Regulation AB,
and (iii) which  elements  of the  Servicing  Criteria  will be  addressed  in
assessments of compliance  provided by each Subcontractor  identified pursuant
to clause (ii) of this paragraph.

      As a condition to the utilization of any Subcontractor  determined to be
"participating  in the servicing  function" within the meaning of Item 1122 of
Regulation  AB, the  Company  shall cause any such  Subcontractor  used by the
Company  (or by any  Subservicer)  for the  benefit of the  Purchaser  and any
Depositor to comply with the  provisions of Sections 5 and 7 of this Agreement
to the same  extent as if such  Subcontractor  were the  Company.  The Company
shall be responsible for obtaining from each  Subcontractor  and delivering to
the Purchaser and any Depositor any assessment of compliance  and  attestation
and the other  certifications  required to be delivered by such  Subcontractor
under Section 5, in each case as and when required to be delivered.

      Section 7  INDEMNIFICATION; REMEDIES.

      (a)   The  Company  shall  indemnify  the  Purchaser  and  each  of  the
following  parties  participating  in  a  Securitization   Transaction:   each
sponsor and issuing entity;  each Person  (including,  but not limited to, any
Master Servicer)  responsible for the preparation,  execution or filing of any
report  required  to be  filed  with  the  Commission  with  respect  to  such
Securitization  Transaction,  or for execution of a certification  pursuant to
Rule 13a-14(d) or Rule  15d-14(d)  under the Exchange Act with respect to such
Securitization   Transaction;   each  broker  dealer  acting  as  underwriter,
placement  agent or initial  purchaser,  each Person who  controls any of such
parties or the Depositor  (within the meaning of Section 15 of the  Securities
Act and  Section 20 of the  Exchange  Act);  and the  respective  present  and
former directors,  officers,  employees,  agents and affiliates of each of the
foregoing and the Depositor  (each,  an "Indemnified  Party"),  and shall hold
each of them (each,  an  "Indemnified  Party")  harmless  from and against any
claims,  losses,  damages,  penalties,  fines,  forfeitures,  legal  fees  and
expenses and related costs, judgments,  and any other costs, fees and expenses
that any of them may sustain arising out of or based upon:

            (i)(A)      any untrue  statement of a material fact  contained or
      alleged  to be  contained  in any  information,  report,  certification,
      accountants'  letter or other material  provided under this Article 1 by
      or on behalf of the Company,  or provided  under this Article 1 by or on
      behalf  of any  Subservicer,  Subcontractor  or  Third-Party  Originator
      (collectively,  the  "Company  Information"),  or (B)  the  omission  or
      alleged  omission to state in the Company  Information  a material  fact
      required to be stated in the Company  Information  or necessary in order
      to make the statements  therein, in the light of the circumstances under
      which   they  were   made,   not   misleading;   provided,   by  way  of
      clarification,  that  clause (B) of this  paragraph  shall be  construed
      solely by  reference  to the  Company  Information  and not to any other
      information  communicated  in  connection  with a sale  or  purchase  of
      securities,  without  regard to whether the Company  Information  or any
      portion  thereof is  presented  together  with or  separately  from such
      other information;

            (ii)  any  breach by the  Company  of its  obligations  under this
      Article  I,  including  particularly  the  failure by the  Company,  any
      Subservicer,  any Subcontractor or any Third-Party Originator to deliver
      any information,  report,  certification,  accountants'  letter or other
      material  when and as  required  under  this  Article I,  including  any
      failure  by the  Company  to  identify  pursuant  to  Section  6(b)  any
      Subcontractor  "participating  in the  servicing  function"  within  the
      meaning of Item 1122 of Regulation AB; or

            (iii) any breach by the  Company of a  representation  or warranty
      set forth in Section 2(a) or in a writing furnished  pursuant to Section
      2(b) and  made as of a date  prior to the  closing  date of the  related
      Securitization  Transaction, to the extent that such breach is not cured
      by such closing date,  or any breach by the Company of a  representation
      or  warranty  in a writing  furnished  pursuant  to Section  2(b) to the
      extent made as of a date subsequent to such closing date; or

            (iv)  if the  indemnification  provided for herein is  unavailable
      or insufficient to hold harmless an Indemnified  Party, then the Company
      agrees  that it shall  contribute  to the amount paid or payable by such
      Indemnified  Party  as a  result  of  any  claims,  losses,  damages  or
      liabilities  incurred by such Indemnified Party in such proportion as is
      appropriate to reflect the relative fault of such  Indemnified  Party on
      the one hand and the Company on the other.

      In the case of any failure of  performance  described in clause  (a)(ii)
of this Section,  the Company shall  promptly  reimburse  the  Purchaser,  any
Depositor,  as applicable,  and each Person  responsible for the  preparation,
execution  or filing of any report  required  to be filed with the  Commission
with  respect  to  such  Securitization  Transaction,  or for  execution  of a
certification  pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange
Act with respect to such Securitization Transaction,  for all costs reasonably
incurred  by each  such  party in order to  obtain  the  information,  report,
certification,   accountants'  letter  or  other  material  not  delivered  as
required  by  the  Company,   any  Subservicer,   any   Subcontractor  or  any
Third-Party Originator.

      This indemnification  shall survive the termination of this Agreement or
the termination of any party to this Agreement.

      (b)   (i)   Any   failure  by  the   Company,   any   Subservicer,   any
      Subcontractor or any Third-Party  Originator to deliver any information,
      report,  certification,  accountants'  letter or other material when and
      as  required  under this  Article  I, or any breach by the  Company of a
      representation  or  warranty  set forth in Section  2(a) or in a writing
      furnished  pursuant  to Section  2(b) and made as of a date prior to the
      closing date of the related  Securitization  Transaction,  to the extent
      that such  breach is not cured by such  closing  date,  or any breach by
      the  Company of a  representation  or  warranty  in a writing  furnished
      pursuant to Section 2(b) to the extent made as of a date  subsequent  to
      such  closing  date,  shall,  except as  provided in clause (ii) of this
      paragraph,  immediately  and  automatically,  without  notice  or  grace
      period,  constitute  an Event of Default  with  respect  to the  Company
      under this Agreement and any  applicable  Reconstitution  Agreement,  if
      such failure or breach is not cured  within two (2) Business  Days after
      the Company  receives  written  notice of such failure or breach  (which
      may be provided  by e-mail),  and shall  entitle  the  Purchaser  or any
      Depositor,  as  applicable,  in its sole  discretion  to  terminate  the
      rights and  obligations  of the Company as servicer under this Agreement
      and/or  any  applicable   Reconstitution   Agreement   without   payment
      (notwithstanding   anything  in  this   Agreement   or  any   applicable
      Reconstitution  Agreement to the  contrary) of any  compensation  to the
      Company except for  reimbursing  the Company for any servicing  advances
      that the Company  actually made as servicer  pursuant to this  Agreement
      and rights  arising  prior to such  termination  (and if the  Company is
      servicing  any of the Mortgage  Loans in a  Securitization  Transaction,
      appoint  a  successor  servicer  reasonably  acceptable  to  any  Master
      Servicer  for such  Securitization  Transaction);  provided  that to the
      extent  that any  provision  of this  Agreement  and/or  any  applicable
      Reconstitution  Agreement expressly provides for the survival of certain
      rights or obligations  following termination of the Company as servicer,
      such provision shall be given effect.

            (ii)  Any  failure  by  the  Company,   any   Subservicer  or  any
      Subcontractor  to deliver  any  information,  report,  certification  or
      accountants'  letter  when  and  as  required  under  Section  4  or  5,
      including  any failure by the  Company to  identify  pursuant to Section
      6(b) any Subcontractor  "participating in the servicing function" within
      the meaning of Item 1122 of Regulation  AB, which  continues  unremedied
      for ten calendar  days after the date of written  notice from the Master
      Servicer  shall  constitute  an Event of  Default  (notwithstanding  any
      other  provision in this  Agreement or any  Reconstitution  Agreement to
      the contrary)  with respect to the Company under this  Agreement and any
      applicable  Reconstitution  Agreement,  and shall entitle the Purchaser,
      any  Master  Servicer  or any  Depositor,  as  applicable,  in its  sole
      discretion  to terminate  the rights and  obligations  of the Company as
      servicer  under  this  Agreement  and/or any  applicable  Reconstitution
      Agreement  without payment  (notwithstanding  anything in this Agreement
      to  the  contrary)  of  any  compensation  to  the  Company  except  for
      reimbursing  the Company  for any  servicing  advances  that the Company
      actually made as servicer  pursuant to this Agreement and rights arising
      prior  to  such  termination;  provided  that  to the  extent  that  any
      provision  of  this  Agreement  and/or  any  applicable   Reconstitution
      Agreement  expressly  provides  for the  survival  of certain  rights or
      obligations  following  termination  of the  Company as  servicer,  such
      provision shall be given effect.

            (iii) The Company shall  promptly  reimburse the Purchaser (or any
      designee  of  the  Purchaser,   such  as  a  master  servicer)  and  any
      Depositor,  as applicable,  for all reasonable  expenses incurred by the
      Purchaser (or such  designee) or such  Depositor,  as such are incurred,
      in connection  with the  termination  of the Company as servicer and the
      transfer of  servicing of the  Mortgage  Loans to a successor  servicer.
      The  provisions of this paragraph  shall not limit  whatever  rights the
      Purchaser  or any  Depositor  may have under  other  provisions  of this
      Agreement and/or any applicable  Reconstitution  Agreement or otherwise,
      whether  in equity or at law,  such as an action for  damages,  specific
      performance or injunctive relief.

      (c)   NOTIFICATION  AND  COOPERATION.  The parties hereto further agree,
and any  Indemnified  Party  not a party  hereto  is  deemed  to  agree,  as a
condition  to  its  reliance  on  such  indemnification,  that  the  Company's
indemnification  obligations under this Section 7 are subject to the following
terms and conditions:

            (i)   An  Indemnified  Party  seeking  indemnification   hereunder
      shall give written notice to the Company within a reasonable  time after
      the  Indemnified  Party  receives  notice  of  an  indemnifiable   claim
      provided  that  failure to give such  notice  within a  reasonable  time
      shall  not  invalidate  the  Company's  obligations  to  indemnify  such
      Indemnified  Party  except if, and then only to the  extent  that,  such
      failure  materially  prejudices the Indemnifying Party or its ability to
      defend such claim, and the  Indemnifying  Party shall have the burden of
      proving such material prejudice;
            (ii)  The  Company  shall  undertake  the defense of the action or
      claim with  counsel or other  representatives  of its own  choosing  and
      reasonably  acceptable  to the  Indemnified  Party (which  counsel shall
      not,  except with the consent of the  Indemnified  Party,  be counsel to
      the Indemnifying Party);
            (iii) The  Indemnified  Party shall have the right to  participate
      and  assist in, but not  control,  the  defense of such claim and employ
      separate  counsel  in  any  action  or  claim,  at  the  expense  of the
      Indemnified  Party  (i.e.,  at its own  expense),  provided  that if the
      interests  of  the  Company  and  the  Indemnified  Party  diverge,  the
      Indemnified   Party  shall  be  entitled  to  separate  counsel  at  the
      Company's expense, provided such expense is reasonable; and
            (iv)  The Company  shall not settle or  compromise  any claim suit
      or action  against the  Indemnified  Party  without  the  express  prior
      written consent of the Indemnified Party.

      (d)   EXCLUSIVE  REMEDY.  Except for remedies  under the  Agreement  and
remedies that cannot be waived as a matter of law and injunctive  relief,  the
rights  under this  Section 7 shall be the  exclusive  remedy for  breaches of
this  Section  7  (including  any  covenant,  obligation,   representation  or
warranty contained herein or therein).

      (e)   LIMITATIONS.      Notwithstanding  anything in this  Agreement  to
the contrary,  in no event shall the Company be obligated under this Section 7
to indemnify an Indemnified  Party otherwise  entitled to indemnity  hereunder
in  respect  of any  indemnifiable  claims or losses to the  extent  that such
claims or losses  result  directly from the willful  misconduct,  bad faith or
negligent acts of the Indemnified Party.

      (f)   The  parties  hereto  agree  that any  written  notice  under this
Section 7 may be made via email.

            Section 8   THIRD PARTY BENEFICIARY.

For  purposes  of this  Article I and any  related  provisions  thereto,  each
Master  Servicer  shall  be  considered  a  third-party  beneficiary  of  this
Agreement,  entitled  to all the  rights and  benefits  hereof as if it were a
direct party to this Agreement.



<PAGE>



      IN WITNESS  WHEREOF,  the  Seller and the  Purchaser  have  caused  this
Amendment to be executed and  delivered by their duly  authorized  officers as
of the day and year first above written.


                                          NATIONAL CITY MORTGAGE CO.
                                          (Seller)


                                          By:
                                                 -------------------------
                                          Name:  KELLY C. JOHNSON
                                                 -------------------------
                                          Title: SENIOR VICE PRESIDENT
                                                 -------------------------
-----


                                          EMC MORTGAGE CORPORATION
                                          (Purchaser)


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


<PAGE>


                                  EXHIBIT A

                         FORM OF ANNUAL CERTIFICATION

      Re: The [ ] agreement dated as of [ ], 200[ ] (the - "Agreement"),
                           among [IDENTIFY PARTIES]

      I,  ________________________________,   the  _______________________  of
[NAME  OF  COMPANY]  (the  "Company"),   certify  to  [the  Purchaser],   [the
Depositor],  and the [Master Servicer] [Securities  Administrator]  [Trustee],
and their  officers,  with the  knowledge  and intent that they will rely upon
this certification, that:

            (1)   I have  reviewed  the servicer  compliance  statement of the
      Company  provided in  accordance  with Item 1123 of  Regulation  AB (the
      "Compliance  Statement"),  the  report on  assessment  of the  Company's
      compliance  with the  servicing  criteria  set forth in Item  1122(d) of
      Regulation AB (the  "Servicing  Criteria"),  provided in accordance with
      Rules  13a-18 and  15d-18  under  Securities  Exchange  Act of 1934,  as
      amended  (the  "Exchange  Act")  and  Item  1122 of  Regulation  AB (the
      "Servicing   Assessment"),   the  registered  public  accounting  firm's
      attestation  report  provided in accordance with Rules 13a-18 and 15d-18
      under  the  Exchange  Act and  Section  1122(b)  of  Regulation  AB (the
      "Attestation   Report"),   and   all   servicing   reports,    officer's
      certificates  and other  information  relating to the  servicing  of the
      Mortgage  Loans by the Company  during 200[ ] that were delivered by the
      Company to the [Depositor] [Master Servicer] [Securities  Administrator]
      [Trustee]  pursuant  to  the  Agreement   (collectively,   the  "Company
      Servicing Information");

            (2)   Based on my knowledge,  the Company  Servicing  Information,
      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 the light of the  circumstances  under  which such  statements
      were made , not  misleading  with  respect to the period of time covered
      by the Company Servicing Information;

            (3)   Based  on  my  knowledge,   all  of  the  Company  Servicing
      Information  required to be provided by the Company  under the Agreement
      has been  provided  to the  [Depositor]  [Master  Servicer]  [Securities
      Administrator] [Trustee];

            (4)   I am responsible  for reviewing the activities  performed by
      the Company as servicer under the  Agreement,  and based on my knowledge
      and  the  compliance   review  conducted  in  preparing  the  Compliance
      Statement  and except as  disclosed  in the  Compliance  Statement,  the
      Servicing   Assessment  or  the  Attestation  Report,  the  Company  has
      fulfilled its obligations under the Agreement; and

            (5)   The  Compliance  Statement  required to be  delivered by the
      Company  pursuant to this  Agreement,  and the Servicing  Assessment and
      Attestation  Report  required  to be  provided by the Company and by any
      Subservicer and Subcontractor  "participating in the servicing function"
      pursuant  to the  Agreement,  have  been  provided  to  the  [Depositor]
      [Master  Servicer].  Any material  instances of noncompliance  described
      in  such  reports  have  been  disclosed  to  the  [Depositor]   [Master
      Servicer].  Any material  instance of  noncompliance  with the Servicing
      Criteria has been disclosed in such reports.


                                          Date:
                                                 -------------------------

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




<PAGE>



                                  EXHIBIT B

        SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE

      The assessment of compliance to be delivered by the Company [Name of
Subservicer] shall address, at a minimum, the criteria identified as below as
"Applicable Servicing Criteria":


<TABLE>
                                                                                           APPLICABLE SERVICING
                                   SERVICING CRITERIA                                            CRITERIA
---------------------------------------------------------------------------------------    --------------------
     REFERENCE                                     CRITERIA
                                       GENERAL SERVICING CONSIDERATIONS
<S>                  <C>                                                                   <C>
                     Policies and procedures are instituted to monitor any performance
                     or other triggers and events of default in accordance with the
1122(d)(1)(i)        transaction agreements.                                                         X
                     If any material servicing activities are outsourced to third
                     parties, policies and procedures are instituted to monitor the
                     third party's performance and compliance with such servicing
1122(d)(1)(ii)       activities.                                                                     X
                     Any requirements in the transaction agreements to maintain a
1122(d)(1)(iii)      back-up servicer for the mortgage loans are maintained.
                     A fidelity bond and errors and omissions policy is in effect on the
                     party participating in the servicing function throughout the
                     reporting period in the amount of coverage required by and
                     otherwise in accordance with the terms of the transaction                       X
1122(d)(1)(iv)       agreements.
                                      CASH COLLECTION AND ADMINISTRATION
                     Payments on mortgage loans are deposited into the appropriate
                     custodial bank accounts and related bank clearing accounts no more
                     than two business days following receipt, or such other number of
1122(d)(2)(i)        days specified in the transaction agreements.                                   X
                     Disbursements made via wire transfer on behalf of an obligor or to              X
1122(d)(2)(ii)       an investor are made only by authorized personnel.
                     Advances of funds or guarantees regarding collections, cash flows
                     or distributions, and any interest or other fees charged for such
                     advances, are made, reviewed and approved as specified in the
1122(d)(2)(iii)      transaction agreements.                                                         X
                     The related accounts for the transaction, such as cash reserve
                     accounts or accounts established as a form of
                     overcollateralization, are separately maintained (e.g., with                    X
                     respect to commingling of cash) as set forth in the transaction
1122(d)(2)(iv)       agreements.
                     Each custodial account is maintained at a federally insured
                     depository institution as set forth in the transaction agreements.
                     For purposes of this criterion, "federally insured depository
                     institution" with respect to a foreign financial institution means
                     a foreign financial institution that meets the requirements of Rule             X
1122(d)(2)(v)        13k-1(b)(1) of the Securities Exchange Act.
                     Unissued checks are safeguarded so as to prevent unauthorized                   X
1122(d)(2)(vi)       access.
                      Reconciliations are prepared on a monthly basis for all
                     asset-backed securities related bank accounts, including custodial
                     accounts and related bank clearing accounts. These reconciliations
                     (A) are mathematically accurate; (B) were prepared within 30
                     calendar days after the bank statement cutoff date, or such other
                     number of days specified in the transaction agreements; (C) were
                     reviewed and approved by someone other than the person who prepared
                     the reconciliation; and (D) contain explanations for reconciling
                     items. These reconciling items are resolved within 90 calendar days             X
                     of their original identification, or such other number of days
1122(d)(2)(vii)      specified in the transaction agreements.
                                      INVESTOR REMITTANCES AND REPORTING
                     Reports to investors, including those to be filed with the
                     Commission, are maintained in accordance with the transaction
                     agreements and applicable Commission requirements. Specifically,
                     such reports (A) are prepared in accordance with timeframes and
                     other terms set forth in the transaction agreements; (B) provide
                     information calculated in accordance with the terms specified in
                     the transaction agreements; (C) are filed with the Commission as
                     required by its rules and regulations; and (D) agree with
                     investors' or the trustee's records as to the total unpaid                      X
                     principal balance and number of mortgage loans serviced by the
1122(d)(3)(i)        Servicer.
                     Amounts due to investors are allocated and remitted in accordance
                     with timeframes, distribution priority and other terms set forth in
1122(d)(3)(ii)       the transaction agreements.                                                     X
                     Disbursements made to an investor are posted within two business
                     days to the Servicer's investor records, or such other number of                X
1122(d)(3)(iii)      days specified in the transaction agreements.
                     Amounts remitted to investors per the investor reports agree with
                     cancelled checks, or other form of payment, or custodial bank                   X
1122(d)(3)(iv)       statements.
                                          POOL ASSET ADMINISTRATION
                      Collateral or security on mortgage loans is maintained as required             X
1122(d)(4)(i)        by the transaction agreements or related mortgage loan documents.
                     Mortgage loan and related documents are safeguarded as required by              X
1122(d)(4)(ii)       the transaction agreements
                     Any additions, removals or substitutions to the asset pool are
                     made, reviewed and approved in accordance with any conditions or
1122(d)(4)(iii)      requirements in the transaction agreements.                                     X
                     Payments on mortgage loans, including any payoffs, made in
                     accordance with the related mortgage loan documents are posted to
                     the Servicer's obligor records maintained no more than two business
                     days after receipt, or such other number of days specified in the
                     transaction agreements, and allocated to principal, interest or
                     other items (e.g., escrow) in accordance with the related mortgage              X
1122(d)(4)(iv)       loan documents.
                     The Servicer's records regarding the mortgage loans agree with the
                     Servicer's records with respect to an obligor's unpaid principal
1122(d)(4)(v)        balance.                                                                        X
                     Changes with respect to the terms or status of an obligor's
                     mortgage loans (e.g., loan modifications or re-agings) are made,
                     reviewed and approved by authorized personnel in accordance with
1122(d)(4)(vi)       the transaction agreements and related pool asset documents.                    X
                     Loss mitigation or recovery actions (e.g., forbearance plans,
                     modifications and deeds in lieu of foreclosure, foreclosures and
                     repossessions, as applicable) are initiated, conducted and
                     concluded in accordance with the timeframes or other requirements               X
1122(d)(4)(vii)      established by the transaction agreements.
                     Records documenting collection efforts are maintained during the
                     period a mortgage loan is delinquent in accordance with the
                     transaction agreements. Such records are maintained on at least a
                     monthly basis, or such other period specified in the transaction
                     agreements, and describe the entity's activities in monitoring
                     delinquent mortgage loans including, for example, phone calls,
                     letters and payment rescheduling plans in cases where delinquency               X
1122(d)(4)(viii)     is deemed temporary (e.g., illness or unemployment).
                     Adjustments to interest rates or rates of return for mortgage loans
                     with variable rates are computed based on the related mortgage loan
1122(d)(4)(ix)       documents.                                                                      X
                     Regarding any funds held in trust for an obligor (such as escrow
                     accounts): (A) such funds are analyzed, in accordance with the
                     obligor's mortgage loan documents, on at least an annual basis, or
                     such other period specified in the transaction agreements; (B)
                     interest on such funds is paid, or credited, to obligors in
                     accordance with applicable mortgage loan documents and state laws;
                     and (C) such funds are returned to the obligor within 30 calendar               X
                     days of full repayment of the related mortgage loans, or such other
1122(d)(4)(x)        number of days specified in the transaction agreements.
                     Payments made on behalf of an obligor (such as tax or insurance
                     payments) are made on or before the related penalty or expiration
                     dates, as indicated on the appropriate bills or notices for such
                     payments, provided that such support has been received by the
                     servicer at least 30 calendar days prior to these dates, or such                X
1122(d)(4)(xi)       other number of days specified in the transaction agreements.
                     Any late payment penalties in connection with any payment to be
                     made on behalf of an obligor are paid from the servicer's funds and
                     not charged to the obligor, unless the late payment was due to the
1122(d)(4)(xii)      obligor's error or omission.                                                    X
                     Disbursements made on behalf of an obligor are posted within two
                     business days to the obligor's records maintained by the servicer,
                     or such other number of days specified in the transaction                       X
1122(d)(4)(xiii)     agreements.
                      Delinquencies, charge-offs and uncollectible accounts are
                     recognized and recorded in accordance with the transaction
1122(d)(4)(xiv)      agreements.                                                                     X
                     Any external enhancement or other support, identified in Item
                     1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained
1122(d)(4)(xv)       as set forth in the transaction agreements.
</TABLE>


<PAGE>


                                   EXHIBIT C

                       REPORTING DATA FOR MONTHLY REPORT

                    STANDARD FILE LAYOUT - MASTER SERVICING
<TABLE>
                                                                                                                             MAX
   COLUMN NAME                                  DESCRIPTION                      DECIMAL           FORMAT COMMENT           SIZE
-------------------            ----------------------------------------------    -------    ----------------------------    ----
<S>                            <C>                                               <C>        <C>                             <C>
SER_INVESTOR_NBR               A value assigned by the Servicer to define a                 Text up to 10 digits             20
                               group of loans.
LOAN_NBR                       A unique identifier assigned to each loan by                 Text up to 10 digits             10
                               the investor.
                               A unique number assigned to a loan by the
SERVICER_LOAN_NBR              Servicer.  This may be different than the
                               LOAN_NBR.                                                    Text up to 10 digits             10
BORROWER_NAME                  The borrower name as received in the file.                   Maximum length of 30 (Last,      30
                               It is not separated by first and last name.                  First)
                               Scheduled monthly principal and scheduled
SCHED_PAY_AMT                  interest payment that a borrower is expected                 No commas(,) or dollar signs
                               to pay, P&I constant.                                2       ($)                              11
NOTE_INT_RATE                  The loan interest rate as reported by the            4       Max length of 6                   6
                               Servicer.
NET_INT_RATE                   The loan gross interest rate less the service        4       Max length of 6                   6
                               fee rate as reported by the Servicer.
SERV_FEE_RATE                  The servicer's fee rate for a loan as                4       Max length of 6                   6
                               reported by the Servicer.
SERV_FEE_AMT                   The servicer's fee amount for a loan as              2       No commas(,) or dollar signs     11
                               reported by the Servicer.                                    ($)
NEW_PAY_AMT                    The new loan payment amount as reported by           2       No commas(,) or dollar signs     11
                               the Servicer.                                                ($)
NEW_LOAN_RATE                  The new loan rate as reported by the Servicer.       4       Max length of 6                   6
ARM_INDEX_RATE                 The index the Servicer is using to calculate         4       Max length of 6                   6
                               a forecasted rate.
ACTL_BEG_PRIN_BAL              The borrower's actual principal balance at           2       No commas(,) or dollar signs     11
                               the beginning of the processing cycle.                       ($)
ACTL_END_PRIN_BAL              The borrower's actual principal balance at           2       No commas(,) or dollar signs     11
                               the end of the processing cycle.                             ($)
                               The date at the end of processing cycle that
BORR_NEXT_PAY_DUE_DATE         the borrower's next payment is due to the
                               Servicer, as reported by Servicer.                           MM/DD/YYYY                       10
SERV_CURT_AMT_1                The first curtailment amount to be applied.          2       No commas(,) or dollar signs     11
                                                                                            ($)
SERV_CURT_DATE_1               The curtailment date associated with the                     MM/DD/YYYY                       10
                               first curtailment amount.
CURT_ADJ_ AMT_1                The curtailment interest on the first                2       No commas(,) or dollar signs     11
                               curtailment amount, if applicable.                           ($)
SERV_CURT_AMT_2                The second curtailment amount to be applied.         2       No commas(,) or dollar signs     11
                                                                                            ($)
SERV_CURT_DATE_2               The curtailment date associated with the                     MM/DD/YYYY                       10
                               second curtailment amount.
CURT_ADJ_ AMT_2                The curtailment interest on the second               2       No commas(,) or dollar signs     11
                               curtailment amount, if applicable.                           ($)
SERV_CURT_AMT_3                The third curtailment amount to be applied.          2       No commas(,) or dollar signs     11
                                                                                            ($)
SERV_CURT_DATE_3               The curtailment date associated with the                     MM/DD/YYYY                       10
                               third curtailment amount.
CURT_ADJ_AMT_3                 The curtailment interest on the third                2       No commas(,) or dollar signs     11
                               curtailment amount, if applicable.                           ($)
PIF_AMT                        The loan "paid in full" amount as reported by        2       No commas(,) or dollar signs     11
                               the Servicer.                                                ($)
PIF_DATE                       The paid in full date as reported by the                     MM/DD/YYYY                       10
                               Servicer.
                                                                                            Action Code Key:
                                                                                            15=Bankruptcy,
                               The standard FNMA numeric code used to                       30=Foreclosure, , 60=PIF,         2
ACTION_CODE                    indicate the default/delinquent status of a                  63=Substitution,
                               particular loan.                                             65=Repurchase,70=REO
INT_ADJ_AMT                    The amount of the interest adjustment as             2       No commas(,) or dollar signs     11
                               reported by the Servicer.                                    ($)
SOLDIER_SAILOR_ADJ_AMT         The Soldier and Sailor Adjustment amount, if         2       No commas(,) or dollar signs     11
                               applicable.                                                  ($)
NON_ADV_LOAN_AMT               The Non Recoverable Loan Amount, if                  2       No commas(,) or dollar signs     11
                               applicable.                                                  ($)
LOAN_LOSS_AMT                  The amount the Servicer is passing as a loss,        2       No commas(,) or dollar signs     11
                               if applicable.                                               ($)
                               The scheduled outstanding principal amount
SCHED_BEG_PRIN_BAL             due at the beginning of the cycle date to be                 No commas(,) or dollar signs
                               passed through to investors.                         2       ($)                              11
SCHED_END_PRIN_BAL             The scheduled principal balance due to               2       No commas(,) or dollar signs     11
                               investors at the end of a processing cycle.                  ($)
                               The scheduled principal amount as reported by
SCHED_PRIN_AMT                 the Servicer for the current cycle -- only                   No commas(,) or dollar signs
                               applicable for Scheduled/Scheduled Loans.            2       ($)                              11
                               The scheduled gross interest amount less the
                               service fee amount for the current cycle as
SCHED_NET_INT                  reported by the Servicer -- only applicable                  No commas(,) or dollar signs
                               for Scheduled/Scheduled Loans.                       2       ($)                              11
                               The actual principal amount collected by the
ACTL_PRIN_AMT                  Servicer for the current reporting cycle --                  No commas(,) or dollar signs
                               only applicable for Actual/Actual Loans.             2       ($)                              11
                               The actual gross interest amount less the
                               service fee amount for the current reporting                 No commas(,) or dollar signs
ACTL_NET_INT                   cycle as reported by the Servicer -- only            2       ($)                              11
                               applicable for Actual/Actual Loans.
                               The penalty amount received when a borrower
PREPAY_PENALTY_ AMT            prepays on his loan as reported by the                       No commas(,) or dollar signs
                               Servicer.                                            2       ($)                              11
PREPAY_PENALTY_ WAIVED         The prepayment penalty amount for the loan           2       No commas(,) or dollar signs     11
                               waived by the servicer.                                      ($)
MOD_DATE                       The Effective Payment Date of the                            MM/DD/YYYY                       10
                               Modification for the loan.
MOD_TYPE                       The Modification Type.                                       Varchar - value can be alpha     30
                                                                                            or numeric
DELINQ_P&I_ADVANCE_AMT         The current outstanding principal and                2       No commas(,) or dollar signs     11
                               interest advances made by Servicer.                          ($)
</TABLE>




<PAGE>




                                   EXHIBIT D

                      REPORTING DATA FOR DEFAULTED LOANS

                 STANDARD FILE LAYOUT - DELINQUENCY REPORTING
<TABLE>
  COLUMN/HEADER NAME                                      DESCRIPTION                          DECIMAL     FORMAT COMMENT
--------------------------             ---------------------------------------------------     -------     --------------
<S>                                    <C>                                                     <C>         <C>
SERVICER_LOAN_NBR                      A unique number assigned to a loan by the
                                       Servicer.  This may be different than the LOAN_NBR
LOAN_NBR                               A unique identifier assigned to each loan by the
                                       originator.
CLIENT_NBR                             Servicer Client Number
SERV_INVESTOR_NBR                      Contains a unique number as assigned by an
                                       external servicer to identify a group of loans in
                                       their system.
BORROWER_FIRST_NAME                    First Name of the Borrower.
BORROWER_LAST_NAME                     Last name of the borrower.
PROP_ADDRESS                           Street Name and Number of Property
PROP_STATE                             The state where the  property located.
PROP_ZIP                               Zip code where the property is located.
BORR_NEXT_PAY_DUE_DATE                 The date that the borrower's next payment is due                    MM/DD/YYYY
                                       to the servicer at the end of processing cycle, as
                                       reported by Servicer.
LOAN_TYPE                              Loan Type (i.e. FHA, VA, Conv)
BANKRUPTCY_FILED_DATE                  The date a particular bankruptcy claim was filed.                   MM/DD/YYYY
BANKRUPTCY_CHAPTER_CODE                The chapter under which the bankruptcy was filed.
BANKRUPTCY_CASE_NBR                    The case number assigned by the court to the
                                       bankruptcy filing.
POST_PETITION_DUE_DATE                 The payment due date once the bankruptcy has been                   MM/DD/YYYY
                                       approved by the courts
BANKRUPTCY_DCHRG_DISM_DATE             The Date The Loan Is Removed From Bankruptcy.                       MM/DD/YYYY
                                       Either by Dismissal, Discharged and/or a Motion
                                       For Relief Was Granted.
LOSS_MIT_APPR_DATE                     The Date The Loss Mitigation Was Approved By The                    MM/DD/YYYY
                                       Servicer
LOSS_MIT_TYPE                          The Type Of Loss Mitigation Approved For A Loan
                                       Such As;
LOSS_MIT_EST_COMP_DATE                 The Date The Loss Mitigation /Plan Is Scheduled To                  MM/DD/YYYY
                                       End/Close
LOSS_MIT_ACT_COMP_DATE                 The Date The Loss Mitigation Is Actually Completed                  MM/DD/YYYY
FRCLSR_APPROVED_DATE                   The date DA Admin sends a letter to the servicer                    MM/DD/YYYY
                                       with instructions to begin foreclosure proceedings.
ATTORNEY_REFERRAL_DATE                 Date File Was Referred To Attorney to Pursue                        MM/DD/YYYY
                                       Foreclosure
FIRST_LEGAL_DATE                       Notice of 1st legal filed by an Attorney in a                       MM/DD/YYYY
                                       Foreclosure Action
FRCLSR_SALE_EXPECTED_DATE              The date by which a foreclosure sale is expected                    MM/DD/YYYY
                                       to occur.
FRCLSR_SALE_DATE                       The actual date of the foreclosure sale.                            MM/DD/YYYY
FRCLSR_SALE_AMT                        The amount a property sold for at the foreclosure          2        No commas(,)
                                       sale.                                                               or dollar
                                                                                                           signs ($)
EVICTION_START_DATE                    The date the servicer initiates eviction of the                     MM/DD/YYYY
                                       borrower.
EVICTION_COMPLETED_DATE                The date the court revokes legal possession of the                  MM/DD/YYYY
                                       property from the borrower.
LIST_PRICE                             The price at which an REO property is marketed.            2        No commas(,)
                                                                                                           or dollar
                                                                                                           signs ($)
LIST_DATE                              The date an REO property is listed at a particular                  MM/DD/YYYY
                                       price.
OFFER_AMT                              The dollar value of an offer for an REO property.          2        No commas(,)
                                                                                                           or dollar
                                                                                                           signs ($)
OFFER_DATE_TIME                        The date an offer is received by DA Admin or by                     MM/DD/YYYY
                                       the Servicer.
REO_CLOSING_DATE                       The date the REO sale of the property is scheduled                  MM/DD/YYYY
                                       to close.
REO_ACTUAL_CLOSING_DATE                Actual Date Of REO Sale                                             MM/DD/YYYY
OCCUPANT_CODE                          Classification of how the property is occupied.
PROP_CONDITION_CODE                    A code that indicates the condition of the
                                       property.
PROP_INSPECTION_DATE                   The date a  property inspection is performed.                       MM/DD/YYYY
APPRAISAL_DATE                         The date the appraisal was done.                                    MM/DD/YYYY
CURR_PROP_VAL                          The current "as is" value of the property based on         2
                                       brokers price opinion or appraisal.
REPAIRED_PROP_VAL                      The amount the property would be worth if repairs          2
                                       are completed pursuant to a broker's price opinion
                                       or appraisal.
IF APPLICABLE:
DELINQ_STATUS_CODE                     FNMA Code Describing Status of Loan
DELINQ_REASON_CODE                     The circumstances which caused a borrower to stop
                                       paying on a loan.   Code indicates the reason why
                                       the loan is in default for this cycle.
MI_CLAIM_FILED_DATE                    Date Mortgage Insurance Claim Was Filed With                        MM/DD/YYYY
                                       Mortgage Insurance Company.
MI_CLAIM_AMT                           Amount of Mortgage Insurance Claim Filed                            No commas(,)
                                                                                                           or dollar
                                                                                                           signs ($)
MI_CLAIM_PAID_DATE                     Date Mortgage Insurance Company Disbursed Claim                     MM/DD/YYYY
                                       Payment
MI_CLAIM_AMT_PAID                      Amount Mortgage Insurance Company Paid On Claim            2        No commas(,)
                                                                                                           or dollar
                                                                                                           signs ($)
POOL_CLAIM_FILED_DATE                  Date Claim Was Filed With Pool Insurance Company                    MM/DD/YYYY
POOL_CLAIM_AMT                         Amount of Claim Filed With Pool Insurance Company          2        No commas(,)
                                                                                                           or dollar
                                                                                                           signs ($)
POOL_CLAIM_PAID_DATE                   Date Claim Was Settled and The Check Was Issued By                  MM/DD/YYYY
                                       The Pool Insurer
POOL_CLAIM_AMT_PAID                    Amount Paid On Claim By Pool Insurance Company             2        No commas(,)
                                                                                                           or dollar
                                                                                                           signs ($)
FHA_PART_A_CLAIM_FILED_DATE            Date FHA Part A Claim Was Filed With HUD                            MM/DD/YYYY
FHA_PART_A_CLAIM_AMT                   Amount of FHA Part A Claim Filed                           2        No commas(,)
                                                                                                           or dollar
                                                                                                           signs ($)
FHA_PART_A_CLAIM_PAID_DATE             Date HUD Disbursed Part A Claim Payment                             MM/DD/YYYY
FHA_PART_A_CLAIM_PAID_AMT              Amount HUD Paid on Part A Claim                            2        No commas(,)
                                                                                                           or dollar
                                                                                                           signs ($)
FHA_PART_B_CLAIM_FILED_DATE            Date FHA Part B Claim Was Filed With HUD                            MM/DD/YYYY
FHA_PART_B_CLAIM_AMT                   Amount of FHA Part B Claim Filed                           2        No commas(,)
                                                                                                           or dollar
                                                                                                           signs ($)
FHA_PART_B_CLAIM_PAID_DATE             Date HUD Disbursed Part B Claim Payment                             MM/DD/YYYY
FHA_PART_B_CLAIM_PAID_AMT              Amount HUD Paid on Part B Claim                            2        No commas(,)
                                                                                                           or dollar
                                                                                                           signs ($)
VA_CLAIM_FILED_DATE                    Date VA Claim Was Filed With the Veterans Admin                     MM/DD/YYYY
VA_CLAIM_PAID_DATE                     Date Veterans Admin. Disbursed VA Claim Payment                     MM/DD/YYYY
VA_CLAIM_PAID_AMT                      Amount Veterans Admin. Paid on VA Claim                    2        No commas(,)
                                                                                                           or dollar
                                                                                                           signs ($)
</TABLE>

EXHIBIT 2: STANDARD FILE CODES - DELINQUENCY REPORTING

The LOSS MIT TYPE field should show the approved Loss Mitigation Code as
follows:
         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

NOTE: 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 code
as follows:
         o     Mortgagor
         o     Tenant
         o     Unknown
         o     Vacant

The PROPERTY CONDITION field should show the last reported condition of the
property as follows:
         o     Damaged
         o     Excellent
         o     Fair
         o     Gone
         o     Good
         o     Poor
         o     Special Hazard
         o     Unknown

EXHIBIT 2: STANDARD FILE CODES - DELINQUENCY REPORTING, CONTINUED

The FNMA DELINQUENT REASON CODE field should show the Reason for Delinquency
as follows:

               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



<PAGE>




EXHIBIT 2: STANDARD FILE CODES - DELINQUENCY REPORTING, CONTINUED

The FNMA DELINQUENT STATUS CODE field should show the Status of Default as
follows:

                 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

<PAGE>

                                     EXHIBIT E

                    REPORTING DATA FOR REALIZED LOSSES AND GAINS

        CALCULATION OF REALIZED LOSS/GAIN FORM 332- INSTRUCTION SHEET

      NOTE:  DO NOT NET OR COMBINE ITEMS.  SHOW ALL EXPENSES INDIVIDUALLY AND
      ALL CREDITS AS SEPARATE LINE ITEMS.  CLAIM PACKAGES ARE DUE ON THE
      REMITTANCE REPORT DATE.  LATE SUBMISSIONS MAY RESULT IN CLAIMS NOT
      BEING PASSED UNTIL THE FOLLOWING MONTH.  THE SERVICER IS RESPONSIBLE TO
      REMIT ALL FUNDS PENDING LOSS APPROVAL AND /OR RESOLUTION OF ANY
      DISPUTED ITEMS.

