AMENDMENT
      NO. 1 TO PURCHASE, WARRANTIES


AND
      SERVICING AGREEMENT








THIS
      AMENDMENT NO. 1, effective as of May 14, 2004, amends the Purchase, Warranties
      and Servicing Agreement among EMC Mortgage Corporation (the “Purchaser”), First
      Tennessee Mortgage Services, Inc., as servicer (the “Servicer”) and First
      Horizon Home Loan Corporation (the “Seller”, and together with the Servicer, the
“Company”), previously entered into as of September 1, 2003 (the “Agreement”).





RECITALS





WHEREAS,
      the Company sells to the Purchaser, and the Purchaser purchases from the
      Company, from time to time, pursuant to the Agreement, certain conventional
      residential Mortgage Loans on a servicing retained basis; and





WHEREAS,
      in connection with future sales of Mortgage Loans to the Purchaser, the Company
      and the Purchaser wish to amend the Agreement as set forth below.





NOW,
      THEREFORE, in consideration of the premises and the mutual covenants hereinafter
      set forth and for good and valuable consideration, the receipt and sufficiency
      of which are hereby acknowledged, the Purchaser and the Company agree to amend
      the Agreement as follows:





1.  Section
      3.02(h) of the Agreement shall be deleted in its entirety and replaced with
      the
      following:




(h)  Each
      Mortgage Loan complies with, and the Company has complied with, applicable
      local, state and federal laws, regulations and other requirements including,
      without limitation, usury, equal credit opportunity, real estate settlement
      procedures, the Federal Truth-In-Lending Act, disclosure laws and all applicable
      predatory and abusive lending laws and consummation of the transactions
      contemplated hereby, including without limitation, the receipt of interest
      by
      the owner of such Mortgage Loan, will not involve the violation of any such
      laws, rules or regulations. None
      of
      the Mortgage Loans are (a) Mortgage Loans subject to 12 CFR Part 226.31, 12
      CFR
      Part 226.32 or 226.34 of Regulation Z, the regulation implementing TILA, which
      implements the Home Ownership and Equity Protection Act of 1994, as amended,
      or
      (b) except as may be provided in subparagraph (c) below, classified and/or
      defined, as a “high cost”, “threshold”, “predatory” “high risk home loan” or
“covered” loan (or a similarly classified loan using different terminology under
      a law imposing additional legal liability for mortgage loans having high
      interest rates, points and or/fees) under any other applicable state, federal
      or
      local law including, but not limited to, the States of Georgia, New York, North
      Carolina, Arkansas, Kentucky or New Mexico or (c) Mortgage Loans subject to
      the
      New Jersey Home Ownership Security Act of 2002 (the “Act”), unless such Mortgage
      Loan is a (1) “Home Loan” as defined in the Act that is a first lien Mortgage
      Loan, which is not a “High Cost Home Loan” as defined in the Act or (2) “Covered
      Home Loan” as defined in the Act that is a first lien purchase money Mortgage
      Loan, which is not a High Cost Home Loan under the Act. In addition to and
      notwithstanding anything to the contrary herein, no Mortgage Loan for which
      the
      Mortgaged Property is located in New Jersey is a Home Loan as defined in the
      Act
      that was made, arranged, or assigned by a person selling either a manufactured
      home or home improvements to the Mortgaged Property or was made by an originator
      to whom the Mortgagor was referred by any such seller. Each
      Mortgage Loan is being (and has been) serviced in accordance with Accepted
      Servicing Practices and applicable state and federal laws, including, without
      limitation, the Federal Truth-In-Lending Act and other consumer protection
      laws,
      real estate settlement procedures, usury, equal credit opportunity and
      disclosure laws. Company shall maintain in its possession, available for the
      Purchaser’s inspection, as appropriate, and shall deliver to the Purchaser or
      its designee upon demand, evidence of compliance with all such
      requirements.





2.  The
      following representations and warranties shall be added to Section 3.02 of
      the
      Agreement:





(yy)  There
      is
      no Mortgage Loan that was originated on or after October 1, 2002 and before
      March 7, 2003, which is secured by property located in the State of
      Georgia.





(zz)  No
      proceeds from any Mortgage Loan were used to finance single premium credit
      insurance policies.




(aaa )  No
      borrower was encouraged or required to select a Mortgage Loan product offered
      by
      the Mortgage Loan’s originator which is a higher cost product designed for less
      creditworthy borrowers, unless at the time of the Mortgage Loan’s origination,
      such borrower did not qualify taking into account credit history and
      debt-to-income ratios for a lower-cost credit product then offered by the
      Mortgage Loan’s originator or any affiliate of the Mortgage Loan’s originator.
      If, at the time of loan application, the borrower may have qualified for a
      lower-cost credit product then offered by any mortgage lending affiliate of
      the
      Mortgage Loan’s originator, the Mortgage Loan’s originator referred the
      borrower’s application to such affiliate for underwriting
      consideration.






