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                                 AMENDMENT NO. 3
                         Dated as of September 22, 2004
                                       to
                         POOLING AND SERVICING AGREEMENT
                            Dated as of June 1, 2002
                                      among
                   BEAR STEARNS ASSET BACKED SECURITIES, INC.,
                                    Depositor
                            EMC MORTGAGE CORPORATION,
                               Seller and Company
                   WELLS FARGO BANK, NATIONAL ASSOCIATION (as
                successor to Wells Fargo Bank Minnesota, National
                                  Association),
                  Master Servicer and Securities Administrator
                                       and
                               JPMORGAN CHASE BANK
                (as successor to Bank One, National Association),
                                     Trustee

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

               BEAR STEARNS ASSET BACKED SECURITIES TRUST 2002-AC3
                   ASSET-BACKED CERTIFICATES, SERIES 2002-AC3

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

         THIS AMENDMENT NO. 3, dated as of September 22, 2004 (the "Amendment"),
to the Pooling and Servicing Agreement, dated as of June 1, 2002, among BEAR
STEARNS ASSET BACKED SECURITIES, INC., a Delaware corporation, as depositor (the
"Depositor"), EMC MORTGAGE CORPORATION, a Delaware corporation, as seller (the
"Seller") and company (the "Company"), WELLS FARGO BANK, NATIONAL ASSOCIATION, a
national banking association (as successor to Wells Fargo Bank Minnesota,
National Association) as master servicer (the "Master Servicer") and securities
administrator (the "Securities Administrator") and JPMORGAN CHASE BANK, a New
York banking corporation (as successor to Bank One, National Association), as
trustee (the "Trustee"), as amended by Amendment No. 1, dated as of September
30, 2002 and Amendment No. 2, dated as of March 14, 2003 (as amended, the
"Pooling and Servicing Agreement").

                               W I T N E S S E T H

         WHEREAS, the Depositor, the Seller, the Company, the Master Servicer,
the Securities Administrator and the Trustee entered into the Pooling and
Servicing Agreement;

         WHEREAS, the Depositor, the Seller and the Company desire to amend
certain provisions

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of the Pooling and Servicing Agreement to provide for the payment of certain
amounts to the holders of the Class M-1, Class M-2 and Class B Certificates in
connection with the allocation of Realized Losses to such classes of
Certificates.

         WHEREAS, Section 12.01 of the Pooling and Servicing Agreement provides
that the Pooling and Servicing Agreement may be amended by the Depositor, the
Seller, the Company, the Master Servicer, the Securities Administrator and the
Trustee with the consent of MBIA and the holders of each Class of Certificates
affected thereby for the purpose of adding any provisions to the Pooling and
Servicing Agreement or changing in any manner or eliminating any of the
provisions thereof or of modifying in any manner the rights of the Holders of
such Class or Classes of affected Certificates, upon the satisfaction of certain
conditions set forth therein;

         NOW, THEREFORE, the parties hereto agree as follows:

         SECTION 1. Defined Terms.

         For purposes of this Amendment, unless the context clearly requires
otherwise, all capitalized terms which are used but not otherwise defined herein
shall have the respective meanings assigned to such terms in the Pooling and
Servicing Agreement.

         SECTION 2. The Amendments.

         (a) Section 1.01 of the Pooling and Servicing Agreement is hereby
amended as follows:

                  (i) The following definition shall be added to Section 1.01:

                  "RESERVE FUND: Shall mean the separate trust account created
                  and maintained by the Trustee pursuant to Section 6.10 hereof.

                  (ii) The definition of Trust Fund shall be amended as follows:

                           (A)      by adding the words "the Reserve Fund," to
                                    the beginning of clause (ii) thereof; and

                           (B)      by deleting the last sentence thereof in its
                                    entirety and replacing it with the following
                                    sentence: "The Prepayment Charges, the
                                    Reserve Account, the Yield Maintenance Fund,
                                    the Net Rate Cap Reserve Fund and the
                                    Reserve Fund shall constitute assets of the
                                    Trust Fund but will not be included in any
                                    of REMIC I, REMIC II or REMIC III."

                  (b) Section 6.06(a) of the Pooling and Servicing Agreement is
hereby amended by replacing the words "(other than the Reserve Account, the Net
Rate Cap Reserve Fund and the

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Yield Maintenance Reserve Fund)" with "(other than the Reserve Account, the Net
Rate Cap Reserve Fund, the Yield Maintenance Reserve Fund and the Reserve Fund)"
in the second sentence thereof.

         (c) Article VI of the Pooling and Servicing Agreement is hereby amended
by adding the following Section 6.10 to the end thereof:

         "Section 6.10     Reserve Fund.

         (a) The Trustee shall establish and maintain a Reserve Fund on behalf
of the Class M-1, Class M-2 and Class B Certificateholders. The Reserve Fund
must be an Eligible Account. The Reserve Fund shall be in the name of the
Trustee for the benefit of the Class M-1, Class M-2 and Class B
Certificateholders and designated "JPMorgan Chase Bank, in trust for the
registered holders of Bear Stearns Asset Backed Securities, Inc., Asset-Backed
Certificates, Series 2002-AC3, Class M-1, Class M-2 and Class B". The Holder of
the Class R-III Certificates shall remit to the Trustee on the date of this
Amendment an amount equal to $915,000.00 for deposit in the Reserve Fund. On
each Distribution Date as to which there is an Applied Realized Loss Amount with
respect to any Class M-1, Class M-2 or Class B Certificate, the Trustee has been
directed by the Class R-III Certificateholder to, and therefore will, remit to
the Class or Classes of Certificates as to which the Applied Realized Loss
Amount was allocated, in accordance with Section 6.04(a), any Unpaid Realized
Loss Amounts remaining unreimbursed after making the required distributions
pursuant to clauses SIXTH, SEVENTH and EIGHTH of Section 6.04(a).

         (b) The Reserve Fund is an "outside reserve fund" within the meaning of
Treasury Regulation ss.1.860G-2(h) and shall be an asset of the Trust Fund but
not an asset of any REMIC. The Trustee on behalf of the Trust shall be the
nominal owner of the Reserve Fund. The Class R-III Certificateholder shall be
the beneficial owner of the Reserve Fund, subject to the power of the Trustee to
remit such funds held therein to the holders of the Class M-1, Class M-2 and
Class B Certificates as described in clause (a) above. Amounts in the Reserve
Fund shall, at the direction of the Class R-III Certificateholder, be invested
in Permitted Investments that mature no later than the Business Day prior to the
next succeeding Distribution Date. If no investment direction is received by the
Trustee from the Class R-III Certificateholder, the Trustee shall invest the
funds in such account in Permitted Investments managed by the Trustee or an
affiliate of the kind described in clause (x) of the definition of Permitted
Investments. All net income and gain from such investments shall be distributed
to the Class R-III Certificateholder, not as a distribution in respect of any
interest in any REMIC, on such Distribution Date. All amounts earned on amounts
on deposit in the Reserve Fund shall be taxable to the Class R-III
Certificateholder. Any losses on such investments shall be deposited in the
Reserve Fund by the Class R-III Certificateholder out of its own funds
immediately as realized."

         SECTION 2. Effect of Amendment.

         Upon execution of this Amendment, the Pooling and Servicing Agreement
shall be, and be

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deemed to be, modified and amended in accordance herewith and the respective
rights, limitations, obligations, duties, liabilities and immunities of the
Seller, the Company, the Master Servicer, the Depositor, the Trustee and the
Securities Administrator shall hereafter be determined, exercised and enforced
subject in all respects to such modifications and amendments, and all the terms
and conditions of this Amendment shall be deemed to be part of the terms and
conditions of the Pooling and Servicing Agreement for any and all purposes.
Except as modified and expressly amended by this Amendment, the Pooling and
Servicing Agreement is in all respects ratified and confirmed, and all the
terms, provisions and conditions thereof shall be and remain in full force and
effect.

         SECTION 3. Binding Effect.

         The provisions of this Amendment shall be binding upon and inure to the
benefit of the respective successors and assigns of the parties hereto, and all
such provisions shall inure to the benefit of the Seller, the Company, the
Master Servicer, the Depositor, the Trustee and the Securities Administrator.

         SECTION 4. Governing Law.

         This Amendment shall be construed in accordance with the substantive
laws of the State of New York (without regard to conflict of law principles) and
the obligations, rights and remedies of the parties hereto shall be determined
in accordance with such laws.

         SECTION 5. Severability of Provisions.

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

         SECTION 6. Section Headings.

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

         SECTION 7. Counterparts.

         This Amendment may be executed in several counterparts, each of which
shall be an original and all of which shall constitute but one and the same
instrument.

                            [signature pages follow]

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


                                      BEAR STEARNS ASSET BACKED
                                      SECURITIES, INC.,
                                               as Depositor

                                      By: /s/ Baron Silverstein
                                         ---------------------------------------
                                      Name:   Baron Silverstein
                                      Title:  Vice President

                                      EMC MORTGAGE CORPORATION,
                                               as Seller and Company

                                      By: /s/ Sue Stepanek
                                         ---------------------------------------
                                      Name:   Sue Stepanek
                                      Title:  Executive Vice President


                                      WELLS FARGO BANK, NATIONAL
                                      ASSOCIATION
                                               as Master Servicer and Securities
                                               Administrator

                                      By: /s/ Brett Handelman
                                         ---------------------------------------
                                      Name:   Brett Handelman
                                      Title:  Vice President

                                      JPMORGAN CHASE BANK
                                               as Trustee

                                      By: /s/ Greg Kwansy
                                         ---------------------------------------
                                      Name:   Greg Kwansy
                                      Title:  Authorized Officer



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CONSENTED AND AGREED:

BEAR, STEARNS SECURITIES CORP.
         Holder of 100% Percentage Interest of the
         Class R-III Certificates


By: /s/ Gary Altiero
    -----------------------------
Name:   Gary Altiero
Title:  Managing Director