                  1.

                  2.    The numbers on the 332 form  correspond with the numbers
                        listed below.

      LIQUIDATION AND ACQUISITION EXPENSES:
      1.    The Actual Unpaid Principal Balance of the Mortgage Loan.  For
            documentation, an Amortization Schedule from date of default
            through liquidation breaking out the net interest and servicing
            fees advanced is required.

      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. For documentation, an Amortization Schedule from
            date of default through liquidation breaking out the net interest
            and servicing fees advanced is required.

      3.    Accrued Servicing Fees based upon the Scheduled Principal Balance
            of the Mortgage Loan as calculated on a monthly basis. For
            documentation, an Amortization Schedule from date of default
            through liquidation breaking out the net interest and servicing
            fees advanced is required.

      4-12. Complete as applicable.  Required documentation:

            *  For taxes and insurance advances - see page 2 of 332 form -
            breakdown required showing period

              of coverage, base tax, interest, penalty.  Advances prior to
              default require evidence of servicer efforts to recover
              advances.

            *  For escrow advances - complete payment history

               (to  calculate  advances  from last  positive  escrow  balance
                forward)

            *  Other expenses -  copies of corporate advance history showing
            all payments

            *  REO repairs > $1500 require explanation

            *  REO repairs >$3000 require evidence of at least 2 bids.

            *  Short Sale or Charge Off require P&L supporting the decision
            and WFB's approved Officer Certificate

            *  Unusual or extraordinary items may require further
            documentation.

      13.   The total of lines 1 through 12.

3.    CREDITS:

      14-21. Complete as applicable.  Required documentation:

            * Copy of the HUD 1 from the REO sale.  If a 3rd Party Sale, bid
            instructions and Escrow Agent / Attorney

               Letter of Proceeds Breakdown.

            *  Copy of EOB for any MI or gov't guarantee

            *  All other credits need to be clearly defined on the 332
            form

      22.   The total of lines 14 through 21.

      PLEASE NOTE: For HUD/VA loans, use line (18a) for Part A/Initial  proceeds
                   and line (18b) for Part B/Supplemental proceeds.

      TOTAL REALIZED LOSS (OR AMOUNT OF ANY GAIN)
      23.   The  total  derived  from  subtracting  line  22 from  13.  If the
            amount  represents a realized gain, show the amount in parenthesis
            (   ).

                  CALCULATION OF REALIZED LOSS/GAIN FORM 332

      Prepared by:                                    Date:
                    ------------------                       ---------------
      Phone:                           Email Address:
              ----------------------                 ---------------------


Servicer Loan No.         Servicer Name               Servicer Address


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

      WELLS FARGO BANK, N.A. LOAN NO.
                                     -----------------------------

      Borrower's Name:
                       ---------------------------------------------------------
      Property Address:
                       ---------------------------------------------------------

      LIQUIDATION TYPE:  REO SALE          3RD PARTY SALE         SHORT SALE
      CHARGE OFF

      WAS THIS LOAN GRANTED A BANKRUPTCY DEFICIENCY OR CRAMDOWN    YES     NO
      If "Yes", provide deficiency or cramdown amount
                                                      --------------------------
<TABLE>
      LIQUIDATION AND ACQUISITION EXPENSES:
      <S>       <C>                                                   <C>                     <C>
      (1)       Actual/Unpaid/Principal/Balance1of(Mortgage Loan      $ _______________       (1)
      (2)       Interest accrued at Net Rate                           ________________       (2)
      (3)       Accrued Servicing Fees                                 ________________       (3)
      (4)       Attorney's Fees                                        ________________       (4)
      (5)       Taxes (see page 2)                                     ________________       (5)
      (6)       Property Maintenance                                   ________________       (6)
      (7)       MI/Hazard Insurance Premiums (see page 2)              ________________       (7)
      (8)       Utility Expenses                                       ________________       (8)
      (9)       Appraisal/BPO                                          ________________       (9)
      (10)      Property Inspections                                   ________________       (10)
      (11)      FC Costs/Other Legal Expenses                          ________________       (11)
      (12)      Other (itemize)                                        ________________       (12)
                Cash for Keys__________________________                ________________       (12)
                HOA/Condo Fees_______________________                  ________________       (12)
                ______________________________________                 ________________       (12)

                TOTAL EXPENSES                                        $ _______________       (13)
      CREDITS:
      (14)      Escrow Balance                                        $ _______________       (14)
      (15)      HIP Refund                                             ________________       (15)
      (16)      Rental Receipts                                        ________________       (16)
      (17)      Hazard Loss Proceeds                                   ________________       (17)
      (18)      Primary Mortgage Insurance / Gov't Insurance           ________________       (18a) HUD Part A
                                                                       ________________       (18b) HUD Part B
      (19)      Pool Insurance Proceeds                                ________________       (19)
      (20)      Proceeds from Sale of Acquired Property                ________________       (20)
      (21)      Other (itemize)                                        ________________       (21)
                _________________________________________              ________________       (21)

                TOTAL CREDITS                                         $________________       (22)
      TOTAL REALIZED LOSS (or Amount of Gain)                         $________________       (23)
</TABLE>


<PAGE>


ESCROW DISBURSEMENT DETAIL


    TYPE     DATE PAID   PERIOD OF   TOTAL    BASE      PENALTIES    INTEREST
(TAX /INS.)              COVERAGE     PAID   AMOUNT