(bbb)  The
      methodology used in underwriting the extension of credit for each Mortgage
      Loan
      employs objective mathematical principles which relate the borrower’s income,
      assets and liabilities to the proposed payment and such underwriting methodology
      does not rely on the extent of the borrower’s equity in the collateral as the
      principal determining factor in approving such credit extension. Such
      underwriting methodology confirmed that at the time of origination
      (application/approval) the borrower had a reasonable ability to make timely
      payments on the Mortgage Loan.






(ccc)  With
      respect to any Mortgage Loan that contains a provision permitting imposition
      of
      a premium upon a prepayment prior to maturity: (i) prior to the loan’s
      origination, the borrower agreed to such premium in exchange for a monetary
      benefit, including but not limited to a rate or fee reduction, (ii) prior to
      the
      loan’s origination, the borrower was offered the option of obtaining a mortgage
      loan that did not require payment of such a premium, (iii) the prepayment
      premium is disclosed to the borrower in the loan documents pursuant to
      applicable state and federal law, and (iv) notwithstanding any state or federal
      law to the contrary, the Servicer shall not impose such prepayment premium
      in
      any instance when the mortgage debt is accelerated as the result of the
      borrower’s default in making the loan payments.






(ddd)  No
      borrower was required to purchase any credit life, disability, accident or
      health insurance product as a condition of obtaining the extension of credit.
      No
      borrower obtained a prepaid single-premium credit life, disability, accident
      or
      health insurance policy in connection with the origination of the Mortgage
      Loan;
      No proceeds from any Mortgage Loan were used to purchase single premium credit
      insurance policies as part of the origination of, or as a condition to closing,
      such Mortgage Loan.






(eee)  The
      Servicer will transmit full-file credit reporting data for each Mortgage Loan
      pursuant to the Fannie Mae Selling Guide and that for each Mortgage Loan,
      Servicer agrees it shall report one of the following statuses each month as
      follows: new origination, current, delinquent (30-, 60-, 90-days, etc.),
      foreclosed, or charged-off.







(fff)  Any
      Mortgage Loan with a Mortgaged Property in the State of Illinois complies with
      the Illinois Interest Act.





3.  The
      following field shall be added to the definition of Mortgage
      Loan Schedule :





“and
      (28)
      whether such Mortgage Loan is a “Home Loan”, “Covered Home Loan”, “Manufactured
      Housing” or “Home Improvement Loan” as defined in the
      New
      Jersey Home Ownership Security Act of 2002. ”





4.  Section
      6.04 of the Agreement shall be deleted in its entirety and replaced with the
      following:





Section
      6.04  Annual
      Statement as to Compliance .





The
      Company will deliver to the Purchaser not later than March 15 th of each
      year, beginning March 15, 2005, an
      executed Officers' Certificate acceptable to the Purchaser 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.
      Such Officers’ Certificate shall contain no restrictions or limitations on its
      use. Copies of such statement shall be provided by the Company to the Purchaser
      upon request.





If
      the
      Company does not timely comply with this Section 6.04, the Purchaser shall
      give
      prompt written notice to the Company. The Company shall have a period of five
      (5) Business Days after receipt of such notice to provide what is required
      hereunder. Failure of the Company to timely comply thereafter shall be deemed
      an
      Event of Default, automatically, without notice and without any cure period,
      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.





5.  Section
      6.05 of the Agreement shall be deleted in its entirety and replaced with the
      following:





Section
      6.05  Annual
      Independent Certified Public Accountants' Servicing Report .





The
      Company, at its expense and not later than March 15 th of each
      year, beginning March 15, 2005, 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 acceptable 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. Such statement shall contain no restrictions or limitations on its
      use. Copies of such statement shall be provided by the Company to the Purchaser.
      In addition, on an annual basis, Company shall provide Purchaser with copies
      of
      its audited financial statements.





If
      the
      Company does not timely comply with this Section 6.05, the Purchaser shall
      give
      prompt written notice to the Company. The Company shall have a period of five
      (5) Business Days after receipt of such notice to provide what is required
      hereunder. Failure of the Company to timely comply thereafter shall be deemed
      an
      Event of Default, automatically, without notice and without any cure period,
      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.





6.  All
      other
      terms and conditions of the Agreement remain unchanged and in full force and
      effect.




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





IN
      WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to be
      executed and delivered by their proper and duly authorized officers as of the
      day and year first above written.







**EMC
      MORTGAGE CORPORATON**


Purchaser





By:________________________


Name:


Title:





**FIRST
      HORIZON HOME LOAN**


**CORPORATION**


Seller





By:
      _______________________


Name:


Title:





**FIRST
      TENNESSEE MORTGAGE**


**SERVICES,
      INC.**


Servicer





By:
      _______________________


Name:


Title: